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Does the European Union want to force France to privatise 150 hydroelectric dams?

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CheckNews, France

22 March 2019, Updated: 22 March 2019

The European Commission launched in early March an infrigement procedure against France and seven other countries, regarding competition rules for hydroelectric concessions.

In early March the European Commission launched an infraction procedure against several countries including France. The Commission is asking France to respect competition rules in the case of its hydroelectric concessions (dams and other installations) and to publish invitations to tender. A number of these plants, conceded for 75-year periods by the state after the war, have been reattributed without the competitive tendering that is required by the Treaty on the Functioning of the EU. 150 (of 399) concessions will expire by 2023.

Let’s start off by saying that the Commission is not asking for the dams to be privatised. European regulations “shall in no way prejudice the rules in Member States governing the system of property ownership”, according to article 345 of the TFUE.

The Commission’s shot across the bow rekindles a dispute which began almost 15 years ago. In 2005 the Commission launched a procedure against French utility EDF, in a position of dominance with its control 80% of hydroelectric plants. At stake was a derogation in the 1993 Sapin law which put incumbent operators in a preferential position. Subsequently, a 2006 law on water utilities jettisoned “rights of preference” and made clear that renewal of hydro concessions must be subjected to a selection procedure.

But this step towards competition was not entirely due to the European Commission. It was “made necessary by EDF’s loss of its status as a public body, in 2004”, explains French Socialist MP Marie-Noëlle Battistel. A 2004 law had transformed EDF into a limited company with at least 70% control by the state. This meant that the company no longer enjoyed the exemptions from competition policy which benefited public bodies. The first calls for tender were due by the end of 2007. None materialized. In April 2010 the government presented a plan to renew 10 hydroelectric concessions by 2015. The process began but then stalled.

In 2015 the European commissioner in charge of competition policy sent a formal warning to France for having granted and maintained “most of the hydroelectric concessions” to the benefit of EDF. According to Marie-Noëlle Battistel, France eventually replied in a note dated 22 January 2018. But a year later there is still no call for tender. What next? Negotiations with Brussels continue, now with the extra pressure of the infraction procedure launched against France last week.

Translated by Harry Bowden, VoxEurop

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