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[Cites 0, Cited by 0] [Section 5] [Entire Act]

NCT Delhi - Subsection

Section 5(14) in The Delhi Electricity Regulatory Commission (Terms and Conditions for Determination of Transmission Tariff) Regulations, 2011

(14)The WACC (pre-tax) for each year of the Control Period shall be computed at the start of the Control Period in the following manner:Where,
WACC= [ D/E ] * rd + [ 1 ] * re                
1+D/E 1+D/E                
D/E is the Debt to Equity Ratio and for the purpose of determination of tariff, debt-equity ratio for the asset capitalized shall be 70:30. Where equity employed is in excess of 30%, the amount of equity for the purpose of tariff shall be limited to 30% and the balance amount shall be considered as notional loan. The interest rate on the amount of equity in excess of 30% treated as notional loan shall be the weighted average rate of the loans of the Licensee for the respective years and shall be further limited to the prescribed rate of return on equity in the Regulations. Where actual equity employed is less than 30%, the actual equity and debt shall be considered:Provided that the Working capital shall be considered 100% debt financed for the calculation of WACC;Provided further that the Debt to Equity Ratio for the assets covered under Transfer Scheme, dated July 1, 2002 shall be considered as per the debt and equity in the transfer scheme;Provided further that Debt to Equity Ratio for the assets capitalised till 1.04.2012 (other than assets covered under Transfer Scheme) shall be considered as per the debt and equity approved by the Commission at the time of capitalization.rd is the Cost of Debt and shall be determined at the beginning of the Control Period after considering Transmission Licensee's proposals, present cost of debt already contracted by the Transmission Licensee, credit rating, benchmarking and other relevant factors (risk free returns, risk premium, prime lending rate etc.).re is the Return on Equity (pre-tax) and shall be considered at 14% post-tax for the transmission business.