Section 23 in Bihar Electricity Regulatory Commission (Multi Year Distribution Tariff) Regulations, 2015
23. Treatment of Depreciation.
(a)Depreciation shall be calculated for each year of the control period on the original cost of the fixed assets of the corresponding year.(b)Depreciation shall not be allowed on assets funded by capital subsidies, consumer contributions or grants.(c)Depreciation shall be calculated annually on the basis of assets capitalized and put to use based on the straight line method over the useful life of the asset and at the rate specified by the Central Electricity Regulatory Commission.(d)The residual value of assets shall be considered as 10% and depreciation shall be allowed to a maximum of 90% of the original cost of the asset.The Distribution Licensee shall submit separate detail of fully depreciated asset along with year of commissioning and year of attaining ninety percent depreciation with the tariff petition..Provided that Land shall not be treated as a depreciable asset and its cost shall be excluded while computing 90% of the original cost of the asset:(e)Depreciation shall be charged from the first year of commercial operation of the asset.Provided that in case the operation of the asset is for a part of the year, depreciation shall be charged on proportionate basis:(f)A provision of replacement of assets shall be made in the capital investment plan.
