The Energy Market Regulatory Authority ("Authority") in Turkey has published procedures and principles for calculating the basis parameters of electricity distribution tariffs. The Authority published Procedures and Principles for Determining Base Efficiency Parameters for Electricity Distribution Companies' Tariffs ("Procedures and Principles") on 24 November 2015, entering into effect on the same date.
Significant provisions of the Procedures and Principles include:
- The Data Envelopment Analysis method must be used to calculate the efficiency level which is used as the basis of tariff calculations.
- Within the scope of the Communiqué on Regulation of Distribution System Revenue ("Communiqué"), efficiency levels must be calculated by using operation cost items, in accordance with the Communiqué.
- Efficiency calculations applied to electricity distribution companies under the efficiency model cannot be less than 5 years and more than 10 years.
- When calculating operations cost, variables include the length for the baseline period, transformer capacity, transformer quantity, energy sum logs in to the distribution system, peak demand, geographical space, number of subscribers in the distribution area, as well as other similar variables. Uncontrollable base operation costs within scope of the Communiqué are excluded from base operation costs.
- Environmental factors include density of users (user/km2), household consumer consumption ratio, socioeconomic developmental index, realized lost energy ratio, as well as other similar variables.
- A specified margin of error applies when calculating efficiency parameters. Variables which do not meet this margin are not included in the ultimate model.
- Data used for efficiency calculations can be presented in any format.
- The Authority considers submitted data, making comparisons to data from previous years and other submissions.
Please see this link for full text of the Procedures and Principles. (Only available in Turkish).
Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.
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