The Electricity Market Tariffs Regulation ("Regulation") was published in Official Gazette number 29453 on 22 August 2015. The Regulation enters into force on 1 January 2016, abolishing the Electricity Market Tariffs Regulation dated 11 August 2002 ("Former Regulation"). The Regulation includes rules and procedures for preparing, reviewing, evaluating, amending and approving regulated electricity tariffs. It amends the rules and criteria for preparation for transmission, wholesale, distribution, connection, retail sale, market operation and end consumer supply tariffs.
Distribution Tariffs
The Regulation states that distribution tariffs will consist of distribution system usage prices and prices applied within the scope of the distribution tariff. The Former Regulation limits distribution system usage prices to investment, operation and maintenance costs. Under the Regulation, the definition expands to "all costs arisen during provision of the distribution services, if suitable within the scope of the legislation".
Therefore, when determining the distribution system usage price, the Regulation takes into account investment costs of activity, operation costs, maintenance costs, lost energy supply costs, transmission tariff costs, prices paid to relevant authorities and other costs required to carry out the distribution activity.
The Energy Market Regulatory Authority determines the distribution tariff, taking into account suggestions by distribution companies. Separate procedures and standards for tariffs can be adopted for each distribution area, or a single tariff can be adopted nationwide.
Retail Sale Price
The retail sale price will be determined by considering the costs of operation for provision of the supply services by the relevant supply companies. Separate retail sale prices can be adopted depending on consumers' connection status and their purpose of electricity use.
Final Consumer Supply Tariff
The final consumer supply tariff will be prepared in line with the applicable retail sales tariffs and market prices. It is intended to encourage eligible consumers to enter into the competitive market, while enabling a fair profit range to the relevant suppliers. Nevertheless, the Electricity Market Regulatory Authority can determine a separate retail tariff for consumers with low consumption rates, taking into account social and economic factors. The Regulation enables separate tariffs to be applied to consumers with high and low consumption.
Transition Period from Cross Subsidization
Until abolishment of cross subsidization applications for energy supply (temporary article 1 of Electricity Market Law number 6446), the retail sales tariff will be applied as the final consumer supply tariff. A new communiqué will be published within three months of the cross subsidization application being abolished. Until the new communique comes into force, temporary prices approved by the Electricity Market Regulatory Authority will apply.
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.
