Section 35(35)(b) in The Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005
(b)The energy rate for a hydro power generating station shall be such rate as may be notified by the Commission from time to time, based on the price/variable cost of the least-cost available alternative source of power if such hydro power generating station was not to be despatched in accordance with the final despatch schedule of the State Load Despatch Centre.