RERC Regulations 20Chapter III · Financial principles for computing costs and return

Section 20 · Consumer contribution, Deposit work and Grant

(1)

The following nature of work carried out by the licensee shall be classified under this category:

(a)

Works after obtaining a part or all of the funds from the users in the context of consumer contribution, deposit works, and grant.

(b)

Capital works undertaken by utilising grants received from the State and Central Governments, including funds under RGGVY, APDRP, etc.

(2)

Principles for treatment of the expenses on such capital expenditure shall be as follows:

(a)

Normative O&M expense as specified in these Regulations shall be allowed.

(b)

Provisions related to Depreciation, as specified in Regulation 23, shall not be applicable to the extent of financial support provided through consumer contribution, deposit work and grant. The licensee or generating company, as the case may be, shall be allowed to claim deprecation to the extent of financial support, including the loan and equity contribution, provided by them. .

(c)

Provisions related to return on equity, as specified in Regulation 21 shall be applicable to the extent of normative debt: equity mix of 70:30 or actual equity, whichever is less, on the contribution made by the licensee or generating company, as the case may be.

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