Section 9(2) in Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014
(2)The Capital Cost of a new project shall include the following:(a)the expenditure incurred or projected to be incurred up to the date of commercial operation of the project;(b)Interest during construction and financing charges, on the loans (i) being equal to 70% of the funds deployed, in the event of the actual equity in excess of 30% of the funds deployed, by treating the excess equity as normative loan, or (ii) being equal to the actual amount of loan in the event of the actual equity less than 30% of the funds deployed;(c)Increase in cost in contract packages as approved by the Commission;(d)Interest during construction and incidental expenditure during construction as computed in accordance with Regulation 11 of these regulations;(e)capitalised Initial spares subject to the ceiling rates specified in Regulation 13 of these regulations;(f)expenditure on account of additional capitalization and de-capitalisation determined in accordance with Regulation 14 of these regulations;(g)adjustment of revenue due to sale of infirm power in excess of fuel cost prior to the COD as specified under Regulation 18 of these regulations; and(h)adjustment of any revenue earned by the transmission licensee by using the assets before COD.
