why some suppliers encourage their customers to join EDF

In recent days, several alternative electricity suppliers have announced further price increases to their customers. While encouraging them to terminate their contract…

These are difficult times for alternative electricity suppliers. Faced with rising prices, several industry players have pulled out of the market in recent months. Among them Oui Energy, Bulb and Leclerc Energies. Cdiscount, for its part, is no longer taking on new clients, while Hydroption was placed in forced liquidation at the end of 2021.

More recently, Mint Energie sent an email to its customers benefiting from a fixed price contract announcing that the price of their plan would soon be more expensive due to “the constant increase in the purchase price of electricity in the wholesale market.” for more than a year”.

But the supplier doesn’t stop there. In the rest of the email, he openly encourages his concerned customers to “go to EDF” to take advantage of the Regulated Sales Tariff (TRV). Enough to save a lot of money: 218 euros just in the case of a member of a collective of dissatisfied Mint customers, according to an estimate by the supplier itself.

10,000 contracts terminated at Iberdrola

The same unpleasant surprise for Ohm Energies customers warned of an imminent price increase a few days ago. The supplier, “in the process of letting go”, according to Energy Regulatory Commission (CRE) President Emmanuelle Wargon, is no longer holding back its subscribers, reminding them that they “can terminate their contract at any time without penalty within three months.” “.

As for Iberdrola, it advises its 2% of customers at the end of the contract (ie 10,000 people) to look for another operator so that it cannot avoid a price increase. “These are customers who have contracts with a guaranteed rate and which expire at the end of October 2022,” explains BFM Business Emmanuel Rollin, director of Iberdrola France. If the Spanish supplier had decided to extend these contracts, “we would have been forced to pass on the astronomical increase in electricity costs, so there is a great risk for our customers. There are contracts on the market with regulated tariffs, and that is the option we offer”.

Customers who are overdue are now invited to contact the offer comparator that has been set up on the Internet by the Energy Mediator. But EDF also has an obligation to take back those who want to return to its regulated rate that the public group alone offers. This TRV, which is set three times a year by CRE and approved by the government, aims to guarantee consumers a more stable electricity price than market prices. For 2022, the increase is therefore limited to 4%.

Raised ceiling of the Arenh

If the current situation has enabled EDF to stop losing customers, the alternative suppliers offering offers at freely set prices have been weakened. In the first quarter of 2022, free rate offers “only” gained 163,000 customers, i.e. -137% compared to the 3rd quarter of 2021, according to the latest report from CRE.

To support these players exposed to market volatility – most of whom do not produce enough electricity – the government took the decision in February to raise the ceiling of the so-called Arenh mechanism by 20%, from 100 TWh to 120 TWh. In concrete terms, this corresponds to the volume of cheap nuclear energy (42 €/MWh) that EDF, as a producer with a competitive advantage thanks to its fleet, is obliged to resell to its competitors.

Once this volume is distributed among the different players, the alternative suppliers must source from the wholesale markets to meet their needs. At prices that this time has nothing to do with. For France, the MWh has reached 700 euros in recent days. An outbreak that is impossible for suppliers to imagine unless they pass it on to their customers or terminate certain subscribers’ contracts as Iberdrola did by inviting them to join EDF.

A resale on the markets?

But why are providers intentionally pushing some of their subscribers away, sometimes without even waiting to find out if they would accept an increase in their bill? For some, this incentive to leave with the competition would be aimed at taking advantage of the Arenh mechanism. In addition, the moment was chosen by Mint of Iberdrola to encourage their customers to end inquiries. Indeed, the Arenh quotas available to each alternate player are calculated over low demand periods. Either on weekends, public holidays and above all… in July and August, as you remember Humanity.

Therefore, in order to obtain the maximum amount of cheap electricity, alternative players have “an interest in having the maximum number of customers in the summer,” Fabien Gay, Seine-Saint-Denis PCF senator, estimates on Twitter. Before they wanted to shrink their subscriber portfolio at the end of August. So that they can have not only a volume of Arenh sufficient for the needs of their customers, without supply in the wholesale markets, but also any surplus that they could resell strongly in the markets.

Mint customer, Romain is not “against the idea” of subscribing to EDF. “But this questions the allocation of Arenh rights to this supplier and their eventual resale at exorbitant prices in the markets, rather than supplying them to their customers at a decent price. invites its own customers to see the competition,” he explains. Contacted, Mint Energie did not respond to our requests.

For her part, Emmanuelle Wargon, who received the leaders of Iberdrola France on Tuesday, warned: “We have discussed two topics with them, she emphasizes. Excess profits. We will be unyielding in this,” said the president of CRE. The government responsible for the proper functioning of the energy market had also pledged to carry out “strengthened ex-post controls on the use that will be made of the allocated volumes” by the end of 2021 (Arenh).

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