EDF seeks 2.5 percent annual rise in power tariffs

French utility EDF is asking the government for an annual increase of 2.5 percent in regulated electricity prices over three years, a newspaper said on Sunday, ahead of a critical meeting for France's nuclear industry. Last year Energy Minister Segolene Royal blocked a 5 percent increase in the state-owned utility's tariffs set for August, hitting its shares, and announced the tariffs would no longer be calculated solely on the basis of EDF's costs.
Under the new method, power tariffs are now calculated by stacking several elements, including the historical cost of EDF's nuclear plants, the market price of electricity, retail costs, network costs and taxes.
This paved the way for a smaller 2.5 increase in November.
Le Journal du Dimanche newspaper cited a source close to EDF as saying that no agreement had been reached on the tariffs, with a decision expected this summer. Contacted by Reuters, a spokesman for EDF declined to comment.
But the newspaper said a rise in tariffs could be a way for the government to reward EDF for coming to the rescue of troubled nuclear group Areva. The utility offered 2 billion euros ($2.2 billion) for Areva's reactor business, French media have reported.
President Francois Hollande is set to review strategic priorities for the nuclear industry with senior members of his government on June 3.
Although a decision on the restructuring of loss-making Areva is only expected around mid-July, the meeting at the president's office, which the two companies will not attend, is expected to cement EDF's role as the dominant force of France's nuclear industry.
The sale of Areva's nuclear reactor business to EDF would reduce the integrated nuclear group created by the merger of Cogema and Framatome by Anne Lauvergon, dubbed "Atomic Anne", to its former nuclear fuel cycle business.
It would also end years of rivalry between the two state-controlled companies, which culminated in the shock loss by the French nuclear industry of a major contract in Abu Dhabi to South Korean competitors in 2009.
The nuclear industry directly provides about 100,000 jobs across France, which derives 75 percent of its electricity from the atom, the highest share of any country in the world.