The European Union’s executive arm has ordered France's electricity giant, EDF, to repay the government a total of 1.37 billion euros (USD 1.5 billion) in back taxes

"The European Commission has decided that Electricite de France (EDF), the main electricity provider in France, has been granted tax breaks incompatible with EU rules on State aid," said a statement released by the Commission on Wednesday.

The case, dating from 1997, has been going through the EU court and regulatory system since 2003. The latest decision by the EU in the case sent EDF's shares plunging by as much as 2.8 percent in afternoon trading on the Paris stock exchange, AFP reported.

Reacting to European Commission’s decision, EDF said it "took note" of the decision and will "proceed to repay the indicated sums," also warning that the decision will have a negative impact on its revenues during the current year.

"EDF contests the existence of illegal state aid and will request, under the reservation of a closer analysis of the ruling, a cancelation by the EU court," the company added in a statement.

EDF is currently considered as an international supplier of electricity, relying on 58 nuclear reactors in France, while also building new power plants, including the controversial Hinkley Point project in Britain.

"The Commission's investigation confirmed that EDF received an individual, unjustified tax exemption which gave it an advantage to the detriment of its competitors, in breach of EU State aid rules," EU Competition Commissioner Margrethe Vestager said in a statement.

The ruling is apparently based on a 1997 decision by French tax authorities according to which they exempted EDF from corporate tax on investments in France's high-voltage transmission network for the period of a decade.

The Commission argued that the tax exemption, nominally available to any company, had no justification because no private company was able to make the same investment, which in the absence of the tax exemption would have been highly unprofitable.

"It is therefore state aid that has strengthened EDF's position to the detriment of its competitors, without furthering any objective of common interest," the Commission said.

After the EU’s decision was announced, French Economy Minister Emmanuel Macron told reporters in Paris that the decision will have no serious impact on EDF’s revenues.

While EDF was a totally state-run company in 1997, with no meaningful competitor on the French market, it is now a public company competing in electricity markets worldwide, through 85 percent of it is still owned by the French government.