Under the Euro Medium Term Note Programme ... - Finance - EDF

Risk Factors
and critical infrastructure will not become more restrictive, which could generate additional
investments or costs for the EDF Group.
Any one of these events may have material, negative consequences on the EDF Group’s
image, activities, results and financial position.
A significant share of the EDF Group’s revenue is generated from activities subject to
regulated rates, and changes in such rates may have an impact on the EDF Group’s
results
In France, a significant share of EDF Group’s revenue depends on regulated rates that are
set by the public and/or regulatory authorities (integrated regulated sale rates and TURPE).
This method of setting rates with the participation of regulatory authorities also applies in
other countries where the EDF Group operates.
The public and regulatory authorities may decide to limit or block rate increases, yet require
quality of service to remain unchanged. These authorities may also change the conditions of
access for such regulated rates. For example, the NOME law of 7 December 2010 grants
suppliers in competition with EDF access to ARENH at an initial price set at €40/MWh on 1
July 2011, then €42/MWh on 1 January 2012, by the Ministers in charge of the economy and
energy portfolios, but the mechanisms governing these price changes are still subject to
uncertainties. The NOME law also provides that medium and large businesses will cease
benefiting from the regulated rates as from 1 January 2016, but individuals and professional
businesses will continue to qualify. Individuals and professional business customers will be
allowed to change between market-based offers and regulated rates for an indefinite time,
but medium and large businesses will be entitled to do so only until 31 December 2015.
The EDF Group cannot guarantee that the statutes and regulations concerning such
reversibility rights will not be extended beyond what is currently anticipated, or that other rate
systems will not be adopted. The EDF Group also cannot guarantee that the regulated or
purchase rates will always be set at a level which would allow it to maintain its short-,
medium- or long-term investment capacity or its property interests, while ensuring a fair
return on the capital invested by the EDF Group in its generation, transmission and supply
assets.
EDF has certain obligations, in particular public service obligations, that are
remunerated by mechanisms that may not provide complete compensation for
additional costs incurred in connection with such obligations, or that are subject to
change
The public service contract entered into by the French government and EDF on 24 October
2005 specifies the objectives and terms for performing the public service obligations that
EDF is appointed to perform under Article 2 of law nº 2000-108 of 10 February 2000, and
also sets out the mechanisms under which EDF is compensated for the performance of
these obligations.
EDF cannot be sure that the compensation mechanisms provided in the laws and regulations
applicable to it regarding remuneration for these public service obligations and the adoption
of regulated rates will fully compensate additional costs incurred to perform such obligations
and/or adopt such rates. Furthermore, EDF cannot guarantee that these compensation
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