2017-2020, EMRA and 21 Electricity Distribution Companies of Türkiye
Following distribution privatizations in Türkiye, requirement to regulate distribution activities and revenues increased considering some targets such as decreasing end user tariffs, meeting investment costs of private companies, increasing efficiency and service quality in the sector.
Thus, revenue and price cap methodologies started to be applied as tariff setting methodology.
In price cap methodology, price cap that could be applied to end-users are defined ex-ante in the beginning of implementation period, and this price cap is updated dynamically considering some variables such as CPI.
On the other hand, revenue is regulated considering OPEX and CAPEX of distribution and retail sales companies in line with the related legislation and is corrected each year.
Through these methods, distribution companies are incentivized to decrease their costs and increase revenues to make profit.
In order to develop a new model for calculation of operational revenue requirement (taking into account the future developments) for the 4th Implementation period (2021-2025), all of the 21 Distribution Companies in Türkiye initiated a Project called “Reference Distribution Company Project.
Output of this project will be a new electricity distribution tariff proposal for the years 2021 – 2025 (4th Regulatory Period).
