EDF, which benefited from a settlement procedure in this case, made two commitments: firstly, to make its Blue TRV customer file available to alternative electricity suppliers who requested it, and secondly, to separate the telephone subscription process for Blue TRV customers and prospects from that of customers and prospects with market offers.
As indicated in note 17.3 to the consolidated financial statements for the year ended 31 December 2022 (see section 6.1), the ADLC, in a decision dated 18 January 2022, rejected the complaint and the request for protective measures filed against it by ANODE (National Association of Energy Retailers). This complaint related to EDF’s refusal to maintain access to the database of non-residential customers affected by the end of the Blue TRVE and having automatically switched, on 31 December 2020, to a tariff exit contract. However, the ADLC considered that the facts put forward by ANODE were not supported by sufficient evidence to substantiate the existence of the practices complained of. ANODE eventually appealed the Authority’s decision on 1 March 2022 and, at the same time, EDF filed a voluntary intervention statement on 30 March 2022. In a decision dated 3 November 2022, the Paris Court of Appeal ruled EDF’s voluntary intervention to be inadmissible. On 30 November 2022, EDF filed an appeal with the French Supreme Court (Cour de Cassation) against this ruling of inadmissibility by the Court of Appeal. The substantive appeal proceedings against the ADLC decision of 18 January 2022 is still ongoing.
In the context of the shareholders’ agreement of TNPJVC Guangdong Taishan Nuclear Power Company Limited, whose purpose is the construction, operation, maintenance and management of the Taishan nuclear power plant with a capacity of two times 1,750MW, an arbitration procedure “in interpretation” was initiated in January 2021 by EDF against its partners China General Nuclear Power Co. ltd, Guangdong Nuclear Power Investments Co. ltd and Taishan Nuclear Power Industry Investments Co. Ltd. (together CGN), before the Singapore ICC.
The disagreement relates to accounting policy and in particular the duration of the depreciation of the plant, with EDF arguing that the duration should be consistent with the life of the plant, while CGN believes that it should be limited to the duration of TNPJVC.
The award is expected in 2023.
On 13 January 2022, the French government announced exceptional measures to limit the increase in electricity prices for consumers in 2022. These measures mainly include the provision by EDF to eligible suppliers of an additional 20TWh over the period from 1 April to 31 December 2022 at a price of €46.20/MWh.
The terms of implementation of this measure were specified by a Decree dated 11 March 2022 and by 4 Orders. The decree stipulates that, in order to benefit from these additional volumes for a price of €46.20/MWh, eligible suppliers will have to sell to EDF a volume equivalent to the one granted to them by EDF under this additional allocation, at a price equal to the average of wholesale market quotations recorded between 2 and 23 December 2021 of the calendar base product for electricity delivery in mainland France for the year 2022, i.e. €256.98/ MWh.
As this measure considerably impaired the Company, EDF applied for review to the French government in May 2022, requesting that the Decree of 11 March 2022 and the corresponding Orders be rescinded. As the absence of a response from the French government within the two-month period constituted an implicit decision rejecting the application for review, EDF filed an appeal with the French Council of State (Conseil d’État) for misuse of power on 9 August 2022 against the Decree and the corresponding Orders.
At the same time, EDF sent the French Prime Minister a preliminary request for compensation for the losses resulting from the implementation of the governmental measure in question, estimated at €8.34 billion at the end of June 2022. As the absence of a response from the French government within the two-month time limit gave rise to an implicit decision to reject the request for compensation, EDF lodged an appeal for compensation with the Paris Administrative Court on 27 October 2022 to obtain full compensation from the French government for its losses under this scheme.
In a decision handed down on 3 February 2023, the Conseil d’État rejected EDF’s appeal. The compensation proceedings initiated by EDF before the Paris Administrative Court to obtain full compensation from the State for the losses suffered by EDF are continuing.
Associations defending the interests of EDF minority shareholders have initiated several legal proceedings in connection with the simplified tender offer (“OPAS”) for EDF shares filed by the French government with the AMF on 4 October 2022 stipulating a price of €12 per share and €15.52 per OCEANE.
On 24 November 2022, the Supervisory Board of the employee’s mutual fund (“FCPE Actions EDF”) and Énergie En Actions filed an action for speedy resolution on the merits before the Paris Commercial Court seeking the reversal of the resolution of the Board of Directors of EDF of 27 October 2022 which had issued an opinion on the French government’s offer; this request was rejected by the Paris Commercial Court on 16 December 2022.
In addition, on 2 December 2022, the same two associations, joined by the Association pour la Défense des Actionnaires Minoritaires (Association for the Defence of Minority Shareholders or “ADAM”), filed an action before the Paris Court of Appeal seeking to overturn the French Financial Markets Authority’s compliance decision of 22 November 2022 declaring the French government’s offer to be compliant with the applicable legal and regulatory provisions. Pursuant to Article L. 621-30 of the Monetary and Financial Code, the judgment of the Paris Court of Appeal should be rendered within five months of the filing of the appeal, i.e. by early May 2023 at the latest. At the same time, they applied for a stay of execution of the compliance decision, pending the outcome of their appeal to have the decision overturned. On 24 January 2023, FCPE Actions EDF, Énergie en Actions and ADAM withdrew from the stay of execution proceedings following commitments made by the French government(1).
As an undertaking in which the French State holds a majority share (see section 7.2.9 “By law or statutory provisions preventing a change in control over the Company”), 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 French 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 Court of Auditors (Cour des Comptes) and Parliament. Thus, in addition to the control performed by the Statutory Auditors, the Company’s accounts and management and, where applicable, those of its directly-held majority subsidiaries, fall under the control of the French General Accounting Office, in accordance with Articles 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 French State, or the dilution of the French State’s stake in EDF’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.
Articles L. 121-1 et seq. of the French Energy Code outline the framework for the public electricity sector.
(1) See the press release of 25 January 2023 “Update on the timetable of the simplified public tender offer for the equity securities of EDF”.
