Regulator Orders Engie to Make Its Natural Gas Prices Reflect Costs
May 02 2016 - 1:03PM
Dow Jones News
By Inti Landauro
PARIS -- France's antitrust regulator has ordered power utility
Engie SA to change its natural gas prices for non-residential
customers to better reflect its costs.
Acting on a complaint filed in October by rival Direct Energie,
the regulator, Autorité de la Concurrence, said Engie, formerly
known as GDF Suez, didn't reflect all its costs in some of the
individual offers made to large companies. The company's price
policy could threaten to push rivals out of the market, it
said.
Even though the probe isn't complete, the regulator said it
found enough evidence to force Engie to change its pricing policy
immediately.
"It appeared the Engie offers could in some cases qualified as
eviction or predatory prices," Autorité de la Concurrence said in a
statement.
The investigation shows how the energy market has become complex
since the deregulation of electricity and gas distribution over the
last decade. The new regulation lets customers decide whether to
remain with former monopolies -- Engie for natural gas and
Electricité de France SA for electricity -- or shift to new
suppliers.
The government created regulated fees for residential customers
for both Engie and EDF that take into account all the costs plus a
"reasonable" profit margin.
Direct Energie, a new utility that operates in France, claimed
that Engie was able to take advantage of its dominant position and
the guaranteed profits on residential customers to make offers to
some large non-residential customers which don't reflect costs,
with the aim of driving rivals out of the market.
Engie said it has always respected the gas market's rules and
insisted the market is already very competitive. The company said
it is considering appealing the Autorité de la Concurrence's
decision.
Autorité de la Concurrence can eventually decide to fine Engie
for abusing its dominant position. Fines for breaching competition
rules can total as much as 10% of a company's overall revenue, but
are traditionally significantly lower.
Engie faces another investigation on from Autorité de la
Concurrence on its practices toward residential customers that has
been going on for two years and could lead to a separate fine.
Write to Inti Landauro at inti.landauro@wsj.com
(END) Dow Jones Newswires
May 02, 2016 12:48 ET (16:48 GMT)
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