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Cost based distribution tariffs

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2019
Karaosmanoğlu, Gülsüm
Electrical power systems consist of generation, transmission and distribution systems. These three systems have different economical and financial characteristics such as natural monopolies and competitive markets with divergent cost structures based on diverse investment and operation expenditures. The aggregation of all these disbursements from generation, transmission and distribution systems forms the overall electricity cost. Revealed cost, which is a result of different market characteristics of different systems, is mainly reflected to customer tariffs, for sustainable and continuous operation. These costs may vary depending on the demographic, geographical and social characteristics of the regions. The length and characteristics of distribution overhead line, for example, may be a factor that increases investment cost, generally is longer in geographically large areas compared to smaller ones with the same electricity consumption. In this study, the factors that constitute the customer tariffs and the calculation methods of these factors are examined. In addition, the tariff components and values for Turkey are explained since first implementation period, which began in 2006. Furthermore, operation, investment and power loss including illicit utilization costs of distribution companies are decomposed and analyzed based on electricity distribution regions in Turkey. Regional tariff models are evaluated and compared with the national tariff values. Besides, the factors affecting the change of the operation and investment expenditures of the distribution system are determined by regression analysis.