The Court of Auditors judges that the tax on electricity producers is “not fair for consumers”

A tax which is “not fair for consumers” because it is unprofitable: the Court of Auditors criticized on Friday the “contribution” implemented by the government to try to capture the “rent” from electricity producers. This was the shocking argument of the government, accused in 2022 of not doing enough to fight against the “superprofits” of companies having benefited from the surge in energy prices after the Russian invasion of Ukraine. But the “contribution on the inframarginal rent” of electricity producers does not generate revenue “up to what would be fair for consumers”, according to the financial magistrates.

“In an effective regulatory system”, the margins accumulated by energy companies “would be returned to consumers”, estimates the Court in a report published Friday devoted to the support measures deployed by the State during the recent energy crisis. But the yield from the CRI and the increase in royalties from hydroelectric concessions should “not exceed six billion euros for the years 2022 and 2023”, according to the Court. A figure to be compared with the “more than 30 billion euros in net profit margins” (before corporate tax) recorded in 2022 and 2023 by electricity traders, producers and suppliers or with the bill of 36 billion net euros that the State must pay between 2021 and 2024 under the multiple support measures for energy consumers: price shield, fuel compensation, etc.

“Failing to capture most of the predictable profit margins to finance its support for consumers, the State seeks to limit the net budgetary cost of the shield by increasing the prices paid by the consumer,” concludes the Court of Auditors. The “scope” and “parameterization” of this contribution “strongly limit its performance” and prevent “ensuring all French customers of electricity prices consistent with the full production costs of the park in service”, warns the control body. This “estimates in total that the bill overall paid by end customers and taxpayers for the supply of electricity will thus exceed national production costs by 37 billion euros over 2022-2023”.

In its recommendations, the institution suggests to the Ministry of Ecological Transition and Bercy to “propose to Parliament to change the scope and methods of calculating the CRI for 2024, in order to increase its performance”. The two ministries are also invited to “configure the tariff shield” on electricity “so that the prices paid by consumers best reflect current production costs”. The government has so far not reacted to the criticisms of the Court of Auditors.

If the exceptional measures deployed by the State to protect households and businesses from soaring energy prices were justified, the Court recognizes, they were “abundant” and their implementation “complex”. Shields, fuel check, wood check, electricity shock absorber: the institution lists “nearly 25 different support systems”. Ninety percent of aid to households was “not targeted according to income or the beneficiaries' capacity to absorb this shock,” notes the Court. A “certainly questionable” characteristic for public support for the consumption of gas and fossil fuels, “with regard to France’s decarbonization objectives”.

The Court of Auditors finally notes that the main aid measures were implemented via energy suppliers or fuel distributors, which raises questions about “the complete passing on of public support to customers”. Faced with the risks of “windfall effects”, it invites sector authorities such as the Energy Regulatory Commission (Cre) to strengthen their controls. In September 2023, the president of Cre Emmanuelle Wargon publicly singled out three energy suppliers (Elmy Fourniture, Mint Energy and Sagitterre), suspected of not passing on to their customers rebates granted by their supplier EDF.