EDF / 2018 Reference document

RISK FACTORS AND CONTROL FRAMEWORK Legal proceedings and arbitration

The ADLC and EDF appealed to the Court of Cassation. By a ruling dated 27 September 2017, the Court of Cassation rejected EDF’s arguments on appeal and annulled the 2015 ruling of the Paris Court of Appeal in that it dismissed the aggravating circumstance arising from repeated breaches. The Court of Cassation therefore referred the case back to the Paris Court of Appeal on the single question of determining the increase in the fine due to repeated breaches. In a decision dated 27 September 2018, the Paris Court of Appeal confirmed to EDF the increase of the fine by €1.9 million for recidivism. This decision, stipulating a fine of €7.9 million, is now final. Litigation by photovoltaic operators for compensation On 13 May 2014, Solaire Direct issued proceedings against EDF, EDF EN, EDF ENR and EDF ENR Solaire before the Commercial Court in Paris seeking compensation for the damage it claims to have suffered as a result of the practices condemned by the ADLC in its decision issued on 17 December 2013, assessed by Solaire Direct at €8.7 million. On 16 December 2014, the Court ordered a stay of proceedings pending the judgment to be issued by the Court of Appeal in Paris on EDF’s appeal against the above-mentioned ADLC decision. In a judgement dated 21 February 2017, the Commercial Court ordered a new stay of proceedings until the ruling of the Court of Cassation on the appeal filed by the ADLC against the decision dated 21 May 2015. The Court of Cassation gave its ruling (see the “Solaire Direct” dispute above) and the case was re-entered on the case list and Solaire Direct estimates its damages at €5.2 million. These proceedings are still pending. On 11 December 2014, Apem Énergie, Arkeos, Biosystem-AD, Cap Eco Énergie, Cap Sud, Isowatt, PCI-m, Photen and Sol’Air Confort started proceedings against EDF, EDF ENR and EDF ENR Solaire before the Commercial Court in Paris on the same grounds. They claim alleged damages of €18.3 million. By judgement dated 27 September 2017, the court rejected the action of the plaintiffs on the grounds of limitation of action by lapse of time. Only six of the eleven companies appealed the decision. Total damages and interest claimed now stand at €9.4 million. These proceedings are still pending. Photovoltaic producers litigation The announcement by the public authorities in autumn 2010 of an upcoming decrease in photovoltaic electricity purchase prices triggered a massive increase in requests for connections (this rush being explained by the fact that the date on which a full application was submitted would then determine the applicable price). Several successive ministerial orders were then issued reducing purchase prices. As these reductions were not sufficient to stem the rush of applications for contracts, the government, by decree dated 9 December 2010, suspended the conclusion of new contracts for a period of three months and stated that if the financial and technical proposal for a request had not been approved before 2 December 2010, a new connection request would need to be submitted at the end of this three-month period. In this context, a number of producers, having lost their right to the feed-in tariff in force before the moratorium, have instituted compensation proceedings against EDF distribution network operator (DNO) in the non-interconnected zones (NIZ) and Enedis, DNO in metropolitan France, on the grounds that the DNOs did not issue the technical and financial proposals relating to the connection within a time frame which would have enabled them to benefit from the more advantageous electricity purchase conditions (see section 2.4.2 "Procedures concerning EDF subsidiaries and holdings - Enedis") By order dated 15 March 2017, the European Court of Justice confirmed that the orders of 10 July 2006 and 12 January 2010 fixing the purchase prices of electricity of photovoltaic origin constituted “intervention by the State or through the resources of the State”, one of the four criteria for qualifying as state aid. It reiterated that such aid measures implemented without having been previously notified to the Commission are illegal. It is now for the national jurisdictions to implement the consequences of this, particularly by ruling out the application of these illegal orders. Several decisions in favour of Enedis have been issued since the beginning of 2018 on this subject. In particular, the Versailles Court of Appeal dismissed, at the beginning of July 2018,150 producers, either because Enedis' fault has not been established or because there is no causal link between Enedis' fault and the producers' prejudice, or by considering that the prejudice of producers is not compensable in so far as the 2006 and 2010 tariff orders are illegal, in the absence of notification to the European Commission under the control of State aid. A large majority of rulings have been appealed to the Court of Cassation.

Similarly, EDF has obtained a number of favourable decisions in recent months considering the damage to producers as irreparable because it is illegal. In parallel with the indemnity disputes pending before the civil courts, EDF and Enedis solicited the benefit of their Civil Liability insurance policy. Insurers refused to apply their guarantee. The Court of Cassation ruled in a decision dated 9 June 2015, (Green Yellow) that Enedis’ liability was to be covered by its insurers and that the DNO was liable. Following this judgement, Enedis and EDF summoned the insurers in April 2017 to have the existence of two partial serial claims recognised by the courts. Hence, if the courts confirmed the existence of two partial serial claims, there would be a single deductible and coverage cap for each of them for claims with the same technical cause. SUN’R On 21 June 2012, SUN’R filed a complaint against EDF and Enedis, along with an application for protective measures (mesures conservatoires), with France’s ADLC. SUN’R accused Enedis of delays in the procedure for the connection of its photovoltaic facilities and EDF of delays in the implementation of the mandatory purchase contracts and the payment of the related invoices. In addition, according to SUN’R, EDF ENR benefited from special treatment for the connection of its facilities by Enedis and the payment of its invoices by EDF. In a decision of 14 February 2013, the ADLC issued a decision rejecting all the applications for protective measures made by SUN’R but the proceedings on the merits are still ongoing. On 12 January 2018, ADLC’s investigation services sent to the parties a discharge proposal, concluding that there were no anti-competitive practices by EDF, Enedis and RTE. On 4 July 2018, the ADLC closed the proceedings with a decision dismissing the case. At the same time as its complaint before the ADLC in 2012, SUN’R filed on 29 August 2012 a petition at an urgent applications hearing for expert assessment and provisional damages before the Administrative Court in Paris including a claim for provisional compensation of €1 million for EDF and €2.5 million for Enedis. By order of 27 November 2012, the urgent applications judge (juge des référés) at the Administrative Court in Paris dismissed this petition. On 30 April 2015, SUN’R summoned Enedis and EDF SA before the Commercial Court of Paris seeking compensation for the loss allegedly caused to it by the delays in the procedure to connect its proposed solar energy plants to the electricity distribution network. It has asked the Court to stay the proceedings and claims, pending ADLC’s decision on the merits of the case, a provisional amount of €10 million to be applied against its loss. In a judgment issued on 7 November 2016, the Commercial Court in Paris dismissed SUN’R’s application for provisional damages and issued a stay of proceedings pending ADLC’s decision on the merits of the case. On 24 November 2015, Sun West, Azimut 56 and JB Solar initiated proceedings against Enedis and EDF before the Commercial Court of Paris on the same grounds. They are currently claiming almost €4 million to compensate their alleged loss but have asked the Court to stay the proceedings pending ADLC’s decision on the merits of the case. In a judgement dated 4 December 2017, the Paris Commercial Court dismissed the application by Sun West, Azimut 56 and JB Solar for provisional damages and issued a stay of proceedings pending ADLC’s decision on the merits of the case. This decision was rendered on 4 July 2018, the date on which the ADLC adopted a decision to dismiss the case (definitively). The behaviours denounced by the distraining party are therefore deemed not to have been adopted. The Commercial Court of Paris, by its ruling dated 10 December 2018, acknowledged SUN'R's withdrawal from its indemnity action and by its ruling dated 12 December 2018, acknowledged the withdrawal of Sun West, Azimut 56 and JB Solar. This case is therefore definitively closed. Eole Miquelon On 20 July 2015, Eole Miquelon filed a complaint with ADLC on the practices implemented in the electricity industry in Miquelon. Eole Miquelon operates a wind farm on the island and claims that EDF has restricted the use of wind energy produced from its facilities in order to give preferential treatment to the electricity it produces directly. Eole Miquelon claims it will be forced to close its operations on the island because of these practices. On 31 January 2018, the ADLC adopted a decision acknowledging the withdrawal of the distraining party and closing the case.

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EDF I Reference Document 2018