The Commission has, however, asked France to recover the part of these reductions (estimated at less than €50 million) exceeding the levels permitted under EU State aid rules.

In France, all electricity consumers must pay a surcharge on electricity consumption, known as the ‘contribution to the public electricity service’ (CSPE). The CSPE goes chiefly towards funding four distinct measures:

(i) support measures for renewable energy;

(ii) high-efficiency co-generation;

(iii) tariff equalisation (compensation for electricity generators in non-interconnected geographical areas), and

(iv) implementation of the social tariff for electricity.

In order to maintain their international competitiveness, France has put in place a CSPE reduction scheme for large electricity consumers.

The Commission’s investigation

In March 2014, the Commission launched an in-depth enquiry to assess whether or not these CSPE reductions for large electricity consumers and electricity-intensive companies in 2003-15 were compatible with EU state aid rules.

Renewables support (i)

The Guidelines on State aid for environmental protection and energy 2014-2020 authorise reductions – up to a certain level – in contributions levied on electricity-intensive companies exposed to international trade and used to fund renewable energy support schemes (this corresponds to CSPE measure (i)). These provisions enable Member States to fund support for renewable energies while safeguarding the international competitiveness of their electricity-intensive companies. The Guidelines also provide for the possibility of gradually lowering surcharge reductions under adjustment plans.

The Commission has concluded that CSPE reductions linked to support measures for renewable energy are compatible with EU State aid rules and, in particular, with the Guidelines on State aid for environmental protection and energy for 2014-2020;

Support for (ii) high-efficiency co-generation, (iii) tariff equalisation and (iv) social tariffs.

The Guidelines do not apply directly to CSPE reductions for the other three support measures that the CSPE funds. In spite of this, the Commission considered that there were many similarities between the different objectives pursued by the CSPE, and accordingly it analysed the four measures in the same context.

CSPE reductions provide a sustainable funding base for these measures. They enable France to continue financing these support measures and to pursue its climate and energy objectives without placing an excessive burden on electricity-intensive companies which are particularly affected by the CSPE.

The Commission has therefore concluded that the CSPE reductions necessary to provide a sustainable funding base for the other three measures are compatible with EU State aid rules, in particular Article 107(3)(c) TFEU.

Recovery

However, France has granted certain reductions which go beyond what is necessary to ensure sustainable funding for the four support measures concerned. Any surcharge reductions exceeding the levels set by these adjustment plans must be recovered.

Under the Guidelines, parties benefiting from reductions must contribute at least 15% of the burden and must be particularly affected by this cost – i.e. electricity-intensive companies operating in sectors exposed to international trade.  Part of the reductions granted by France does not comply with these two conditions.

The Guidelines also indicate that, for any reduction in the charge granted prior to 2019 which does not yet comply with all the compatibility criteria, Member States may submit an adjustment plan which provides for the reductions to be gradually brought into line with the compatibility criteria laid down in the Guidelines .

France has submitted an adjustment plan of that type to the Commission. It will have to recover from the beneficiaries any reductions exceeding the levels authorised by the adjustment plan. To date, on the basis of the information at its disposal, the Commission estimates the recoverable amount at less than €50 million.    

Background

The CSPE was brought in by Law 2003-8 of 3 January 2003 on the gas and electricity markets and on the public electricity service. It is intended to offset the extra costs of public electricity service charges resulting from producing energy from renewable energy sources, from funding high-efficiency co-generation, and from compensation of electricity generators in non-interconnected areas, and the extra costs of implementing the social tariff. The scheme also provides for CSPE reductions for certain companies which uses a large amount of electricity.

More information on today’s decision will be available under case number SA.36511 in the State aid register on the DG Competition website, once any potential confidentiality issues have been resolved. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.