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Legislation   General

3/29/2022

Price Difference Revision for Power Distribution Contractors

It will be possible to pay price differences to those power distribution contractors who fail to fulfill their obligations due to the rapid increase in foreign exchange rates and prices as a result of the negotiations between the distribution companies and contractors...

The Energy Market Regulatory Authority (EMRA) has made the price difference revision requested by the electricity contractors.

EMRA has permitted payment of price differences caused by cost increases to the contractors of distribution companies. According to this, distribution companies will be allowed to pay price differences to the contractors and subcontractors who are contracted grid and infrastructure projects, subject to a mutual agreement of the parties.

Unit prices will be determined according to the company realizations achieved for the unit prices of power distribution grid investments. The ratio of the average realized values of 2022 including company-based and grand total values as well as supply and labor costs to the values based on updated unit will be estimated. If the average value of the ratios found by estimations covering 21 distribution companies falls short of 90 percent, unit prices will be determined for the realized values for companies based on the unit prices for 2022.

Termination of contracts and implementation of price differences are permitted as in 2018 as a relief for the problems that were caused by the increases in foreign exchange rates and costs for the contracts signed prior to January 1, 2022. The decision covers the contracts in Turkish lira executed after January 1, 2022, for the investment liabilities of power distribution companies in the form of grid investments subject to a unit price as well as giving meter reading and payment notices, power cut-off and restoration, meter removal and restoration, repair and maintenance services for 2021, 2022 and 2023.

The differences will not be paid by the state but rather by distribution companies subject to a mutual agreement. Payment of price differences will be contingent on contractor's request, mutual agreement between the distribution company and the contractor, and application of the same pricing method to subcontractors as well.

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