Companies to sign new French electricity MOU

16 January 2007 16:09  [Source: ICIS news]

PARIS (ICIS news)--Companies from several different industries will sign a memorandum of understanding (MOU) with France's electricity utility EdF, industry sources said on Tuesday.


The MOU defines the conditions of a long-term industrial and commercial partnership in terms of volumes delivered, price and industrial risk-sharing, sources said.


No official details will be available until the agreement has been approved by the European Commission. 


However, four months of negotiations with EdF have yielded a compromise which the companies involved describe as satisfactory (Exeltium, the consortium of France's electricity-intensive industrial groups; Air Liquide, Solvay, Rhodia and Arkema from the chemical industry; Alcan and Arcelor-Mittal from the steel industry; and UPM Kymmene from the paper industry), through spokeswoman Sandra Luneau of Arcelor-Mittal.


EdF is to remain the country’s single supplier despite bids launched in May 2006 towards some 15 European electricity companies, sources said.


The consortium was formed with the backing of Industry Minister Francois Loos because he feared that soaring electricity prices sparked off by the liberalisation of the electricity and gas markets would push electricity-intensive companies to relocate elsewhere when their ongoing contracts with EdF expired.


The ‘industrial partnership’ means that the consortium companies will pay a large part of the long-term electricity contracts in advance as an investment in further power capacities.


Under the MOU, some 60 small and medium-size electricity companies will also be able to take part in the consortium. Payment advanced by each member will be in proportion to the amounts of electricity lifted, sources said. 


Electricity deliveries will only be able to start at the beginning of the second quarter when all details and contracts, including arrangements with the banks, are completed.


Meanwhile, the Industry Ministry indicated that companies will be able to revert to the new ‘transitory government-regulated electricity tariff’ over the next two years with an additional 10-23% price percentage, according to the size of the company.

By: Doris Leblond
+44 20 8652 3214

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