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ENERGY

What you need to know about planned power cuts in France this winter

The French government continues to insist that power cuts are very unlikely this winter. Nevertheless, there is an emergency plan in place, so here's what it says about power cuts, from length and frequency to warning times.

What you need to know about planned power cuts in France this winter
Electric pylons near an electric power station in the countryside of Saint-Laurent-de-Terregatte, western France (Photo by Damien MEYER / AFP)

Power outages in France during the winter of 2022-2023 are still unlikely, and President Emmanuel Macron has urged people “not to panic.” However, they are still a “real possibility” and if you would like to be prepared for potential power cuts, here is what you should know:

When and how will I know if there’s going to be a power outage?

You can continue scanning the situation using the website and application Ecowatt.

READ MORE: ‘Ecowatt’: How to use France’s new energy forecasting website and app

You will be able to see an ‘energy forecast’ for the following three days – which will put your local area into the category of Green (no strains in the grid), Orange (the grid is strained, consider decreasing energy consumption), or Red (the grid is very strained, power cuts will be inevitable without a decrease in consumption).

If EcoWatt goes red, the first step will be asking businesses to make voluntary decreases, so for example factories could go onto a three-day week.

If this still doesn’t work, then targeted power cuts may be necessary – but these will be limited in time and area and planned in advance.

The government says that power cuts will last for no longer than two hours and will be done on a commune basis – so there will never be a situation where a whole département will be blacked out, far less the entire country.

So how do I know if my area will be affected?

If Ecowatt is red, keep checking it – at 3pm each day it will be updated with any areas that face power cuts the following day.

At 3pm you will be able to see whether your département will be impacted and at 5pm you will be able to check your individual address to see if you are in a ‘load shedding’ zone (délestage in French) – the technical term for a planned outage.

You can set up alerts by SMS and email on both the application and website.

And of course there will be extensive media coverage (including on The Local) of planned cuts. 

How long would the rolling blackout last?

French government authorities have specified that power outages would not occur for more than two hours at a time.

They would occur either in the morning (between the hours of 8am and 1pm) or in the evening between the hours of 6pm and 8pm and would not affect crucial buildings such as hospitals. 

If you are impacted by a power outage on one day, you can rest assured you will not be in a “load shedding area” the following day, power bosses will vary the areas for targeted cuts and no area will have two consecutive days of cuts.

What are the things that might be impacted in the event of a power cut?

There are several every-day items that could be shut off during a power outage that you might need to be aware of; 

READ MORE: OPINION: France faces the real possibility of power cuts this winter and it can’t blame Putin

ATMs and Contactless Payment – If you are in an area that will be impacted by power outages, consider taking out cash the day before. During the power outage, you may not be able to access an ATM or use a credit/ debit card to pay, depending on whether the card reader is fully charged. 

Elevators and digicodes – if you live in an apartment block then both your lift and the electronic door codes will not work. Your building might block access to elevators during the rolling blackout. If you know you will be in an area where power is cut, you might want to consider postponing your heavy shopping trip or furniture delivery to the following day.

Digicodes and access badges also will not work without electricity. However, that does not mean you will be locked out or trapped inside, as the electricity is only used to keep the door locked. 

Shops closed – While supermarkets with generators will be able to remain open, you can expect some smaller shops to be closed during power outages.

Public transport – This will depend on where you live in France, though you can expect some services to be interrupted. Local authorities have been tasked with coming up with their own response plans in the event of power cuts. The French government has asked local authorities to err on the side of caution, in order to avoid the possibility of passengers finding themselves stranded in the middle of a track. As for the Paris Metro system, this will not be affected by power outages. Government spokesperson Olivier Véran told BFMTV on Friday that it runs on “its own electricity network.” You can expect more detailed information in the coming weeks.

Schools – While this has not yet been confirmed, the French government is reportedly working alongside the Ministry of Education to develop plans to close schools in the mornings if the area is to be impacted by rolling blackouts. This would be to protect students and teachers from having to be in the building without access to heating, alarm systems or lighting. Schools would be open again in the afternoons, as power cuts are not set to take place between 1pm and 6pm. 

Phone and internet service – During a power cut, there could be interruptions in telecommunications (both for mobile and landline devices). If you have an emergency, you should still dial 112. As this phone number is accessible regardless of the telephone operating company or line, there is still a chance it will be covered by at least one operator in the area. Call centres for the fire department and the police will continue to function. 

Traffic lights – Like other illuminated traffic signs, these are powered by electricity. It is therefore possible that they will be out of service during power cuts, so consider avoiding driving during a power outage.

Charging devices – If you learn that your area will be impacted by a power outage, consider charging any devices you might need during the day the night before. Keep in mind though that the power cut will only last two hours.

Hot water – If your water is heated electrically, it likely will not be available during a power outage. It would therefore be advised to plan around the two hour power cut for your hot water needs.

Refrigerators and freezers – There is no need to panic here – the power would only be off for two hours, so your food ought to remain protected, as refrigerators can keep cold up to four to six hours after the power shuts off. As for freezers, they can keep their temperature for 24 to 48 hours.

And what won’t be affected?

Priority sites such as hospitals, prisons, police stations, fire stations, critical factories and other emergency services will not experience power cuts.

If your power line also services a priority site, then you will be spared from blackouts. For this reason, people living in urban areas are less likely to be impacted by power cuts than people living in rural areas. As for Paris specifically, the city is so dense and is connected to so many priority sites that only about 20 percent of the Parisian territory could be impacted by power cuts. 

Current estimates show that about 60 percent of the French population could be impacted by power cuts – the remaining 40 percent are either connected to a priority line or are part of the 3,800 “high-risk patients” who are dependent on home medical equipment.

Member comments

  1. be prudent as they can be a power surge when electric power returns. This can damage the likes of live boxes, fixed phones, fridges and anything connected to the power sockets. The answer is to buy very effective ” multiprise parafoudre et surtension” which will protect most appliances

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For members

AMERICANS IN FRANCE

Ask the expert: What Americans in France need to know about 401(k) and other pensions

Whether you are looking to retire to France or are working here, here's what you need to know about US private pension plans such as the 401(k) and IRA for French residents.

Ask the expert: What Americans in France need to know about 401(k) and other pensions

For many Americans, retiring to France is a dream. The idea of a calm life in the French countryside is understandably alluring, and thanks bilateral tax agreements between the US and France – France is an attainable and attractive destination for pensioners looking to live off their private American pension plans in the land of cheese and wine.

“France is the bees’ knees for American retirees”, summarised tax expert, Jonathan Hadida in an interview with The Local. Thanks to the US-France tax treaty, US-sourced pension income is only taxed in the United States. 

Hadida explained exactly what Americans in France – both of retirement age and pre-retirement – should know about their American private pension plans. 

For those of pre-retirement age (below 59 and a half years old)

One of the most common questions Americans in France have regarding their pension contribution plans is whether they can continue contributing from France.

For 401(K)s, the answer depends on whether you are working in France as a posted worker or whether you are working on a French contract. Posted workers can continue to contribute to their 401(K)s, but those on French contracts cannot.

The reason for this is quite simple – 401(K)s are employer-pension plans. Posted workers can continue to report their 401(K) contributions in the way that they normally would while based in the United States – on the W2 tax form in Box 1. 

As for Americans working in France on local (French) contracts, “Generally what happens is that you have to roll it into an IRA with a US-investment broker to manage your funds”, Hadida explained for those looking to continue contributing. 

As for IRAs (Individual Retirement Accounts), it is possible to continue contributing from France. However, you must have earned taxable income in the United States. 

“There are two ways Americans in France are able to avoid double taxation – via foreign income exclusion or the foreign tax credit,” Hadida told The Local.

“Basically, you wind up in the same position, but these are two different ways of getting to the same place.

“If you go with the foreign income exclusion option. This is great because it goes straight off the top and writes off the first S120,000 of income in 2023. But the problem is that this  means you have zero taxable income in the United States, so you cannot contribute to an IRA.

“On the other hand, with the foreign tax credit you still have taxable income in the United States so you can still contribute to an IRA.

“The foreign tax credit tends to be a good option well for those living in France because taxes are generally higher in France than they would be in the United States.”

READ MORE: Ask the experts: What do Americans in France need to know about investments and pensions?

The next step would be to determine whether it is advantageous to continue contributing to a traditional IRA or a Roth IRA. 

“I generally recommend that it is best to make it a contribution to a Roth IRA as you will get the benefit of tax free growth for as long as you hold the money in the Roth and no tax upon distribution. Americans in France generally don’t need the ‘deductible’ contribution which is a benefit of the traditional IRA”, Hadida explained.

However, the decision to stick with a traditional or Roth IRA depends on your income and tax bracket, as well as how much you would like to contribute. 

If the Roth IRA is not possible for you, Hadida offered an alternative solution: the backdoor Roth contribution. In order to do this, “you contribute to a non-deductible IRA contribution and then roll the money over to a Roth IRA.  There is currently no threshold for this”, the tax expert explained.

Keep in mind that such a step would likely require the assistance of a tax or financial adviser. 

What about Americans in France who have had their IRAs closed down?

Hadida warned: “There has been an ongoing issue with people having their traditional IRA accounts closed by US-based banks when they realise you are not living in the United States”.

This issue of having Americans abroad having their IRAs closed is also linked to challenges some Americans have experienced with trying to open new IRAs while resident in France.

International Financial Advisor, Bryan Dunhill with Dunhill Financial, an American-expat advisory company, told The Local that whether IRA closures depend on the US-based bank, and for the most part occur because “banks are concerned about the possibility of misadvising clients”. 

Luckily, according to Dunhill, there is a solution for Americans in France who find themselves in this situation. “Basically, you need to go to an American expat advisory company who will be able to open a new IRA for you.

“For example, with Dunhill Financial, we are able to open up the same account with our provider, and we transfer all the securities in kind”, Dunhill explained. 

The financial adviser added that “you have to transfer the money within 60 days from the date that the original IRA is closed. Otherwise, there will be tax consequences”. 

As for your IRA, “everything that is earned within the plan until you take it out grows tax-free”, Hadida explained. That being said, it is advisable to report your IRA or Roth IRA to French authorities as a foreign-based bank account. “It’s safer to say yes – report them all. There is no real downside to reporting it. You can do this on the 39-16”.

Essentially, this means that those of working-age (pre-retirement) do not have to worry about reporting to any capital gains French authorities. The reporting aspect comes once you begin drawing your pension in your later years.

For those of retirement age (over 59 and a half), looking to withdraw from pension funds

The picture for retirees is a bit different than for those still in the workforce. 

“The reason we call France the bees’ knees for American retirees is because US-sourced pension income is only taxed in America. That means when you take money out of your 401(K) or IRA, those are taxable at your tax bracket in the United States. 

“You have to report it on the US-side and pay US taxes at your marginal rate”, Hadida said.

The tax expert continued: “On the French side, US-sourced pension income is reportable in France for rate-purposes but benefits from a deemed credit.

“This means you put it on your French tax form, and you calculate the tax and you get a deemed credit equal to that. Ultimately, you wind up paying no French taxes on your US-sourced pension thanks to Article 18 of the US-France tax treaty”.

READ MORE: Pensions: What should I expect if I worked in both France and a non-EU country?

How do I signal my US-sourced pension income on my French taxes?

Although you probably won’t end up paying French taxes on your US pension, you do need to tell the French taxman about it. This is the same for all non-French income.

Dunhill explained: “You fill it in within box 1AL or 1BL on form 20-42 on the French tax return, then you claim it in on the 8TK of the 20-47 to say it is US-based pension income, and then you will get a tax credit from the French.

“It goes in and it goes out on the French side. Being a US-retiree in France is fantastic”. 

For both 401(K)s and IRAs, Americans in France should still keep in mind that early withdrawal (prior to the age of 59 and a half) can still lead to a 10 percent early distribution penalty. There are certain exemptions, such as first time homebuyers and higher education, but you should meet with a tax adviser to determine if you qualify.

This article is intended as an overview of pension and tax rules and does not constitute financial advice. If you have specific questions about your personal situation, we advise you to seek independent financial advice from a specialist in US-French rules.

Jonathan Hadida is a lawyer specialising in international taxation and advising expats – find more on Hadida Tax Advisors here. Bryan Dunhill is an international tax advisor with Dunhill Financial, an American-expat advisory company.

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