Electricity distribution activities are performed by distribution companies in regions indicated in their respective licenses. In cases where there are consumers unable to purchase electricity and/or capacity from another supplier in the region served by any distribution company, then such distribution company is obliged to obtain a retail sale license and engage in electricity sales to such consumers on a retail basis and/or provide retail sale services. On the condition that they obtain retail licenses, distribution companies can engage in retail sales of electricity and/or retail sale services for consumers in their respective regions, even if there are other retail sale company and/or companies in their designated regions. Distribution companies owning and/or operating distribution facilities in the regions specified in their licenses carry out renewal, replacement and capacity expansion investments for these facilities and provide non-discriminatory electricity distribution and connection services to all system users including eligible consumers connected and/or to be connected to the distribution system within a period of time to be specified by regulations in accordance with the terms and provisions of their distribution licenses and the distribution code. Distribution companies provide ancillary services under ancillary services agreements.

The duty to prepare demand forecasts, in accordance with the regulation, for the regions specified in distribution licenses and notify them to the Turkish Electricity Transmission Co. Inc. belongs to distribution companies. EMRA approves these forecasts and they are published by Turkish Electricity Transmission Co. Inc.

The duty to prepare the investment plans for public-owned transmission facilities in line with EMRA-approved demand forecasts and to submit these for EMRA approval, as well as the realization of necessary improvements and strengthening those activities undertaken by the investment program as a result of approved investment plans in distribution facilities and building of new distribution facilities, belong to distribution companies.

Ownership of investments made after privatization in accordance with Law no. 4046, with the purpose of the improvement, strengthening and expansion of electricity distribution facilities belongs to the public. Any kind of approval, amendment and inspection rights concerning all kinds of operation and investment planning and implementation in privatized electricity distribution facilities and assets belong to the EMRA. The EMRA demands if the investments required for service supply are not proposed, and if approved investments have not been done, the license is cancelled and a new tender is made.

In addition to the distribution grid, the establishment of private direct lines in conformity with the standards applicable for the distribution grid between legal entities engaging in electricity generation activity and their customers and/or their affiliates within the scope of their licenses, and/or eligible consumers on the property of the parties for which the direct line shall be installed, is possible under a control agreement to be made between the Turkish Electricity Transmission Co. Inc. and distribution companies. Installation of a private direct line shall not constitute a hindrance against selection of the suppliers by the eligible consumers.