Turkey Further Liberalizes Its Electricity Tariffs

Recent development

On August 22, 2015, the Energy Market Regulatory Authority ("EMRA") issued the Electricity Market Tariff Regulation setting the rules for the introduction of regional tariffs and a supplier of last resort tariff. The regulation will enter into effect on January 1, 2016, and govern the five-year tariff period from 2016 to 2020.

What EMRA did

Since 2006, EMRA has established base values for price caps, revenue caps and transmission pass-through costs which are then used to set end-user tariffs in five-year periods. This cost-based pricing structure has the effect of liberalizing the tariff system. While EMRA has not yet announced the tariffs for the third five-year period, it is expected to do so by the end of this year. Although most of the pricing rules and the method of implementation have not changed under the regulation, there are some significant changes: