Section 27(2) in Karnataka Electricity Reform Act, 1999
(2)The Commission shall, subject to sub-section (3), have the power to lay down methodology and the terms and conditions for determination of revenue of the licensee under sub section (1) of this section and the determination of tariff, in such other manner as the Commission considers appropriate and for doing so, the Commission shall be guided by the following factors, namely:-(a)the financial principles and their applications provided in sections 46, 57 and 57-A of the Electricity (Supply) Act, 1948 (54 of 1948) and in the sixth schedule thereto;(b)in the case of the Board or its successor entities, the principles under section 59 of the Electricity (Supply) Act, 1948;(c)that the tariff progressively reflects the cost of supply of electricity at an adequate and improving level of efficiency;(d)the factors which would encourage efficiency, economical use of the resources, good performance and optimum investments and other matters which the Commission considers appropriate for the purpose of this Act ; and(e)the interest of the consumers are safeguarded and at the same time, the consumers pay for the use of electricity in a reasonable manner based on the average cost of supply of energy;(f)the electricity generation, transmission, distribution and supply are conducted on commercial principles(g)national and state power plans formulated by the Central or State Government, as the case may be :Provided that the contracts concluded by the Government of Karnataka and/or the Board with generation and transmission companies prior to commencement of the Act shall be deemed to have been approved by the Commission under the provisions of this Act and shall be given effect by the Commission.
