TotalEnergies agrees to cut small business contracts
TotalEnergies wants to look good. While Emmanuel Macron called on energy suppliers to renegotiate contracts deemed excessive for small businesses, the energy giant announced measures in favor of VSEs, which are being stifled by high electricity prices. Especially those who signed an electricity supply contract in the last months, when the market prices were at their highest. It intends to allow them to renegotiate their contracts to take advantage of the drop in prices in wholesale markets seen in recent days.
TotatEnergies is the first electricity supplier to make this commitment public, even before the start of a meeting in Bersi with energy companies to set a threshold for the renegotiation of electricity supply contracts for artisans. For small electricity suppliers, a meeting that promises to be as revitalizing as the results can be overwhelming.
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The meeting, scheduled to start at 4:00 p.m., follows remarks by Emmanuel Macron on Thursday, reacting to numerous warnings launched by artisans, especially bakers, due to the explosion of electricity bills. During the traditional Epiphany cake ceremony, the President announced that all artisans and very small businesses (companies with an annual turnover or balance sheet of less than 2 million euros and less than 10 employees) can renegotiate the contract. “Excessive Contracts” power supply under conditions yet to be determined.
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It should be recalled that between June and December 2022, electricity prices in the markets continuously exceeded 400 euros/MWh, and at the end of August, the peak was above 1100 euros/MWh. Since then, they have dropped considerably. Thus, electricity supply contracts for a year’s supply in the French wholesale market were being negotiated on Friday at around 225 euros per megawatt hour.
Updating the payment schedule and contract amendments
“Given the drop in electricity prices at the beginning of 2023, TotalEnergies Electricity and Gaz France will publish on Monday an update of the Horizon Electricity price list, which will take into account the recent drop in electricity prices. electricity, tax for 320 megawatt-hours at the rate of € except (MWh)”the oil giant writes in a press release that it sells electricity to 5.7 million sites in France.
The multinational company also says it is ready “Initiate price changes with VSEs that have signed a Horizon agreement between August 1 and November 30, 2022.” The company thus offers “Reduce these contracts to an average annual price of 320 euros per MWh excluding VAT, after taking into account the amortization mechanism imposed by public authorities in favor of VSEs”.
It should be recalled that the state has undertaken to automatically amortize about 20% of the account for small businesses. Hence, these VSEs will benefit from a rate equivalent to the Horizon rate offered from January 2023. The relevant VSEs who request it will benefit from these new tariffs with retroactive effect from the date of implementation of the contracts. “, the company continues.
Small suppliers are worried
“Aware of the great impact of electricity prices on the economic activity of VSEs and for the sake of national solidarity, TotalEnergies Electricity and Gaz France want to mobilize to overcome the challenges caused by this energy crisis like never before”the major argues.
As with the fuel discount, the multinational company, which has enjoyed huge profits in previous quarters, is keen to show that it cares about the people most vulnerable to the energy crisis. A possible gesture for the big electricity suppliers with strong backs but more difficult for the smaller suppliers… with the risk of damaging their image a bit more.
“If we have bought electricity at €800 per MWh to supply a professional customer, and the latter wants to renegotiate to €400 due to a market downturn, that makes the model unusable. “, Argued, yesterday, a modestly sized alternative supplier. In fact, suppliers buy the energy that the customer will need during the proposed period, not when they actually consume it, but in advance at the time of the contract.
“Perhaps giants like EDF, Engie or TotalEnergies will be able to absorb these losses, but others will not,” he insisted.