Section 68 in Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019
68. Hedging of Foreign Exchange Rate Variation.
(1)The generating company or the transmission licensee, as the case may be, may hedge foreign exchange exposure in respect of the interest and repayment of foreign currency loan taken for the generating station or the transmission system, in part or in full at their discretion.(2)If the petitioner enters into hedging arrangement(s) based on its approved hedging policy, the petitioner shall communicate to the beneficiaries concerned, of entering into such arrangement(s) within thirty days.(3)Every generating company and transmission licensee shall recover the cost of hedging of foreign exchange rate variation corresponding to the normative foreign debt, in the relevant year on year-to-year basis as expense in the period in which it arises and extra rupee liability corresponding to such foreign exchange rate variation shall not be allowed against the hedged foreign debt.(4)To the extent the generating company or the transmission licensee is not able to hedge the foreign exchange exposure, the extra rupee liability towards interest payment and loan repayment corresponding to the normative foreign currency loan in the relevant year shall be permissible, provided it is not attributable to the generating company or the transmission licensee or its suppliers or contractors.
