PARIS, Nov 22 (Reuters) - A recent deal regulating French nuclear power risks making electricity more expensive and must be carefully monitored to ensure the new rules do not strengthen EDF's dominant position, power group Engie's CEO said on Wednesday.

Vigilance will be needed to ensure EDF's producer and supplier activities are strictly separated, said Engie , which is the second largest electricity supplier in the country behind state-owned EDF.

The French government and EDF reached a deal on future nuclear power reference prices set at 70 euros per megawatt-hour (MWh) earlier this month in a compromise to allow EDF to be profitable while shielding consumers from sharp bill rises.

"What is on the table is a strengthening of the market, therefore deregulation. We are in principle favourable to this approach. But it is true that, in this context, it is absolutely critical that the rules of competition are applied rigorously," Engie Chief Executive Catherine MacGregor, told Reuters.

"The conditions under which EDF will trade must clearly be the subject of a careful examination and must be respectful of the rules of competition," she added.

The deal is both complex and vague, Engie said, and given the very limited capacity to predict real electricity prices, the redistribution system creates a lack of visibility.

It also creates a risk of misunderstanding for industrial and private consumers and will considerably complicate the construction of offers for commercial contracts signed over several years, the group added.

The company said it regretted that alternative suppliers from EDF, as well as manufacturers and consumers, received only limited information before its conclusion and will only be able to participate in a consultation from this week.

The deal is also expected to favour the massive and rapid development of renewable energy alongside nuclear power, Engie said, adding that renewables are integral to the diversification of energy sources and the transition from fossil fuels. (Reporting by Forrest Crellin and Benjamin Mallet; Editing by Alexander Smith)