Procedures and principles have been introduced in Turkey for calculating target loss rates for determining technical or non-technical losses for electricity distribution companies, under the Electricity Market Tariffs Regulation. The Energy Market Regulatory Board published its decision (dated 26 November 2015) regarding the Procedures and Principles on Determination of the Electricity Distribution Companies' Target Loss Rates ("Procedures and Principles") in Official Gazette number 29563 on 15 December 2015, entering into effect on the same date.

Under the Procedures and Principles, a distribution company's actual annual technical and non-technical loss rates for previous three years ("Actual Loss Rate") are taken into account when calculating the company's target loss rate ("Target Loss Rate") for the coming year. Electricity leak costs billed for the relevant year will also be taken into consideration.

The Procedures and Principles outline different equations for determining the Target Loss Rates. Factors which determine the relevant equation for a given electricity distribution company are the company's weighted average Actual Loss Rate for the previous three years, compared to:

  • The threshold value determined by the Energy Market Regulatory Board, and
  • The national Actual Loss Rate for the previous three years

The Procedures and Principles state that if a distribution company's calculated Target Loss Rate for a tariff year is lower or higher than its Actual Loss Rate for that year, the difference will not be subject to any correction during tariff calculations.

Please see this link for full text of the Procedure 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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