The Draft Amendment expressly addresses the surcharges to be paid (which are found as unlawful by the Court of Appeals) and the authority of regulating them is explicitly granted to the EMRA.

Article 4 of the Law No. 4628 on Organization and Duties of the Energy Market Regulatory Authority authorizes the Energy Market Regulatory Authority (“EMRA”) to set the pricing principles to be employed for the sale of electricity to consumers with regard to the market conditions. Relying on this authority, EMRA has set out surcharges so far that include: leakage loss, notification service, distribution service, transmission service, retail sales service, meter reading charges and a part of the contribution fee to TRT. In light of the fact that individuals, entities, consumers, end users, and PEPs are bound by the decisions of EMRA and the private electricity providers (“PEPs”) do have not have an option not to collect surcharges imposed by EMRA based on the 3rd Civil Chamber of the Court of Appeals (“3rd Chamber”) approving the decisions of the courts of first instance which dismissed the lawsuits initiated by individual consumers or legal entity end users for the return of the surcharges paid to the PEPs until May 21, 2014.

On May 21, 2014, a new era commenced as the Civil Assembly of the Court of Appeals (“Civil Assembly”) changed this precedent by holding that the surcharges imposed on consumers are unlawful and must be returned back to them. In rendering this decision, the Civil Assembly relied upon the following main reasons:

• It is true that EMRA has the authority to set out pricing principles for the sale of electricity but this authority is restricted to the determination of the cost and profit of 1 kw electricity until the electricity reaches to consumers. Therefore, EMRA’s authority is limited.

• Charging consumers for the loss of energy during the transmission of electricity and for electricity theft by third persons under the name of leakage and loss is contrary to the rule of law and equity principles which are also protected under the Turkish Constitution. Such charges discourage the PEPs from improving their technical infrastructure in a way as to prevent the loss of electricity caused by technology will be prevented. It also discourages the PEPs from taking legal action against and to follow-through on measurements against electricity thieves.

• The principle of transparency necessitates consumers to monitor the exact amount of the leakage and loss in the invoices they have been charged and the amount of money they are charged in return for a specific service.