Opening the electricity market: a false competition?

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Former Oceano
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Opening the electricity market: a false competition?

by Former Oceano » 07/09/06, 20:52

While the social week is under the sign of the demonstrations against the Suez / GDF merger, the UFC wishes for its part to alert the opinion on the "false competition" induced by the liberalization of the energy market from the 1er January 2007. "In theory, the consumer will be able to freely choose his supplier and compete. In practice, it will be trapped by a market where free prices will no longer allow it to benefit from the regulated price of gas and electricity, "said Alain Bazot, president of the consumer association. The cause of this "false choice" lies in the "principle of irreversibility" imposed by law. Clearly, the consumer who has chosen to leave the regulated tariff for a competing bid in the deregulated market will not be able to reconsider his choice. Consequence: it will not react in case of drift of free prices, while the market will no longer face the reference price of the regulated tariff ... Indeed, if the consumer can not return freely to the regulated price, this price loses all orientation power in the market. "Without a reversible choice, competition no longer plays," says Alain Bazot. There can be no optimal price for the consumer as theoretically suggests the theory the principle of the free market. For the UFC, the government tends to trap consumers, as it has tended to businesses two years earlier by opening them the market in 2005.
"The government intends to lock up the consumer and make him the guinea pig of the reform because he knows, like the analysts of the sector, that the price slippage is more than probable in the medium term", warns the association. However, recalls the UFC, the opening up of energy to competition was presented as an opportunity to lower energy prices. But, beyond the surge in oil prices, other factors suggest that the announced profits will be limited. On the contrary, EDF and GDF "do not have to fear competition and will have complete freedom to take advantage of their extremely dominant position", explains Alain Bazot. There are several reasons for this: on the one hand, the export capacities of other European countries are low, or even non-existent, on the other hand, the electricity and gas interconnection networks are already saturated, limiting the possibilities of exports. Finally, a few potentially competing companies charge prices on their respective markets which are not very competitive, ie higher than those of EDF or GDF on the French market. The demonstration of the UFC is convincing, especially as EDF forecasts show that the company only plans to lose 0,03% of its customers in 2007, while it intends to gain shares market in 2010 by installing an additional 3200 megawatts. In addition, the Suez / GDF merger strengthens the concentration of the gas sector. Suez is in fact the 6th operator on this market in Europe and owns Electrabel, Distrigas and Fluxys, which control the transmission and distribution network in Belgium. "The quantities of gas sold by Suez represent 38% of those of GDF ... The merger will therefore strengthen the existing monopoly of GDF in France and will remove the only potential competition which threatened GDF in the north of the territory", according to the UFC.

73% increase

"Ineffective competition on this market will lead to an abuse of a dominant position, it is a fact", adds Julien Dourgnon, in charge of the study. The association warns consumers: they could relive "the bitter experience of certain companies which have chosen to subscribe to an offer on the unregulated market and which have suffered an increase in their electricity bills by 73% in less than two years," without being able to reverse ”. Finally, the current text risks creating an inequality of treatment between consumers benefiting from the regulated tariff and those “permanently locked in markets with high inflationary risk”. For the UFC-Que Choisir, “as long as the conditions for real competition are not met, the government must allow consumers to benefit from the regulated tariff at any time.” For the moment, none of the 110 or so amendments tabled on the bill does not address the issue.


source Novethic
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by Christophe » 07/09/06, 20:54

Saw this at the JT, really foutage mouth ... an example of an industrial mill was given: + 5M € electricity bill per year and more since they are no longer at EdF.

For once I'm at the bottom of the side of EdF :D
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by Targol » 07/09/06, 21:44

it is indeed scandalous. All the more scandalous that individuals, unlike businesses, will not benefit from the discount that I described in this subject (which no one else reacted to : Cry: ) and that proves that competition in this sector is only beneficial to sellers : Evil:
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by Christophe » 10/09/06, 21:53

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