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French gas giant Engie announces €100 average discount for 880,000 households

French gas supplier Engie has promised an average €100 discount later this year for some 880,000 customers on low incomes.

French gas giant Engie announces €100 average discount for 880,000 households
(Photo by Daniel ROLAND / AFP)

The group’s CEO, Catherine MacGregor, also announced “a support fund of €60 million for small and medium-sized businesses”, in an interview with Le Parisien the day before the company was due to announce its results for the first half of the year.

Engie made a profit of €3.5 billion in the first quarter of 2022 and there are calls from many French politicians for a windfall tax.

“We are aware of the inflationary reality and concerned about the difficulties encountered by our customers, whether households or businesses,” MacGregor said, adding that the measure for householders will cost the energy giant €90 million.

The discount will take effect in November and will be applied to all households who receive the chèque-energie from the government, a €100 payment given to low-income households.

McGregor said that Engie had “largely anticipated” a large drop in gas supplies from Russia – the Nordstream pipeline to Europe is currently operating at 20 percent capacity

“Storage filling in France is progressing well,” McGregor said. “We are now at 77 percent, and we will be at 95 percent, or even 100 percent, by the end of the year. We are using all levers at our disposal. Whether it’s with the contracts we have with other suppliers or liquefied natural gas, we will secure the volumes we need to serve our customers this winter.

“The entire European energy system is under stress. This includes gas, electricity production, the French nuclear fleet and hydroelectric production. We need to be less wasteful and create more room for manoeuvre by diversifying our supply sources, filling our reserves, developing biomethane projects and accelerating the energy transition. 

“We are lagging behind in wind power, both onshore and offshore. Its development must be done with the adoption by the citizens. We must co-construct these projects, which is the meaning of our TED (Transition Energétique Durable) label, which integrates stakeholders upstream.”

McGregor moved to allay fears of power shortages this winter, but said that efforts to cut unnecessary use now will help conserve stocks.

“We are not anticipating such a disaster scenario,” she said. 

“We know that if the winter is very cold, the demand for energy will be higher. That is why we all need to be energy sober now. A certain number of common sense initiatives are well known: reduce lighting and temperature, unplug appliances that are not needed, use the eco program for household appliances and make sure that they do not consume too much energy… 

“Businesses, on the other hand, must show energy efficiency and be vigilant about air conditioning and heating: every degree counts. I am convinced that in the long term, the energy transition will succeed through a combination of green energy, electricity and gas, and sobriety.”

Engie’s discount announcement follows that of fuel supplier TotalEnergies, which announced a discount of €0.20 per litre of fuel between September and November at all its service stations. That discount will then drop to €0.10 until the end of the year.

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FRENCH POLITICS

What now for France’s public service broadcasters after TV licence axed?

Questions remain over the future of France’s public service broadcasters after bill abolishing annual €138 licence fee leaves future funding plans for the broadcasters vague.

What now for France's public service broadcasters after TV licence axed?

Households in France will no longer have to pay for an annual TV licence after parliament approved scrapping the annual €138 per household charge, meaning that this November the usual tax bill will simply not arrive.

The measure is part of a €65 billion package of financial aid to help people cope with the spiralling cost of living.

Revealed: What will you get from the cost-of-living package?

But abolishing the TV licence was not without its critics, while questions remain over the future funding of France’s public service broadcasters.

The €138 annual fee has been used to finance the TV and radio channels in the public sector.

It raises €3.7 billion a year – 65 percent of which is allocated to France Télévisions, 15.9 percent to Radio France, 7.5 percent to Arte, 7 percent to France Médias Monde, 2.4 percent to audiovisual archive agency INA and 2.1 percent to TV5 Monde, a Senate report revealed.

TV licence funding currently supplies about half of the total turnover of France Télévisions, while the rest comes from advertising.

Proposing the licence fee cut, president Emmanuel Macron said he wanted to define a budget “with multi-year visibility”, with fixed financing amounts. But, no long-term concrete plans are currently in place.

The government has said there is no question of public service broadcasters losing money, insisting it will replace the licence fee “euro for euro” with public subsidies financed by VAT. 

This model, however, is guaranteed only to the end of 2024 – after which the government will have to present different financing strategies to Parliament.

Despite the bill passing, Senators lined-up to criticise the absence of a concrete long-term funding strategy.

Les Républicains’ Jean-Raymond Hugonet said the plans were being pushed through too quickly for populist reasons and argued it was a change that should have come with a definitive public broadcasting strategy. 

Socialist senator David Assouline said Malak had “hailed the glory” of French public broadcasting but was “creating the conditions to weaken it”.

Assouline has long been a critic of the plan. “From the moment there is no more dedicated funding and we have to draw from the general state budget, we will end up being told that it all costs too much and that we have to cut expenses, close a channel, or even, as we already hear sometimes, privatise,” he told a demonstration against the plans in July.

Concerned staff at France Télévisions and Radio France went on strike at the end of June in protest at the changes, saying that getting rid of the fee amounted to a “threat” to the independence of the channels in question. 

Unions and cultural experts have expressed concern about the possibility that broadcasters’ independence would be eroded if financing was at the whim of the government of the time. Bruno Patino, the head of Arte France, has told AFP that he feared for his channel’s future if the funding model changed.

Another critic, cultural economist Françoise Benhamou told Le Monde: “The disadvantage of budgeting is that we are much less protected from the vagaries of politics, since the latter decides on the budget.”

And LFI MP and journalist Clémentine Autain said in July: “This is a highly political and dangerous measure. Democracy needs a strong public audiovisual service, with a fair financing system that guarantees independence.”

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