EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Description of the Group's activities

energy services, local management of energy and energy efficiency, under the ■ management of Dalkia and its subsidiaries Tiru and Groom Energy Solutions; R&D and Innovation, as part of EDF Innovation Lab; ■ urban street lighting, via Citelum, a wholly-owned subsidiary of EDF. ■ Nuclear activities in the United States 1.4.5.3.4.1 Nuclear generation: Constellation Energy Nuclear Group (CENG) On 6 November 2009, the EDF group and CEG established CENG. Since the merger between Exelon and CEG, EDF and Exelon have owned stakes of 49.99% and 50.01% respectively in CENG. EDF and Exelon agreed in 2014 to transfer the power plant operating licenses of CENG to Exelon. Pursuant to this agreement, Exelon manages the day-to-day operations of the three CENG nuclear sites (five nuclear reactors).

As part of the transaction, in 2016, CENG paid EDF US$400 million in special dividends and EDF was granted a put option to sell its CENG shares to Exelon at fair market value exercisable between 1 January 2016 and 30 June 2022. CENG is governed by a Board of Directors of ten members, five of whom are appointed by the EDF group and the other five, including the Chairman, by Exelon. CENG’s nuclear activities CENG’s nuclear business is under the control of the US Nuclear Regulatory Commission (NRC). CENG operates five nuclear reactors, spread across three operating sites and representing a combined capacity of 4,240MW. The duration of licences for Units 1 and 2 of Calvert Cliffs, Unit 1 of Nine Mile Point and RE Ginna is 60 years.

1.

Output (2) (TWh) 2017

Reactors

Capacity (in MW)

% interest

company-owned capacity (in MW)

2016 7.18 7.57 5.35 8.29 5.04

Calvert Cliffs 1 Calvert Cliffs 2 Nine Mile Point 1 Nine Mile Point 2 (1)

894 881 620

100 100 100

894 881 620

7.83 7.27 4.89 9.11 4.70

1,287

82

1,056

RE Ginna

575

100

575

TOTAL 33.44 CENG owns 82% of this unit (i.e. 1,056MW of the unit’s total capacity of 1,287MW). The 18% of Unit 2 of Nine Mile Point not owned by CENG belongs to the (1) Long Island Power Authority (LIPA). LIPA receives 18% of the capacity and electricity generated by Nine Mile Point Unit 2, in consideration for payment to CENG of its share of the costs incurred by the unit, and is responsible for its 18% share of the costs of dismantling the unit. CENG and LIPA are each required to provide specific funding for Nine Mile Point 2. These values correspond to the sum of the exact values expressed to one decimal place after rounding. (2) 4,240 4,009 33.80

The assets of EDF represented 2% of the US nuclear generation capacity and 0.4% of total electricity generation in 2017. The principal competitors of EDF on this market are Entergy, AEP, Exelon, Dynergy and NRG. Regulations of the State of New York On 1 August 2016, the New York Public Service Commission (NYPSC) issued an ordinance establishing a new regulation, the Clean Energy Standard (CES), of which one of the aspects is aimed at the preservation of nuclear resources in the State of New York, by the recognition of their zero-carbon electricity generation environmental characteristics. The planned mechanism includes the creation of a programme of zero emission certificates (ZEC: Zero Emission Credit) in order to preserve the low-carbon nuclear generation installations, which comply with the criteria determined by the NYPSC. The New York State Energy Research and Development Authority (NYSERDA) centralises the award of ZECs to eligible power plants via a 12-year contract, administered in six tranches of two years, with effect from 1 April 2017 until 31 March 2029. The payment of ZECs to eligible producers will be made on the basis of the number of megawatt-hour produced, subject to caps and minimum performance requirements. The price to be paid for the ZEC for each tranche will be determined administratively using a formula based on the social cost of carbon estimated by the federal government in 2016. This formula also includes downward adjustments related to price fluctuations in the energy market and capacity. For the first tranche (from 1 April 2017 to the end of March 2019), the price of a ZEC was fixed at $17.48 per MWh generated. For the following tranches, the price will be updated twice annually. Each electricity supplier (“Load Serving Entity”) is required to purchase a ZEC volume consistent with its market share in the State of New York. Recovery of program costs from customers who benefit from regulated tariffs is included in their electricity bills. The NYPSC has established that Ginna and Nine Mile Point nuclear facilities are eligible for the ZEC program. On 18 November 2016, agreements for the sale of ZECs for Ginna and Nine Mile Point were signed with NYSERDA. During the 2017 fiscal year, CNEG recognised $248 million for the sale of ZECs. Several stakeholders have filed petitions with NYPSC requesting a review of CES mechanisms. A petition, aimed at invalidating the ZEC program, was filed on 30 November 2016 in a New York court by environmental groups. This petition

contends that NYPSC is not empowered to set up this program and that it violated, from its implementation, certain technical provisions of New York State law on administrative procedures (SAPA). On 15 February 2017, CENG filed a motion to have this case dismissed. The matter is currently being investigated. On 19 October 2016, a coalition of thermal generation companies filed a complaint before the New York federal district court against NYPSC, alleging that the ZEC program would violate certain provisions of the US constitution, and more specifically that it would interfere with regulatory requirements of the Federal Energy Regulatory Commission concerning wholesale tariffs and that it would constitute severe discrimination against competitors from other states. The State and CENG filed an appeal on 17 November 2017. EDF Trading in North America 1.4.5.3.4.2 EDF Trading operates in the North American markets for electricity (including transmission rights), gas, coal and environmental products. EDF Energy Services is the commercial and industrial retail arm of EDF Trading and provides management and optimisation services to large-scale energy intensive commercial and industrial customers throughout North America (see section 1.4.6.3 “Optimisation and trading: EDF Trading”). EDF Énergies Nouvelles in North America 1.4.5.3.4.3 EDF Énergies Nouvelles, through its subsidiaries EDF Renewable Energy, EDF Renewable Services, EDF EN Canada and EDF EN Mexico, continued its expansion in North America, commissioning 812,5MW gross of wind, solar photovoltaic and biogas capacity in 2017. EDF Renewable Services manages wind and solar projects, both for the Company’s own accord and on behalf of third parties (see section 1.4.1.5.3 “EDF Énergies Nouvelles”). 1.4.5.3.4.4 Dalkia in North America Dalkia, a wholly-owned subsidiary of the EDF group, is present in the North American energy services markets (local management of energy and energy efficiency) with 414 employees. Dalkia operates through its subsidiaries Tiru in Canada, DK Energy US and Groom Energy Solutions in the United States (see section 1.4.6.1.1 “Dalkia”). The principal competitors on this market are Veolia and Constellation.

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DF I Reference Document 2017