The electricity price equalization mechanism in Turkey has been updated. The mechanism aims to partially or completely protect consumers from price differences arising from cost differentiations incurred by distribution and authorized supply companies (for their regulated sales activities) in different regions. The Energy Market Regulatory Authority published the Communiqué on the Price Equalization Mechanism (“Communiqué”) in Official Gazette number 29579 on 31 December 2015, entering into effect on 1 January 2016.

Factors considered when calculating the support amount include (Article 5):

  • The amount of each distribution company’s income cap determined for the current tariff year within the frame of related legislation and approved by the Energy Market Regulatory Board, along with annual demand estimations (as allocated to each retail sale period by taking into account the seasonal haulage rates);
  • The income requirement for the relevant retail company for the current tariff year, within the frame of related legislation.

Significant points under the Communiqué include:

  • Parties to the price equalization mechanism are (Article 6):
  • Distribution companies.
  • Authorized supply companies in each region.
  • The Turkish Electricity Trade and Contracting Corporation (“TETCC”).
  • The parties must transfer the support amount determined by the price equalization mechanism through TETCC (Article 8).
  • Legal entity license holders must pay the support amounts as a priority (Article 9).
  • If a party fails to make a payment, the sanctions outlined under Article 16 of Electricity Market Law Number 6446 will apply.

The Communiqué repeals the earlier Communiqué on the Price Equalizing Mechanism in the Electricity Market, which was published in Official Gazette number 28579 on 6 March 2013.

Please see this link for 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.