Universal Registration Document 2020

7. General information about the Company and its capital

7.1.6 EDF, a public undertaking with a public service mission

7.1.6.1 EDF as a public undertaking

As an undertaking in which the French State holds a majority share (see section 7.2.9), EDF is subject to the provisions of Order no. 2014-948 of 20 August 2014 on the governance and equity transactions of companies with a public shareholding and its application Decree no. 2014-949 of the same date.

In accordance with the legislation that applies to all undertakings of which the State is a majority shareholder, EDF may have to undergo certain State audit procedures, in particular through an economic and financial evaluation assignment, pursuant to Decree no. 55-733 of 26 May 1955 on State economic and financial evaluation and Decree no. 53-707 of 9 August 1953 on State evaluation of national public undertakings and certain organisations, the purpose of which has an economic or social component.

EDF also has to undergo the audit procedures performed by the French General Accounting Office (Cour des comptes) and the Parliament. Thus, in addition to the control performed by the Statutory Auditors, the Company’s accounts and management and, if applicable, those of its directly-held majority subsidiaries, fall under the control of the French General Accounting Office, in accordance withArticles L. 111-4, L. 133-1 and L. 133-2 of the French Code of Financial Jurisdictions.

Lastly, the disposal of EDF shares by the State, or the dilution of the State’s stake inEDF’s capital, is subject to a specific procedure under Order no. 2014-948 of 20 August 2014 on the governance and equity transactions of companies with a public shareholding.

As a buyer, EDF is governed by the French Public Procurement Code.

7.1.6.2 Public service in France
Statutory definition of public service in France

Articles L. 121-1 et seq. of the French Energy Code outline the framework for the public electricity sector.

Public service missions

Articles L. 121-1 et seq. of the French Energy Code state that the public electricity service must provide a balanced supply of electricity, develop and operate public electricity networks and supply electricity at regulated sales tariffs.

Balanced development of electricity supply mission

The purpose of developing a balanced supply of electricity, which is defined in Article L. 121-3 of the French Energy Code, is to achieve the objectives defined in the multi-year energy programme (PPE). The PPE was defined by decree and sets out priority courses of action for the public authorities for the management of all forms of energy in continental metropolitan France. It must be compatible with the greenhouse gas emission reduction targets set in the carbon budget and the low carbon strategy, which are defined by Decree no. 2020-457 of 21 April 2020.

It defines the quantitative objectives for the plan and the maximum indicative budget for the public funds that will be allocated by the State and its public institutions in order to attain them. It may be broken down by objective and by industry sector.

Decree n° 2020-456 of 21 April 2020 set the multi-year energy programme for 2019-2023 period and 2024-2028 period.

Pursuant to the law, EDF prepared a Corporate Strategy Plan (PSE) presenting the actions that the Company commits to implementing in order to meet the security of supply and electricity generation diversification objectives defined in the first period of the PPE. On 14 October 2020, the PSE was submitted for approval by the Minister for Energy.

The ’Climate and Energy’ Act of 8 November 2019 also specifies the procedure concerning the Strategic Business Plan (PSE), which will have to cover both periods of the Multi-year Energy Programme (PPE), be made public (with the exception of information relating to business secrecy), and present the accompanying measures put in place for employees as a result of the closure of nuclear or thermal power stations. In the event that the Strategic Business Plan (PSE) is incompatible with the Multi-year Energy Programme (PPE), the act provides for a formal notice followed, if necessary, by sanctions.

The mission relating to the balanced development of electricity supply also involves guaranteeing supply in areas that are not interconnected to continental metropolitan France (Corsica, and the overseas départements and territories, as well as some islands in Brittany). Corsica, Guadeloupe, French Guiana, Martinique, Mayotte, LaRéunion, and Saint-Pierre-et-Miquelon will each have their own specific PPE. Other areas that are not interconnected with the continental metropolitan network, except for Saint Martin and Saint Barthélemy, will be subject to a section appended to the PPE for continental metropolitan France.

As a power producer, EDF, along with the other producers, contributes to the performance of this mission.

Mission to develop and operate public transmission and distribution networks

The mission to develop and operate the public electricity transmission and distribution networks, which is defined in Article L. 121-4 of the French Energy Code, involves ensuring:

  • a rational electricity distribution service in France through the public transmission and distribution networks, in a way that is environmentally friendly, the interconnection with neighbouring countries;
  • connection and access to the public transmission and distribution networks, under non-discriminatory conditions.

Public network operators are designated by law to carry out this duty: RTE for transport, Enedis and Local Distribution Companies (Entreprises Locales deDistribution, or LDCs) for distribution, EDF in zones that are not interconnected to the continental metropolitan network.

Mission to supply electricity

The public service mission to supply electricity, which is defined in Article L. 121-5 of the French Energy Code, involves ensuring the supply of electricity throughout France to customers who benefit from regulated electricity sales tariffs.

By law, this mission has been entrusted to EDF and to the LDCs.

The conditions under which customers can benefit from regulated electricity sales tariffs are defined in Articles L. 337-7 et seq. of the French Energy Code.

The mission to supply electricity also includes supplying emergency power to customers connected to public networks, if their supplier is unable to supply power or has had its licence withdrawn or suspended.

Social cohesion

Article L. 121-5 of the French Energy Code provides that the supply of electricity at regulated tariffs must contribute to social cohesion, in particular through the national equalisation of regulated electricity sale tariffs and tariff entitlement.

Article L. 115-3 of the French Social Action and Families Code prohibits electricity suppliers from cutting off electricity supplies to the primary residences of individuals or families during the winter period (from 1 November to 31 March) due to unpaid bills, including through contract termination. Electricity suppliers may, nevertheless, incertain cases, reduce the power supplied, except with regard to customers who benefit from “energy vouchers”. These vouchers are a special means of payment that allow households that are experiencing financial difficulties to cover part of their energy consumption expenses (electricity, gas, fuel oil, etc.) or their expenditure on improving the energy efficiency of their home.

In its capacity as an electricity supplier, EDF is required to maintain electricity supplies under the conditions laid down by said Article and by Decree no. 2008-780 of 13 August 2008 on the procedure applicable in the event of unpaid electricity, gas, heating and water bills, implemented in its amended form pursuant to Decree no. 2014-274 of 27 February 2014 and Decree no. 2016-555 of 6 May 2016.

Public Service Contract

On 24 October 2005, a Public Service Contract was entered into by the State and EDF pursuant to Article L. 121-46 of the French Energy Code. This contract, which details the commitments made by EDF and the State and specifies the rules governing the financial compensation for service commitments, will remain in force until a newcontract is signed, as provided for in the contract itself.