EDF_REGISTRATION_DOCUMENT_2017

1.

PRESENTATION OF EDF GROUP Legislative and regulatory environment

Public service missions Articles L. 121-1 et seq. of the French Energy Code state that the purpose of the public electricity service is, inter alia, to guarantee electricity supply throughout French territory, while acting in the general interest, to develop and operate public electricity networks and to supply electricity at regulated sales tariffs and at the basic necessity tariff. Balanced development of electricity supply mission The purpose of the balanced development of electricity supply mission, which is defined in Article L. 121-3 of the French Energy Code, is to achieve the objectives defined in the multi-year energy plan (PPE), which Law no. 2015-992 of 17 August 2015 on Energy Transition for Green Growth substituted for the multi-year generation investment plan (PPI). 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. 2015-1491 of 18 November 2015, pursuant to the aforementioned Law of 17 August 2015. The PPE contains sections on (i) the security of supply, (ii) improving energy efficiency and reducing primary energy consumption, in particular fossil fuel, developing the utilisation of renewable energies and energy recovery, the balanced development of energy networks, storage and conversion, and managing the demand for energy, (v) the preservation of consumer purchasing power and the competitiveness of energy prices, in particular for undertakings that are exposed to international competition and (vi) the evaluation of the needs for professional skills in the field of energy and how training courses can be adapted to these needs. It defines the quantitative objectives for the plan and the maximum indicative budget for the public funds that the State and its public institutions will mobilise in order to attain them. This budget is defined in terms of commitments and accomplishments. It may be broken down by objective and by industry sector. The first PPE must cover an initial period of three years (2016-2018), then a second period of five years (2018-2023). Subsequent PPEs will be drawn up for two, successive five-year periods. The first PPE was defined by Decree no. 2016-1442 of 27 October 2016 on the multi-year energy plan. Pursuant to the law, on 6 April 2017, 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. The PSE was submitted for approval by the Minister for Energy who, after reviewing its compatibility with the PPE, asked EDF to develop a new plan. The balanced development of electricity supply mission also involves guaranteeing the supply of 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, Guyana, Martinique, Mayotte, La Réunion, 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. The PPE plan, covering the 2019-2023 period, will be debated during the first half of 2018 (Decision no. 2017/41/PPE/1 of 6 September 2017 relating to the draft PPE revision). The adoption of the PPE and the publication of the corresponding decree are expected by the end of 2018.

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. These are the public network operators designated by law who are responsible for this mission: RTE for transport, Enedis and Local Distribution Companies (Entreprises Locales de Distribution, 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 involves the application of the special “basic necessity” rate (TPN). This public service mission is assigned to all electricity suppliers. The Law of 17 August 2015 on Energy Transition for Green Growth provides for the gradual replacement of the TPN by “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. Pursuant to Decree no. 2016-555 of 6 May 2016 on energy vouchers, the energy voucher system has been trialled since 20 May 2016 in the French départements of Ardèche, Aveyron, Côtes-d’Armor and Pas-de-Calais and should be rolled out fully by 1 January 2018. The mission to supply electricity moreover includes supplying emergency power to customers who are connected to the public networks. The relevant administrative authority designates emergency suppliers through one or more tendering procedures. As the implementing regulations had not yet been adopted on the date of this Reference Document, this provision has still not entered into force. 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, in certain cases, reduce the power supplied, except with regard to customers who benefit from the TPN or “energy vouchers”. 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 that is 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. Public Service Contract On 24 October 2005, a Public Service Contract was signed 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 new contract is signed, as provided for in the contract itself.

80

EDF I Reference Document 2017