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Working paper / Energy

Academic Opinion of Economic Scholars on Champsaur Commission's Paper

Author(s): LÉVÊQUE François, GLACHANT Jean-Michel

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ABSTRACT

This paper is the joint position taken by nine academics on the French debate introduced by the “Rapport de la commission présidée par Paul Champsaur sur l’organisation du marché de l’électricité” on April 2009. In order to reform the French reform, the Champsaur commission has made three main recommendations: (i) withdrawing the current retail administered tariff for business (ii) maintaining retail administered tariffs for households (iii) introducing a wholesale administered tariff on electricity from nuclear power generation. This rapport invites discussions on the French market design. Our academic joint position challenges these propositions. The authors welcome to the fact the commission proposes to abandon the tariff for business as very complex to implement (and hence costly) and freezes competition. However, authors have reservations about the other two recommendations. They are mainly based on the classical two-prong economic test to support a new regulation: (i) assessing its costs and benefits to ensure the latter offsets the former; (ii) comparing the recommended regulation with alternative instruments to verify that it is the best choice.