Section 10(4) in Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2014
(4)All regional entities which had at any time during the previous financial year failed to make payment of Charges for Deviation including Additional Charges for Deviation within the time specified in these regulations shall be required to open a Letter of Credit (LC) equal to 110% of its average payable weekly liability for Deviations in the previous financial year, in favour of the concerned RLDC within a fortnight from the date these Regulations come into force.Provided that -(i)if any regional entity fails to make payment of Charges for Deviation including Additional Charges for Deviation by the time specified in these regulations during the current financial year, it shall be required to open a Letter of Credit equal to 110% of weekly outstanding liability in favour of respective Regional Load Despatch Centre within a fortnight from the due date of payment.(ii)LC amount shall be increased to 110% of the payable weekly liability for Deviation in any week during the year, if it exceeds the previous LC amount by more than 50%.Illustration. - If the average payable weekly liability for Deviation of a regional entity during 2009-10 is L20 crore, the regional entity shall open LC for 22 crore in 2010-11. If the weekly payable liability during any week in 2010-11 is L35 crore which is more than 50% of the previous financial year's average payable weekly liability of Rs 30 Crore, the concerned regional entity shall increase the LC amount to L38.5 Crore (1.1* L35.0) by adding L16.5 Crore.
