Section 25 in Bihar Electricity Regulatory Commission (Multi Year Distribution Tariff) Regulations, 2015
25. Treatment of Interest on loan.
(a)The Distribution Licensee shall provide detailed loan-wise, project-wise and utilization-wise details of all the loans.(b)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 where equity actually deployed is less than 30% of the capital cost, the actual loan shall be considered for determination of interest on loan:(c)Actual loan or normative loan, if any, shall be referred as gross normative loan in this Regulation.(d)The normative loan outstanding as of 1st April of control period shall be computed by deducting the cumulative repayment as approved by the Commission (basis as mentioned below) up to 31st March of current period (a year before control period) from the gross normative loan.(e)The repayment for the control period shall be deemed to be equal to the depreciation allowed for the year.(f)Notwithstanding any moratorium period availed by the Distribution Licensee, the repayment of the loan shall be considered from the first year of the control period as per annual depreciation allowed.(g)The rate of interest shall be the weighted average rate of interest calculated on the basis of actual loan portfolio at the beginning of each year of the control period, in accordance with terms and conditions of relevant loan agreements, or bonds or non-convertible debentures:Provided that if no actual loan is outstanding but normative loan is still outstanding, the last available weighted average rate of interest shall be applicable.Provided further that the interest on loan shall be calculated on the normative average loan of the year by applying the weighted average rate of interest:Provided also that exception shall be made for the existing loans which may have different terms as per the agreements already executed if the Commission is satisfied that the loan has been contracted for and applied to identifiable and approved projects:(h)The Distribution Licensee shall make every effort to refinance the loan as long as it results in net benefit to the consumers.Provided that the cost associated with such refinancing shall be eligible to be passed through in tariffs and the benefit on account of refinancing of loan and interest on loan shall be shared in the ratio of 50:50 between the Distribution Licensee and the consumers.Provided further that the Distribution Licensee shall submit the calculation of such benefit to the Commission for its approval.(i)The Distribution Licensee shall enable tracking of the loans converted into grants under schemes like APDRP, R-APDRP, RGGVY, RSVP, etc or any other loan from the Central or State Government by providing information and data regularly to the Commission, for enabling the Commission to recover from Distribution Licensee the amount of interest on loans which have been passed on to the consumers in the earlier years and have been converted into grant subsequently so that the recovered amount is passed on to the consumers.(j)Addition to loan during the year for interest purpose will be restricted to the quantum of assets capitalized and put to use.
