Section 19 in Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014
19. Debt-Equity Ratio.
(1)For a project declared under commercial operation on or after 1.4.2014, the debt-equity ratio would be considered as 70:30 as on COD. If the equity actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be treated as normative loan:Provided that:(i)where equity actually deployed is less than 30% of the capital cost, actual equity shall be considered for determination of tariff:(ii)the equity invested in foreign currency shall be designated in Indian rupees on the date of each investment:(iii)any grant obtained for the execution of the project shall not be considered as a part of capital structure for the purpose of debt : equity ratio.Explanation. - The premium, if any, raised by the generating company or the transmission licensee, as the case may be, while issuing share capital and investment of internal resources created out of its free reserve, for the funding of the project, shall be reckoned as paid up capital for the purpose of computing return on equity, only if such premium amount and internal resources are actually utilised for meeting the capital expenditure of the generating station or the transmission system.(2)The generating company or the transmission licensee shall submit the resolution of the Board of the company or approval from Cabinet Committee on Economic Affairs (CCEA) regarding infusion of fund from internal resources in support of the utilization made or proposed to be made to meet the capital expenditure of the generating station or the transmission system including communication system, as the case may be.(3)In case of the generating station and the transmission system including communication system declared under commercial operation prior to 1.4.2014, debt:equity ratio allowed by the Commission for determination of tariff for the period ending 31.3.2014 shall be considered.(4)In case of the generating station and the transmission system including communication system declared under commercial operation prior to 1.4.2014, but where debt:equity ratio has not been determined by the Commission for determination of tariff for the period ending 31.3.2014, the Commission shall approve the debt:equity ratio based on actual information provided by the generating company or the transmission licensee as the case may be.(5)Any expenditure incurred or projected to be incurred on or after 1.4.2014 as may be admitted by the Commission as additional capital expenditure for determination of tariff, and renovation and modernisation expenditure for life extension shall be serviced in the manner specified in clause (1) of this regulation.Chapter - 5 Tariff Structure
