EDF_REGISTRATION_DOCUMENT_2017

RISK FACTORS AND CONTROL FRAMEWORK Legal proceedings and arbitration

Flaws affecting nuclear power stations Following the discovery of a flaw affecting a steam generator in Fessenheim reactor 2 manufactured at the factories in Le Creusot (AREVA NP), Greenpeace and six other associations lodged a complaint against EDF and AREVA NP with the Public Prosecutor’s Department in Paris on 14 October 2016 for four offences, including use of falsified documents, reckless endangerment and late reporting of an incident. In parallel, on 4 May 2016 the Observatoire du Nucléaire association filed a complaint with the Public Prosecutor’s Department in Chalon-sur-Saône for forgery, use of falsified documents and endangerment against AREVA following the audit conducted on the activities of the factory in Le Creusot which revealed, in particular “irregularities in the manufacturing control process for approximately 400 parts produced since 1965, around fifty of which appear to be in service in nuclear power stations in France.” ASN also declared that on 25 October 2016, it had reported the irregularities discovered at the factory in Le Creusot to the Public Prosecutor’s Department in Chalon-sur-Saône under Article 40 of the French Code of Criminal Procedure (Code de procédure pénale). Flamanville 3 – action against the modified decree giving construction approval Three appeals have been filed against the amended construction authorisation decree for Flamanville 3. The first two were filed on 23 May 2017, before the Council of State, and were initiated by several non-profit organisations (one by CRILAN and the other by "Notre Affaire à tous") directly against the decree of 23 March 2017 amending the construction authorisation decree for Flamanville 3 and changing the commissioning time limit. At the hearing held on 8 March 2018, the public rapporteur concluded that both appeals had been dismissed. The third appeal was filed on 21 August 2017, also before the Council of State, by several non-profit organisations including Greenpeace, CRILAN and "Notre Affaire à tous" against the implicit refusal of the Prime Minister to revoke the amended construction authorisation decree for Flamanville 3. Flamanville 3 – request for a judicial appraisal concerning the anomaly on the steel and the bottom of the reactor vessel By petition brought before the Paris Regional Court on 24 August 2017, the Observatoire du Nucléaire requested the appointment of a court expert, notably to obtain an opinion on the anomaly in the reactor vessel at Flamanville 3. By order dated 31 October 2017, the Regional Court dismissed the petition. As it was not appealed, this judicial decision became definitive. Flamanville 3 – action against the opinion of the Nuclear Safety Authority dated 10 October 2017 On 30 November 2017, several associations, including the “Sortir du nucléaire” network and Greenpeace France, introduced proceedings before the Council of State to request the cancellation of the opinion by the Nuclear Safety Authority dated 10 October 2017 relative to the anomaly in the steel in the bottom and lid of the Flamanville 3 reactor vessel. The Nuclear Safety Authority considered that this anomaly was not likely to compromise the commissioning of the reactor vessel providing specific checks were carried out during the operation of the facility. Fessenheim On 14 March 2017, the Association Trinationale de Protection Nucléaire (ATPN), represented by Ms Corinne Lepage, began proceedings before the Council of State to request the cancellation, firstly, of decision no. 2016-DC-0551 by the Nuclear Safety Authority dated 29 March 2016, fixing the instructions relative to the procedures for the sampling and consumption of water, the discharge of effluents and monitoring the environment at the Fessenheim power plant and, secondly, decision no. 2016-DC-0550 by the Nuclear Safety Authority fixing the limit values for discharges to the environment of effluents from the same facility. In addition, two trade union organisations (FO and CFE-CGC) as well as several local authorities, including the municipality of Fessenheim, began proceedings respectively in May and July 2017 before the Council of State to request the cancellation of decree no. 2017-508 dated 8 April 2017, repealing the authorisation to operate the nuclear power plant at Fessenheim. Regulated electricity sales tariffs – appeal against the decision of 27 July 2017 On 24 August 2017, ENGIE began proceedings before the Council of State against the decision dated 27 July 2017 relative to regulated electricity sales tariffs. On

27 September 2017, the national association of retail energy operators (ANODE) also brought a summary petition against this decision, which it supplemented by an additional supporting statement on 22 December 2017. ENGIE and ANODE are requesting that the Council of State cancel the decision of 27 July 2017 on the grounds that it was taken based on legislative provisions that are contrary to European Union law. More particularly, according to these two companies, the regulated electricity sales tariffs do not fulfil the cumulative conditions laid down by Directive 2009/72/CE dated 13 July 2009 concerning the common rules for the internal electricity market, as they were interpreted by the European Court of Justice (Federutility decision of 20 April 2010 and ANODE decision of 7 September 2016) and the Council of State (ANODE decision of 19 July 2017). The decision of the Council of State should be made in the first half of 2018.

2.

2.4.2

LEGAL PROCEEDINGS CONCERNING

EDF’S SUBSIDIARIES AND HOLDINGS

RTE Tax disputes

RTE was subject to several audits of its accounts for the previous financial years. The main grounds for adjustment concerned the deductibility of provisions for benefits for work-related accidents and work-related illnesses. By a ruling dated 28 December 2017, the Council of State definitively validated the position of the Company and recognised the tax-deductibility of these provisions. This subject is therefore definitively closed. ENEDIS Tax disputes The tax authority was contesting the tax deductibility of provisions for benefits for work-related accidents and work-related illnesses. The rulings of the Council of State of November and December 2017 relative to the same subject for other companies of the Group provide an identical solution for the Company, confirming the tax-deductibility of these provisions and ending these disputes. Photovoltaic producers litigation In 2010, announcements of cuts in electricity purchase prices led to a considerable surge in the number of connection requests received by Enedis units, primarily in August 2010 (due to the fact that at that time, the date on which a full request was filed determined the applicable prices). Three months later, the moratorium decree issued on 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 (see section 2.4.1 “Legal proceedings concerning EDF”). At the end of this moratorium, new electricity purchase provisions were introduced. Within this framework, a system of invitations to tender was developed and, moreover, a new order set the new mandatory purchase price for photovoltaic electricity. This order, issued on 4 March 2011, led to a significant drop in photovoltaic electricity purchase prices. The judgment handed down by the Council of State on 16 November 2011 dismissing the various appeals lodged against the moratorium decree issued in December 2010 led to a considerable surge in the number of proceedings issued against Enedis at the end of 2011, which continued in 2012, 2013, 2014 and 2015. The limitation period for issuing claims for compensation connected to this moratorium expired in March 2016. These proceedings were mainly issued by producers forced to abandon their projects as the operating conditions are less attractive than before due to the new electricity purchase prices. These producers believe that this situation was caused by Enedis, on the ground that Enedis failed to issue technical and financial proposals relating to connection in a timely manner, which would have allowed them to enjoy the more attractive electricity purchase conditions. The judgments issued at first instance, and by the Court of Appeal, contain diverging reasons and findings, with some courts dismissing all of the claims filed by the claimants while others award them compensation, but on the whole the compensation awarded is lower than requested.

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EDF I Reference Document 2017