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Free-market power offers win over more French homes

The number of French homes quitting state-set electricity and gas contracts rose sharply in the last quarter of 2007 compared with the previous three months, the country’s energy regulator CRE said on Monday.

The CRE said that 34,000 out of 29 million households had picked free-market electricity contracts, five times more than at the end of the previous quarter. For gas, 114,000 homes had chosen a free-market offer by Dec. 31, 2007, a tenfold rise on the previous three months. Gas and electricity markets in the European Union opened themselves fully to competition on July 1, 2007. “The first three months were during the summer and were not the most dynamic ones in terms of business,” a CRE spokesman said. Analysts say the uptake will continue to rise, especially once the effects kick in of a law giving consumers the right to revert to state-set gas and power tariffs after switching to a free-market offer. 

Gaz de France said last week it had gained 50,000 new household electricity clients since July 1, 2007. “When 10 customers leave state-owned utility EDF, eight come to Gaz de France,” state-owned GDF’s finance director, Stephane Brimont, told journalists last week. EDF said last month it had gained 90,000 new household clients for gas but that it had lost the equivalent number for electricity. Two systems operate side-by-side in France as EDF and Gaz de France continue to deliver low, state-fixed gas and power prices while free-market prices are also on offer to French consumers. While power markets elsewhere in Europe are tied to volatile oil, coal and gas markets, state tariffs and heavy reliance on nuclear power have kept prices in France low. (Reuters)