Procedures and principles have been updated for determining revenues and tariffs for electricity distribution companies in Turkey. These include applicable equations, as well as factors which should be included or excluded during calculations. The Energy Market Regulatory Authority ("Authority") published the Communiqué Regarding Regulation of Distribution System Revenues ("Communiqué") in Official Gazette number 29567 on 19 December 2015, entering into effect on 1 January 2016.

Charges for use of distribution system will be determined based on the activities that are necessary for the distribution company to carry out its distribution activities (Article 2). These charges are calculated within the scope of procedures and principles for tariff practices applicable to distribution companies, taking into account the distribution revenue ceiling and demand forecast. The distribution revenue ceiling includes the system operating revenue ceiling and lost energy revenue ceiling.

The system operating revenue requirement will be calculated for each tariff year, before the implementation period, in accordance with an equation outlined in Article 6 of the Communiqué. All amounts and elements of the calculation will be calculated with reference to the implementation period's base CPI.

Information about investments must be presented to the Authority in the requested format (Article 11). Approved investment expenses include spending which is necessary to carry out distribution activities and sub-activities, as well as other spending with investment characteristics.

In principle, investment spending made during the implementation period's tariff year must not fall below 65% of the investment ceiling for the relevant year (Article 12). If spending falls below this threshold, the Energy Market Regulatory Board may revise the investment ceilings and/or revenue requirements for the relevant implementation period.

Distribution companies can only charge consumers for services specifically stated under Article 25.

The Communiqué includes a non-exhaustive list of revenues which are not included when calculating revenues and tariffs (Article 26). Revenues that have similar characteristics with those listed under Article 26 will also be excluded during calculations.

Please see this link for the full text of the Communiqué (only available in Turkish).

Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.