Electricity: why some suppliers encourage their customers to join EDF

Electricity: why some suppliers encourage their customers to join EDF

In recent days, several alternative electricity providers have announced new price increases to their customers. While encouraging them to terminate their contract…

Times are tough for alternative electricity providers. Given the rise in prices, several players in the sector have withdrawn from the market in recent months. Among them, Oui Energy, Bulb and Leclerc Energies. For its part, Cdiscount is no longer accepting new customers, while Hydroption was put into forced liquidation at the end of 2021.

More recently, Mint Energie sent an email to its fixed-price contract customers to announce that their subscription price would soon be more expensive due to “the constant increase in the purchase price of electricity in the wholesale market of more than one year”.

But the provider does not stop there. In the rest of the email, he openly encourages his interested customers to “go to EDF” to benefit from the regulated sales tariff (TRV). Enough to save a lot of money: 218 euros precisely in the case of a member of a group of dissatisfied Mint customers, according to an estimate made by the provider itself.

10,000 contracts terminated at Iberdrola

The same bad surprise for Ohm Energies customers, alerted a few days ago of an imminent price increase. The provider, “in the process of untying”, according to the president of the Energy Regulatory Commission (CRE), Emmanuelle Wargon, does not stop its subscribers anymore and reminds them that they can “terminate their contract without penalty at any time”. . within three months”.

For its part, Iberdrola also advises its 2% of customers at the end of the contract (that is, 10,000 people) to look for another operator, ensuring that it cannot avoid a price increase. “These are customers who have contracts with a guaranteed rate and that expire at the end of October 2022,” explained Emmanuel Rollin, director of Iberdrola France, at BFM Business. If the Spanish supplier had decided to renew these contracts, “we would have been forced to pass on the astronomical increase in the cost of electricity, so there is a high risk for our customers. There are contracts in the market with regulated rates, and that is the option we offer.”

Now expired customers are invited to use the offer comparator created on the Internet by Energy Mediator. But EDF also has the obligation to recover those who would like to return to its regulated rate that the public group is the only one that offers. Established three times a year by the CRE and approved by the government, this TRV aims to guarantee consumers a more stable electricity price than market prices. By 2022, its increase has thus been limited to 4%.

Raised roof of the Arenh

If the current situation has allowed EDF not to lose any more customers, the alternative suppliers that offer offers at freely fixed prices have, on the contrary, been weakened. In the first quarter of 2022, free rate offers gained “only” 163,000 customers, that is, -137% compared to the 3rd quarter of 2021, according to the latest CRE report.

To support these players exposed to market volatility – most of whom do not produce enough electricity – the government made the decision in February to raise the ceiling of the so-called Arenh mechanism by 20%, raising it from 100 TWh to 120 TWh . Specifically, it corresponds to the volume of cheap nuclear electricity (€42/MWh) that EDF, as a producer with a competitive advantage thanks to its fleet, is obliged to resell to its competitors.

Once this volume has been distributed among the different actors, the alternative suppliers will have to source from the wholesale markets to cover their needs. At prices that this time have nothing to do with it. For France, the MWh has reached 700 euros in recent days. An outbreak impossible for providers to assume, unless they transmit it to their clients or terminate the contract of certain subscribers as Iberdrola did by inviting them to join EDF.

A resale in the markets?

But why do providers deliberately kick some of their subscribers out, sometimes without even waiting to know if they’d accept an increase in their bill? For some, this incentive to go out with the competition would be aimed at taking advantage of the Arenh mechanism. On the other hand, the moment chosen by Mint or Iberdrola to encourage their clients to stop consulting. In fact, the Arenh quotas available to each alternative player are calculated in periods of low demand. Whether on weekends, holidays and especially… in July and August, as is remembered Humanity.

To obtain the maximum amount of cheap electricity, the alternative actors have “interest in having the maximum number of customers in the summer”, estimates Fabien Gay, PCF senator for Seine-Saint-Denis, on Twitter. Before looking to reduce its subscriber base at the end of August. So that they can not only have a sufficient volume of Arenh for the needs of their customers, without having to source from the wholesale markets, but also any surplus that they can forcefully resell on the markets.

Mint client Romain is not “against the idea” of subscribing to EDF. “But this questions the assignment of Arenh’s rights to this supplier and their possible resale at exorbitant prices in the markets, instead of providing them to their clients at a decent price. In any case, it seems suspicious that a private company invites its own clients in this way. to see the competition,” he explains. Contacted, Mint Energie did not respond to our requests.

For her part, Emmanuelle Wargon, who received the leaders of Iberdrola France on Tuesday, warned: “With them we deal with two issues, she stresses. First, compliance with the regulations and the fact that” they do not take advantage of it to make excess profits . In this we will be intransigent”, said the president of the CRE. The authority in charge of ensuring the proper functioning of the energy market had also promised at the end of 2021 to carry out “reinforced ex post controls of the use that will be made of the assigned volumes (Arenh).”

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