Section 73 in The Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005
73. Debt-equity ratio.
- 73.1 Any capital expenditure incurred during a financial year on a capital expenditure project commenced on or after April 1, 2005 and/or on purchase of fixed asset on or after such date shall be assumed to be financed at a normative debt:equity ratio of 70:30, to be applied on the annual allowable capital cost for such year.73.2Any fixed asset capitalized on account of a capital expenditure project commenced on or after April 1, 2005 or on account of fixed asset purchased on or after such date shall be assumed to have been financed at a normative debt:equity ratio of 70:30 to be applied on the original cost of such project/fixed asset.73.3Any approved change in the original cost of a project/fixed asset after the date of commissioning shall be assumed to have been financed at the normative debt:equity ratio.73.4Where the Distribution Licensee has achieved financial closure prior to the date of notification of these Regulations in respect of a capital expenditure project commenced on or after April 1, 2005 with a debt:equity ratio less than 70:30, he may apply to the Commission for exemption from Regulation 73.1 along with reasons therefor:Provided further that the Commission may exempt such capital expenditure project from the normative debt:equity ratio if it believes that the application of Regulation 73.1 is likely to adversely affect the commissioning schedule of such project and thereby, the cost and quantity of electricity supplied to consumers.73.5The Commission may, if it deems appropriate, allow a relaxation in the debt:equity ratio norm specified in this Regulation 73 where the applicant reasonably demonstrates inability to raise loan capital, up to the stipulated norm, due to market constraints, corporate/group exposure norms of lenders or similar factors:Provided that the Commission shall give any interested or affected party the opportunity to make representations before approving a relaxation in the debt:equity ratio norm under this Regulation 73.5.
