The Energy Regulation and Markets Review - Stikeman Elliott

Turkey
also not be allowed to be direct or indirect shareholders of a company engaged in other
market activities.
Safeguards and sanctions
Due to the nature of distribution companies, the Draft EML envisages additional
sanctions for them. According to the new regime, a distribution licence cannot be
cancelled. If the distribution company fails to fulfil its obligations with respect to its
distribution activities under applicable laws and regulations, commits certain breaches
that bring its distribution service quality to an unacceptable level, or becomes or will
become insolvent, EMRA may jointly or severally impose the following sanctions:
a all or some of the members of the board of directors will be dismissed and new
appointments will be made by EMRA accordingly;
b if the distribution licence holder fails to fulfil its investment and service obligations
under the tariff, the financial burden for such failure will be reimbursed from the
revenues extracted by the licence holder from other activities; if this is insufficient,
it will come out of dividends of the shareholders, and, if this is insufficient, from
other assets of the shareholders; or
c the seizure and transfer of the shares to the state, and the subsequent transfer of
the distribution licence to a third party will be carried out pursuant to Article 31
of the Draft EML.
Market share
The total volume of the electricity distributed by the same group of licence holding
companies may not exceed 30 per cent of the total electricity distributed in all regions
in the previous year.
Price equalisation mechanism
The deadline for the application of the price equalisation mechanism will be extended
until 31 December 2015.
Privatisation of generation facilities
The Draft EML grants a grace period to corporations that will be formed within the scope
of the privatisations of the generation facilities of EÜAŞ, its affiliates and subsidiaries, for
the realisation of all the investments that need to be made for environmental compliance
and completing environmental permit requirements. The grace period will expire on 31
December 2018. The Draft EML further provides that no penalties will be applicable for
pre-privatisation period.
Measurement requirement for wind and solar licence applications
The measurement report covering at least a period of one year must be provided for wind
and solar projects licence applications. This report must be prepared by a pre-approved
company and should not be older than three years.
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