The French government has allowed French state-controlled power utility Electricite de France (EDF) to increase its electricity tariffs for residential consumers by 5% in August, and by the same share in August next year, citing recent increases of the company's production costs.

This would be the largest hike in at least a decade as the government wants to halt lawsuits by EDF’s rivals, who are iterating that the artificially low tariffs hurt competition. The decision came after the French government last year decided to cap regulated tariff increases at 2% a year, in order protect households. However, the French regulator CRE recommended last month increasing power tariffs between 6.8% and 9.6% as soon as this summer and then by 3.2% in both 2014 and 2015. Over recent years, EDF, which is the world's largest nuclear operator, had to cope with high costs, mainly because of additional investments imposed on the company's nuclear power plants to increase safety standards.