French Government Rejects EDF Call For 20% Hike In Power Prices
20 July 2009 - 1:40AM
Dow Jones News
A French government official Sunday rejected again calls by
Electricite de France (EDF.FR) Chief Executive Pierre Gadonneix to
raise power tariffs by 20% over three years.
Claude Gueant, an advisor to President Nicolas Sarkozy, said in
an interview on Europe 1 radio station that the increase in power
prices demanded by Gadonneix was "out of proportion," and that the
government was considering a "very limited" increase.
"I find it regrettable that the CEO of EDF worries the French
people with the prospect of an increase (in power prices) when he
knows very well that the governemnt, which sets tariffs, won't be
able to follow him," Gueant said.
Gueant is the third high-ranking government official to rebuke
Gadonneix this week. Finance Minister Christine Lagarde said
Thursday that the announcement made by the head of state-controlled
EDF was "incomprehensible."
In an interview to Le Parisien newspaper, Henri Guaino, another
advisor to Sarkozy, said it would be a mistake to make the French
consumer pay for EDF's mistakes in its international expansion
policy.
In recent years, the French energy behemoth has been buying
assets abroad, including its U.K. competitor British Energy, and
half of the nuclear reactors of Constellation Energy Group Inc.
(CEG) in the U.S.
As a result, last year its debt rose by about 50% to EUR24.5
billion.
Gadonnaix's mandate to lead EDF expires in November.
-By Gabriele Parussini, Dow Jones newswires; +33 1 4017 1740;
gabriele.parussini@dowjones.com.