According to the information we have received from corporations that generate and consume electrical power, the industrial enterprises in Turkey are paying higher prices for electricity consumption, as compared to the prices that are applied in the European countries. The fact that electrical energy is sold to the manufacturing enterprises at prices that are about twofold to threefold higher than the prices applied in the European countries, increase both the production costs and the prices of the goods and services that are sold to Europe.  The high cost of electrical energy, which is one of the major inputs in our products, weaken our competitive power and stands amongst the principal reasons underlying the  high rate of unemployment and the increase in the foreign deficits Our manufacturing enterprises are facing difficulties in competing against the European products of whose input costs are lower,  both within Turkey and abroad, and consequently,  besides the decline that occurs in their exports, they are also losing their local customers to their foreign competitors.

Meanwhile, in order to strengthen the local enterprises, who are substantially weakened against their European competitors due to other factors as well, such as  the high costs of labor, interests, raw materials, machinery and equipment, we are compelled to reduce the input costs of our manufacturing enterprises.

According to the information provided by the corporations that generate and consume electrical power, there exists a multitude of factors that increase the costs of electrical power. Some of these reasons can be outlined as follows: 1) Authorizations and responsibilities regarding the production, diffusion and pricing of electrical power in Turkey,  have been   distributed amongst the Ministry of Energy, Regulatory Board for Energy Markets, Department of Privatization Administration, Undersecretariat of Treasury, and the State Planning Organization.  The energy policies and applications adopted for Turkey, which has been   regulated by authorizations and responsibilities distributed amongst numerous units, impose severe difficulties and limitations on coordination amongst the concerned units, and on the adoption of measures for cost reduction.                

2) Moreover, the production and diffusion of electrical energy has also been distributed amongst a great number of establishments. These establishments are as follows:  the monopoly for the import and trading of natural gas, Boru Hatları T.A.Ş. (BOTAŞ); the monopoly for the diffusion of electrical power, Türkiye Elektrik İletim A.Ş. (TEİAŞ); Türkiye Elektrik Üretim A.Ş. (EÜAŞ) an authority in charge of the management of state-run facilities for generating electrical power;   Türkiye Elektrik Ticaret A.Ş. (TETAŞ), who purchases electrical power from the private enterprises and from state-run production facilities at wholesale prices, and Türkiye Elektrik Dağıtım A.Ş. (TEDAŞ), who purchases electrical energy from TETAŞ, and distributes the electrical energy that it has purchased, amongst 21 electrical power diffusion companies that operate in various locations throughout the country, which on the whole, consist of 26 corporations While these corporations, which share among themselves all the operations that were single handedly undertaken by the Türkiye Elektrik Kurumu  (TEK) before 1985, are focused on operating at ‘full profitability and efficiency’  the price of the electrical power increases by several fold until it reaches the end consumer.

3) A significant portion of the electrical power that is generated is utilized through illegal means without the payment of the cost. Of 162 KWS electrical power generated in 2005, 40% was used in the industry, and although the cost for this consumption was paid, 40% portion of this total was not paid to the distributor firms. Of this second 40%,  a portion of 25% was used through illegal means, the users of 5% of this electrical power did not pay their debts, and 10% was lost at the network. Such high rates of illegal use and loss, are very rarely seen in other countries. For example, in Germany, this rate is only 6%.

4)  Certain public enterprises, such as the municipalities and government and municipality offices, act very slow in the payment of their electricity bills to the distribution firms, and this delay increases the cost of electricity consumption. 

5) Producer firms pay a municipality consumption tax at a rate of 1% over the total of the billed electricity costs that they pay.

According to the information that we have on hand,   a research to be conducted within the scope of the electricity production and distribution chain may provide substantial benefits within a short period of time. Through the measures that can be determined as the result of this research, and that may be implemented as remedies, significant reduction may be provided in the production and distribution costs of electrical power, and in the prices of sale of electrical power to the end consumers. While the authorities were seeking remedies against complaints regarding ‘YTL with high value’ the principal measures that are really necessary in the reduction of input costs were overlooked.  However, it should be beyond any doubt that by focusing on the measures that reduce the input costs of the producer firms,  we may further strengthen our economy, and that we may be able to provide significant contributions to the reduction of unemployment and of the foreign deficits.

Source: Radikal Newspaper