EDF_REGISTRATION_DOCUMENT_2017

2.

RISK FACTORS AND CONTROL FRAMEWORK Legal proceedings and arbitration

On 12 April 2016, AET issued proceedings against EDF with the Commercial Court in Paris, after the negotiations failed to result in a settlement. The Paris Commercial Court gave a decision on 4 December 2017 in favour of EDF. The claims of AET were dismissed in their entirety. AET has a period of 3 months from notification in Switzerland to lodge an appeal. Also, AET summonsed EDF on 9 November 2017 in relation to the same contract to claim a share in the benefits of the capacity mechanism. AMF investigation On 21 July 2016, AMF (French Financial Markets Regulator) conducted a search of EDF’s premises, during which EDF provided it with certain documents. This search was part of an AMF investigation into the financial information reported to the markets by EDF since July 2013. It does not in any way mean that an offence has been committed that could be attributed to the EDF group. CRE/REMIT investigation On 1 December 2016, the CRE (Energy Regulation Commission) launched an investigation into whether EDF and its subsidiaries EDF Trading Limited and EDFT Markets Limited were guilty of engaging, since 1 April 2016, in practices that could constitute breaches of the provisions of regulation (EU) no. 1227/2011 of 25 October 2011 on wholesale energy market integrity and transparency (REMIT). On the same day, the CRE opened another investigation aiming to determine whether EDF and its subsidiaries EDF Trading Ltd. and EDFT Markets Ltd. engaged in practices, from 1 January 2014, that could constitute breaches of the provisions of the REMIT regulation. On 14 December 2017, the CRE opened a third investigation aiming to establish whether EDF and any other person that may have been related to it engaged in practices, from 1 January 2017, that could constitute breaches of the provisions of regulation (EU) no. 1227/2011 dated 25 October 2011 on wholesale energy market integrity and transparency (REMIT). They do not in any way mean that an offence has been committed that could be attributed to the EDF group. CNIL investigation On 18 October 2016, CNIL (French Data Protection Authority) conducted an on-the-spot check at EDF’s premises, using its general inspection powers under the 1978 French Act. During this inspection, it asked for information on EDF’s processing of personal data collected from Linky meters, transferred by the distribution network manager Enedis to EDF, and on the methods used to collect and retain proof of customer consent to the processing of detailed data. EDF provided the requested elements. The CNIL closed the procedure by letter sent to the Chairman of EDF on 9 November 2017. Restarting of the Gravelines 2, Dampierre 3 and Tricastin 3 nuclear reactors Since 2015 and following the detection of a flaw in the domes of the Flamanville EPR vessel, EDF has tested its operational nuclear reactors, at the request and under the supervision of ASN. These tests were designed to ensure that the channel heads (meaning the bottom part) of the steam generators used for the 18 reactors of the 900 or 1,450MWe series operated by EDF are not affected by flaws similar to those discovered in the Flamanville EPR vessel, namely a high carbon content that could affect their mechanical toughness. During the inspections of the steam generators, carbon content was detected in certain components, and affecting certain areas only, of twelve reactors fitted with channel heads manufactured by a Japanese company called JCFC (Japan Casting and Forging Corporation), including those used at the nuclear power station in Gravelines (reactor 2), Dampierre (reactor 3) and Tricastin (reactor 3). After several controls conducted by EDF during scheduled shutdowns of these reactors and the provision of additional technical information to ASN proving the fitness for service of the channel heads of these steam generators, ASN consented to the restarting of each of the above-mentioned reactors. In three urgent applications filed with the Council of State on 23 December 2016 along with an ultra vires application (recours en excès de pouvoir), the Observatoire du Nucléaire association asked the court to suspend the effects of the ASN’s consent to the restarting of the three reactors referred to above. As per ordinance dated 18 January 2017, the Council of State dismissed these urgent applications. The examination on the merits of the ultra vires application by the Council of State is still ongoing.

brought an action before the European Union General Court against the European Commission’s decision. On 26 September 2016, the Court dismissed the second action on the grounds that the applicants had failed to show that they were individually affected by this decision or that it could have a significant adverse effect on the competitive position of the companies in question in the electricity market in the EU. On 9 December 2016, Greenpeace Energy appealed against this ordinance before the European Union Court of Justice. This order was confirmed by the European Court of Justice on 10 October 2017. As these applications have no suspensive effect, EDF, the UK government and CGN (China General Nuclear Power) signed all of the HPC-related agreements, including the contract for difference, on 29 September 2016. Action against the final investment decision for the project Hinkley Point C Application to the Regional Court in Paris by EDF SA’s Central Works Council Authorised in an order issued on 20 June 2016, EDF SA’s central works council (hereinafter the “CCE”) filed an urgent application against EDF with the Presiding Judge of the Regional Court in Paris, to be heard on 22 September 2016. In particular, the CCE asked the Presiding Judge of the Regional Court in Paris, ruling in urgent proceedings, to order EDF to provide a certain number of documents and/or information to the CCE, to extend the consultation period for EDF’s CCE and to order EDF not to implement the Hinkley Point C project, and this was challenged by EDF. In a decision issued on 27 October 2016, the Presiding Judge of the Regional Court in Paris, ruling in urgent proceedings, held that the applications filed by the CCE were inadmissible and ordered it to pay €1,500 to EDF SA under Article 700 of the French Code of Civil Procedure. The CCE appealed this decision and a hearing took place before the Court of Appeal in Paris on 9 March 2017. A preliminary ruling on constitutionality (question prioritaire de constitutionnalité – QPC) challenging the compatibility of the law n° 2013-504 dated 14 June 2013 regarding employment protection which sets the conditions under which procedures for the information and consultation of employees representatives have to be conducted in this type of cases has been filed by the CCE. By decision dated 17 May 2017, the Court of Appeal ruled that the QPC raised by the appellants was not lacking in serious character, but did not send it to the Court of Cassation, as it had already had a QPC referred to it on the same question and therefore decided to stay the proceedings while waiting for its decision. Note that the Constitutional Council, in its decision of 4 August 2017, validated the provisions of the French Labour Code that were disputed relative to the prearranged deadline. The procedure has therefore resumed before the Paris Court of Appeal. A decision should be given during 2018. Greenpeace Greenpeace declared that on 24 November 2016, it lodged a complaint against EDF and its Chairman & Chief Executive Officer with the National Financial Prosecutor for market-related offences, claiming that they presented an inaccurate balance sheet and disseminated misleading information. This complaint was lodged following the work conducted by AlphaValue on EDF’s position, at the request of Greenpeace. EDF challenged AlphaValue’s findings and noted that its accounts had been audited and certified by its Statutory Auditors and that the cost of decommissioning its operational nuclear facilities had also been audited on behalf of the Ministry of the Environment, Energy and the Sea, a summary of which had been published on 15 January 2016, which on the whole backed up the Company’s estimates. EDF lodged a criminal complaint on 25 November 2016 to draw the consequences of these false allegations and misleading information. Application to the Commercial Court in Paris filed by AET Within the framework of a 20-year basic electricity supply agreement entered into on 20 December 2007, for an annual capacity of 70MW, Azienda Elettrica Ticinese (“AET”), a public company of the Canton of Ticino asked the court to order a renegotiation of energy prices, claiming that the market prices had fallen below the prices agreed in the agreement since 2014 and at certain periods. As the prices in the agreement were non-negotiable and there was no hardship clause, EDF proposed to adjust the prices, in compliance with the original economic balance, stressing that it was under no obligation to renegotiate the prices.

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EDF I Reference Document 2017