This week CoRDiS, the dispute settlement and sanctions committee for CRE, the French energy regulator, announced (click here) fines against two entities for abusing the ARENH scheme.
- For over a decade Accès Régulé à l'Électricité Nucléaire Historique (ARENH) contracts have been a feature of the French electricity market which is dominated by the EDF nuclear generation fleet. ARENH is a regulatory mechanism set up in 2010 that allows non-EDF electricity suppliers to access a portion of EDF’s nuclear generation. ARENH sets a regulated price for suppliers at EUR 42/MWh (it temporarily rose to EUR 46.20/MWh in 2022 before reverting back to the standard rate). ARENH is set to expire at the end of 2025. In late 2022 and early 2023, CRE referred two ARENH-related cases to CoRDiS. This week CoRDiS announced that it had fined Mint Energie EUR 3.5 million and BCM Energy EUR 3 million for abuses under the ARENH scheme although relatively few details on the cases were made public;
- Regarding the Mint case, CoRDiS ruled that the price increases the company applied to its customers in 2021 and 2022 were aimed at reducing the size of its customer base so that it could resell the power it had acquired under ARENH on the wholesale market during the EU energy crisis when prices were exceptionally high. CoRDiS concluded that Mint had implemented a commercial strategy deliberately aimed at using the electricity volumes acquired under ARENH for purposes other than the intended legislative purpose, and they had hence committed an abuse of ARENH under Article L. 134-26 of the French Energy Code;
- Regarding the BCM case, the CoRDiS announcement notes that in November 2021 the company had submitted an ARENH application to the CRE for customers who were not in its portfolio at the time the ARENH application was submitted. BCM Energy had maintained that its application was linked to a plan to acquire a part of the supply business of its sister company (OUI Energy, now called the “Elmy Groupe”). CoRDiS determined that the evidence submitted by BCM was not sufficient to convince the committee that the supposed restructuring of the group was genuine which would have otherwise justified the ARENH volumes it had requested. Since its ARENH application for 2022 did not comply with the characteristics and forecasts of their customer portfolio used in the application, CoRDiS concluded that its application was submitted without any intention of developing a customer base commensurate with its application. It thus concluded that BCM had abused its ARENH rights under Article L. 134-26 of the French Energy Code.
In its announcement, CoRDiS explicitly notes that despite the expiry of ARENH on 31 December 2025, they considered the “crack down” necessary to warn all market players of the need to comply with the requirements laid down by the legislation. For its part, CRE published this statement supporting the CoRDiS decision, and hinting at further scrutiny of the topic:
The CRE is continuing its checks and exercising the utmost vigilance in detecting abusive practices by certain operators in order to promote the proper functioning of the market and strengthen consumer confidence. In the autumn, it will publish the results of its checks carried out as part of the implementation of the guidelines and will present its initial recommendations for prudential rules.
This is by no means the first instance of enforcement involving ARENH – this case was announced in July 2024. Firms participating in the ARENH scheme are advised to remain vigilant as the scheme enters into its final stanza. Despite its imminent end, CRE may be minded to pursue cases of abuse nonetheless before focussing all of its efforts on wholesale market monitoring.
