Section 14 in Central Electricity Regulatory Commission (Fees and Charges of Regional Load Despatch Centre and other related matters) Regulations, 2019
14. Computation of Capital Cost.
(1)The capital cost as admitted by the Commission after prudence check, for each of the Regional Load Despatch Centres or NLDC, as the case may be, shall form the basis for determination of annual charges.(2)The capital cost shall be computed by considering the following:(i)The Capital cost as admitted by the Commission as on 01.04.2019 duly trued up by excluding liability, if any;(ii)Expenditure on account of additional capitalization determined in accordance with the Regulation 15 (1);(iii)The fixed assets which have been replaced during control period shall be de-capitalized in accordance with Regulation 15 (2);(iv)Interest during construction and incidental expenditure during construction;(v)Any grant received from the Central or State Government or any statutory body or authority for execution of the project which does not carry any liability of repayment shall be excluded from the Capital Cost for the purpose of computation of interest on loan, return on equity and depreciation;(3)The Capital cost shall be admitted after prudence check which may include scrutiny of the reasonableness of the capital expenditure, financing plan, Interest During Construction (IDC), Incidental Expenditure During Construction (IEDC), financing charges, any gain or loss on account of Foreign Exchange Rate Variation (FERV), cost over-run and time over-run and such other matters as may be considered appropriate by the Commission:Provided that interest during construction shall be computed corresponding to the loan from the date of infusion of debt fund, and after taking into account the prudent phasing of funds duly adjusting IDC on account of time overrun if any;Provided further that incidental expenditure during construction shall be computed after prudence check duly adjusting the IEDC on account of time over run, if any, interest on deposits or advances, or any other receipts and liquidated damages recovered or recoverable corresponding to the delay.(4)RLDC or NLDC shall submit Auditor Certificate for the capital expenditure incurred as on 1.4.2019 and , a Management Certificate duly signed by an authorised person, not below the level of Director of the company, for the projected capital expenditure for respective years of the period 2019-24:
