Section 25 in Himachal Pradesh Electricity Regulatory Commission (Promotion of Generation from the Renewable Energy Sources and Terms and Conditions for Tariff Determination) Regulations, 2017
25. Depreciation.
- For the purpose of tariff determination, depreciation shall be computed in the following manner, namely:-(a)the value base for the purpose of depreciation shall be the normative capital cost (for generic tariff) or the capital cost of the project as admitted by the Commission (for project specific tariff), as the case may be;(b)the salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the capital cost of the asset;(c)depreciation per annum shall be based on 'Differential Depreciation Approach'. For tariff purposes, the depreciation shall be allowed @ 5.28% per annum till such time the requirement for repayment of loan component of the capital cost as per regulations 21, 23 and 24 after adjusting the amount of subsidy as per regulation 22, is fully provided and the remaining depreciation shall be spread over the residual useful life of the project on straight line method;(d)depreciation shall be chargeable from the first year of commencement of operation of the project:Provided that in case of operation of the asset for part of the year, depreciation shall be charged on pro rata basis for the purposes of project specific determination of tariff.
