The New Regulation on the Procedures and Principles Regarding
Execution of Water Utilization Right Agreements for Generation
Activities in the Electricity Market (the "Water
Utilization Right Regulation") was published in the
Official Gazette on February 21, 2015, numbered 29274 and went into
effect on the date of its publication. The Water Utilization Right
Regulation has abolished the old Regulation for Procedures and
Principles Regarding Execution of Water Utilization Right
Agreements for Generation Activities in the Electricity Market
published in the Official Gazette on June 26, 2003, numbered 25150
(the "Former Regulation").
The purpose of the Water Utilization Right Regulation is to
regulate principles and/or procedures regarding: (i) the content of
Water Utilization Agreements (the "Water
UtilizationAgreement(s)") to be
executed between the General Directorate of State Hydraulic Works
(the "General Directorate"), and
legal entities operating in the electricity market within the scope
of the Electricity Market Law numbered 6446; (ii) the execution
process for Water Utilization Agreements; (iii) the rules on
the establishment of unlicensed production power plants over dams,
water conveyance lines ("su isale hatları") and
waste water conveyance lines ("atık su isale
hatları") used by Municipalities for the provision of
drinking water purposes.
The Water Utilization Right Regulation covers, including among
others: (i) application rules and announcement principles for the
execution of Water Utilization Agreements;(ii) preparation and
evaluation rules for feasibility reports regarding
hydroelectric power projects; (iii) provisions that must be
included in Water Utilization Agreements; (iv) principles and
procedures for the execution, renewal, amendment and termination of
Water Utilization Agreements; (v) payment rules for the
hydroelectric resource contribution fee by generation companies to
the General Directorate; (vi) general undertakings of
generation companies to the General Directorate (e.g. submission of
notifications, reports and other documents, payment of relevant
fees and submission of temporary letters of guarantee, etc.);
(vii) rules on the announcement of hydroelectric power projects by
the General Directorate on its official website.
The other rules regulated under the Water Utilization Right
Regulation may be summarized as follows:
The Water Utilization Right Regulation is different from the
Former Regulation since it enables legal entities, whose majority
of capital belongs to a Municipality, to establish unlicensed
production power plants over dams, water conveyance lines and waste
water conveyance lines used by the relevant Municipalities for
provision of drinking water purposes.
As per the Water Utilization Right Regulation, legal entities
which intend to obtain a hydroelectric generation license are
required to execute or obtain the right to execute a Water
Utilization Agreement with the General Directorate before applying
to the Energy Market Regulatory Authority for the relevant license.
The Water Utilization Right Regulation sets forth the principles
applicable to this process and provides the draft Water Utilization
The Water Utilization Right Regulation also contains a
calculation method for the hydroelectric resource contribution fee
and foresees that this contribution fee should be paid every year
in accordance with this method during the period of the
Pursuant to the Provisional Article of the Water Utilization
Right Regulation, existing Water Utilization Agreements executed by
the generation companies will continue to be effective during the
term of their generation licenses.
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.
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