The regulations on the electricity market are regulated by the Electricity Market Law (EML) No. 6446 in Turkish Law. This Law entered into force on 30 March 2013.
The objective of this Law is to ensure a financially sound, stable and transparent electricity market that operates in accordance with the provisions of private law in a competitive environment, and an independent regulation and audit in this market for the purpose of electricity supply to the consumers in an efficient, low-cost and environment-friendly manner.
Any legal person operating in the market and subject to private law provisions must necessarily be established as a joint stock company or a limited liability company based on the provisions of the related legislation, and the shares of such a legal person must be registered, except the shares traded in the stock exchange in pursuant to the capital market legislation for joint stock companies.
License
The activities executable in the market after obtaining the compulsory license are generation activity, transmission activity, distribution activity, wholesale activity, retail activity, market operation activity, import activity and export activity.
License is the permission given to execution these activities. License application is made to EMRA. Procedures and principles on the applications and evaluations as well as the procedures and principles regarding licensing, amendment, termination, annulment, periods, time extensions, renewals and the rights and obligations under a license, license fees to be determined according to the type of activity and the nature of the business, provisions regarding the licensed legal person's rights, obligations, duties, capital adequacy, and qualified personnel required to be employed under a license, and the procedures and principles on the assignment of the rights of a licensee, the tariff of which is subject to regulation are regulated by the regulation issued by the Energy Market Regulatory Authority.
The principles applicable to the licenses to be granted and the licensees are obliged to respect under this Law are as follows:
- Apart from the exceptions in the EML, every legal person intending to engage in market activities shall necessarily obtain a separate license for each activity and facility, if such activities are to be executed at multiple facilities, before the initiation of the activity.
- Every license holders with a tariff subject to a regulation is obliged to keep separate accounts and records for each activity, the tariff of which is subject to a regulation, and for each zone restricted under the license.
- Every legal person shall be obliged to pay the EMRA the charges determined by the Board for license obtaining, renewal, amendment, and license copying as well as annual license fees.
- Every licensed legal person shall be obliged to keep ready its facilities as well as legal books and records for audits by the EMRA, to open them for the audit when required by the EMRA, and provide in due course the EMRA with all kinds of full and accurate information and documentation required by the EMRA to execute its activities.
- Every license holders shall be obliged to fulfill the requirements of the legislation depending on their field of activity in addition to obtaining a license.
A license shall be granted for a maximum period of forty-nine years. The minimum period applicable to the licenses for the activities of generation, transmission and distribution shall be ten years.
Persons whose license applications are rejected must be informed about the reason for the rejection.
Each license shall terminate automatically when its term is over, and be terminated based on a Board decision in the events that the bankruptcy of the licensed legal person is finalized, the licensee requests so, or the conditions for granting license are no longer valid.
There are also activities that can be executable without a license. These activities are shown in article 14 of EML.
Audit of the Electricity Market
The examination and supervision of electricity market activities and persons operating without a license, excluding distribution companies, are carried out by EMRA. Audits on electricity distribution companies defined under this Law shall be conducted by the Energy and Natural Resources Ministry. The Ministry can carry out this audit together with public institutions and organizations, including EMRA, as well as delegate this authority to these organizations.
EMRA shall impose sanctions and penalties on those who carry out these activities in the case of not fulfilling their obligations and for violations of the legislation. These sanctions and penalties are shown in article 16 of EML.
Cancellation of License
License cancellation reasons are shown in article 16 of EML. In case of the submission, during the license application process or the license validity period, of false documents and misleading information regarding the conditions for licensing or in the event that the changes in the license conditions affecting the licensing process are not reported to the EMRA if it is impossible to correct the aforesaid false documents or misleading information or changes in the license conditions, or in case the relevant legal person continuing the violation despite the written warning for the elimination of the violation within thirty days, the license of that legal person shall be aned. If it is discovered that the conditions constituting a basis for licensing are not sustained during the license validity period or if the absence of these conditions from the very beginning is found out, the license shall be aned. The amount of raised penalty fine to be imposed due to repeating the same action within two years shall not exceed ten percent of the relevant legal person’s gross income in the balance sheet of the previous fiscal year. If the total fine amount reaches this level, the EMRA may annul the license. The license is also canceled if the production facility cannot be established on time or the enterprises cannot start operation.
Any legal person whose license is aned, as well as the shareholders holding ten percent of the shares or higher in this personality, the president and members of the board including those retired from office within a year prior to the license annulment is not entitled to obtain any licenses, apply for a license, own directly or indirectly shares of legal personalities having applied for a license, or take part directly in the executive board of such legal personalities for three years following the date of license annulment.
The EMRA shall take necessary measures in the event that licenses are terminated or aned in order to protect consumers and prevent the disruption of market activities.
Administrative Fines
In order for EMRA to impose administrative fines, it is required to initiate an investigation and request documents and information from the legal person during the investigation. If the EMRA requests information or a site inspection and if it is discovered that such information is incorrect, deficient or misleading or no information or no opportunity for a site inspection is provided, the relevant legal person shall be given a warning for the provision of the correct information and an opportunity for the inspection within fifteen days. Those continuing the violation despite the written warning shall be imposed an administrative fine.
In case of the submission, during the license application process or the license validity period, of false documents and misleading information regarding the conditions for licensing or in the event that the changes in the license conditions affecting the licensing process are not reported to the Board, an administrative fine shall be imposed.
If it is discovered that the provisions of this Law, the secondary legislation or the license or the decisions and instructions of the Board are violated, the relevant legal person shall be provided with a warning for the elimination of the violation within thirty days according to the nature of the violation or for not repeating the same, while those continuing the violation or repeating the same action despite the written warning shall be imposed by an administrative fine.
If the electricity license holders act in violation of the EML, regulation or license provisions in a way that cannot be corrected due to their nature, administrative fines will be imposed.
In case of any inconsistency with the prohibition of affiliate relation applicable throughout the term of the license, a warning shall be given for the correction of the affiliate relation within thirty days. Those continuing the violation despite the written warning shall be imposed an administrative fine.
If it is discovered that a legal person is operating out of the license scope in the market, the relevant legal person shall be warned for the termination of the said or unfavorable activity within fifteen days. Those continuing the violation despite the written warning shall be imposed an administrative fine.
Judicial Remedy Against EMRA Decisions
It is necessary to first file to EMRA against the Board decisions made by EMRA. A lawsuit is filed against EMRA Board decisions within 60 days from the notification of the decision. This 60-day period is suspended in case of an file to EMRA. If the party applying to EMRA does not receive an answer within 60 days or receives a negative answer, this period continues.
A lawsuit is filed in Ankara Administrative Courts against the decisions of EMRA Board.
Appeals can be filed against the decisions of the court of first instance.
