France Unveils New Steps to Cap Power Bills Ahead of April Election

(Bloomberg) -- France unveiled fresh measures to cap an increase in household electricity costs in a bid to appeal to voters facing soaring bills ahead of April’s presidential election.

The government filed amendments to the 2022 draft budget, proposing that tariff hikes be spread over time rather than thrusted on consumers in February as planned, Budget Minister Olivier Dussopt said Friday. Bills will rise by no more than 4% next year -- as flagged back in October -- and small suppliers will get a cash advance to tide them over, he said.

French wholesale power prices have surged to records amid a Europe-wide shortage of natural gas and reduced nuclear-plant capacity at home. The government’s plan, which would see ministers override the energy regulator’s authority to set regulated tariffs, comes amid an “exceptional backdrop of price increases” and will help protect household finances, Dussopt said.

The measures, revealed Thursday in Le Figaro newspaper and subject to approval, are designed to be supplementary steps after ministers already put forward a plan to cut taxes on power. Those cuts, announced two months ago, probably wouldn’t be sufficient to offset the jump in regulated tariffs normally set by the regulator.

Shares of Electricite de France SA, the state-controlled nuclear giant, fell as much as 2.2% on Friday after a 2% decline the day before.

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