REGULATION CONCERNING ELECTRICITY DEMAND FORECAST

CHAPTER ONE Objective, Scope, Legal Basis, Definitions and Abbreviations Objective Article 1 (1) The objective of this Regulation is to set forth the principles and procedures regarding formation of electricity demand forecasts those constitute the basis for preparation of generation capacity projection together with transmission system 10 year statement, and distribution companies investment plans together with distribution system 10 year statement. Scope Article 2 (1) This Regulation covers the principles and procedures to be followed in performing, assessing, updating and approving of demand forecasts in accordance with the demand forecast method, which is determined by distribution companies. Legal Basis Article 3 (1) This Regulation has been issued in compliance with the provisions of the Electricity Market Law no. 4628. Definitions Article 4 (1) For the purposes of interpretation and implementation of this Regulation, the following terms and abbreviations bear the following meanings; a) Distribution region: The region defined in the license of a distribution company, b) Distribution company: Any legal entity engaged in electricity distribution in a designated geographical region, c) Law: Electricity Market Law No. 4628 dated February 20, 2001, ) Board: The Energy Market Regulatory Board, d) Authority: The Energy Market Regulatory Authority, e) Demand forecasting: The forecast performed for a certain period of time under different scenario options by a distribution company, f) Demand forecast method: The model to be formed by using scientific methods within the demand forecasting framework, g) TEA: Turkish Electricity Transmission Corp. CHAPTER TWO Principles, Periods of Demand Forecasting, Determination of Method, Data Set Demand forecasting method and its principles Article 5 (1) Distribution company performs or makes someone to perform demand forecasting for its own region by using scientifically and technically proven methods by taking into account peculiarities of concerned distribution region and by considering published official macroeconomic targets, and if deemed necessary by asking the opinions of relevant authorities and institutions. (2) Making real or legal persons to perform demand forecasting by a distribution company does not remove the distribution companys responsibility.
The English version of this Regulation 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.

Demand forecasting period and scenarios Article 6 (1) Demand forecasts are performed annually with a 10 years horizon, on the basis of low, base and high consumption scenarios. The base scenario is taken as the basis for preparation of generation capacity projection and transmission system 10 year statement by TEA, and of investment plan and distribution system 10 year statement by distribution companies. Fundamental data set for demand forecasting Article 7 (1) Fundamental data set for demand forecasting may be formed from economical, social, demographic, climatic, environmental data and past values of the variable that is to be forecasted, and other regional data that demand forecast model requires. (2) Official data that is published by relevant authorities and institutions together with regional data that is registered by a distribution company are used in fundamental data set for demand forecasting. (3) Effects of used data in data set that is required by demand forecasting model on results of demand forecasting is justified by means of scientific and logical approaches. (4) It is essential to have enough number of observations concerning data set that is to be used in demand forecasting within the framework of method to be chosen and of model to be formed. The data set to be used is adjusted for making it appropriate for using it in demand forecasting model through application of transformations those resulting from statistical tests. CHAPTER THREE Principles, Assessment and Verification of Model Principles to be considered in demand forecasting Article 8 (1) The following principles are considered in formation of the model that is to be used for demand forecasting; a) State of reflection of relation between variables by its mathematical expression, b) State of accommodation of an economically meaningful relation between used illustrative independent variable or variables and dependent variable or variables to be forecasted, c) State of being strong in illustration capacity of deterministic determination coefficients, ) State of being an easy and understandable design, d) State of showing consistency with economy and econometrics theory, e) State of showing consistency between forecasts produced for forecasted values of variable or variables with real values of these variable or variables, if it is performed for past years in retrospective. Assessment and verification of demand forecasting model Article 9 (1) Following the formation of the demand forecasting model, the following generally accepted tests in econometrics and statistics literature together with other required tests, which are formed within the framework of chosen different models are performed and subsequently necessary corrections and amendments are made: a) Whether the whole model is statistically significant, b) Whether the parameter or parameters for forecasted illustrative variable or variables are statistically significant, c) Whether the model shows structural stability,
The English version of this Regulation 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.

) Whether the model presents multi co-linearity, heteroscedasticity and successive autocorrelation , d) Whether the model excludes a necessary variable, includes unnecessary variables, and justifies straightness of functional form. (2) The confidence interval for employed tests shall not exceed 10%. CHAPTER FOUR Results of Demand Forecasts, Reporting and Publishing Demand forecast results Article 10 (1) Demand forecasts results include; a) Annual forecasts for total electricity demand, peak demand, and number of subscribers in the relevant distribution region, which are produced by means of a model or models, for a 10 years time horizon on the basis low, base and high consumption scenarios, b) Information to be used for preparation of capacity generation projection and transmission system 10 year statement as articulated in the Electricity Market Grid Regulation, c) Information to be used for preparation of distribution system 10 year statement and investment plan. (2) The information required in subparagraphs (b) and (c) of first paragraph may be produced through use information and foresights those rooted to the results of demand forecasting model. Demand forecast report Article 11 (1) Demand forecast results, together with data set used in demand forecasting, as in the form of a report are presented to the Authority both in written and in magnetic media by end February of each year. (2) Beside the demand forecast results indicated in Article 10 and data set used in demand forecasting, assumptions concerning demand forecasting model, mathematical and econometric theoretical framework, global assessment and justification of data, forecasting of parameters, performing of tests, addition of necessary amendments and corrections, comparison of fitted values with actual values of dependent realized variable or variables through use of demand forecasting model with the ones produced through use of the model, forecasts made under different scenarios, and overall comments and assessments for distribution region and model or models are provided in detail in the Demand Forecast Report. (3) The Demand Forecast Report prepared by a distribution company is investigated in due course to consistency with the principles and procedures laid down in this Regulation, and if deemed appropriate by a Board decision, it is submitted to TEA by the distribution company within 10 days following the notification of the Authority. (4) The Demand Forecast Report is returned to the distribution company for revision, if not deemed appropriate by the Board. Distribution company presents the revised Demand Forecast Report to the Authority within 1 month time following the notification date. Consolidation of demand forecasts Article 12 (1) TEA consolidates the forecasts of consumers those are directly connected to the transmission system with the demand forecasts results of distribution regions. TEA, while forming the format of the report to be presented to the Authority, may
The English version of this Regulation 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.

ask additional information and document concerning Demand Forecast Report from distribution companies, by declaring the reason behind. (2) The demand forecasts concluded by TEA are presented to the Authority by 1 July of each year. Approval and publishing of demand forecasts Article 13 (1) The demand forecasts those concluded and presented to the Authority by TEA are published on TEA internet site as in the form tables for each distribution region and as consolidated. If it is not approved by the Board, the demand forecasts are sent to TEA for reviewing. TEA presents the revised demand forecasts within one month time following the date of notification. (2) Demand forecasts are published by 1 October of each year. Updating of forecast results Article 14 (1) Distribution company prepares data set for next coming 10 years period through revision of data set and if required the model or models, by taking into account annual realization of forecasted variable or variables with illustrative variable or variables. (2) Distribution company, may make changes in the data set used for forecasting, in general structure of forecasting model, and in demand forecast method if they rely on economical and scientific facts. (3) If more than 5% difference between fitted value according to base scenario and actual value in concurring 2 years, demand forecast method is reviewed by the distribution company, and written opinion is presented to the Board. Data supply obligation Article 15 (1) Legal entities managing organized industrial zones give the data that is limited with the purpose of performing demand forecasting, which is asked by distribution companies, to relevant distribution company. The distribution company uses this data in performing regional demand forecasting. Confidentiality Article 16 (1) Any distribution company and TEA cannot use and disclose the information that they gathered under the scope of this Regulation for any other means. CHAPTER FIVE Provisional Articles and Final Provisions Provisional Article 1 (1) A sample Demand Forecast Report prepared by a distribution company in accordance with the Article 11, together with the data set used in demand forecasting is presented to the Authority once, by 31 August, within the scope of performed preparatory studies before approval of the regional demand forecasts by the Board. Effectiveness Article 17 (1) This Regulation becomes effective on the date of its publication. Enforcement Article 18 (1) This Regulation is enforced by the President of the Energy Market Regulatory Authority.
The English version of this Regulation 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.