Section 76 in The Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005
76. Calculation of aggregate revenue requirement.
- 76.1 Return on equity capital76.1.1The Distribution Licensee shall be allowed a return at the rate of 16 per cent per annum, in Indian Rupee terms, on the amount of approved equity capital:Explanation I - for the purpose of this Regulation, equity capital shall be the sum total of paid-up equity capital, preference share capital, fully/compulsorily convertible debentures (or other financial instrument with equivalent characteristics), foreign currency convertible bonds, share premium account and any reserves, available for distribution as dividend or for capitalization by way of issue of bonus shares, which have been invested in the Distribution Business and in the Retail Supply Business. The amount of any grant, revaluation reserve, development reserve, contingency reserve and contributions from consumers/users shall not be included in the equity capital. The amount reflected in the books of account as deferred tax liability or deferred tax asset of the Distribution Business and the Retail Supply Business shall be added or deducted, as the case may be, from the amount of equity capitalExplanation II - for the purpose of this Regulation, the amount of equity capital as at April 1, 2005 shall be computed as follows:Equity capital as at April 1, 2004 as determined by the Commission in accordance with Explanation I above, plus Equity capital portion of the allowable capital cost, for the investments put to use in distribution business, calculated in accordance with Regulations 72 and 73 above, for the year ending March 31, 2005:Provided that in case of a Distribution Licensee formed as a result of a transfer scheme under Section 131 of the Act, the date of the said transfer scheme shall be the effective date instead of April 1, 2004 for determination of equity capital above:Provided further that in case of a local authority engaged, before the commencement of the Act, in the business of distribution of electricity, the opening balance of equity capital shall be stipulated appropriately by the Commission in its Order passed under sub-section (3) of Section 64 of the Act.The amount of equity capital at the commencement of each financial year thereafter shall be computed as follows:Equity capital as at the commencement of the previous financial year, calculated in accordance with these Regulations, plus Equity capital portion of the allowable capital cost, for the investments put to use in distribution business, calculated in accordance with Regulations 72 and 73 above, for the previous financial year.76.1.2The return on equity capital shall be computed in the following manner:(a)Return at the allowable rate as per Regulation 76.1.1 above, applied on the amount of equity capital at the commencement of the financial year; plus(b)Return at the allowable rate as per Regulation 76.1.1 above, applied on
