France looks to extend electricity tariff ‘shield’ to flat owners

A retroactive capped rate could be put in place for copropriétés to protect people living in shared buildings from soaring energy costs

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A capped rate for flat owner electricity bills looks set to be introduced in France, which may also allow previously high energy bills to be regularised retroactively.

The announcement was made by the Minister Delegate for Housing Olivier Klein, who said he would be speaking with gas and electricity suppliers.

This comes two days after the announcement that small businesses (TPEs, or très petites entreprises) would benefit from a guaranteed electricity rate in 2023.

Mr Klein promised that “no one would slip through the net” with regard to the tariff shield (‘bouclier tarifaire’) for housing.

In other words, there will be protection for all so the tariff shield which already benefits houses on regulated rates will also cover condos, including bills for lighting in common areas and common heating.

"For copropriétés or leaseholders who have taken out electricity or gas subscriptions that are proving too costly, we are working on a similar solution with the relevant energy companies as we are doing with the bakers and other small businesses,” said Mr Klein on Radio J.

“It's the same principle, we're going to work with the energy companies so that they have prices that aren't too steep for leaseholders and those living in condominiums.”

What do the price caps entail?

Households on regulated energy contracts have been covered since autumn 2021 by what the government calls a gas and electricity bouclier tarifaire. This froze regulated gas rates in place and capped electricity bills at a 4% rise.

France’s regulated gas tariff (tarif réglementé de gaz naturel) is rising by up to 15% this month, and the regulated electricity tariff (tarif réglementé de l’électricité) will do the same in February.

Read more: How much will French gas bills increase from January 2023?

This tariff shield initially had many inconsistencies: for example, social housing and condos did not benefit from it.

The idea is therefore to cap all new contracts signed in 2023 so that the syndicates do not have to make a claim at the end of the year for the difference between what they have paid and what they should have paid, thus easing the load on owners’ pockets.

“It is important to know that a large number of condominiums are in financial difficulty: it is therefore important to spare them from having to pay more than they should,” announced Mr Klein on Radio J.

In addition, this shield will be retroactive. "Where the charges have been too large, they will be regularised," he said during the same interview.

Help for businesses

This year businesses with fewer than ten employees will pay a maximum of €280 per megawatt hour of electricity. This is much more than the pre-crisis price of around €50, but significantly less than the €400 to €1,000 reached during the second half of 2022.

The cap is designed to avoid “catastrophic increases” for bakers, restaurateurs and other artisans.

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