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EDF wants lower power tax

French government tells the state-owned utility to cut its costs

Paris

EDF chief executive officer Jean-Bernard Levy called on the French government to consider lowering taxes on electricity, but the environment minister said that the state-owned utility needed to reduce its high costs.

Mr Levy defended a planned 6 per cent increase in regulated power tariffs next month, which he said reflected higher commodities prices as well as higher taxes.

"Taxes account for more than a third of power bills, it is as if we had a value-added tax of 55 per cent on electricity . . . We know the government is studying the issue of environmental taxes, maybe it should consider taxing electricity less," he said on Europe 1 radio.

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Environment Minister Francois de Rugy, also interviewed on Europe 1, responded by saying that EDF should focus on cutting costs. "If we lower the taxes, we lower state revenue. We cannot lower all taxes," he said. He added that EDF generates nearly all electricity in France, and that its costs have been rising for years.

"Firstly, EDF's salary burden is higher than those of other energy companies. Secondly, there is the high cost of France's nuclear fleet. EDF's debt is there to prove it, over 35 billion euros (S$53.9 billion). EDF is in debt because it cannot cover its production costs with its revenue," Mr de Rugy said.

He also pointed to the fact that EDF employees can buy their electricity at just one-tenth of the price that French consumers pay, which has been regularly criticised by state audit body the Cour des Comptes. "They have a 90 per cent discount. Maybe the CEO of EDF could change that. That is his responsibility," Mr de Rugy said.

Mr Levy responded on Europe 1 that EDF had made proposals to the government about its staff benefits but that nothing had been done. REUTERS