The refusal of the mayor of Montataire in northern France to pay for the rise in electricity prices could be followed by other elected officials.
Free West Media –
Jean-Pierre Bosino, the communist mayor of Montataire, has announced that he expected the municipality’s electricity costs to quadruple from 600 000 to 2,5 million euros. He has refused to pay such sums and has called on other elected representatives to follow suit.
Is this the beginning of a wave of refusals? On learning of the forecast increase in electricity costs for his municipality, the PCF mayor of Montataire (Oise) Bosino almost “fell off his chair”, reported French daily Le Parisien, and said he would simply not pay the bill.
The bill would quadruple for this town of 15 000 inhabitants with an operating and investment budget of 32 million euros, if prices rise from 600 000 euros to 2,5 million euros. It would be impossible to follow, according to the mayor, who said that “taxes would have to be increased by 40 percent” to absorb the shock.
Bosino argued that the opening of the market to competition was to blame, seeing it as the cause of this sharp rise, recalling that the NOME law [abbreviation for “new organisation of the electricity market”] – of 2011 – voted during Nicolas Sarkozy’s term of office – “obliged EDF, the historical supplier, to resell electricity of nuclear origin at 50 euros per megawatt to its competitors, which costs it 8 billion euros, which is now missing for the maintenance of the power stations”.
The politician was furious and blamed “these same competitors who speculate and drive up prices by selling this electricity at 700, 800, 1000 euros per megawatt”. In order to get out of a system that is “walking on its head”, he called for local authorities to be exempted from the obligation to go through calls for tender and to be able to buy electricity at a regulated rate.
His request was addressed directly to the State which must react quickly, according to the elected representative. The price of wholesale electricity in France has increased more than tenfold in a year.
“If nothing is done, we will not pay the bills, we call on all communities to do the same,” he told Oise Hebdo, refusing to consider any closure or reduction in activity of local public services. “Faced with this situation, the President of the Republic and the government are playing around with announcements that are completely disconnected from reality,” he said.
Jean-Pierre Bosino’s warning and call for disobedience echoed a report submitted to the Senate at the end of July, according to which “the forecasts of local authorities will have to be revised in order to provide for this operating [energy] item with expenditure that is sometimes three to four times higher than the previous year’s”.
The rise in energy expenditure “jeopardises essential local public services” and could lead to “an increase in local taxes affecting the purchasing power of households”.
Earlier, French energy giant EDF filed an appeal with the Council of State seeking compensation of more than 8 billion euros. It has been plagued by the terms of the “tariff shield”, and in particular the sale of electricity at low prices to its competitors, the electricity producer in a press release on 9 July.
On 13 January 2022, an additional allocation of 20 TWh of electricity sold at regulated prices for 2022 was announced by the government. It justified these measures by the desire to increase by 20 percent the annual quota of electricity sold at a reduced price to its competitors, to 120 TWh (compared to 100 TWh previously). This sale was made within the framework of the mechanism called “regulated access to historical nuclear electricity” (Arenh), regularly denounced by EDF.
According to the Ministry of the Economy, “the State will continue to defend the Arenh increase mechanism before the State Council, which again recalled last July the general interest associated with this decision”. The same source defended the importance of forcing the EDF to buy volumes of electricity at a high price on the markets in order to resell them to its competitors.
The EDF estimated that the measures decided by the government would reduce its gross operating surplus (Ebitda) by some 10 billion euros this year.
The bill adds to another major setback: the decline in its nuclear production, linked to corrosion problems on some reactors, could cost nearly 24 billion euros more, according to the latest estimates published in late July.