Communiqué Regarding Regulation of Market Management Revenue
Objective and scope
Article 1- This Communiqué covers the principles and procedures regarding the
calculation of the market management revenue cap that will form the basis for the tariff
proposals regarding the market management prices of TEIAS, in accordance with the
provisions of Article 8 of the “Electricity Market Tariffs Regulation”
Definitions and Abbreviations
Article 2- For the purposes of interpretation and implementation of this Regulation,
the following terms bear the following meanings:
1. TEİAŞ: Turkish Electricity Transmission Co. Inc.,
2. Market Management Reference Revenue (PIRG0): The market management
revenue that is determined as the reference value for the beginning of the implementation
period with due regard to the market management costs that are calculated as per the
provisions of the “Communiqué regarding Electricity Market Chart of Accounts, Regulated
Items and Reporting”,
3. Market Management Revenue Cap (PIGT): The limiting value forming the basis
of market management price,
4. Cost Component (MB): The portion of the market management revenue cap for
any tariff period aiming to cover the forecasted costs,
5. Cost Adjustment Factor (MFDF): The factor that allows the Market Management
Reference Revenue to be adjusted in line with the inflation and efficiency,
6. Electricity Market Index (EPE): The index that is used for converting the Market
Management Reference Revenue value into current prices as of the beginning of the tariff
period, and for calculation of revenue correction component, and automatic price
adjustments, in order to reflect the average cost change in the electricity market,
7. Electricity Market Index Change Ratio (EPEDO): The percentage change in
Electricity Market Index between two given dates, to be calculated by dividing the difference
to initial value,
8. Actual Transmission System Revenue (GPIG): The value of the market
management revenues incurred in a tariff period as calculated in accordance with the year-end
value of the Electricity Market Index, as per the provisions of the “Communiqué regarding
Electricity Market Chart of Accounts, Regulated Items and Reporting”,
9. Revenue Difference (GF): The difference between the market management
revenue cap of the related period as calculated in accordance with the year-end value of the
Electricity Market Index and the actual market management revenue of the related tariff
period,
10. Revenue Correction Component (GFDB): The component used for adjusting the
Revenue Difference together with the interest calculated in accordance with the interest rate,
11. Interest Rate (FO): The interest rate that is used for the calculation of Revenue
Correction Component and Investment Correction Component and determined by the Board
for one tariff period on the basis of the Undersecretariat of Treasury interest rate.
Disclaimer:
The English version of the Communıqué Regarding the Principles and Procedures of Financial Settlement in the
Electricity Market is intended to assist interested foreign parties. There may be discrepancies between the Turkish and
English versions. In case such discrepancies occur, the Turkish version shall prevail.
Calculation of Market Management Revenue Cap (PIGT)
Article 3- The market management revenue cap (PIGTt) of TEIAS for tariff period t is
calculated in accordance with the below formula::
PIGTt  PIMBt  GFDBt
(1)
where;
PIGTt
means Market Management Revenue Cap of TEIAS for tariff period t
and that is calculated in accordance with the EPE value of the first day
of tariff period t (YTL),
PIMBt
means cost component of market management revenue cap of TEAİŞ
for tariff period t and that is calculated in accordance with the formula
in (2) (YTL),
means the Revenue Correction Component calculated in accordance
with the formula contained in 6 (YTL),
GFDBt
a) Calculation of Market Management Cost Component (PIMBt)
The Market Manegement Cost Component for tariff period t is calculated in
accordance with the below formula:
PIMBt  PIRG 0  MFDFt (2)
where;
PIRG0
means Market Management Reference Revenue of TEİAŞ (YTL),
MFDFt
means the Cost Adjustment Factor that is applicable for tariff period t
and is calculated in accordance with the formula contained in (3).
1) Calculation of Cost Adjustment Factor (MFDFt ) value
The Cost Adjustment Factor applicable for tariff period t is calculated considering
inflation and efficiency aspects, in accordance with the below formula:
:
MFDFt  MFDFt 1  1  EPEDOt  (3)
where;
MFDFt-1
means the cost adjustment factor applicable for the previous tariff
period within the implementation period,
EPEDOt
means Electricity Market Index Change Ratio applicable for tariff
period t as calculated in accordance with the formula contained in (4).
MFDF t-1 is deemed as “1” for the first tariff period of the implementation period.
2) Calculation of Electricity Market Index Change Ratio (EPEDOt)
Disclaimer:
The English version of the Communıqué Regarding the Principles and Procedures of Financial Settlement in the
Electricity Market is intended to assist interested foreign parties. There may be discrepancies between the Turkish and
English versions. In case such discrepancies occur, the Turkish version shall prevail.
The Electricity Market Index Change Ratio (EPEDOt) applicable for tariff period t is
calculated in accordance with the below formula:
EPEDOt  ( EPEt 1 / EPEt 2 )  1 (4)
where;
EPEt-1
means the value of Electricity Market Index as of the end of the
eleventh month of tariff period t-1,
EPEt-2
means the value of Electricity Market Index as of the end of the
eleventh month of tariff period t-2.
The above formula is implemented as follows for the first tariff period:
EPEDO1  ( EPE1 / EPE0 )  1 (5)
where;
EPEDO1
means the Electricity Market Index Change Ratio applicable for the
first tariff period of the implementation period,
EPE1
means the value of Electricity Market Index envisaged for the first day
of the first tariff period of the implementation period,
EPE0
means the value of the Electricity Market Index corresponding to the
fixed prices forming the basis of PIRG0 calculation.
b) Calculation of Revenue Correction Component (GFDBt)
The Revenue Correction Component applicable for tariff period t is calculated in
accordance with the below formula:
GFDBt  GFt 2  (1  FOt 1 ) (6)
where;
GF t-2
means the difference between the market management revenue cap and
the actual market management revenue of TEIAS in tariff period t-2, as
calculated in accordance with the formula contained in (7) (YTL),
FOt-1
means the interest rate expressed in percentage for the tariff period t-1
of the current implementation period.
The Revenue Correction Component is deemed as zero (0) for the first two tariff
periods of the first implementation period.
1) Calculation of Revenue Difference (GFt-2)
The year-end Revenue Difference applicable for tariff period t-2 is calculated in
accordance with the below formula:
Disclaimer:
The English version of the Communıqué Regarding the Principles and Procedures of Financial Settlement in the
Electricity Market is intended to assist interested foreign parties. There may be discrepancies between the Turkish and
English versions. In case such discrepancies occur, the Turkish version shall prevail.
GFt 2  PIGTYDt 2  GPIGt 2 (7)
where;
PIGTYD t-2
means the value of market management revenue cap of TEIAS in tariff
period t-2 as calculated in accordance with the year-end value of
Electricity Market Index in tariff period t-2 (YTL),
GPIG t-2
means the actual market management revenue of TEIAS as calculated
in accordance with the year-end value of Electricity Market Index in
tariff period t-2, as per the provisions of the “Communiqué regarding
Electricity Market Chart of Accounts, Regulated Items and Reporting”
(YTL).
The parameters to be inserted in the license during revenue control
Article 4- The values of the following parameters are inserted in the transmission
license of TEIAS as part of the revenue control::
PIRG0
Market Management Reference Revenue
EPE0
the value of the Electricity Market Index corresponding to the fixed
prices forming the basis of PIRG0 calculation
Implementation
period
The period in which parameters prevail
Provisional Article 1- TEİAŞ monitors net operational cost concerning market
management sub-activity, net investment cost subject to regulation and tariff revenues in
separate accounts under market management sub-activity until the Communiqué Regarding
the Principles and Procedures of Financial Settlement in the Electricity Market is annulled and
cash implementation of Electricity Market Balancing and Settlement Regulation begins, as a
requirement of the provision of Article 38 titled Account Unbundling for TEİAŞ of
Communiqué regarding Electricity Market Chart of Accounts, Regulated Items and Reporting
according to this Communiqué.
Effectiveness
Article 5 – This Communiqué shall be effective on the date of its publication.
Enforcement
Article 6 – This Communiqué shall be enforced by the President of the Energy Market
Regulatory Authority.
Disclaimer:
The English version of the Communıqué Regarding the Principles and Procedures of Financial Settlement in the
Electricity Market is intended to assist interested foreign parties. There may be discrepancies between the Turkish and
English versions. In case such discrepancies occur, the Turkish version shall prevail.