Section 22 in Central Electricity Regulatory Commission (Fees and Charges of Regional Load Despatch Centre and other related matters) Regulations, 2019
22. Operation and Maintenance Expenses.
(1)Operation and maintenance(O&M) expenses (excluding human resource expenses) shall be derived on the basis of actual operation and maintenance expenses for the years 2014-15 to 2018-19, based on the audited balance sheets. The O&M expenses shall be normalized by excluding abnormal operation and maintenance expenses, donation, loss-in-inventory, prior-period adjustments, claims and advances written-off, provisions, etc., if any, after prudence check by the Commission.(2)The normalized operation and maintenance expenses, after prudence check, for the years 2014-15 to 2018-19, shall be escalated at the rate of 4.77% to arrive at the normalized operation and maintenance expenses at the 2018-19 price level respectively and then averaged to arrive at normalized average operation and maintenance expenses for the 2014-15 to 2018-19 at 2018-19 price level. The average normalized operation and maintenance expenses of 2018-19 price level shall be escalated at the escalation rate as worked out in accordance with clause(4) of this Regulation to arrive the operation and maintenance expenses for the year 2019-20.(3)The operation and maintenance expenses for the year 2019-20 shall be escalated further at the annual escalation rate as worked out in accordance with clause (4) this Regulation to arrive at permissible operation and maintenance expenses for the subsequent years of the control period.(4)The escalation rate shall be worked out by considering the compounded annual growth rate, inflation rate, rationalization of O&M expenses and other factors, if any.(5)The actual expenditure towards Annual Maintenance Contract (AMC) of SCADA system and other Software/Hardware like REMC, National Open Access Registry (NOAR), web based scheduling software etc. involving significant expenditure, after prudence check, shall be considered for arriving at the Operation and Maintenance Expenses during 2019-20 to 2023-24.
