Section 5(4)(d) in Orissa Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulation, 2004
(d)In case of direct procurement of power by the distribution licensees from generators/other sources in order to optimise the cost of power procured by utilities, the Commission may lay down guidelines for power purchase mainly based on merit order dispatch. While devising the guidelines, the Commission may consider the following;(i)Load profiles during various seasons;(ii)Technical constraints;(iii)Avoidable costs (whether from own generation or power purchase) after giving due consideration to valid contractual obligations.