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From January 1, 2023, companies, local authorities and associations will benefit from the electricity buffer.

Published on December 21, 2022 by Pierre Belhache - 5 mins reading time
SMALL BUSINESSES Associations Companies Invoices Procedures

To combat soaring energy prices by reducing electricity bills for professionals (businesses, local authorities and associations), the government has launched an electricity shock absorber that will apply from January 1, 2023 until the end of the year.

A system applicable from January 1, 2023

To reduce energy bills for businesses, the government has announced new measures applicable from January 1, 2023.

Presented to electricity suppliers on November 29, the electricity buffer will take effect from January 1 to December 31, 2023. It is aimed at all local authorities, their groupings and non-profit associations, and public establishments operating in a non-competitive sector, whatever their size. The Finance Bill for 2023 adopted on first reading by the French National Assembly provides for a budget allocation of 3 billion euros for this scheme.

Thanks to this system, local authorities will be able to benefit from a reduction in their electricity bill by the State once the contracted price exceeds a certain threshold. For example, a local authority that signs a contract with a total electricity price of 500 euros/MWh will be able to reduce its bill by around 100 euros/MWh, corresponding to an average reduction of 20%.

This also applies to very small businesses and SMEs that do not benefit from the tariff shield. When presenting the scheme, Anne Pannier-Runacher, the French Minister for Energy Transition, gave the example of an SME whose contract was signed at an average electricity price of around 800 euros/MWh. In this case, it will benefit from a tariff linked to ARENH on half of its bill. On the remaining 50%, the damper will compensate for half the difference between the market price (800 euros/MWh) and the threshold set at 325 euros/MWh. As a result, the customer will only have to pay 400 euros/MWh.

Assistance can be combined with the safety net

The electricity buffer can be combined with the "safety net" designed to partially offset the rise in energy prices in 2023. However, players eligible for both schemes will see their energy expenditure taken into account when calculating the amount of compensation offered by the safety net reduced.

Whereas the electricity buffer provides a price reduction, the safety net corresponds to a compensation payment. To qualify, communes and groupings must meet the following three criteria:

  • a gross savings rate in 2021 of less than 22% ;
  • per capita fiscal or financial potential less than twice the average for the stratum ;
  • a loss of gross savings of at least 25% by 2022.

The measure was extended in 2023 to departments and regions meeting relatively similar criteria.

No steps required to benefit from the electricity buffer

Local authorities, companies and associations wishing to benefit from the electricity buffer in 2023 do not need to take any particular steps. The scheme will be reflected directly in their electricity bill. It will be up to the supplier, under the strict control of the Commission de Régulation de l'Énergie, to calculate the amount paid contract by contract.

 

 

They simply need to send the supplier a certificate of eligibility for the electricity buffer for the given contract.

Against this backdrop of persistently high market prices, the government is inviting suppliers to compete with each other to find the best contract and the most relevant offer in terms of price.