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EMRA REGULATION DRAFT: NEW APPLICATION ON LATE PAYMENTS OF SUPPLIER COMPANIES TO PRODUCERS!


The Energy Market Regulation Authority (EMRA) has published on its website a “Draft Amendment to the Electricity Market Balancing and Settlement Regulation” (Balancing and Settlement Regulation) and a “Draft on the Procedures and Principles Regarding Unlicensed Production Payments” (Procedures and Principles). Opinions and suggestions from those concerned about the draft amendments were due on May 13, 2022. These drafts were prompted by the recent defaults in recent payments by supplier companies-in-charge.


The EMRA Procedures and Principles and the amendment to the Balancing and Settlement Regulation are targeted at the supplier companies-in-charge that do not fulfill their payment obligations to unlicensed producers, partially or completely on time.


As amended, the Balancing and Settlement Regulation and the Procedures and Principles will be applied to the supplier companies-in-charge as follows:

  1. The EMRA may take action against a relevant supplier company-in-charge under the Procedures and Principles when the EMRA detects a partial or complete default in payments by a supplier company-in-charge, within the scope of the Regulation on Unlicensed Electricity Production in the Electricity Market.

  2. In case EMRA decides to take action against a supplier company-in-charge, the net advance receivables within the scope of the transactions carried out in the day-ahead market and intra-day market of that supplier company-in-charge may be blocked by the central settlement institution for a period determined by EMRA, not exceeding 6 months, in order to make the relevant payments to unlicensed producers.

  3. Enerji Piyasaları İşletme Anonim Şirketi (EPİAŞ) and the relevant supplier company- in-charge shall report to the central settlement institution the total amount to be paid to unlicensed producers (LÜYTOB), in order to determine total amount of advance receivables to be blocked. If the reported LÜYTOBs are different from each other, the greater reported amount would be blocked.

In case the blocked advance receivables are less than the LÜYTOB, the blocking action would be determined by:

a.By the central settlement institution blocking the invoice receivable, if any, of the relevant supplier company-in-charge;

b.By transferring the missing amount to the free current account at the central settlement institution by the relevant supplier company-in-charge;

c.By proportioning the collected amount to the total amount to be paid, if the amount collected within the scope of subparagraphs (a) and (b) is not sufficient.


It is very important to mention at this point that a separate cash collateral account is opened at the central settlement institution on behalf of the supplier company-in-charge about which action is taken. The amounts mentioned in third paragraph, above, are transferred to the cash collateral account, and blocked and not paid to the supplier company-in-charge.


During an invoice period, the blocked amounts in cash collateral account at the central settlement institution are transferred by the central settlement institution to the accounts of the relevant unlicensed producers within the framework of the payment list reported to the central settlement institution by the relevant supplier company-in-charge on the eighth business day following the final settlement notification.


There is insufficient information regarding the detail of the procedure mentioned above in the Procedures and Principles. Apparently, sub-article 1/c of article 7 of the Procedures and Principles details how the procedure will proceed and will be determined by central settlement institution.


A big question now is how to confirm the accuracy of the payment lists given by supplier company-in-charge to the central settlement institution. Because, according to the sub-article 2 of the article 7 of the Procedures and Principles, the relevant supplier company-in-charge is responsible for the accuracy of the information in the payment list, and central settlement institution cannot be held responsible for the costs and damages arising from the incorrect information in the payment list. In other words, there is no institution to confirm the payment list given by supplier company-in-charge. However, according to the article 8 of the Procedures and Principles, if EMRA determines that the information provided pursuant to a request is inaccurate, incomplete, or misleading, or if no information is provided, or the opportunity for on-site inspection is not provided, action may be taken against the relevant supplier company-in-charge in accordance with article 16 of Electricity Market Law, in order to prevent reliance on any incorrect information.


Isikal Law Office

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