Business is booming.

France Will Cap Energy Price Hikes at 15 Percent

PARIS – France will curb electricity and gas prices expected to rise in 2023 as the government pledged on Wednesday to extend measures protecting French consumers from a European energy crisis exacerbated by the war in Ukraine.

Élisabeth Borne, the French prime minister, said at a press conference in Paris that the government would limit price increases to 15 percent — far less than the 120 percent increase she said was expected without government intervention.

“That’s the commitment we’re making,” she says. The plan, the government said, is expected to cost about $16 billion, or nearly $16 billion.

Russia’s decision to limit gas flows to Europe is partly the cause of this increase. But France is not as dependent on Russian gas for its energy production as some of its European neighbors.

In a reassuring tone, Ms Borne said that in the “most likely scenarios” France could endure the winter without rationing or imposing drastic power cuts – although its nuclear facilities, which supply about 70 percent of France’s electricity, are currently plagued by technical problems.

Earlier on Wednesday, French electricity and gas operators had announced widespread power outages during the winter were unlikely, but targeted cuts during consumption peaks were possible.

Ms Borne said everyone in France played a part in reducing the country’s overall energy consumption, which the government aims to cut by 10 percent compared to 2021. The government will soon launch an awareness campaign called “Every gesture counts”. which will encourage households, businesses and municipalities to turn down the heating and turn off more lights.

“Only sobriety and European solidarity will allow us to avoid power cuts and rationing in the most pessimistic scenarios,” said Ms Borne –

France had already capped gas and electricity prices in 2022 and has one of the lowest inflation rates in Europe.

But the 15 percent limit announced on Wednesday, which will take effect in January for gas and in February for electricity, is higher than the current one. Ms Borne said that bills for households using electric heating would increase by about €20 a month instead of €180, and by about €25 a month for those using gas instead of €200.

She promised that the government would help 12 million of the poorer households in France to cover their energy costs with one-off checks of about 100 to 200 euros.

“The French who are in a precarious energy situation should not be the victims of the efforts,” said Ms Borne.