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ment effective unbundling with regard to transmission systems.
According to the said Directive, the only way in which effective trans-
parency and prevention of discrimination within the market can be
implemented is the removal of the incentive for vertically integrated
undertakings to discriminate, by the ownership unbundling of network
operations and generation. Accordingly, the unbundling of distribution
and transmission system operators has been required for vertically
integrated undertakings.
Unbundling in Turkish Law
Unbundling in Turkish Law has been provided with various provi-
sions of the Electricity Market Law numbered 4628 (“Law”) and the
Regulation on Electricity Market License (“Regulation”) published in
the Official Gazette dated August 4, 2002 and numbered 24836.
Pursuant to the Regulation, license holding legal entities which con-
duct multiple operations within the market and/or which conduct the
same operation in multiple facilities or areas are under the obligation
of keeping separate accounts and books for each operation that is sub-
ject to license and for each facility or area as well as for operations that
complete or that are required by a market operation and operations that
relate to side products.
The Law on the other hand sets forth multiple provisions relating
to unbundling. First of all, in line with the Regulation, legal entities
holding multiple licenses and/or which conduct the same operation
within multiple facilities must keep separate accounts and books for
each operation subject to license and for each facility. It is possible for
generation companies to participate in distribution companies; howev-
er, they are prohibited from establishing control over the distribution
company.
Private distribution companies may establish generation facilities
besides conducting distribution and retail sales activities under the
condition that they obtain a license. However, in this case the accounts
must be unbundled. In addition to this, the distribution company may
purchase electricity from the generation company or companies that it
is affiliated with for a purchase price that does not surpass the average
wholesale price for the country.
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