AERC MYT Regulations, 2018

Assam Electricity Regulatory Commission (Terms and Conditions
for determination of Multi Year Tariff) Regulations, 2018
No. AERC. 673/2018/196– In exercise of powers conferred under Section 61 read with Section 181(2)
(zd) of the Electricity Act, 2003 (36 of 2003) and in supersession of the Assam Electricity Regulatory
Commission (Terms and Conditions for determination of Multi Year Tariff) Regulations, 2015 and its
Amendments and all other powers enabling it in this behalf, and after previous publication, the Assam
Electricity Regulatory Commission hereby makes the following regulations:
CHAPTER 1: PRELIMINARY
1 Short title, extent, applicability and commencement

1.1 These Regulations shall be called the Assam Electricity Regulatory Commission (Terms
and Conditions for determination of Multi Year Tariff) Regulations, 2018 for Generation,
Transmission, SLDC, Wheeling and Retail Supply.
1.2 These Regulations shall come into force from the date of their notification in the Official
Gazette of the Government of Assam.
1.3 These Regulations shall extend to the whole of the State of Assam.
1.4 These Regulations shall be applicable for determination of tariff in all cases covered under
st
these Regulations from 1 April, 2019 onwards.
THE ASSAM GAZETTE, EXTRAORDINARY, JULY17, 2018 2708
1.5 However, for all purposes including the review matters pertaining to the period till FY 2018-
19, the issues related to determination of tariff shall be governed by Assam Electricity
Regulatory Commission (Terms and Conditions for determination of Multi Year Tariff)
Regulations, 2015 including amendments thereto.
1.6 These Regulations shall be applicable to all existing and future Generating Companies,
Transmission Licensees, Distribution Licensees, SLDC and their successors, if any. within
the state of Assam under section 62 of the Act.
(i) for supply of electricity by a generating company to a distribution licensee,
(ii) for transmission of electricity by a transmission licensee to a distribution licensee or to
open access consumers and
(iii) for wheeling & retail supply of electricity by a distribution licensee.
(iv) in all other cases where the Commission has the jurisdiction for tariff determination.
(v) State load dispatch centre.
1.7 Notwithstanding anything contained in these regulations the Commission shall adopt the
tariffs as may be determined through the process of competitive bidding, under Section 63
of the Act, in accordance with the competitive bidding guidelines notified by the Central
Government.
1.8 These regulations shall not apply for tariff determination of renewable energy generation
projects. The tariff for such generation projects shall be determined as per Assam
Electricity Regulatory Commission (Terms & Conditions for determination of Tariff from
Renewable Energy Sources) Regulations, 2017 as amended from time to time.
2 Definitions
2.1 In these Regulations, unless the context otherwise requires:
(1) “Accounting Statement” means for each financial year, the following statements, namely-
(i) balance sheet, prepared in accordance with the form contained in Part I of Schedule
VI to the Companies Act, 2013as amended from time to time;
(ii) profit and loss account, complying with the requirements contained in Part II of
Schedule VI to the Companies Act, 2013;
(iii) cash flow statement, prepared in accordance with the Accounting Standard on Cash
Flow Statement (AS-3) of the Institute of Chartered Accountants of India;
(iv) report of the statutory auditors;
(v) cost records prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 2013;
(vi) together with notes thereto, and such other supporting statements and information as
the Commission may direct from time to time;
Provided that in case of any local authority engaged in the business of distribution of
electricity, the Accounting Statement shall mean the items, as mentioned above, prepared
and maintained in accordance with the relevant Acts or Statutes as applicable to such local
authority:
Provided further that the Commission may, from time to time, specify regulatory accounts to
be maintained by a local authority under the Act:
Provided further that once the Commission notifies the Regulations for submission of
Regulatory Accounts, the applications for tariff determination and truing up shall be based on
the Regulatory Accounts.
(2) “Act” means the Electricity Act, 2003 (36 of 2003), as amended from time to time;
(3) “Additional capitalization” means the capital expenditure actually incurred or projected to
be incurred after the date of commercial operation of the project and admitted by the
Commission after prudence check;
(4) “Allocation Statement” means for each financial year, a statement in respect of each of the
separate businesses of the of the Generating Company or Transmission Licensee or
Distribution Licensee, showing the amounts of any revenue, cost, asset, liability, reserve or
provision etc, which has been either:
(i) charged from or to each such Other Business together with a description of the basis of
that charge; or
(ii) determined by apportionment or allocation between different businesses of the licensee
including the Licensed Businesses, together with a description of the basis of the
apportionment or allocation:
Provided that for the purpose of this Regulation, the licensed business of the Distribution
Licensee for an area of supply would be separated as Distribution Wires and Retail Supply
business:
Provided further that such allocation statement in respect of a generating station, owned
and/or maintained and/or operated by the distribution licensee, shall be maintained in a
manner so as to enable tariff determination, stage-wise, Unit wise and/or for the whole
generating station.
(5) “Applicant” means a Generating Company or Transmission Licensee or Distribution

Licensee who has made an application for determination of Annual Revenue Requirement
and Tariff in accordance with the Act and these Regulations and includes a Generating
Company or Transmission Licensee or Distribution Licensee whose tariff is the subject of a
review by the Commission either on suo-motu basis or on a Petition filed by any interested or
affected person or as part of an annual performance review;
(6) “Aggregate Revenue Requirement” means the requirement of the Transmission Licensee
or Distribution Licensee or Generating Company or SLDC for recovery, through tariff, of
allowable expenses and return on capital pertaining to its Licensed or Regulated Business for
a particular financial year, in accordance with these Regulations;
(7) “Auxiliary Energy Consumption” in relation to a period in case of a generating station
means the quantum of energy consumed by auxiliary equipment of the generating station,
such as the equipment being used for the purpose of operating plant and machinery including
switchyard of the generating station and the transformer losses within the generating station,
expressed as a percentage of the sum of gross energy generated at the generator terminals
of all the units of the generating station
Provided further that power consumed in housing colony and other facilities of a Generating
Station including the power consumed in construction phase shall not be included as part of
the auxiliary consumption for the purpose of these Regulations.
(8) “Availability” in relation to a thermal Generating Station for any period means the average of
the daily average declared capacities as certified by Assam State Load Despatch Centre
(SLDC) for all the days during that period expressed as a percentage of the installed capacity
of the Generating Station minus normative auxiliary consumption in MW, as specified in these
Regulations, and shall be computed in accordance with the following formula:
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 = 10000 × 𝐷𝐶𝑖 / {𝑁 × 𝐼𝐶 × 100 − 𝐴𝑈𝑋𝑛 } %

𝑖=1
Where:
N = number of time blocks in the given period
DCi = Average Declared Capacity in MW for the ith time block in such
period
IC = Installed Capacity of the Generating Station in MW
AUX = Normative Auxiliary Consumption in MW, expressed as a
percentage of gross generation
(9) “Base year” means the financial year immediately preceding the first year of the Control
Period and used for the purposes of these regulations;
(10) “Beneficiary” in relation to a Generating Station means the purchaser of electricity
generated at such a Generating Station whose tariff is determined under these Regulations;
“Beneficiary” in relation to transmission business means the person who has contracted the
transmission capacity on payment of transmission charges.
(11) “Block” in relation to a combined cycle thermal Generating Station includes combustion
turbine – generators, associated waste heat recovery boilers, connected steam turbine –
generators and auxiliaries;
(12) “Bulk Power Transmission Agreement” means an executed Agreement that contains the
terms and conditions under which a Transmission System User is entitled to access an intra-
State transmission system of a Transmission Licensee;
(13) “Capital Cost” means the capital cost as determined in accordance with Chapter 5 of these
regulations.
(14) “Change in law” means occurrence of any of the following events:
a) enactment, bringing into effect or promulgation of any new Indian law; or
b) adoption, amendment, modification, repeal or re-enactment of any existing Indian law; or
c) change in interpretation or application of any Indian law by a competent court, Tribunal or
Indian Governmental Instrumentality which is the final authority under law for such
interpretation or application; or
d) change by any competent statutory authority in any condition or covenant of any consent
or clearances or approval or licence available or obtained for the project; or
e) coming into force or change in any bilateral or multilateral agreement/treaty between the
Government of India and any other Sovereign Government having implication for the
generating station or the transmission system regulated under these Regulations.
(15) “Commission” means the Assam Electricity Regulatory Commission;
(16) “Conduct of Business Regulations” means the Assam Electricity Regulatory Commission
(Conduct of Business) Regulations, 2004 as amended from time to time.
(17) “Contracted Capacity” means the capacity in MW contracted by long-term Transmission
System User as part of its long term power procurement plan through a power purchase
agreement and shall be equivalent to the deemed Transmission Capacity Right of a
Transmission System User.
(18) “Control Period” means the period comprising of three years from April 1, 2019 to March 31,
2022, and for every block of three years thereafter or such other period as may be decided by
the Commission, for submission of forecast in accordance with Chapter 3 of these
Regulations;
(19) “Cut-off Date” means 31st March of the year closing after two years of the year of
commercial operation of the project, and in case the project is declared under commercial
operation in the last quarter of a year, the cut-off date shall be 31st March of the year closing
after three years of the year of commercial operation;
(20) “Date of Commercial Operation” means:

a. in relation to a Unit or block of a thermal Generating Station, the date declared by the
generating company after demonstrating the maximum continuous rating (MCR) or the
installed capacity (IC) through a successful trial run after at least a seven (7) day prior
notice to the beneficiaries, from 00:00 hour of which scheduling process as per the Indian
Electricity Grid Code (IEGC) / Assam Electricity Grid Code is fully implemented, and in
relation to the generating station, the date of commercial operation means the date of
commercial operation of the last unit of the generating station;
b. in relation to a Unit of a hydro Generating Station, the date declared by the generating
company from 00:00 hour of which, after notice to the beneficiaries, scheduling process in
accordance with the Indian Electricity Grid Code / Assam Electricity Grid Code is fully
implemented, and in relation to the Generating Station as a whole, the date declared by
the generating company after demonstrating peaking capability corresponding to installed
capacity of the Generating Station through a successful trial run, after notice to the
beneficiaries:
Note:
(i) In case the hydro Generating Station with pondage or storage is not able to demonstrate
peaking capability corresponding to the installed capacity for the reasons of insufficient
reservoir or pond level, the date of commercial operation of the last Unit of the Generating
Station shall be considered as the date of commercial operation of the Generating Station
as a whole, provided that it shall be mandatory for such hydro Generating Station to
demonstrate peaking capability equivalent to installed capacity of the generating Unit or
the Generating Station as and when such reservoir/pond level is achieved.
(ii) In case of purely run-of-river hydro Generating Station, if the Unit or the Generating
Station is declared under commercial operation during lean inflows period when the water
is not sufficient for such demonstration, it shall be mandatory for such hydro Generating
Station or Unit to demonstrate peaking capability equivalent to installed capacity as and
when sufficient inflow is available.
c. in relation to the transmission system, the date declared by the transmission licensee
from 00:00 hour of which an element of the transmission system is in regular service after
successful charging and trial operation for transmitting electricity and communication
signal from sending end to receiving end:
Provided that where the transmission line or substation is dedicated for evacuation of
power from a particular generating station, the generating company and transmission
licensee shall endeavour to commission the generating station and the transmission
system simultaneously as far as practicable and shall ensure the same through
appropriate Implementation Agreement.
Provided further that in case an element of the transmission system is ready for regular
service but is prevented from providing such service for reasons not attributable to the
transmission licensee or its suppliers or its contractors but is on account of the delay in
commissioning of the concerned generating station or in the commissioning of the
upstream or downstream transmission system, the transmission licensee shall approach
the Commission with an appropriate application to approve the date of commercial
operation of such element of the transmission system.
d. Date of commercial operation in relation to a communication system or element thereof
shall mean the date declared by the transmission licensee from 0000 hour of which a
communication system or element is put into service after completion of site acceptance
test including transfer of voice and data to respective control centre as certified by the
State Load Dispatch Centre.
(21) “Day” means the 24 hour period starting at 00:00 hour;
(22) “De-Capitalisation” for the purpose of the tariff under these regulations, means reduction in
Gross Fixed Assets of the project corresponding to the removal/deletion of assets as
admitted by the Commission;
(23) “De-Commissioning” means removal from service of a generating station or a unit thereof
or transmission system including communication system or element thereof, based on the
decision of the Board of Directors/Management Authority of the Generating Company, with
intimation to the Central Electricity Authority and the Commission, either on its own or on an
application made by the project developer or the beneficiaries or both, that the project cannot
be operated due to non performance of the assets on account of technological obsolescence
or uneconomic operation or a combination of these factors;
(24) “Declared Capacity” (DC) shall mean the capability of the generating station to deliver ex-
bus electricity in MW declared by such generating station in relation to any time-block of the
day as defined in the AERC Grid Code or whole of the day, duly taking into account the
availability of fuel;
Note:
(i) In case of a gas turbine generating station or a combined cycle generating
station, the generating station shall declare the capacity for units and
modules on gas fuel and liquid fuel separately, and these shall be scheduled
separately. Total declared capacity and total scheduled generation for the
generating station shall be the sum of the declared capacity and scheduled
generation for gas fuel and liquid fuel for the purpose of computation of
availability and Plant Load Factor respectively.
(ii) Declared capacity however shall be limited to Installed Capacity.
(iii) Daily average declared capacity means the sum of capacity declared for
every fifteen minutes block during the twenty four hour period divided by
ninety six.
(iv) for hydro power Generating Stations, the ex-bus capacity in MW expected to
th
be available from the Generating Station for the i day of the month, which
the station can deliver for at least three (3) hours, taking into account the
availability of water. This shall be certified by the Assam State Load Dispatch
Centre after the day is over.;
(25) “Design Energy” in relation to a hydro power Generating Station means the quantum of
energy, which could be generated in a 90 per cent dependable year with 95 per cent installed
capacity of the Generating Station;
(26) “Distribution Retail Supply Business” means the business of sale of electricity by a
distribution licensee to the consumers within the area of supply in accordance with the terms
of the licence for distribution and retail supply of electricity;
(27) “Distribution Wheeling Business” means the business of operating and maintaining a
distribution system for wheeling of electricity in the area of supply of the Distribution Licensee;
(28) “Expected Revenue from Tariff and Charges” means the revenue estimated to accrue to
the Generating Company or Transmission Licensee or Distribution Licensee from the
Regulated Business at the prevailing tariff;
(29) “Existing Generating Unit/Station” means a Generating Unit/ Station declared under
commercial operation prior to the date of effectiveness of these Regulations;
(30) “Existing Project” means a project declared under commercial operation prior to the date of
effect of these Regulations;
(31) “Event” means an unscheduled or unplanned occurrence in the intra-State transmission

system including faults, incidents and breakdowns
(32) “Fees and Charges Regulations” means the “AERC (Payment of Fee etc) Regulations,
2015” as amended from time to time.
(33) “Force Majeure Event” means, with respect to any party, any event or circumstance, which
is not within the reasonable control of, and is not due to an act of omission or commission of,
that party and which, by the exercise of reasonable care and diligence, could not have been
prevented, and without limiting the generality of the foregoing, would include the following
events:
a. acts of God, including but not limited to lightning, storm, action of the elements,
earthquakes, flood, torrential rains, drought and natural disaster;
b. strikes, lockouts, go-slow, bandh or other industrial disturbances not instigated by any
party;
c. acts of public enemy, wars (declared or undeclared), blockades, insurrections, riots,
revolution, sabotage, vandalism and civil disturbance;
d. unavoidable accident, including but not limited to fire, explosion, radioactive
contamination and toxic dangerous chemical contamination;
e. any shutdown or interruption of the grid, which is required or directed by the State or
Central Government or by the Commission or the Assam State Load Despatch Centre;
and
f. any shut down or interruption, which is required to avoid serious and immediate risks of a
significant plant or equipment failure.
(34) “Gas-engine based Generating Station” means generating station which generates power
through reciprocating gas engines using natural gas or RLNG as fuel.
(35) “Generation Business” means the business of production of electricity from a Generating
Station for the purpose of (i) giving supply to any premises or enabling a supply to be so
given (ii) for the purpose of supply of electricity to any Distribution Licensee in accordance
with the Act and the rules and regulations made thereunder and, (iii) subject to the
Regulations made under sub-section (2) of Section 42 of the Act, supply of electricity to any
consumer;
(36) “Gross Calorific Value” in relation to a thermal Generating Station means the heat
produced in kilocalories by complete combustion of one kilogram of solid fuel or one litre of
liquid fuel or one standard cubic metre of gaseous fuel, as the case may be;
(37) “Gross Station Heat Rate” means the heat energy input in kcal required to generate one
kWh of electrical energy at generator terminals;
(38) “Implementation Agreement‟ means the agreement, contract or memorandum of

understanding, or any such covenant, entered into (i) between transmission licensee and
generating station or (ii) between transmission licensee and developer of the associated
transmission system for the execution of project in coordinated manner;
(39) “Infirm power” means electricity injected into the grid prior to the commercial operation of a
Unit or Block of the Generating Station;
(40) “Installed Capacity” means the summation of the name plate capacities of all the Units of
the Generating Station or the capacity of the Generating Station (reckoned at the generator
terminals) as approved by the Commission from time to time;
(41) “Intra-State Transmission System (InSTS)” means any system for conveyance of
electricity by transmission lines within the area of the State and includes all transmission
lines, sub-stations and associated equipment of Transmission Licensees in the State:
(42) “Licensee” means any person or persons granted license under Section 14 or exempted
under Section 13 of the Act including deemed licensee;
(43) “Licensed business” means the functions and activities, which the licensee(s) is required to
undertake in terms of the licence granted by the Commission or as a deemed Licensee(s)
under the Act;
(44) “Maximum Continuous Rating” or “MCR” in relation to a Unit of the thermal Generating
Station means the maximum continuous output at the generator terminals, guaranteed by the
manufacturer at rated parameters, and in relation to a Block of a combined cycle thermal
Generating Station means the maximum continuous output at the generator terminals,
guaranteed by the manufacturer with water or steam injection (if applicable) and corrected to
50 Hz grid frequency and specified site conditions;
(45) “New Generating Unit/Station” means a Generating Unit/Station declared under

commercial operation on or after the date of coming into force of these Regulations;
(46) “Net Calorific Value” means the amount of usable heat energy released when a fuel is
burned under conditions similar to those in which it is normally used. When fossil fuels are
burned, the carbon and hydrogen in these fuels combine with oxygen in the air to produce
carbon dioxide and water. Some of the energy released in burning goes into transforming the
water into steam and is usually lost. The amount of heat spent in transforming the water into
steam is not counted as part of net heat content
(47) “Normative Annual Plant Availability Factor” or “NAPAF” in relation to a thermal

generating station means the availability factor specified in Regulation 46.1 and in relation to
a hydro generating station means the availability factor specified in Regulation 49.1
(48) “Non-Tariff Income” means income relating to the regulated business other than from tariff,
excluding any income from Other Business and, in case of the Retail Supply Business of a
Distribution Licensee, excluding income from wheeling and receipts on account of cross-
subsidy surcharge and additional surcharge on charges of wheeling;
(49) “Open Access Regulations” means the Assam Electricity Regulatory Commission (Terms
and Conditions for Open Access) Regulations, 2005 as amended from time to time;
(50) “Operation and Maintenance expenses” or “O&M expenses” means the expenditure
incurred on operation and maintenance of the project, or part thereof, and includes the
expenditure on manpower, repairs, spares, consumables, insurance and overheads but
excludes fuel expenses and water charges;
(51) “Original Project Cost” means the capital expenditure incurred by the Generating Company
or the Transmission Licensee, as the case may be, within the original scope of the project up
to the cut-off date as admitted by the Commission;
(52) “Other Business” means any business undertaken by the Generating Company,
Transmission Licensee or Distribution Licensee, other than the business regulated by the
Commission;
(53) “Plant Availability Factor (PAF)” in relation to a Generating Station for any period means
the average of the daily declared capacities (DCs) for all the days during that period
expressed as a percentage of the installed capacity in MW, reduced by the normative
auxiliary energy consumption.
(54) “Plant Load Factor (PLF)”in relation to a thermal Generating Station for a given period,
means the total sent-out energy corresponding to actual ex-bus generation during such
period, expressed as a percentage of sent out energy corresponding to installed capacity in
that period and shall be computed in accordance with the following formula:
𝑃𝑙𝑎𝑛𝑡 𝐿𝑜𝑎𝑑 𝐹𝑎𝑐𝑡𝑜𝑟 = 10000 × 𝐴𝐺𝑖 / {𝑁 × 𝐼𝐶 × 100 − 𝐴𝑈𝑋𝑛 } %

𝑖=1
Where:
N = number of time blocks in the given period
th
AGi = Actual Ex-bus Generation in MW for the i time block in such period
IC = Installed Capacity of the Generating Station in MW
AUXn = Normative Auxiliary Consumption in MW, expressed as a percentage of gross
generation
(55) “Project” means a Generating Station or the transmission system including communication
system, as the case may be, and in case of a hydro Generating Station includes all
components of generating facility such as dam, intake water conductor system, power
generating station and generating units of the scheme, as apportioned to power generation
and in case of thermal generating stations does not include mining if it is a pit head project
and dedicated captive coal mine;
(56) „Prudence Check‟ means scrutiny of reasonableness of capital expenditure incurred or
proposed to be incurred, financing plan, use of efficient technology, cost and time over-run
and such other factors as may be considered appropriate by the Commission for
determination of tariff. While carrying out the Prudence Check, the Commission shall look
into whether the generating company or transmission licensee or distribution licensee has
been careful in its judgments and decisions for executing the project or has been careful and
vigilant in executing the project or other decisions that may have any impact on tariff
(57) 'Pumped storage hydro generating station' means a hydro station which generates power
through energy stored in the form of water energy, pumped from a lower elevation reservoir to
a higher elevation reservoir;
(58) “Rated Voltage” means the manufacturer‟s design voltage at which the transmission system
is designed to operate or such lower voltage at which the line is charged, for the time being,
in consultation with Transmission System Users;
(59) “Regulated Business” means any electricity business, which is regulated by the
Commission;
(60) “Run-of-river Generating Station” means a hydro Generating Station, which does not have
upstream pondage;
(61) “Run-of-river Generating Station with pondage” means a hydro Generating Station with
sufficient pondage for meeting the diurnal variation of power demand;
(62) “Scheduled Energy” means the quantum of energy scheduled by the State Load Dispatch
Centre to be injected into the grid by a generating station for a given time period;
(63) “Scheduled Generation” at any time or for any period or time-block means schedule of ex-
bus generation in MW or MWh, given by the State Load Dispatch Centre;
Note:
For the open cycle gas turbine generating station or a combined cycle generating station if
the average frequency for any time-block, is below 49.52 Hz but not below 49.02 Hz and the
scheduled generation is more than 98.5% of the declared capacity, the scheduled generation
shall be deemed to have been reduced to 98.5% of the declared capacity, and if the average
frequency for any time-block is below 49.02 Hz and the scheduled generation is more than
96.5% of the declared capacity, the scheduled generation shall be deemed to have been
reduced to 96.5% of the declared capacity. In such an event of reduction of scheduled
generation of gas turbine generating station, the corresponding drawal schedule of
beneficiaries shall be corrected in proportion to their scheduled drawal with adjustment of
transmission losses on post facto basis.
(64) "State Load Dispatch Centre" or "SLDC" means the centre established by the State
Government for purposes of exercising the powers and discharging the functions under
Section 31 of the Act;
(65) “State Transmission Utility” means the Board or the Government Company specified as
such by the State Government under sub-section (1) of Section 39 of the Act;
(66) “Storage type power station” means a hydro power Generating Station associated with
large storage capacity to enable variation in generation of electricity according to demand;
(67) “Transmission Service Agreement” means the agreement, contract, memorandum of

understanding, or any such covenant, entered into between the Transmission Licensee / STU
and the beneficiary for the operational phase of the transmission system.
(68) “Transmission System” means a line or a group of lines with or without associated sub-
station, and includes equipment associated with transmission lines and sub-stations;
(69) “Transmission System User” means a person who has been allotted transmission capacity
rights to access an intra-State transmission system pursuant to a Bulk Power Transmission
Agreement, except as provided in the Open Access Regulations;
(70) “Trial Run” in relation to generating station or unit thereof shall mean the successful running
of the generating station or unit thereof at maximum continuous rating or installed capacity for
continuous period of 72 hours in case of unit of a thermal generating station or unit thereof
and 12 hours in case of a unit of a hydro generating station or unit thereof:
Provided that where the beneficiaries have been tied up for purchasing power from the
generating station, the trial run shall commence after seven days notice by the generating
company to the beneficiaries.
(71) “Trial operation” in relation to a transmission system or an element thereof shall mean
successful charging of the transmission system or an element thereof for 24 hours at
continuous flow of power, and communication signal from sending end to receiving end and
with requisite metering system, telemetry and protection system in service enclosing
certificate to that effect from concerned State Load Dispatch Centre.
(72) “Unit” in relation to a thermal Generating Station other than combined cycle thermal
Generating Station means steam generator, turbine-generator and auxiliaries, or in relation to
a combined cycle thermal Generating Station, means turbine-generator and auxiliaries; and in
relation to a hydro Generating Station means turbine-generator and its auxiliaries;
(73) “Useful life” in relation to a Unit of a Generating Station, transmission system and
distribution from the date of commercial operation shall mean the following, namely:-
(i) Coal based thermal generating Station - 25 years
(ii) Gas/Liquid fuel based thermal Generating Station - 25 years
(iii) Gas-engine based thermal Generating Station – 25 years
(iv) Hydro Generating Station including Pump Storage – 35 years
(v) AC and DC sub-station- 25 years
(vi) Gas Insulated Substation (GIS) – 25 years
(vii) Transmission line (including HVAC & HVDC) - 35 years
(viii) Distribution line-35 years
Provided that the extension of life of the projects beyond the completion of their useful
life shall be decided by the Commission;
(74) “Wheeling” means the operation whereby the distribution system and associated facilities of
a distribution licensee are used by another person for the conveyance of electricity on
payment of charges to be determined under section 62, and in the event where use of the
distribution system and associated facilities is by a consumer, on payment of a surcharge in
addition to the charges for wheeling as may be determined by the Commission under the first
proviso to sub-section (2) of Section 42, an additional surcharge on the charges of wheeling,
as may be specified by the Commission, if applicable, to meet the fixed cost of such
distribution licensee arising out of his obligation to supply, under Sub-section (4) of Section
42 and wheeling charges under clause (c) of sub-section (1) of Section 62;
(75) “Wheeling Business” means the business of operating and maintaining a distribution
system for conveyance of electricity in the area of supply of the distribution licensee.
(76) “Year” means the financial year ending on 31st March,
2.2 Words or expressions occurring in these Regulations and not defined shall bear the same
meaning as in the Electricity Act, 2003, as amended from time to time.
CHAPTER 2: GENERAL PRINCIPLES
3 Object, Scope of Regulations and Extent of Application

3.1 The objective of these Regulations is to specify the terms and conditions for the determination
of tariffs by the Assam Electricity Regulatory Commission for the supply of electricity by a
generating company to a distribution licensee, for transmission of electricity, for wheeling of
electricity and for retail sale of electricity, and SLDC.
3.2 The Commission in specifying these Regulations is guided by the principles contained in
Sections 61 and 62 of the Act, the National Electricity Policy, 2005 and the Tariff Policy, 2016
notified by the Central Government under Section 3 of the Act.
3.3 The Commission shall determine tariff, including terms and conditions thereof, for all matters
for which the Commission has jurisdiction under the Act, including in the following cases:-
(i) Supply of electricity by a Generating Company to a Distribution Licensee:

(ii) Intra-State transmission of electricity;
(iii) Wheeling Business for Distribution of electricity;
(iv) Retail Supply Business of electricity;
(v) State Load Dispatch Centre;
Provided that the Commission shall determine such tariff, having regard to the terms and
conditions contained in Chapter 6,7, 8, 9 & 10 of these Regulations for applications under this
Regulation for determination of tariff, for generation, transmission, distribution Wheeling
Business and retail supply business and SLDC:
Provided further that the Commission, while determining tariff upon an application made to it
under this Regulation, shall also have regard to the terms and conditions of tariff as may be
specified by the State Commission of such other State and/or the terms and conditions of
tariff as may be specified by the Central Commission where any of the Parties to such
transaction come under the jurisdiction of such State Commission or of the Central
Commission.
3.4 Notwithstanding anything contained in these Regulations, the Commission shall adopt the
tariff if such tariff has been determined through a transparent process of bidding in
accordance with the guidelines issued by the Central Government.
4 Multi-Year Tariff Framework

4.1 The Commission shall determine the tariff for matters covered under clauses (i), (ii), (iii), (iv)
st
and (v) of Regulation 3.3 above under a Multi-Year Tariff framework with effect from 1 April
2019.
4.2 The Multi-Year Tariff framework shall be based on the following elements, for calculation of
Aggregate Revenue Requirement and expected revenue from tariff and charges for
Generating Companies, Transmission Licensee, SLDC, Distribution Wheeling Business and

Retail Supply Business:
(i) Before commencement of Control Period, a forecast of the Aggregate Revenue

Requirement and expected revenue from existing tariff and charges shall be submitted
by the applicant and approved by the Commission;
(ii) A detailed Capital Investment Plan for each year of the Control Period, shall be
submitted by the applicant for the Commission's approval;
(iii) The applicant shall submit operating norms and trajectories of performance parameters
for each year of the Control Period, for the Commission's approval
(iv) The applicant shall submit the forecast of Aggregate Revenue Requirement and
expected revenue from existing tariff for each year of the Control Period, and the
Commission shall approve the tariff for Generating Companies, SLDC, Transmission
Licensee, Distribution Wheeling Business and Retail Supply Business, for each year of
the Control Period;
(v) In its tariff petition, a generating company shall submit information to support the
determination of tariff for each generating station
(vi) Annual Performance review vis-à-vis the approved forecast and categorization of
variation in performance as those caused by factors beyond the control of the applicant
(uncontrollable items) shall be undertaken by the Commission;
(vii) True up of the past years based on audited annual accounts of the licensees and the
Generation companies.
(viii) The mechanism for pass-through of approved gains or losses on account of
uncontrollable items as specified by the Commission in these Regulations;
(ix) The mechanism for sharing of approved gains or losses arising out of controllable items
as specified by the Commission in these Regulations;
(x) Tariff determination for Generating Companies, SLDC, Transmission Licensee and
Distribution Wheeling Business and Retail Supply Business, for each financial year
within the Control period based on the approved forecast. The tariff shall be reviewed at
the time of the true-up and annual performance review.
(xi) There will be no true-up of the controllable items except on account of Force Majeure
events or on account of variations attributable to uncontrollable items. The variations in
the controllable items, as defined in regulation 10, over and above the norms specified
will be governed by incentive and penalty framework specified in these regulations.
(xii) The tariff determined by the Commission and the directions given in the MYT order
shall be the quid pro quo and mutually inclusive. The tariff determined shall, within the
time period specified in the order, be subject to the compliance of the directions by the
generating company and the licensees to the satisfaction of the Commission. Non-
compliance of directions given in the tariff order may also lead to invocation of the
provisions of section 142 of the Act.
(xiii) The tariff determined by the Commission shall continue to operate till it is modified or
revised by the Commission.
5 Control Period and Baseline
5.1 The first Control Period under these Regulations shall be of three financial years from April 1,
2019 to March 31, 2022 and for every block of three years thereafter or such other period as
may be decided by the Commission.
Provided that in case any generating station gets commissioned after notification of these
Regulations but before commencement of the first Control Period, the Commission may
determine the tariff based on the norms as specified for such generating station under these
Regulations, under special case through separate Order.
5.2 The Commission shall determine baseline values for various financial and operational
parameters of ARR for the Control Period taking into consideration the figures approved by
the Commission in the past, actual average figures of last three years, audited accounts,
estimate of the figures for the relevant year, Industry benchmarks/norms and other factors
considered appropriate by the Commission;
Provided that in case of substantial difference between the estimates earlier provided /
considered for determination of baseline values and the actual audited accounts, the
Commission may re-determine the baseline values for the base year suo-moto or on an
application filed by the Applicant
6 Capital Investment Plan

6.1 The Generating Company, Transmission Licensee, SLDC Business and Distribution Licensee
shall submit a Capital Investment Plan for the entire Control Period, as part of the MYT
Petition as per the timeline specified in this Regulation and accompanied by the Fee required
for processing of Investment plan, as specified in AERC (Payment of Fee) Regulations, 2015.
.
6.2 The Capital Investment Plan for a generating company shall be based on planned generation
capacity growth and shall contain among other things the following (i) generation forecasts;
(ii) future performance targets; (iii) proposed efficiency improvement measures; (iv) saving in
operating costs; (v) Plan for reduction in per unit/per MW cost of generation (vi) financial
statements (which include balance sheet, profit and loss statement and cash flow statement) -
current and projected (at least for the control period duration) along with basis of projections;
(vii) any other new measure to be initiated by the Generating Company e.g. IT initiatives, third
party energy audit, safety initiatives etc.
6.3 The Capital Investment Plan for transmission licensee shall be based on proposed generation
capacity addition and future load forecasts of the state and should contain among other things
the following: (i) future plans/ performance targets of the company including efficiency
improvement measures proposed to be introduced (ii) plans for meeting reactive power
requirements; (iii) plan for reduction in transmission losses; (iv) plan for improvement in
quality of transmission service and reliability; (v) metering arrangements; (vi) Plan for
reduction in per MW transmission cost, (vii) financial statements (which include balance
sheet, profit and loss statement and cash flow statement)- current and projected (at least for
the period of control period duration) along with basis of projections; (viii) any other new
measure to be initiated by the Licensee e.g. IT initiatives, safety initiatives etc.
6.4 The Capital Investment plan for distribution licensee shall be based on sales forecast
(MUs)/load growth and should contain among other things the following: (i) future plans/
performance targets of the company including efficiency improvement measures proposed to
be introduced (ii) plan for reduction in distribution and non-technical losses;(iii) plan for
improvement in quality of supply and reliability; (iv) metering arrangements; (v) plan for
improvement in collection efficiency (vi) plan for improvement in consumer services/new
consumer services (vii) Plan for reduction in O&M cost per MU of energy sales (viii) MIS; (ix)
scheme for third party energy audit (x) plan for improvement in metering and billing; (xi)
financial statements (which include balance sheet, profit and loss statement and cash flow
statement)- current and projected (at least for the period of control period duration) along with
basis of projections; (xii) any other new measure to be initiated by the Licensee(s) e.g. IT
initiatives, development of distribution franchisee, periodical business satisfaction surveys,
safety initiatives etc.
6.5 The capital investment plan shall be project/scheme wise and for each scheme/project shall
include:
a. Purpose of investment
b. Capital Structure;
c. Capitalization Schedule;
d. Financing Plan including identified sources of investment;
e. Details of physical parameters / targets;
f. Cost-benefit analysis and payback period;
g. Envisaged reduction in O&M cost/losses;
h. Ongoing projects that will spill into the year under review and new projects
(along with justification) that will commence but may be completed within or
beyond the control period.
6.6 The Capital Investment plan should be realistic in nature, the Capital Investment plan may be
mainly of the following parts:
A. Plans which will be implemented under some tied up schemes or funding has already
been arranged
B. Capital Investments which will get covered by some upcoming schemes/expected
funding
C. Other priority based investments required to be undertaken, but no scheme/funding is
available for them.
6.7 Purpose of investment shall include:
i. for a generation company - generation capacity growth, replacement of assets,

renovation and modernization, reduction in average per unit cost of generation etc;
ii. for a transmission licensee - power evacuation, system augmentation, network
expansion, replacement of assets, reduction in transmission losses, improvement in
transmission service and reliability of supply, reduction in per MW transmission cost, IT
related projects etc.
iii. for a distribution licensee - meeting load growth/ sales forecast (MUs), distribution loss
reduction, non-technical loss reduction, replacement of assets, meeting reactive energy
requirements, improvement in metering, consumer services, collection efficiency,
quality and reliability of supply etc.
6.8 The capital investment plan, in case of a generation company, will be commensurate with
generation capacity growth, renovation & modernization requirements etc.
In case of a transmission licensee, the capital investment plan will be commensurate with
load/generation capacity growth and will be linked to improvement in quality of transmission
service, reliability, metering and reduction in transmission losses.
The capital investment plan in case of a distribution licensee shall be commensurate with
sales forecast (MUs) / load growth of the state, distribution/non-technical loss reduction
targets, improvements envisaged in metering, collection efficiency, reliability and quality of
supply etc.
6.9 Capital Investment for renovation and modernization in case of a transmission licensee and a
generation company shall be made through an application with a detailed project report
(DPR) elaborating the following elements: (i) Complete scope and justification; (ii) Estimated
life extension of the generation/transmission asset; (iii) Improvement in performance
parameters; (iv) Cost-benefit analysis; (v) Phasing of expenditure; (vi) Milestones/Time lines
(vii) Schedule of completion; (viii) Estimated completion cost; (ix) Other aspects.
6.10 Capital investment plan shall incorporate list of schemes in order of priority so as to enable
the Commission to approve the schemes in that order and in case lesser amount of capital
expenditure is to be approved then the schemes of lower priority could be disapproved
6.11 The generation company and licensee shall submit all information / data required by the
Commission for approval of the capital investment plan.
6.12 In the normal course, the Commission shall not revisit the approved capital investment plan
during the control period. However, during the annual performance review and true-up, the
Commission shall monitor the year wise progress of the actual capital expenditure incurred by
the generating company or the licensee vis-à-vis the approved capital expenditure and in
case of significant difference between the actual expenditure viz-a-viz the approved
expenditure, the Commission may true up the capital expenditure, subject to prudence check,
as a part of annual true up exercise or without an application to this effect by the generation
company/licensee. The generating company and the licensee shall submit the scheme-wise
actual capital expenditure incurred along with the annual performance review and true-up
filing.
6.13 In case during execution of the project, the Capital Expenditure is estimated to cross 110% of
the approved limit, the Licensee or company will need to take prior approval of the
Commission before moving ahead with that expenditure.
6.14 In case during the annual performance review, large variations are observed in the actual
cumulative capital expenditure incurred up to the current year starting from first year of the
control period as against the approved capital expenditure, the Commission may revisit the
costs incidental to the actual capital expenditure in the current year and remaining years of
the control period.
Provided that the actual capital expenditure incurred shall be only for the schemes as per the
approved capital investment plan.
Provided that if the actual capital expenditure incurred is more than the approved capital
expenditure (whether at the time of MYT Order or separate approval before investment), the
Commission may take appropriate decision at the time true-up of the cost incidental to such
variations.
6.15 In case the capital expenditure is required for emergency work which has not been approved
in the Capital Investment Plan, the licensee shall submit an application, containing all relevant
information along with reasons justifying emergency nature of the proposed work, seeking
approval by the Commission. The licensee shall take up the work prior to the approval of the
Commission provided that the emergency nature of the scheme has been certified by its
Board of Directors.
6.16 The generation company and the licensee shall submit all information / data as required by
the Commission for necessary approval of the Capital Investment plan.
7 Forecast of Aggregate Revenue Requirement

7.1 The applicant shall develop the forecast of Aggregate Revenue Requirement using the
assumptions relating to the behavior of individual variables that comprise the Aggregate
Revenue Requirement during the Control Period.
7.2 Forecast of expected revenue from tariff and charges
The applicant shall develop the forecast of expected revenue from tariff and charges based
on the following:
a) In the case of a Generating Company, estimates of expected energy generation and

capacity allocated to Distribution Licensees and Open Access Customers for each
financial year within the Control Period;
b) In the case of a Transmission Licensee, estimates of transmission capacity allocated to
Transmission System Users for each financial year within the Control Period;
c) In the case of a Distribution Licensee, estimates of quantum of electricity to be supplied to
consumers and wheeled on behalf of Distribution System Users for each financial year
within the Control Period;
d) In case of SLDC, estimates of allocated transmission capacity to users of intra State
Transmission System for each financial year within the Control Period; and
e) Prevailing tariff as at the date of making the application.
7.3 Based on the forecast of Aggregate Revenue Requirement and expected revenue from tariff
and charges, the Generating Company or Transmission Licensee or Distribution Licensee or
SLDC shall submit the forecast of tariff, that would meet the gap, if any, in the Aggregate
Revenue Requirement.
7.4 The applicant shall provide full details supporting the forecast, including but not limited to
details of past performance, proposed initiatives for achieving efficiency or productivity gains,
technical studies, contractual arrangements and/or secondary research, to enable the
Commission to assess the reasonableness of the forecast.
7.5 On receipt of application, the Commission shall either-
a) Issue an Order approving the tariff for the Control Period, subject to such modifications
and conditions as it may specify in the said Order; or
b) Reject the application for reasons to be recorded in writing, as the Commission may
deem appropriate.
Provided that the applicant shall be given a reasonable opportunity of being heard before
rejecting its application.
7.6 The Commission, in these Regulations, has specified the variables to be considered in the
tariff determination of the applicant that shall be reviewed by the Commission as part of the
Annual Performance Review in accordance with Regulation9.
8 Specific trajectory for certain variables

8.1 The Commission shall stipulate a trajectory while approving the MYT Petition for certain
variables having regard to the reorganization, restructuring and development of the electricity
industry in the State.
8.2 Provided that the variables for which a trajectory may be stipulated include, but are not limited
to,
a) In case of Generating Stations:
Generating station‟s availability, Station heat rate, secondary oil consumption, auxiliary
consumption, Transit losses, etc.
b) In case of Transmission Licensee:
Transmission losses, transmission system availability, etc.
c) In case of Distribution Licensee:
Supply availability, wheeling availability, distribution losses, collection efficiency, etc.
9 Annual Performance Review and True Up

9.1 Where the aggregate revenue requirement and expected revenue from tariff and charges of a
Generating Company or Transmission Licensee or Distribution Licensee or SLDC is covered
under a Multi-Year Tariff framework, then such Generating Company or Transmission
Licensee or Distribution Licensee or SLDC, as the case may be, shall be subject to an annual
performance review and true up during the Control Period in accordance with this Regulation.
9.2 The Generating company, Transmission Licensee and the Distribution Licensee shall file an
application for annual performance review of current year, true-up of previous year and tariff
for the ensuing year not less than 120 days before the close of each year of the control
period..
Provided that the Generating Company or Transmission Licensee or Distribution Licensee or
SLDC, as the case may be, submit to the Commission information in such form as may be
stipulated by the Commission, together with the Accounting Statements, extracts of books of
account and such other details as the Commission may require to assess the reasons for and
extent of any variation in financial performance from the approved forecast of Aggregate
Revenue Requirement and actual revenue from tariff and charges.
Provided that the Petition for Truing Up shall be accompanied by Audited Annual Accounts,
duly certified by the Statutory Auditor and CAG.
Provided that the information sought by the Commission shall be submitted in the formats as
prescribed by the Commission.
9.3 The scope of the Annual Performance review and True up shall be a comparison of the actual
performance of the Generating Company or Transmission Licensee or SLDC or Distribution
Licensee with the approved forecast of Aggregate Revenue Requirement and expected
revenue from tariff and charges and shall comprise the following:
a) True Up: a comparison of the audited performance of the applicant for the previous
financial year with the approved forecast for that financial year and truing up of
expenses and revenue in line with Regulation 10 of this regulation including pass
through of gain/loss pertaining to controllable and uncontrollable items;
b) Annual Performance Review: a comparison of the performance targets estimated to

be achieved for the current financial year(based on 6 months actual data) with the
approved forecast for that financial year including adjusting trajectories of
uncontrollable if needed.
c) Categorisation of variations in performance with reference to approved forecast into
factors within the control of the applicant (controllable items) and those caused by
factors beyond the control of the applicant (un-controllable items)
Provided such categorization of the controllable and uncontrollable items shall be done
in accordance with Regulation 10of this regulation.
9.4 Upon completion of the review, the Commission shall attribute any variations or expected
variations in performance, for variables specified under Regulation 10 below, to factors within
the control of the applicant (controllable items) or to factors beyond the control of the
applicant (uncontrollable items):
Provided that any variations or expected variations in performance, for variables other than
those specified under Regulation 10below, shall not be reviewed by the Commission during
the Control Period and shall be attributed entirely to controllable items:
Provided however, that where the applicant or any interested or affected party believes, for
any variable not specified under Regulation 10 below that there is a material variation or
expected variation in performance, for any financial year, on account of uncontrollable items,
such applicant or interested or affected party may apply to the Commission for inclusion of
such variable, during the Annual Performance Review under Regulation 9.3 above for such
financial year.
9.5 Upon completion of the True-Up and Annual Performance Review, the Commission shall
pass an order recording-
a) The approved aggregate gain or loss to the Generating Company or Transmission

Licensee or Distribution Licensee or SLDC on account of controllable items and the
amount of such gains or such losses that may be shared in accordance with Regulation
12;
b) The approved modifications to the forecast of the Generating Company or Transmission
Licensee or Distribution Licensee or SLDC for the ensuing financial year; and
c) Revision of estimates for the ensuing financial year, if required, based on the audited
financial results for the previous financial year.
10 Controllable and uncontrollable items

10.1 For the purpose of this regulation, the items of ARR shall be identified as 'controllable' or
'uncontrollable'. The variation on account of uncontrollable items shall be treated as a pass-
through subject to prudence check/validation and approval by the Commission;
Provided that the Commission may allow variations in controllable items on account of Force
Majeure events as pass-through in the ARR for the ensuing year based on actual values
submitted by the generating company and licensees and subsequent validation and approval
by the Commission during true-up.
Further provided that the Commission may allow variations in uncontrollable items as pass-
through in the ARR for the ensuing year based on actual values submitted by the generating
company and licensees and subsequent validation and approval by the Commission during
true-up.
10.2 The items in the ARR shall be treated as „controllable‟ or „uncontrollable‟ as follows:
Controllable Items
ARR Element Controllable
Availability Controllable
Plant Load factor / Plant availability factor Controllable
Heat Rate Controllable
Auxiliary Energy Consumption Controllable
Secondary Fuel Oil Consumption (SFC) Controllable
O&M Expenses (excluding terminal liabilities with regard to Controllable
employees on account of changes in pay scales or dearness
allowance due to inflation)
Depreciation Controllable
Interest and Finance Charges Controllable
Return on Equity Controllable
Transit loss of coal Controllable
Capital Expenditure Controllable
Distribution Losses Controllable
Collection Efficiency Controllable
Intra State Transmission losses Controllable
Quality of Supply Controllable
Uncontrollable Items
ARR Element Uncontrollable
Terminal liabilities with regard to employees on account of changes Uncontrollable
in pay scales
One-time expenses such as expense due to change in accounting Uncontrollable
policy & estimates, arrears paid due to revision of pay based on pay
commission recommendations and interim relief etc.,
All statutory levies and taxes, if any excluding tax on Income Uncontrollable
Fuel Price Uncontrollable
Calorific Value of Fuel Uncontrollable
Energy Sales Uncontrollable
Power Purchase Price Uncontrollable
Power Purchase Quantum (MUs) Uncontrollable
Inter State Transmission losses Uncontrollable
Non-Tariff income Uncontrollable
11 Mechanism for pass through of gains or losses on account of Uncontrollable

items
11.1 The approved aggregate gain or loss to the Generating Company or Transmission Licensee
or Distribution Licensee or SLDC on account of uncontrollable items shall be passed through
as an adjustment in the tariff of the Generating Company or Transmission Licensee or
Distribution Licensee or SLDC over such period as may be specified in the Order of the
Commission passed under these Regulations.
11.2 The Generating Company or Transmission Licensee or Distribution Licensee or SLDC shall
submit such details of the variation between expenses incurred and revenue earned and the
figures approved by the Commission, in the prescribed format to the Commission, along with
the detailed computations and supporting documents as may be required for verification by
the Commission.
11.3 Nothing contained in this Regulation shall apply in respect of any gain or loss arising out of
variations in the price of fuel and power purchase, which shall be dealt with as specified by
the Commission from time to time.
12 Mechanism for pass through of gains or losses on account of Controllable items

12.1 The approved aggregate gain to the Generating Company or Transmission Licensee or
Distribution Licensee or SLDC on account of controllable items shall be dealt with in the
following manner:
a) One-third of the amount of such gain shall be passed on as a rebate in tariff over such
period as may be stipulated in the Order of the Commission under Regulation 9.5;
b) The balance amount, which will amount to two-third of such gain, may be utilised at the
discretion of the Generating Company or Transmission Licensee or Distribution Licensee
or SLDC.
12.2 The approved aggregate loss to the Generating Company or Transmission Licensee or
Distribution Licensee or SLDC on account of controllable items shall be dealt with in the
following manner:
a) One-third of the amount of such loss may be passed on as an additional charge in tariff
over such period as may be stipulated in the Order of the Commission; and
b) The balance amount of loss shall be absorbed by the Generating Company or
Transmission Licensee or Distribution Licensee or SLDC.
13 Suo Motu
13.1 The Commission shall, at all times, have the authority, either Suo-Motu or on a petition filed
by any interested or affected party, to determine the Tariff, including terms and conditions
thereof, of Generation Company, Transmission Licensee, SLDC and Distribution Licensees
and shall initiate the process of such determination in accordance with the procedure as
specified:
Provided that the proceedings for such determination of Tariff, including terms and conditions
thereof, shall be in the same manner as set out in the AERC (Conduct of Business
Regulations) 2004, as amended from time to time.
CHAPTER 3: PROCEDURE FOR DETERMINATION OF TARIFF
14 Procedures relating to making an application for determination of Tariff

14.1 An application for determination of tariff shall be made in such form and in such manner as
specified in this Regulation, and accompanied by such fees as may be specified under the
AERC (Payment of Fees etc.) Regulations, 2015, as amended from time to time.
14.2 An application for determination of tariff for first year of the Control Period shall be made
along with the Multi Year Tariff Petition for the Control Period under Regulation 7 and the
Petition for determination of Tariff for subsequent years of the Control Period shall be made
along with Petition for Annual Performance Review under Regulation 9.
14.3 The formats for furnishing information for calculating expected revenue and expenditure and
for determining tariff shall be specified separately for Generation, Transmission, Distribution
and SLDC charges. Information submitted in these formats should be accompanied by
supporting documents/calculations and soft copies.
14.4 The proceedings to be held by the Commission for determination of tariff shall be in
accordance with the AERC (Conduct of Business) Regulations, 2004, as amended from time
to time.
14.5 Notwithstanding anything contained in these Regulations, the Commission shall at all times
have the authority, either on suo-motu basis or on a Petition filed by any interested or affected
Party, to determine the tariff, including terms and conditions thereof, of any Generating
Company or Transmission Licensee or Distribution Licensee or SLDC:
Provided that such determination of tariff may be pursuant to an agreement or arrangement or
otherwise whether or not previously approved by the Commission and entered into at any
time before or after the commencement of the Act:
15 Review at the End of Control Period

15.1 At the end of the control period, the Commission shall review the achievement of objectives
and implementation of the principles of MYT laid- down in these Regulations.
15.2 The end of the one control period may be the beginning of the next control period or as
decided by the Commission. The Commission shall analyse the performance with respect to
the targets set out at the beginning of the control period and shall determine the base value
for the next control period, based on actual performance achieved, expected improvement
and other relevant factors.
16 Determination of Generation Tariff

Existing Generating Station
16.1 Where the Commission has, at any time prior to the date of effect of these Regulations,
approved a power purchase agreement or arrangement between a Generating Company and
a Distribution Licensee or has adopted the tariff contained therein for supply of electricity from
an existing generating Unit/Station, then the tariff for supply of electricity by the Generating
Company to the Distribution Licensee shall be in accordance with tariff mentioned in such
power purchase agreement or arrangement for such period as approved or adopted by the
Commission.
16.2 Where, as at the date of effect of these Regulations, the power purchase agreement or
arrangement between a Generating Company and a Distribution Licensee for supply of
electricity from an existing generating Unit/Station has not been approved by the Commission
or the tariff contained therein has not been adopted by the Commission or where there is no
power purchase agreement or arrangement, then the supply of electricity by such Generating
Company to the Distribution Licensee after the date of effectiveness of these Regulations
shall be in accordance with a power purchase agreement approved by the Commission in
accordance with Chapter 4 of these Regulations
Provided that an application for approval of such power purchase agreement or arrangement
shall be made by the Distribution Licensee to the Commission within a period of three (3)
months from the date of notification of these Regulations:
Provided further that the supply of electricity shall be allowed to continue under the present
agreement or arrangement, as the case may be, until such time as the Commission approves
of such power purchase agreement and shall be discontinued forthwith if the Commission
rejects, for reasons recorded in writing, such power purchase agreement or arrangement.
New Generating Stations
16.3 The tariff for the supply of electricity by a Generating Company to a Distribution Licensee from
a new generating Unit/Station shall be in accordance with tariff as per power purchase
agreement approved by the Commission, except if such power purchase agreement has been
exempted from requiring such approval in accordance with Chapter 4 of these Regulations.
Own Generating Stations
16.4 Where the Distribution Licensee also undertakes the business of generation of electricity, the
transfer price at which electricity is supplied by the Generation Business of the Distribution
Licensee to its Retail Supply Business shall be determined by the Commission:
Provided that the Commission shall have regard to the terms and conditions specified in
Chapter 5 of these Regulations in determining the transfer price for such supply.
16.5 The Distribution Licensee shall maintain separate record for the Generation Business and
shall maintain an Allocation Statement so as to enable the Commission to clearly identify the
direct and indirect costs relating to such business and return on equity capital accruing to
such business.
16.6 The Distribution Licensee shall submit, along with the separate application for determination
of tariff for retail supply of electricity, the information required under Chapter 5 of these
Regulations relating to the Generation Business,
16.7 Notwithstanding anything contained in this Regulation 16, the Commission shall adopt the
tariff for supply of electricity by a Generating Company to a Distribution Licensee if such tariff
has been determined through transparent process of bidding in accordance with the
guidelines issued by the Central Government:
Provided that the applicant shall furnish such information as the Commission may require to
satisfy itself that the guidelines issued by the Central Government have been duly followed.
17 Determination of Tariff for Transmission, Distribution Wheeling Business, Retail

Supply Business and SLDC
17.1 The Commission shall determine the tariff for Transmission, Distribution Wheeling Business,
Retail Supply Business and SLDC based on an application made by the Licensee in
accordance with the procedure contained in this Regulation 17.
17.2 The Commission shall determine the tariff for -
a. Transmission of electricity, in accordance with the terms and conditions contained in
Chapter 7 of these Regulations;
b. Distribution Wheeling Business, in accordance with the terms and conditions contained in
Chapter 8 of these Regulations; and
c. Retail Supply Business, in accordance with the terms and conditions contained in
Chapter 9 of these Regulations.
d. SLDC Business, in accordance with the terms and conditions contained in Chapter 10 of
these Regulations.
17.3 The applicant shall provide as part of its application to the Commission, in such form as may
be stipulated by the Commission from time to time, full details of its calculation of the
Aggregate Revenue Requirement and expected revenue from tariff and charges pursuant to
the terms of its license, and thereafter he shall furnish such further information or particulars
or documents as the Commission or the Secretary or any Officer designated for the purpose
by the Commission may reasonably require to assess such calculation
Provided that the application shall be accompanied where relevant, by a detailed tariff
revision proposal showing category-wise tariff and how such revision would meet the gap, if
any, in Aggregate Revenue Requirement for each year of the Control Period.
Provided further that the Commission may specify additional/alternative formats for details to
be submitted by the applicant, from time to time, as it may reasonably require for assessing
the Aggregate Revenue Requirement and for determining the tariff.
17.4 Upon receipt of a complete application accompanied by all requisite information, particulars
and documents in compliance with all the requirements specified in these Regulations, the
application shall be deemed to be received and the Commission or the Secretary or the
designated Officer shall intimate to the applicant that the application is ready for publication.
17.5 The applicant shall, within seven(7) days of an intimation given to him in accordance with
Regulation 18.4, publish a notice, in at least two (2) English and two (2) Assamese language
daily newspapers in English and Assamese language, respectively widely circulated in the
area to which the application pertains, outlining the proposed tariff, and such other matters as
may be stipulated by the Commission, and inviting suggestions and objections from the
public.
Provided further that the applicant shall also put up on its internet website, in downloadable
spreadsheet format showing detailed computations, the application made to the Commission
along with all regulatory filings, information, particulars and documents in the manner so
stipulated by the Commission along with the public notice:
Provided further that the web-link to the information mentioned in the second proviso to
Regulation 17.5 above shall be easily accessible, archived for downloading and shall be
prominently displayed on the applicant's internet website:
Provided also that the applicant may not provide or put up any such information, particulars or
documents, which are confidential in nature, with the prior approval of the Commission.
Explanation – for the purpose of this Regulation, the term “downloadable spreadsheet format”
shall mean one (or multiple, linked) spreadsheet software files containing all assumptions,
formulae, calculations, software macros and outputs forming the basis of the application.
17.6 The applicant shall furnish to the Commission all such books and records (or certified true
copies thereof), including the Accounting Statements, operational and cost data, as may be
required by the Commission for determination of tariff.
17.7 The Commission may, if it considers necessary, make or cause to be made available to any
person, at any time, such information as has been provided by the applicant to the
Commission including abstracts of such books and records (or certified true copies thereof)
on such terms and conditions as may be specified in the AERC (Conduct of Business)
Regulations, 2004, as amended from time to time:
17.8 The procedural aspects pertaining to applications contained in this Regulation 18shall apply,
only to such extent as may be required by the Commission having regard to the
circumstances of an individual case, to -
a. an application made by a Licensee under the proviso to sub-section (1) of Section 36 of

the Act;
b. an application made by a Distribution Licensee under sub-section (5) of Section 64 of the
Act.
18 Time limit for making an application for determination of Tariff

18.1 Generating company and the licensee shall adhere to the following schedule for various
activities for the Control Period:
Time Schedule for various activities for the Control Period
Obtaining
additional Approval of the
S.
Description Filing of the Document information and Document by the
No.
acceptance by the Commission
Commission
Filing of MYT
Petition (ARR and th
By 30 November of the year Within 120 days of the
Tariff Proposal for Within 45days of
1 preceding the first year of the admission of the
the control period) filing of document
control period petition
along with Capital
Investment Plan
Annual th Within 120 days of
By 30 November of each Within 45 days of
2 Performance admission of the
year of the control period filing of document
Review/ True-up petition
19 Tariff Order
19.1 The Commission shall, within one hundred and twenty (120) days from the receipt of a
complete application & admission as per the AERC (conduct of Business) Regulations, 2004
& amendment if any and after considering all suggestions and objections received from the
public under Section 64 of the Act:
i. Issue a Tariff Order accepting the application with such modifications or such conditions
as may be specified in that Order; or
ii. Reject the application for reasons to be recorded in writing if such application is not in
accordance with the provisions of the Act and the rules and Regulations made there
under or the provisions of any other law for the time being in force:
Provided that an applicant shall be given a reasonable opportunity of being heard before
rejecting his application.
19.2 The tariffs so determined shall be in force from the date specified in the said Order and shall,
unless amended or revoked, continue to be in force for such period as may be stipulated
therein.
20 Publication of Approved Tariff
20.1 The applicant shall within the time specified in the Order of the Commission, publish the
salient features of the tariff approved by the Commission in at least two (2) English and two
(2) Assamese language daily newspapers in English and Assamese language, respectively
having wide circulation in the area of licensee and shall put up the approved tariff / tariff
schedule on its internet website and make available for sale, a booklet containing such tariff
or tariff, as the case may be, to any person upon payment of reasonable reproduction
charges;
Provided that where the applicant is a Generating Company, the publication shall be in such
newspapers as are widely circulated in the area of supply of the Distribution Licensee to
whom the electricity is proposed to be supplied in terms of the Tariff Order and shall also be
put up on the internet website of such Generation Company.
21 Communication of Tariff Order

21.1 The Commission shall, within seven days of passing the Order, send a copy of the Order to
the Government of Assam, the Central Electricity Regulatory Commission, the Central
Electricity Authority, concerned licensees and generating company. The Commission shall
also make available copy of the said Order to any person on payment of a fee fixed by the
Commission.
22 Adherence to Tariff Order

22.1 No tariff or part of any tariff may be ordinarily amended, more frequently than once in the
year, except in respect of any changes expressly permitted under the terms of fuel and power
purchase price adjustment as may be specified in under the AERC (Fuel and Power
Purchase Price Adjustment Formula) Regulations, 2010 and Amendments if any, on account
of fuel cost and power purchase cost.
22.2 The Commission, may, after satisfying itself for reasons to be recorded in writing, allow for the
revision of tariff.
22.3 If any Generating Company or Transmission Licensee or Distribution Licensee or SLDC
recovers a price or charge exceeding the tariff determined under Section 62 of the Act and in
accordance with these Regulations, the excess amount shall be payable to the person who
has paid such price or charge, along with interest equivalent to the base rate of the State
Bank of India without prejudice to any other liability incurred by such Generating Company or
Transmission Licensee or Distribution Licensee or SLDC.
22.4 The Generation Company or Transmission Licensee or Distribution Licensee or SLDC shall
submit periodic information such as compliance to directives, etc. as may be directed by the
Commission, containing operational and cost data to enable the Commission to monitor the
implementation of its Order.
CHAPTER 4: ELECTRICITY PURCHASE AND PROCUREMENT

23 Applicability
23.1 The Regulations contained in this Chapter shall apply to electricity purchase and procurement
by a Distribution Licensee from a Generating Company or Trading Licensee or Distribution
Licensee or from any other source through agreement or arrangement for purchase of power
for distribution and supply within the State.
24 Power procurement guidelines

24.1 The Distribution Licensee shall undertake its power procurement during the year in
accordance with the power procurement plan for the Control Period, which may include long-
term, medium-term and short-term power procurement, approved by the Commission in
accordance with these Regulations.
24.2 A Distribution Licensee shall follow the guidelines contained in this Chapter with respect to:
a. Procurement of power under any arrangement or agreement with a term or duration
exceeding seven (7) years (i.e., long-term power procurement);
b. Procurement of power under any arrangement or agreement with a term or duration
exceeding three (3) months but not exceeding five years (i.e., medium-term power
procurement); and
c. Procurement of power under any arrangement or agreement with a term or duration less
than or equal to one (1) month at a time (i.e., short-term power procurement).
25 Power procurement plan

25.1 The Distribution Licensee shall prepare a plan for procurement of power to serve the demand
for electricity in its area of supply for the Control Period and submit such plan to the
Commission for approval:
Provided that such power procurement plan shall be submitted for the Control Period
commencing on April 1 of the first year of the respective Control Period.
Provided further that the power procurement plan shall be submitted along with the
application for determination of tariff, in accordance with Chapter 2 of these Regulations.
Provided that the power procurement plan submitted by the Distribution Licensee may include
long-term, medium-term and short-term power procurement sources of power, in accordance
with these Regulations.
25.2 The power procurement plan of the Distribution Licensee shall comprise of the following:
a. A quantitative forecast of the unrestricted demand for electricity for each tariff category,
within its area of supply over the Control Period;
b. An estimate of the quantities of electricity supply from the identified sources of generation
and power purchase;
c. An estimate of availability of power to meet the base load and Peak load requirement.
d. Standards to be maintained with regard to quality and reliability of supply, in accordance
with the AERC (Distribution Licensees‟ Standards of Performance) Regulations, 2004, as
amended from time to time;
e. Measures proposed to be implemented as regards energy conservation and energy
efficiency;
f. The requirement for new sources of power generation and/or procurement, including
augmentation of generation capacity and identified new sources of supply, based on (a)
to (d) above;
g. The plan for procurement of power including quantities and cost estimates for such
procurement:
Provided that the forecast/estimate contained in the long-term procurement plan shall be
stated for each year of the Control Period, in terms of quantities of power to be procured
(in millions of units of electricity) and maximum demand (in MW / MVA):
Provided further that the forecasts/estimates shall be prepared for each month over the
Control Period:
Provided also that the long-term procurement plan shall be a cost-effective plan based on
available information regarding costs of various sources of supply.
h. Short-term power procurement proposed shall be in accordance with Regulation 27 of

these Regulations.
25.3 The forecasts/ estimates shall be prepared using forecasting techniques based on past data
and reasonable assumptions regarding the future:
Provided that the forecasts/estimates shall take into account factors such as overall economic
growth, consumption growth of electricity-intensive sectors, advent of competition in the
electricity industry, trends in captive power, impact of loss reduction initiatives, improvement
in Generating Station Plant Load Factors and other relevant factors.
25.4 Where the Commission has stipulated a percentage of the total consumption of electricity in
the area of a Distribution Licensee to be purchased from co-generation and renewable
sources of energy, the power procurement plan of such Distribution Licensee shall include the
plan for procurement from such sources at least upto the stipulated level.
25.5 The Distribution Licensee shall be required to forward a copy of the power procurement plan
to the State Transmission Utility for verification of its consistency with the transmission system
plan for the intra-State transmission system, prepared in accordance with the AERC (Terms
and Conditions for Open Access) Regulations, 2005, as amended from time to time;
Provided that the Distribution Licensee may also consult the State Transmission Utility at the
time of preparation of the power procurement plan to ensure consistency of such plan with the
transmission system plan.
25.6 The Distribution Licensee may, as a result of additional information not previously known or
available to him at the time of submission of the procurement plan under Regulation 25.1,
apply for a modification in the power procurement plan, for the remainder of the Control
Period, as part of the application for Annual Performance Review under Regulation 9.
Provided that the Distribution Licensee may be allowed a modification of the power
procurement plan under this Regulation not more than once in a financial year, i.e., during the
Annual Performance Review.
25.7 The Commission may, as a result of additional information not previously known or available
to the Commission at the time of submission of the procurement plan under Regulation 25.1,
if it so deems, either on suomotu basis or on an application made by any interested or
affected party, modify the procurement plan of the Distribution Licensee, for the remainder of
the Control Period, as part of the Annual Performance Review.
Provided that the Commission may modify the power procurement plan under this Regulation
as and when required.
25.8 The Commission shall review the power procurement plan of the Distribution Licensee, or any
proposed modification thereto, and upon such review being completed, the Commission shall
either-
a. issue an order approving the power procurement plan, or modifications thereto, subject to
such modifications and conditions as it may deem appropriate; or
b. reject the power procurement plan or application for modification thereto, for reasons
recorded in writing, if such plan is not in accordance with the guidelines contained in this
Chapter, and direct the Distribution Licensee to submit a revised plan based on such
considerations as it may specify:
Provided that the Distribution Licensee shall be given reasonable opportunity of being
heard before rejecting its power procurement plan.
26 Approval of power purchase agreement/arrangement

26.1 Every agreement or arrangement for power procurement by a Distribution Licensee from a
Generating Company or Licensee or from other source of supply entered into after the date of
effect of these Regulations shall come into effect only with the prior approval of the
Commission.
Provided that the prior approval of the Commission shall be required in respect of any
agreement or arrangement for power procurement by the Distribution Licensee from a
Generating Company or Licensee or from any other source of supply on a standby basis:
Provided further that the prior approval of the Commission shall also be required for any
change to an existing arrangement or agreement for power procurement, whether or not such
existing arrangement or agreement was approved by the Commission.
26.2 The Commission shall review an application for approval of power procurement
agreement/arrangement having regard to the approved power procurement plan of the
Distribution Licensee and the following factors:
a. Requirement for power procurement under the approved power procurement plan;
b. Adherence to a transparent process of bidding in accordance with guidelines issued by
the Central Government;
c. Adherence to the terms and conditions for determination of tariff specified under Chapter
5 of these Regulations where the process specified in (b) above has not been adopted;
d. Availability (or expected availability) of capacity in the intra-State transmission system for
evacuation and supply of power procured under the agreement/arrangement;
e. Need to promote co-generation and generation of electricity from renewable sources of
energy.
26.3 Where the terms and conditions specified under Chapter 5 of these Regulations are proposed
to be adopted, the approval of the power purchase agreement between a Generating
Company and a Distribution Licensee for supply of electricity from a new Generating Station
may comprise of two steps, at the discretion of the applicant:
a. Approval of a provisional tariff, on the basis of an application made to the Commission at
any time prior to the application made under clause (b) below; and
b. Approval of the final tariff, on the basis of an application made not later than three (3)
months from the cut-off date.
27 Additional Short-term power procurement

27.1 The Distribution Licensee can undertake additional short-term power procurement during the
year, over and above the power procurement plan for the Control Period approved by the
Commission, in accordance with this Regulation.
27.2 Where there has been a shortfall or failure in the supply of electricity from any approved
source of supply during the financial year, the Distribution Licensee may enter into additional
short-term arrangement or agreement for procurement of power (short-term means upto
period of one year):
Provided that if the total power purchase cost for any block of six months including such
short-term power procurement exceeds 105% of the power purchase cost approved by the
Commission for the respective block of six months, the Distribution Licensee shall have to
obtain prior approval of the Commission; and
Provided that the proposed short-term power procurement shall be in accordance with the
AERC (Fuel and Power Purchase Price Adjustment Formula) Regulations, 2010 and
amendments thereof.
27.3 Where the Distribution Licensee has identified a new short-term source of supply from which
power can be procured at a tariff that reduces its approved total power procurement cost, the
Distribution Licensee may enter into a short-term power procurement agreement or
arrangement with such supplier without the prior approval of the Commission.
27.4 The Distribution Licensee may enter into a short-term arrangement or agreement for
procurement of power without the prior approval of the Commission when faced with
emergency conditions that threaten the stability of the distribution system or when directed to
do so by the State Load Despatch Centre to prevent grid failure.
27.5 Within fifteen (15) days from the date of entering into an agreement or arrangement for short-
term power procurement for which prior approval is not required, the Distribution Licensee
shall provide the Commission, full details of such agreement or arrangement, including
quantum, tariff calculations, duration, supplier details, method for supplier selection and such
other details as the Commission may require with regard to such agreement/arrangement to
assess that the conditions specified in this Regulation 27 have been complied with:
Provided that where the Commission has reasonable grounds to believe that the arrangement
or agreement entered into by the Distribution Licensee does not meet the criteria specified in
Regulation 27.2 to Regulation 27.4 above, the Commission may disallow any increase in the
total cost of power procurement (net of additional revenue) over the approved level arising
there from or any loss incurred by the Distribution Licensee as a result, from being passed
through to consumers.
27.6 Subject to the cases specified in Regulation 27.2 to Regulation 27.4 above, where the
Distribution Licensee enters into any agreement or arrangement for short-term power
procurement without the approval of the Commission, any increase in the total cost of power
procurement (net of additional revenue) over the approved level arising there from shall be
deemed to be a variation in performance attributable entirely to controllable factors.
CHAPTER 5: FINANCIAL PRINCIPLES

28 Capital Cost and capital structure
28.1 Capital cost for a project shall include:
a) the expenditure incurred or projected to be incurred upto the date of commercial
operation of the project, any gain or loss on account of foreign exchange risk variation on
the loan during construction up to the date of commercial operation of the project, as
admitted by the Commission, after prudence check
b) Interest during construction and financing charges, on the loans (i) being equal to 70% of
the funds deployed, in the event of the actual equity in excess of 30% of the funds
deployed, by treating the excess equity as normative loan, or (ii) being equal to the actual
amount of loan in the event of the actual equity less than 30% of the funds deployed
c) Increase in cost in contract packages as approved by the Commission;
d) Interest during construction and incidental expenditure during construction as computed
in accordance with Regulation 29.7 of these regulations
e) capitalised initial spares subject to the ceiling rates specified in this Regulation; and
f) additional capital expenditure or de-capitalization determined under Regulation 29
g) Adjustment of revenue due to sale of infirm power in excess of fuel cost prior to the COD
as specified under Regulation 44 of these regulations; and
h) Adjustment of any revenue earned by the transmission licensee by using the assets
before COD.
i) the capital cost admitted by the Commission prior to 1.4.2019 duly trued up by excluding
liability, if any, as on 1.4.2019
j) expenditure on account of renovation and modernization as admitted by this Commission
in accordance with regulation 29.5
Provided that the cost of the common assets forming part of the project, should be considered
based on the suitable allocation and such allocated cost shall form part of the capital cost:
Provided that the assets forming part of the project, but not in use, shall be taken out of the
capital cost:
28.2 The capital cost admitted by the Commission after prudence check shall form the basis for
determination of tariff:
Provided that where the Power Purchase Agreement entered into between the Generating
Company and the Distribution Licensee provides a ceiling of actual expenditure, the original
cost of project shall not exceed such ceiling for the purpose of these Regulations:
Provided further that prudence check may include scrutiny of the reasonableness of the
capital expenditure, financing plan, interest during construction, use of efficient technology,
cost over-run and time over-run and such other matters as may be considered appropriate by
the Commission for determination of tariff:
Provided further that in case of the existing Generating Stations, the capital cost of the project
as admitted by the Commission prior to date of effectiveness of these Regulations and the
additional capital expenditure projected to be incurred and capitalised, as may be admitted by
the Commission, shall form the basis for determination of tariff.
Provided also that in case the site of a Hydro Generating Station is awarded to a developer
(not being a State controlled or owned company) by the State Government by following a
transparent process of bidding, any expenditure incurred or committed to be incurred
including the premium payable to the State Government by the project developer for getting
the project site allotted, shall not be included in the capital cost:
Provided also that the capital cost in case of such hydro Generating Station shall include:
a) cost of approved Rehabilitation and Resettlement (R&R) plan of the project in conformity
with National R&R Policy and R&R package as approved; and
b) cost of the developer‟s 10% contribution towards Rajiv Gandhi Grameen Vidyutikaran
Yojana (RGGVY) project in the affected area.
28.3 The approved Capital Cost shall be considered for determination of tariff and if sufficient
justification is provided for any escalation in the Project Cost, the same may be considered by
the Commission subject to the prudence check:
Provided that in case the actual capital cost is lower than the approved capital cost, then the
actual capital cost shall be considered for determination of tariff of the Generating Company
or Transmission Licensee or Distribution Licensee or SLDC.
28.4 The actual capital expenditure on COD for the original scope of work based on audited
accounts of the Company limited to original cost may be considered subject to the prudence
check by the Commission.
28.5 The capital cost may include initial spares which shall be capitalized as a percentage of the
Plant and Machinery cost upto the cut-off date, subject to the following ceiling norms:
a. Coal-based fired thermal generating stations – 4.0%

b. Gas Turbine/Combined Cycle thermal generating stations – 4.0%
c. Hydro generating stations including pumped storage hydro generating station – 4.0%
d. Transmission system
i. Transmission line – 1.0%
ii. Transmission Sub-station (Green Field) – 4.0%
iii. Transmission Sub-station (Brown Field) – 6.0%
iv. Series Compensation devices and HVDC Station – 4.0%
v. Gas Insulated Sub-station (GIS) – 5.0%
vi. Communication System – 3.5%
Provided that:
Where the benchmark norms for initial spares have been published as part of the benchmark
norms for capital cost by the Commission, such norms shall apply till the exclusion of the
norms specified above:
where the generating station has any transmission equipment forming part of the generation
project, the ceiling norms for initial spares for such equipments shall be as per the ceiling
norms specified for transmission system under these regulations:
once the transmission project is commissioned, the cost of initial spares shall be restricted on
the basis of plant and machinery cost corresponding to the transmission project at the time of
truing up:
for the purpose of computing the cost of initial spares, plant and machinery cost shall be
considered as project cost as on cut-off date excluding IDC, IEDC, Land Cost and cost of civil
works. The transmission licensee shall submit the break up of head wise IDC & IEDC in its
tariff application.
28.6 Scrutiny of the cost estimates by the Commission shall be limited to the reasonableness of
the capital cost, financing plan, interest during construction, use of efficient technology, and
such other matters for determination of tariff.
28.7 Any expenditure on replacement, renovation and modernization or extension of life of old
fixed assets, as applicable to Generating Companies, Transmission Licensees, Distribution
Licensees and SLDC, shall be considered after writing off the net value of such replaced
assets from the original capital cost and shall be calculated as follows:
Net Value of Replaced Assets = OCFA – AD; Where; OCFA: Original Capital Cost of
Replaced Assets; AD: Accumulated depreciation pertaining to the Replaced Assets.
28.8 The capital cost with respect to thermal generating station, incurred or projected to be
incurred on account of the Perform, Achieve and Trade (PAT) scheme of Government of India
will be considered by the Commission on case to case basis and shall include:
a) cost of plan proposed by developer in conformity with norms of PAT Scheme; and
b) sharing of the benefits accrued on account of PAT Scheme.
28.9 The following shall be excluded or removed from the capital cost of the existing and new
project:
a) The assets forming part of the project, but not in use;
b) Decapitalisation of Asset;
c) In case of hydro generating station any expenditure incurred or committed to be incurred
by a project developer for getting the project site allotted by the State government by
following a two stage transparent process of bidding; and
d) the proportionate cost of land which is being used for generating power from generating
station based on renewable energy:
Provided that any grant received from the Central or State Government or any statutory body
or authority for the 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;
29 Additional capitalization and de-capitalization

29.1 The following capital expenditure, actually incurred or projected to be incurred, on the
following counts within the original scope of work, after the date of commercial operation and
up to the cut-off date may be admitted by the Commission, subject to the prudence check.
a. Undischarged liabilities recognized to be payable at a future date;
b. Works deferred for execution;
c. Procurement of initial capital spares within the original scope of work, in accordance with
the provisions of Regulation 28.5;
d. Liabilities to meet award of arbitration or for compliance of the order or decree of a court;
and
e. Change in law or compliance of any existing law:
Provided that the details of works asset wise/work wise included in the original scope of work
along with estimates of expenditure, liabilities recognized to be payable at a future date and
the works deferred for execution shall be submitted along with the application for
determination of tariff.
29.2 The capital expenditure incurred or projected to be incurred in respect of the new project on
the following counts within the original scope of work after the cut-off date may be admitted by
the Commission, subject to prudence check:
a. Liabilities to meet award of arbitration or for compliance of the order or decree of a court;
b. Change in law or compliance of any existing law;

c. Deferred work relating to ash pond or ash handling system in the original scope of work.
d. Any liability for works executed prior to the cut-off date, after prudence check of the
details of such undischarged liability, total estimated cost of package, reasons for such
withholding of payment and release of such payments etc.
29.3 The capital expenditure, in respect of existing generating station or the transmission system
including communication system, incurred or projected to be incurred on the following counts
after the cut-off date, may be admitted by the Commission, subject to prudence check:
a. Liabilities to meet award of arbitration or for compliance of the order or decree of a court
of law;
b. Change in law or compliance of any existing law;
c. Any expenses to be incurred on account of need for higher security and safety of the
plant as advised or directed by appropriate Government Agencies of statutory authorities
responsible for national security/internal security;
d. Deferred works relating to ash pond or ash handling system in the original scope of work;
e. Any liability for works executed prior to the cut-off date, after prudence check of the
details of such undischarged liability, total estimated cost of package, reasons for such
withholding of payment and release of such payments etc.;
f. Any liability for works admitted by the Commission after the cut-off date to the extent of
discharge of such liabilities by actual payments;
g. Any additional capital expenditure which has become necessary for efficient operation of
generating station other than coal/lignite based stations or transmission system as the
case may be. The claim shall be substantiated with the technical justification duly
supported by the documentary evidence like test results carried out by an independent
agency in case of deterioration of assets, report of an independent agency in case of
damage caused by natural calamities, obsolescence of technology, up-gradation of
capacity for the technical reason such as increase in fault level;
h. In case of hydro generating stations, any expenditure which has become necessary on
account of damage caused by natural calamities (but not due to flooding of power house
attributable to the negligence of the generating company) and due to geological reasons
after adjusting the proceeds from any insurance scheme, and expenditure incurred due to
any additional work which has become necessary for successful and efficient plant
operation;
i. In case of transmission system, any additional expenditure on items such as relays,
control and instrumentation, computer system, power line carrier communication, DC
batteries, replacement due to obsolesce of technology, replacement of switchyard
equipment due to increase of fault level, tower strengthening, communication equipment,
emergency restoration system, insulators cleaning infrastructure, replacement of
porcelain insulator with polymer insulators, replacement of damaged equipment not
covered by insurance and any other expenditure which has become necessary for
successful and efficient operation of transmission system; and
j. Any capital expenditure found justified after prudence check necessitated on account of
modifications required or done in fuel receiving system arising due to non-materialisation
of coal supply corresponding to full coal linkage in respect of thermal generating station
as result of circumstances not within the control of the generating station;
Provided that any expenditure on acquiring the minor items or the assets including tools
and tackles, furniture, air-conditioners, voltage stabilizers, refrigerators, coolers,
computers, fans, washing machines, heat convectors, mattresses, carpets etc. brought
after the cut-off date shall not be considered for additional capitalization for determination
of tariff w.e.f. 1.4.2019:
Provided further that any capital expenditure other than that of the nature specified above
in (i) to (iv) in case of coal based station shall be met out of compensation allowance:
Provided also that if any expenditure has been claimed under Renovation and
Modernisation (R&M), repairs and maintenance under (O&M) expenses and
Compensation Allowance, same expenditure cannot be claimed under this regulation.
29.4 In case of de-capitalization of assets of a generating company, SLDC, transmission licensee
or distribution licensee, as the case may be, the original cost of such asset as on the date of
decapitalisation shall be deducted from the value of gross fixed asset and corresponding loan
as well as equity shall be deducted from outstanding loan and the equity respectively in the
year such de-capitalisation takes place, duly taking into consideration the year in which it was
capitalised.
29.5 Renovation & Modernisation:
i. The generating company or the transmission licensee, as the case may be, for meeting the
expenditure on renovation and modernization (R&M) for the purpose of extension of life
beyond the useful life of the generating station or a unit thereof or the transmission system,
shall make an application before the Commission for approval of the proposal with a
Detailed Project Report giving complete scope, justification, cost-benefit analysis, estimated
life extension from a reference date, financial package, phasing of expenditure, schedule of
completion, reference price level, estimated completion cost including foreign exchange
component, if any, record of consultation with beneficiaries and any other information
considered to be relevant by the generating company or the transmission licensee:
Provided that in case of coal fired thermal generating station, the generating company,
may, in its discretion, avail of a „special allowance‟ in accordance with the norms specified
in clause 30.6, as compensation for meeting the requirement of expenses including
renovation and modernisation beyond the useful life of the generating station or a unit
thereof, and in such an event revision of the capital cost shall not be considered and the
applicable operational norms shall not be relaxed but the special allowance shall be
included in the annual fixed cost:
Provided also that such option shall not be available for a generating station or unit for
which renovation and modernization has been undertaken and the expenditure has been
admitted by the Commission before commencement of these regulations, or for a
generating station or unit which is in a depleted condition or operating under relaxed
operational and performance norms.
ii. Where the generating company or the transmission licensee, as the case may be, makes
an application for approval of its proposal for renovation and modernisation, the approval
shall be granted after due consideration of reasonableness of the cost estimates, financing
plan, schedule of completion, interest during construction, use of efficient technology, cost-
benefit analysis, and such other factors as may be considered relevant by the Commission.
iii. In case of gas/ liquid fuel based open/ combined cycle thermal generating station, any
expenditure which has become necessary for renovation of gas turbines/steam turbine after
25 years of operation from its COD and an expenditure necessary due to obsolesce or non-
availability of spares for efficient operation of the stations shall be allowed :
Provided that any expenditure included in the R&M on consumables and cost of
components and spares which is generally covered in the O&M expenses during the major
overhaul of gas turbine shall be suitably deducted after due prudence from the R&M
expenditure to be allowed.
iv. Any expenditure incurred or projected to be incurred and admitted by the Commission after
prudence check based on the estimates of renovation and modernization expenditure and
life extension, and after deducting the accumulated depreciation already recovered from the
original project cost, shall form the basis for determination of tariff.
29.6 Special Allowance for Coal-based fired Thermal Generating station
i. In case of coal fired thermal generating station, the generating company, instead of availing
R&M may opt to avail a „special allowance‟ in accordance with the norms specified in this
regulation, as compensation for meeting the requirement of expenses including renovation
and modernisation beyond the useful life of the generating station or a unit thereof, and in
such an event, revision of the capital cost shall not be allowed and the applicable
operational norms shall not be relaxed but the special allowance shall be included in the
annual fixed cost:
Provided that such option shall not be available for a generating station or unit for which
renovation and modernization has been undertaken and the expenditure has been admitted
by the Commission before commencement of these regulations, or for a generating station
or unit which is in a depleted condition or operating under relaxed operational and
performance norms.
ii. The Special Allowance shall be @ Rs. 8.5 lakh/MW/year for the year 2016-17 and
thereafter escalated @ 6.35% every year during the control period, unit wise from the next
financial year from the respective date of the completion of useful life with reference to the
date of commercial operation of the respective unit of generating station:
Provided that in respect of a unit in commercial operation for more than 25 years as on
1.4.2016, this allowance shall be admissible from the year 2016-17:
iii. In the event of granting special allowance by the Commission, the expenditure incurred or
utilized from special allowance shall be maintained separately by the generating station and
details of same shall be made available to the Commission as and when directed to furnish
details of such expenditure.
29.7 Interest during construction (IDC), Incidental Expenditure during Construction (IEDC)
A. Interest during Construction (IDC):
i. 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 upto
SCOD.
ii. In case of additional costs on account of IDC due to delay in achieving the SCOD, the
generating company or the transmission licensee as the case may be, shall be required to
furnish detailed justifications with supporting documents for such delay including prudent
phasing of funds:
Provided that if the delay is not attributable to the generating company or the transmission
licensee as the case may be, and is due to uncontrollable factors, IDC may be allowed after
due prudence check:
Provided further that only IDC on actual loan may be allowed beyond the SCOD to the
extent, the delay is found beyond the control of generating company or the transmission
licensee, as the case may be, after due prudence and taking into account prudent phasing
of funds.
B. Incidental Expenditure during Construction (IEDC):
i. Incidental expenditure during construction shall be computed from the zero date and after
taking into account pre-operative expenses upto SCOD:
Provided that any revenue earned during construction period up to SCOD on account of
interest on deposits or advances, or any other receipts may be taken into account for
reduction in incidental expenditure during construction.
ii. In case of additional costs on account of IEDC due to delay in achieving the SCOD, the
generating company or the transmission licensee as the case may be, shall be required to
furnish detailed justification with supporting documents for such delay including the details
of incidental expenditure during the period of delay and liquidated damages recovered or
recoverable corresponding to the delay:
Provided that if the delay is not attributable to the generating company or the transmission
licensee, as the case may be, and is due to uncontrollable factors, IEDC may be allowed
after due prudence check:
Provided further that where the delay is attributable to an agency or contractor or supplier
engaged by the generating company or the transmission licensee, the liquidated damages
recovered from such agency or contractor or supplier shall be taken into account for
computation of capital cost.
iii. In case the time over-run beyond SCOD is not admissible after due prudence, the increase
of capital cost on account of cost variation corresponding to the period of time over run may
be excluded from capitalization irrespective of price variation provisions in the contracts with
supplier or contractor of the generating company or the transmission licensee.
30 Treatment of Consumer contribution, Deposit work and Grant

30.1 The following nature of work carried out by the Transmission Licensee or Distribution
Licensee shall be classified under this category:
a. Works after obtaining a part or all of the funds from the users in the context of deposit
works.
b. Capital works undertaken by utilising grants received under various schemes / programs
of the State and Central Governments.
c. Any other grant of similar nature and such amount received without any obligation to
return the same and with no interest costs attached to such subvention.
30.2 Principles for treatment of the expenses on such capital expenditure shall be as follows:
a. Normative O&M expense as specified in these Regulations shall be allowed.
b. Provisions related to Depreciation, as specified in Regulation 32.
c. Provisions related to Return on Equity Capital, as specified in Regulation 33.
31 Debt-equity ratio
31.1 For a project declared under commercial operation on or after April 1, 2019, if the equity
actually deployed is more than 30% of the capital cost, equity in excess of 30% shall be
treated as normative loan for the Generating Company, Transmission Licensee and
Distribution Licensee.
Provided that where equity actually deployed is less than 30% of the capital cost of the
capitalised asset, the actual equity shall be considered for determination of tariff:
Provided further that the equity invested in foreign currency shall be designated in Indian
rupees on the date of each investment.
Provided that any grant obtained for the execution of the project shall not be considered as
part of capital structure for the purpose of debt: equity ratio.
Explanation.- The premium, if any, raised by the Generating Company or the Transmission
Licensee or the Distribution Licensee, as the case may be, while issuing share capital and
investment of internal resources created out of its free reserve, for the funding of the project,
shall be reckoned as paid up capital for the purpose of computing return on equity, provided
such premium amount and internal resources are actually utilised for meeting the capital
expenditure of the Generating Station or the transmission system or the distribution system.
31.2 In case of the Generating Company, Transmission Licensee, Distribution Licensee and
SLDC, if any fixed asset is capitalised on account of capital expenditure prior to April 1, 2019,
debt-equity ratio allowed by the Commission for determination of tariff for the period ending
March 31, 2019 shall be considered:
Provided that in case of retirement or replacement of the assets, the equity capital approved
as mentioned above, shall be reduced to the extent of 30% (or actual equity component
based on documentary evidence, if it is lower than 30%) of the original cost of the retired or
replaced asset.
31.3 Any expenditure incurred or projected to be incurred on or after April 1, 2019, as may be
admitted by the Commission as additional capital expenditure for determination of tariff, and
renovation and modernisation expenditure for life extension, shall be serviced in the manner
specified in this Regulation.
32 Depreciation
32.1 The value base for the purpose of depreciation shall be the Capital Cost of the asset admitted
by the Commission.
Provided that depreciation shall not be allowed on assets funded through Consumer
contribution and Capital Subsidies/Grants.
32.2 The salvage value of the asset shall be considered as 10% and depreciation shall be allowed
up to maximum of 90% of the capital cost of the asset.
Provided that in case of hydro generating stations, the salvage value shall be as provided in
the agreement signed by the developers with the State Government for creation of the site:
Provided further that the capital cost of the assets of the hydro generating station for the
purpose of computation of depreciable value shall correspond to the percentage of sale of
electricity under long-term power purchase agreement at regulated tariff.
Provided also that any depreciation disallowed on account of lower availability of the
generating station or generating unit or transmission system as the case may be, shall not be
allowed to be recovered at a later stage during the useful life and the extended life.
32.3 Land, other than the land held under lease and the land for reservoir in case of hydro
Generating Station, shall not be a depreciable assets and its cost shall be excluded from the
capital cost while computing depreciable value of the assets.
32.4 Depreciation shall be calculated annually based on Straight Line Method and at rates
specified in Appendix-I to these Regulations:
Provided that, the remaining depreciable value as on 31st March of the year closing after a
period of 12 years from date of commercial operation shall be spread over the balance useful
life of the assets.
32.5 In case of the existing projects, the balance depreciable value as on April 1, 2019, shall be
worked out by deducting the cumulative depreciation including Advance Against Depreciation
as admitted by the Commission upto March 31, 2019, from the gross depreciable value of the
assets.
32.6 Depreciation shall be chargeable from the first year of commercial operation. In case of
commercial operation of the asset for part of the year, depreciation shall be charged on pro
rata basis.
32.7 In case of de-capitalization of assets, the cumulative depreciation shall be adjusted by taking
into account the depreciation recovered in tariff by the decapitalized asset during its useful
services.
33 Return on Equity Capital

33.1 Return on equity capital shall be computed on the equity capital determined in accordance
with Regulation 31
33.2 Return on equity shall be computed at the rate of 15.5% for Generating Stations,
Transmission Licensee and SLDC and at the rate of 16.00% for Distribution Licensee on a
post-tax basis.
34 Interest on loan capital

34.1 The loans arrived at in the manner indicated in Regulation 31 shall be considered as gross
normative loan for calculation of interest on loan.
Provided that in case of retirement or replacement of assets, the loan capital approved as
mentioned above, shall be reduced to the extent of 70% (or actual loan component based on
documentary evidence, if it is higher than 70%) of the original cost of the retired or replaced
assets.
34.2 The normative loan outstanding as on April 1, 2019, shall be worked out by deducting the
cumulative repayment as admitted by the Commission up to March 31, 2019, from the gross
normative loan.
34.3 The repayment for each year of the Control period shall be deemed to be equal to the
depreciation allowed for that year:
34.4 Notwithstanding any moratorium period availed by the Generating Company or the
Transmission Licensee or the Distribution Licensee or the SLDC, as the case may be, the
repayment of loan shall be considered from the first year of commercial operation of the
project and shall be equal to the annual depreciation allowed.
34.5 The rate of interest shall be the weighted average rate of interest calculated on the basis of
the actual loan portfolio at the beginning of each year applicable to the Generating Company
or the Transmission Licensee or the Distribution Licensee or SLDC:
Provided that if there is no actual loan for a particular year but normative loan is still
outstanding, the last available weighted average rate of interest shall be considered:
Provided further that if the Generating Company or the Transmission Licensee or the
Distribution Licensee or SLDC, as the case may be, does not have actual loan, then the
weighted average rate of interest of the Generating Company or the Transmission Licensee
or the Distribution Licensee or SLDC as a whole shall be considered.
34.6 The interest on loan shall be calculated on the normative average loan of the year by applying
the weighted average rate of interest.
34.7 The utility shall make every effort to re-finance the loan as long as it results in net savings on
interest and in that event the costs associated with such re-financing shall be borne by the
beneficiaries and the net savings shall be shared between the beneficiaries and the
generating company or the transmission licensee, as the case may be, in the ratio of 2:1.
34.8 The changes to the terms and conditions of the loans shall be reflected from the date of such
re-financing.
34.9 Interest shall be allowed on the amount held as security deposit by the Distribution Licensee
st
from consumers, at a rate equal to SBI base rate as on 1 April of the financial year plus one
percent.
35 Tax on Income
35.1 Income Tax, if any, on the income stream of the regulated business of Generating
Companies, Transmission Licensees, Distribution Licensees and SLDC shall be reimbursed
to the Generating Companies, Transmission Licensees, Distribution Licensees and SLDC as
per actual income tax paid, based on the documentary evidence submitted at the time of
truing up of each year of the Control Period, subject to the prudence check.
Provided that no Income Tax shall be considered on the amount of efficiency gains and
incentive earned by the Generating Companies, Transmission Licensees, Distribution
Licensees and SLDC.
36 Interest on Working Capital

36.1 Generation projects
a) In case of coal based/oil-based fired Generating Stations, working capital shall cover:
(i) Cost of coal for one and half months (1½) for pit-head Generating Stations and
two (2) months for non-pit-head Generating Stations, corresponding to target
availability;
(ii) Cost of secondary fuel oil for two (2) months corresponding to target availability;
(iii) Operation and Maintenance expenses for one (1) month;
(iv) Maintenance spares @20% of operation and maintenance expenses; and
(v) Receivables equivalent to two (2) months of capacity charges and energy
charges for sale of electricity calculated on target availability;
b) In case of Gas Turbine/Combined Cycle/ Gas-engine based Generating Stations, working

capital shall cover:
(i) Fuel cost for one (1) month corresponding to target availability duly taking into
account the mode of operation of the Generating Station on gas fuel and / or
liquid fuel;
(ii) Liquid fuel stock for fifteen (15) days corresponding to target availability subject to
required storage availability;
(iii) Operation and maintenance expenses for one (1) month;
(iv) Maintenance spares @ 30% of operation and maintenance expenses; and
(v) Receivables equivalent to two (2) months of capacity charges and energy
charges for sale of electricity calculated on target availability,
c) In case of Hydro power Generating Stations including pumped storage hydro-electric

generating station, working capital shall cover:
(i) Operation and maintenance expenses for one (1) month;
(ii) Maintenance spares @15% of operation and maintenance expenses; and
(iii) Receivables equivalent to two (2) months of the annual fixed charges.
d) Rate of interest shall be at interest rate equivalent to the normative interest rate of three
hundred (300) basis points above the average State Bank of India MCLR (One Year
Tenor) prevalent during the last available six months for the determination of tariff.
36.2 Transmission& SLDC

a) The Transmission Licensee and SLDC shall be allowed interest on the estimated level of
working capital for the financial year, computed as follows:
i. Operation and maintenance expenses for one (1) month;
ii. Maintenance spares @15% of operation and maintenance expenses; and
iii. Receivables equivalent to two (2) months of the annual transmission charges.
b) Rate of interest shall be at interest rate equivalent to the normative interest rate of three
36.3 Distribution Wheeling Business
a) The Distribution Licensee shall be allowed interest on the estimated level of working
capital for the Distribution Wheeling Business for the financial year, computed as follows:
i. One month of the amount of Operation and Maintenance expenses for such
financial year; plus
ii. Maintenance Spares @15% of operation and maintenance expenses; plus
iii. Receivables equivalent to two (2) months of the expected revenue from charges
for use of Distribution Wires; minus
iv. Amount held as security deposits from Distribution System Users.
c) Interest shall be allowed on the amount held as security deposit by the Distribution
Licensee from Distribution System Users, at the rate equal to SBI base rate as on 1st
April of the financial year
36.4 Retail Supply of Electricity
a) The Distribution Licensee shall be allowed interest on the estimated level of working
capital for the financial year, computed as follows:
a. One month of the amount of Operation and Maintenance expenses for such
financial year (O & M1); plus
b. Maintenance Spares @15% of operation and maintenance expenses (MS); plus
c. Two (2) months equivalent of the expected revenue from sale of electricity at the
prevailing tariff (R2);
minus
d. Amount held as security deposits under clause (a) and clause (b) of sub-section
(1) of Section 47 of the Act from retail supply consumers (SD);
minus
e. One (1) month equivalent of cost of power purchased, based on the annual
power procurement plan (PP1).
Thereby, total working capital considered shall be:

WC= (O & M1+MS+R2)-SD-PP1
c) Interest shall be allowed on the amount held as security deposit by the Distribution
Licensee from consumers, at the rate equal to SBI base rate as on 1st April of the
financial year plus one percent.
37 Operation and Maintenance Expense

37.1 The O&M for generating company and transmission licensee shall be determined as per
Regulation 50and Regulation 66.5 of these Regulations.
37.2 The O&M Expense for the Distribution licensee shall be determined as follows:
a. The licensee shall propose separate trajectories of norms for each of the components
of O&M expenses viz., employee cost, R&M expense and A&G expense;
b. Norms shall be defined in terms of combination of number of personnel for various
activities such as per 1000 consumers and number of personnel per substation, line
length along with annual expenses per personnel for Employee expenses combination
of A&G expense per personnel and A&G expense per 1000 consumers for A&G
expenses and R&M expense as percentage of gross fixed assets for estimation of
R&M expenses;
c. One-time expenses such as expense due to change in accounting policy, arrears paid
due to pay commissions and interim relief etc., shall be excluded from the norms in the
trajectory;
d. The expenses beyond the control of the distribution licensee such as dearness
allowance, pension liabilities and terminal benefits in Employee cost etc., shall be
excluded from the norms in the trajectory;
e. The One-time expenses and the expenses beyond the control of the Distribution
Licensee as per sub-regulations (c) and (d) above shall be allowed by the Commission
over and above normative Operation & Maintenance Expenses after prudence check;
f. The norms in the trajectory shall be proposed over the control period with due
consideration to productivity improvements and commercial viability;
g. The norms shall be proposed at constant prices of base year and escalation on
account of inflation shall be over and above the baseline;
h. The Distribution Licensee shall also carry out absolute and relative analysis while
proposing the norms;
i. In absolute analysis, Distribution Licensee‟s audited accounts of operations for last
three years, expenses claimed for control period, historically approved cost, and
prudence check shall be used by the Commission to estimate values of norms;
j. In relative analysis, performance parameters of other Distribution Licensees within the
same state or in other states shall be considered by the commission to estimate norms:
Provided that other Distribution Licensees so chosen shall have similar profile as that
of the Distribution Licensee under consideration in terms of consumer mix, type of
license area (city, state, etc.) type of distribution networks, viz, underground/overhead,
HT-LT ratio, etc;
k. Suitable average of outcomes of absolute and relative analysis may be taken by the
licensee while proposing the norms over the control period for the distribution licensee;
l. Based on the proposal submitted by the licensee, the Commission shall fix the norms
for the said purposes which shall be taken into account for determining the trajectories
for various components of O&M expenses for the remaining years of the control period;
m. Till such time the norms are fixed by the Commission, the trajectories of various
components of O&M expenses shall be submitted by the licensee and determined by
the Commission on the basis of the actual costs for the previous years in accordance
with the provisions of these regulations;
37.3 In absence of any proposal along with supporting documents, the Commission shall determine
the O&M for the Wheeling and Retail Supply business as per the methodology provided below:
a. Operation and Maintenance (O&M) expenses shall comprise of the following
i. Salaries, wages, pension contribution and other employee costs;
ii. Administrative and general expenses including insurance charges if any;
iii. Repairs and maintenance expenses;
b. The O&M expenses for the first year of the Control Period shall be approved by the
Commission taking into account the actual O&M expenses for last five years till Base
Year subject to prudence check and any other factors considered appropriate by the
Commission.
c. The O&M expenses for the nth year and also for the year immediately preceding the
Control Period, shall be approved based on the formula given below:-
O&Mn = R&Mn + EMPn + A&Gn

Where –
 O&Mn – Operation and Maintenance expense for the nth year;
 EMPn – Employee Costs for the nth year;
 R&Mn – Repair and Maintenance Costs for the nth year;
 A&Gn – Administrative and General Costs for the nth year;
d. The above components shall be computed in the manner specified below:
EMPn = (EMPn-1) x (1+Gn) x (1+CPIinflation)
R&Mn = K x (GFA n-1) x (1+WPIinflation) and
A&Gn = (A&Gn-1) x (1+WPIinflation) + Provision
Where -
 EMPn-1 – Employee Costs for the (n-1)th year;
 A&G n-1 – Administrative and General Costs for the (n-1)th year;
 Provision: Cost for initiatives or other one-time expenses as proposed by the
Distribution Licensee and validated by the Commission.
 „K‟ is a constant specified by the Commission in %. Value of K for each year of the
control period shall be determined by the Commission in the MYT Tariff order based
on licensee‟s filing, benchmarking of repair and maintenance expenses, approved
repair and maintenance expenses vis-à-vis GFA approved by the Commission in past
and any other factor considered appropriate by the Commission;
 CPIinflation – is the average increase in the Consumer Price Index (CPI) for
immediately preceding three years;
 WPIinflation – is the average increase in the Wholesale Price Index (CPI) for
 GFAn-1 --- Gross Fixed Asset of the transmission licensee for the n-1th year;
 Gn is a growth factor for the nth year. Value of Gn shall be determined by the
Commission in the MYT tariff order for meeting the additional manpower requirement
based on licensee‟s filings, benchmarking, and any other factor that the Commission
feels appropriate.
38 Prior Period Expenses

38.1 The utility may submit to the Commission the prior period expenses as a part of the filing for
truing up;
38.2 The Commission may allow prior period expenses for uncontrollable cost items only as per the
audited accounts during truing up subject to prudence check.
CHAPTER 6: COMPONENTS OF ARR AND TARIFF FOR

GENERATION COMPANY
39 Applicability
39.1 The Regulations specified in this Chapter shall apply for determining the tariff for supply of
electricity to a Distribution Licensee from the generating stations located in Assam:
Provided that determination of tariff for supply of electricity to a Distribution Licensee from
Renewable Energy sources of generation shall be in accordance with terms and conditions as
stipulated in the relevant Regulations/Orders of the Commission.
39.2 The Commission shall be guided by the terms and conditions contained in this Chapter in
determining the tariff for supply of electricity by a Generating Company to a Distribution
Licensee in the following cases:
a) where such tariff is pursuant to a power purchase agreement or arrangement entered
into subsequent to the date of effectiveness of these Regulations; or where such tariff
is pursuant to a power purchase agreement or arrangement entered into prior to the
date of effectiveness of these Regulations and either the Commission has not
previously approved such agreement/arrangement or the agreement/arrangement
envisages that the tariff shall be based on the Assam Electricity Regulatory
Commission (Terms and Conditions for determination of Multi Year Tariff) Regulations,
2015, as amended from time to time; or
b) where the Distribution Licensee is engaged in the business of generation of electricity,
in determining the transfer price at which electricity is supplied by the Generation
Business of the Distribution Licensee to its Retail Supply Business:
Provided that the Commission may deviate from the norms contained in this Chapter
or specify alternative norms for particular cases, where it so deems appropriate,
having regard to the circumstances of the case:
Provided further that the reasons for such deviation(s) shall be recorded in writing.
39.3 Notwithstanding anything contained in this Chapter 6, the Commission shall adopt the tariff if
such tariff has been determined through transparent process of bidding in accordance with
the guidelines issued by the Central Government.
40 Petition for determination of generation tariff

40.1 A Generating Company is required to file a Petition for determination of tariff for supply of
electricity to Distribution Licensees in accordance with the provisions of Chapter 3 of these
Regulations.
40.2 Tariff in respect of a Generating Station under these Regulations may be determined Stage-
wise, Unit-wise or for the whole Generating Station. The terms and conditions for
determination of tariff for Generating Stations specified in this Chapter shall apply in like
manner to Stages or Units or for the Generating Station, as the case may be;
40.3 Where the tariff is being determined for Stage or Unit of a Generating Station, the Generating
Company shall adopt a reasonable basis for allocation of capital cost relating to common
facilities and allocation of joint and common costs across all Stages or Units, as the case may
be:
Provided that the Generating Company shall maintain an Allocation Statement providing the
basis for allocation of such costs, which shall be duly audited and certified by the statutory
auditors, and submit such audited and certified statement to the Commission along with the
application for determination of tariff.
40.4 A Generating Company may make a Petition for determination of provisional tariff in advance
of the anticipated Date of Commercial Operation of Unit or Stage or Generating Station as a
whole, as the case may be, based on the capital expenditure actually incurred up to the date
of making the Petition or a date prior to making of the Petition, duly audited and certified by
the statutory auditors/independent auditor and the provisional tariff shall be charged from the
date of commercial operation of such Unit or Stage or Generating Station, as the case may
be.
40.5 A Generating Company shall make a fresh Petition in accordance with these Regulations, for
determination of final tariff based on actual capital expenditure incurred up to the date of
commercial operation of the Generating Station duly certified by the statutory auditors based
on Annual Audited Accounts.
40.6 Any difference in provisional tariff and the final tariff determined by the Commission and not
attributable to the Generating Company may be adjusted at the time of determination of final
tariff for the following year as directed by the Commission.
41 Components of Tariff
41.1 The tariff for sale of electricity from a thermal Power Generating Station shall comprise of two
parts, namely, the recovery of Annual Fixed Charges and Energy (variable) Charges (for
recovery of primary and secondary fuel cost)
41.2 The tariff for sale of electricity from a Hydro Generating Station shall comprise of two parts,
namely, the recovery of Capacity Charge and Energy Charge.
42 Annual Fixed Charges

42.1 The Annual Fixed Charges shall comprise of the following elements:
a. Return on Equity Capital;
b. Interest on Loan Capital;
c. Depreciation;
d. Operation & Maintenance Expenses;
e. Interest on Working Capital;
Less:
(a) Non Tariff Income.
Provided that Depreciation, Interest on Loan Capital and Return on Equity Capital for Thermal
and Hydro Generating Stations shall be considered in accordance with the provisions
specified in Chapter 5 of these Regulations.
Provided further that special allowance in lieu of R&M where opted in accordance to
Regulation 29.5and/or separate compensation allowance in accordance to Regulation Error!
Reference source not found., wherever applicable shall be recovered separately and
shall not be considered for computation of working capital.
43 Capital cost
43.1 For the purpose of determination of tariff, the Capital Cost for a generating station and
additional capitalisation thereof, shall be allowed in accordance with the provisions outlined
under Regulation 28 and Regulation 29 respectively.
43.2 The provisions of Accounting Standards (AS10): Accounting for Fixed Assets of the Institute
of Chartered Accountants of India, as amended from time to time, shall apply, to the extent
not inconsistent with these Regulations, in determining the original cost of capital expenditure
projects and/or original cost of fixed assets capitalized.
44 Sale of Infirm Power

44.1 The tariff for sale of infirm power from the thermal Generating Station to the Distribution
Licensee shall be equivalent to the actual fuel cost, including the secondary fuel cost, as the
case may be, incurred during that period subject to prudence check.
Provided that any revenue other than the recovery of fuel cost earned by the generating
company from sale of infirm power shall be taken as reduction in capital cost and shall not be
treated as revenue.
44.2 The tariff for sale of infirm power for Hydro Stations to the Distribution Licensee shall be the
lowest energy rate of the existing hydro-station in the state and the revenue recovered from
sale of inform power shall be deducted from the capital cost.
45 Non Tariff Income

45.1 The amount of non-tariff income relating to the Generation Business as approved by the
Commission shall be deducted from the Annual Fixed Cost in determining the Annual Fixed
Cost of the Generation Company:
Provided that the Generation Company shall submit full details of its forecast of non-tariff
income to the Commission in such form as may be stipulated by the Commission from time to
time.
The indicative list of various heads to be considered for non-tariff income shall be as under:
a) Income from rent of land or buildings;
b) Income from sale of scrap;
c) Income from statutory investments;
d) Income from sale of Ash/rejected coal;
e) Interest on delayed or deferred payment on bills;
f) Interest on advances to suppliers/contractors;
g) Rental from staff quarters;
h) Rental from contractors;
i) Income from hire charges from contactors and others;
j) Income from advertisements, etc.;
k) Any other non-tariff income
46 Norms of operation for Thermal Generating Stations

46.1 Recovery of capacity charge, energy charge and incentive by the generating company shall be
based on the achievement of the operational norms specified in the regulations 47.1 to 49.
46.2 The Commission may on its own revise the norms of Station Heat Rate n respect of any of the
generating stations for which relaxed norms have been specified
47 Norms of operation for Thermal Power Station

47.1 Normative Annual Plant Availability Factor (NAPAF) for recovery of full (fixed) charges:
i. Existing Plants:
MYT Period
Name of Plant
2019-20 2020-21 2021-22
i) Namrup TPS 50% 50% 50%
ii) Lakwa TPS with WHRU 50% 50% 50%
ii. New plants commissioned on or after 1st April, 2019 for recovery of full (fixed) charge:
Description
Normative Annual Plant Availability Factor (NAPAF) in % 85
47.2 Normative (Target) Plant Load Factor for incentive
i. Existing Plants:
MYT Period
Name of Plant
2019-20 2020-21 2021-22
50% 50 50
i) Namrup TPS
66% 66% 66%
ii) Lakwa TPS with WHRU
ii. New plants commissioned on or after 1st April, 2019 for recovery of full (fixed) charge:
Description (in %)
Coal based generating station 85%
Gas based generating station 85%
Gas-engine based generating station 90%
47.3 Auxiliary Energy Consumption
i. Existing Plants:
MYT Period
Name of Plant 2019-20 2020-21 2021-22
(%) (%) (%)
i) Namrup TPS 4.50% 4.50% 4.50%
ii) Lakwa TPS with WHRU 5.50% 5.50% 5.50%
ii. New plants commissioned on or after 1st April, 2019:
MYT Period
Description 2019-20 2020-21 2021-22
(%) (%) (%)
(i) Coal-based Generating Stations
(a) Below 200 MW cap.
With cooling tower 9 9 9
Without cooling tower 8.5 8.5 8.5
(with natural draft cooling tower or without
cooling tower)
(b) 200 MW series 8.5 8.5 8.5
(c) 500 MW series
i) With steam driven boiler feed 6 6 6
ii) With electrically driven boiler fee 8.5 8.5 8.5
pump______
(ii) Gas based Generating Stations
Open Cycle 1 1 1
Combined Cycle 2.5 2.5 2.5
where electricity driven Gas Booster
Compressor is used
Open Cycle 4 4 4
Combined Cycle 5 5 5
(iii) Gas engine
Open Cycle 2 2 2
with Gas Booster Compressor
Open Cycle 3.5 3.5 3.5
47.4 Gross Station Heat Rate (GSHR):
i. Existing Plants:
MYT Period
Name of Plant
2019-20 2020-21 2021-
(kcal/kWh) (kcal/kWh) 22(kcal/kWh)
NTPS
(i) O.C. 4300 4300 4300
(ii) Partially C.C. 3900 3900 3900
LTPS
(i) O.C. 3900 3900 3900
(ii) Partially C.C. 3200 3200 3200
ii. New plants commissioned on or after 1st April, 2019:

a. Coal based thermal power Generating Stations = 1.045 x Design Heat Rate
(kcal/kWh)
Where, the Design Heat Rate of a unit means the unit heat rate guaranteed by the
supplier at conditions of 100% MCR, zero percent make up, design coal and design
cooling water temperature/back pressure.
Provided that the design heat rate shall not exceed the following maximum design
unit heat rates depending upon the pressure and temperature ratings of the units:
Pressure Rating
150 170 170 247
(Kg/cm2)
SHT/RHT (0C) 535/535 537/537 537/565 565/593

Electrical Turbine Turbine Turbine
Type of BFP
Driven Driven Driven Driven
Max Turbine
Cycle Heat rate 1955 1950 1935 1850
(kCal/kWh)
Min. Boiler Efficiency
Sub-Bituminous
0.86 0.86 0.86 0.86
Indian Coal
Bituminous
Imported 0.89 0.89 0.89 0.89
Coal
Max Design Unit Heat rate (kCal/kWh)
Sub-Bituminous
2273 2267 2250 2151
Indian Coal
Bituminous
Imported 2197 c2191 2174 2078
Coal
Provided further that in case pressure and temperature parameters of a unit are
different from above ratings, the maximum design unit heat rate of the nearest class
shall be taken:
Provided also that where unit heat rate has not been guaranteed but turbine cycle
heat rate and boiler efficiency are guaranteed separately by the same supplier or
different suppliers, the unit design heat rate shall be arrived at by using guaranteed
turbine cycle heat rate and boiler efficiency:
Provided also that where the boiler efficiency is below 86% for Sub-bituminous Indian
coal and 89% for bituminous imported coal, the same shall be considered as 86%
and 89% respectively for Sub-bituminous Indian coal and bituminous imported coal
for computation of station heat rate:
Provided also that maximum turbine cycle heat rate shall be adjusted for type of
cooling system:
Provided also that if one or more units were declared under commercial operation
prior to 1.4.2016, the heat rate norms for those units as well as units declared under
commercial operation on or after 1.4.2016 shall be lower of the heat rate norms
arrived at by above methodology and the norms as per Regulation 0 (ii) of these
Regulations;
Note: In respect of units where the boiler feed pumps are electrically operated, the
maximum design unit heat rate shall be 40 kCal/kWh lower than the maximum design
unit heat rate specified above with turbine driven BFP.
b. Gas-based / Liquid-based thermal generating unit(s)/ block(s)
= 1.05 X Design Heat Rate of the unit/block for Natural Gas and RLNG (kCal/kWh)
= 1.071 X Design Heat Rate of the unit/block for Liquid Fuel (kCal/kWh)
Where, the Design Heat Rate of a unit shall mean the guaranteed heat rate for a unit
at 100% MCR and at site ambient conditions; and the Design Heat Rate of a block
shall mean the guaranteed heat rate for a block at 100% MCR, site ambient
conditions, zero percent make up, design cooling water temperature/back pressure.
c. Gas-engine based generating station
Capacities Heat Rate*

1 to 3MW As per CEA Regulation
3 to 5 MW As per CEA Regulation
>5 MW 2000kCal / kWh for open cycle
>5 MW 1825kCal / kWh for closed cycle
*The Commission may decide to amend and notify the revised norms on case to case
basis
47.5 Secondary Fuel Oil Consumption

st
New plants on or after 1 April, 2019:
i) Coal based thermal generating plant – 0.5 ml/kWh
ii) Coal based thermal generating plant with CFBC technology - 1ml/kWh
47.6 Stabilization period and availability levels:

In relation to a unit, stabilization period shall be reckoned commencing from the date of
commercial operation of that unit as follows, namely:
PAF(%) Stabilization period
(i) Coal-based thermal generating stations 65 180 days
(ii) Gas turbine / combined cycle generating stations 65 90 days
47.7 Wherever the station is designed for combined cycle operation, the approval of SLDC shall be
required for operation of the station in the open cycle mode.
47.8 The Commission may prescribe relaxed operational norms including the norms of Normative
Annual Plant Availability Factor contained in these Regulations for a generating station in
case of Renovation & Modernization undertaken for the generating station or
recommendations on energy saving schemes/ performance improvement studied in house /
other independent agencies, and these relaxed norms shall be applicable for determination of
tariff for such generating station during the Control Period.
Provided further that if any Unit of any of APGCL‟s Generating Stations is shut-down due to
implementation of Central Power Research Institute (CPRI) recommendations, the Target
Availability calculation for recovery of annual fixed charges shall be computed after removing
the Capacity under shut-down for the actual period of shut-down subject to the prior approval
of the Commission for the improvement scheme along-with the approval of Capital
expenditure.
47.9 In case of renovation and modernisation, derating and rerating of the generating station,
norms of operation shall be reviewed and modified accordingly by the Commission.
47.10 The Commission vide separate notification may specify norms for future years on case to
case basis.
48 Transit and handling Losses

48.1 Transit and handling losses for coal based generating stations, as a percentage of quantity of
coal dispatched by the coal supply company during the month shall be as given below:
i. Pit head generating stations : 0.2%
ii. Non-pit head generating stations : 0.8%
48.2 The above norms shall be applicable for all types of coal i.e., domestic coal, washed coal and
imported coal.
Provided that for procurement of coal on delivery basis, no transit and handling loss shall be
allowed.
49 Norms of operation for Hydro Generating Stations

49.1 The norms of operation as given hereunder shall apply for existing hydro stations in the state:
Parameters KLHEP
NAPAF 85%
PLF 44.5%
Auxiliary Consumption 0.50%
49.2 The norms of operation for hydro generating station except those specified in Regulation
49.1shall be as under, namely:
Normative Annual Plant Availability

Sl. No. Particulars
Factor
Storage and Pondage type plants with

head variation between Full Reservoir
a) Level (FRL) and Minimum Draw Down 90%
Level (MDDL) of up to 8%, and where
plant availability is not affected by silt
Month wise peaking capability as provided
Storage and Pondage type plants with
by the project authorities in the DPR
head variation between FRL and MDDL of
b) (approved by CEA or the State
more than 8%, where plant availability is
Government) shall form basis of fixation of
not affected by silt
NAPAF.
Pondage type plants where plant

c) 85%
availability is significantly affected by silt
To be determined plant-wise, based on 10-

d) Run-of-river type plants day design energy data, moderated by
past experience where available/relevant
In addition to the above :

a) A further allowance may be made by the Commission in NAPAF determination under special
circumstances, e.g. abnormal silt problem or other operating conditions, and known plant
limitations.
b) A further allowance of 5% may be allowed for difficulties in the State.

c) In case of a new hydro electric project the developer shall have the option of approaching the
Commission in advance for fixation of NAPAF based on the principles enumerated in Clause
49.2and sub-clause a) and b) of this regulation.
d) In case of Pumped storage hydro generating stations, the quantum of electricity required for
pumping water from down-stream reservoir to up-stream reservoir shall be arranged by the
beneficiaries duly taking into account the transmission and distribution losses etc. up to the
bus bar of the generating station. In return, beneficiaries shall be entitled to equivalent energy
of 75% of the energy utilized in pumping the water from the lower elevation reservoir to the
higher elevation reservoir from the generating station during peak hours and the generating
station shall be under obligation to supply such quantum of electricity during peak hours:
Provided that in the event of the beneficiaries failing to supply the desired level of energy
during off-peak hours, there will be pro-rata reduction in their energy entitlement from the
station during peak hours:
Provided further that the beneficiaries may assign or surrender their share of capacity in the
generating station, in part or in full, or the capacity may be reallocated by the Central
Government, and in that event, the owner or assignee of the capacity share shall be
responsible for arranging the equivalent energy to the generating station in off-peak hours,
and be entitled to corresponding energy during peak hours in the same way as the original
beneficiary was entitled.
49.3 Auxiliary Energy Consumption
a) Surface Hydro electric power Generating Stations

i. With rotating exciters mounted on the generator shaft - 0.7%
ii. With static excitation system: 1%
b) Underground hydro Generating Station
i. With rotating exciters mounted on the generator shaft - 0.9%
ii. With static excitation system: 1.2%
49.4 Transformation losses

From generation voltage to transmission voltage - 0.5% of energy generated.
49.5 The Commission vide separate notification may specify norms for future years on case to
case basis.
50 Operation and Maintenance cost (O&M)

50.1 Existing Generating Station
a. The Operation and Maintenance expenses including insurance shall be derived on the
basis of the average of the actual Operation and Maintenance expenses for the three (3)
years ending March 31, 2018, based on the audited financial statements, excluding
abnormal Operation and Maintenance expenses, if any, subject to prudence check by the
Commission.
b. The average of such operation and maintenance expenses shall be considered as
operation and maintenance expenses for the financial year ended March 31, 2017 and
shall be escalated based on the escalation factor as approved by the Commission for the
respective years to arrive at operation and maintenance expenses for the base year
commencing April 1, 2018.
c. The O&M expenses for each subsequent year shall be determined by escalating the base
expenses determined above for previous FY at the escalation factor 6.30% to arrive at
permissible O&M expenses for each year of the Control Period.
d. Provided that in case, an existing Generating Station has been in operation for less than
three (3) years as at on the date of effectiveness of these Regulations, the O&M
Expenses shall be as specified at Regulation 50.2 for New Generating Stations.
50.2 New Generating Station

a. For Coal based Generating Stations:
Rs. Lakh/MW
200/210/250 MW 300/330/350 600 MW and
Particulars 500 MW Sets
Sets MW Sets above Sets
FY 2019-20 32.43 27.07 21.72 19.54
FY 2020-21 34.47 28.77 23.09 20.77
FY 2021-22 36.64 30.58 24.54 22.08

Note: In case of a plant capacity below 200 MW, the Commission shall determine the norms on
case to case basis.
Provided that the norms shall be multiplied by the following factors for arriving at norms of
O&M expenses for additional units in respective unit sizes for the units whose COD
occurs on or after 1.4.2016 in the same station.
th th
200/210/250 MW Sets Additional 5 & 6 units 0.90
th
Additional 7 &more units 0.85
th th
300/330/350 MW Sets Additional 4 &5 units 0.90
th
th th
500 MW and above Sets Additional 3 &4 units 0.90
th
b. Gas Turbine/Combined Cycle Generating Stations

Rs. Lakh/MW
Gas
Turbine/Combined
Cycle Generating Small gas
Stations other turbine power Advance F Class
Year
than small gas generating Machines
turbine power stations
generating
stations
FY 2019-20 19.90 46.24 36.74
FY 2020-21 21.15 49.15 39.05
FY 2021-22 22.48 52.25 41.51

c. Gas-engine based Generating Station
Parameter Open Cycle Combined Cycle

O&M cost for FY 2015-16
27.03* 27.03*
(Rs. Lakh/ MW/year)
*The O&M expenses for each subsequent year shall be determined by escalating the
base expenses determined above at the escalation factor 6.30% to arrive at permissible
O&M expenses for each subsequent year.
d. Hydro Generating Stations
Existing Hydro Generating Stations
i. The O&M charges for existing hydro generating stations shall be computed similar to
the methodology detailed in Regulation 50.1.
New Hydro Generating Stations

ii. O&M expenses for first year of operation shall be specified as 2% of the original
project cost (excluding cost of rehabilitation and resettlement works) for the first year
of operation.
iii. The O&M expenses for each subsequent year shall be determined by escalating the
base expenses determined above, at the escalation factor of 6.64%.
51 Computation and Payment of Annual Fixed Charges and Energy Charges for
Thermal Generating Stations
51.1 Annual Fixed Charges
a. The total Annual Fixed Charges shall be computed based on the norms specified under
these Regulations and recovered on monthly basis.
b. The full Annual Fixed Charges shall be recoverable at Normative Annual Plant Availability
factor (NAPAF) specified in these Regulation. Recovery of Annual Fixed Charges below
the level of NAPAF shall be on pro rata basis. At zero Availability, no Capacity Charges
shall be payable.
c. Payment of Annual Fixed Charges shall be on monthly basis in equal installments in
proportion to contracted capacity subject to adjustment at the end of the year with respect
to NAPAF.
51.2 Energy Charges

a. The Energy (variable) Charges shall cover landed fuel costs and shall be computed as
follows:
Energy (variable) Charges shall cover fuel costs and shall be worked out on the basis of
ex-bus energy sent out from the Generating Station as per the following formula:
Energy Charges (Rs) = Rate of Energy Charges in Rs/kWh x Energy (ex-bus) for the
month in kWh corresponding to actual generation.
b. Rate of Energy Charges (REC) in Rs/kWh shall be the sum of the cost of normative
quantities of primary and secondary fuel for delivering one kWh of electricity ex-bus and
shall be computed as under:
Where,
Pp= Price of primary fuel namely coal or gas or liquid fuel and lime stone, if applicable, in
Rs/kg or Rs/cum or Rs/litre, as the case may be.
(Qp)n = Quantity of primary fuel required for generation of one kWh of electricity at
generator terminals in kg or litre or standard cubic metre, as the case may be, and shall
be computed on the basis of normative Gross Station Heat Rate (less heat contributed by
secondary fuel oil for coal based Generating Stations) and gross calorific value of coal or
gas or liquid fuel as fired.
Ps= Price of Secondary fuel oil in Rs./ml,
(Qs)n= Normative Quantity of Secondary fuel oil in ml/kWh,
AUXn= Normative Auxiliary Energy Consumption as % of gross generation.
Energy Charges, for the purpose of billing/Fuel Surcharge shall be worked out station-
wise based on weighted average rate based on actual generation from the Units of each
Station
51.3 Adjustment of rate of energy charge (REC) [Fuel Surcharge Adjustment] on account of
variation in price or calorific value of fuels
Any variation in Price and Gross Calorific Value of coal or gas or liquid fuel vis-à-vis approved
values shall be adjusted on month to month basis on the basis of average Gross Calorific Value
of coal or gas or liquid fuel in stock, received and burnt and weighted average landed cost
incurred by the Generating Company for procurement of coal, oil, or gas or liquid fuel, as the
case may be for a power station. In its bills, the Generating Company shall indicate rate of
energy charges at base price of primary and secondary fuel specified by the Commission and
the Fuel Surcharge to it separately. The Generating Company should submit the computation
to the Commission on quarterly basis for analysis and approval of Fuel Surcharge Adjustment.
51.4 Landed Cost of fuel

The landed cost of fuel shall include price of fuel corresponding to the grade/ quality/ calorific
value of fuel inclusive of royalty, taxes and duties as applicable, transportation cost by
rail/road/gas pipe line or any other means, and, for the purpose of computation of energy
charges, shall be arrived at after considering normative transit and handling losses as
percentage of the quantity of fuel dispatched by the fuel supply company during the month as
specified in Regulation 51.2.
52 Incentive
52.1 Incentive shall be payable at a flat rate of 50.0 paise/kWh for actual energy generation in
excess of ex-bus energy corresponding to target Plant Load Factor.
Provided that the actual generation shall also consider the generation loss on account of any
backing down instruction from the Assam State Load Despatch Centre.
52.2 The Incentive amount shall be computed and billed on monthly basis based on the cumulative
Plant Load Factor till the respective month in a Year, subject to adjustment at the end of the
year.
53 Computation and Payment of Annual Fixed Charges and Energy Charges for
Hydro Generating Stations
53.1 The Annual Fixed Charges of a Hydro Generating Station shall be computed on annual basis,
based on norms specified under these Regulations, and recovered on monthly basis under
capacity charge (inclusive of incentive) and ,Energy Charge, which shall be payable by the
beneficiaries in proportion to their respective share in the capacity of the Generating Station.
Further, in addition to Annual Fixed Charges to be recovered through Capacity Charge and
Energy Charge, the Lease Rent and Water Royalty shall be payable by the beneficiaries in
proportion to their respective share in the capacity of the Generating Station on monthly
basis.
53.2 The capacity charge (inclusive of incentive) payable to a Hydro Generating Station for a
calendar month shall be
AFC x 0.5 x NDM / NDY x (PAFM / NAPAF) (in Rupees)
Where,
AFC = Annual fixed cost specified for the year, in Rupees.
NAPAF = Normative Annual Plant Availability Factor in percentage
NDM = Number of days in the month
NDY = Number of days in the year
PAFM = Plant availability factor achieved during the month, in Percentage
53.3 The PAFM shall be computed in accordance with the following formula:
PAFM =10000 x Σ DCi / {N x IC x ( 100 - AUX ) } % i = 1
Where,
AUX = Normative auxiliary energy consumption in percentage
DCi = Declared capacity (in ex-bus MW) for the ith day of the month which the station can
deliver for at least three (3) hours, as certified by the Assam State Load Despatch Centre
after the day is over.
IC = Installed capacity (in MW) of the complete Generating Station

N = Number of days in the month
The Energy Charge shall be payable by every beneficiary for the total energy supplied to
the beneficiary, during the calendar month, on ex-power plant basis, at the computed
Energy Charge rate.
Total Energy Charge payable to the Generating Company for a month shall be:
(Energy Charge Rate in Rs. / kWh) x {Scheduled Energy (ex-bus) for the month in kWh} x
(100 – FEHS) /100
53.4 Energy Charge Rate (ECR) in Rupees per kWh on ex-power plant basis, for a Hydro
Generating Station, shall be determined up to three decimal places based on the following
formula:
ECR = AFC x 0.5 x 10 / { DE x ( 100 – AUX ) x (100 - FEHS)}
Where,
DE = Annual Design Energy specified for the Hydro Generating Station, in MWh, subject to
the provision in Regulation 49.5 below.
FEHS = Free energy for home State, in percent
53.5 In case actual total energy generated by a Hydro Generating Station during a year is less
than the Design Energy for reasons beyond the control of the Generating Company, the
following treatment shall be applied on a rolling basis:
i. in case the energy shortfall occurs within ten years from the date of commercial
operation of a Generating Station, the ECR for the year following the year of energy
shortfall shall be computed based on the formula specified in Regulation 49.4 with
the modification that the DE for the year shall be considered as equal to the actual
energy generated during the year of the shortfall, till the Energy Charge shortfall of
the previous year has been made up, after which normal ECR shall be applicable;
Provided that in case actual generation from a hydro generating station is less than
the design energy for a continuous period of 4 years on account of hydrology factor,
the generating station shall approach CEA with relevant hydrology data for revision
of design energy of the station.
ii. in case the energy shortfall occurs after ten years from the date of commercial
operation of a Generating Station, the following shall apply:
Suppose the specified annual Design Energy (DE) for the station is DE MWh, and
the actual energy generated during the concerned (first) and the following (second)
financial years is A1 and A2 MWh, respectively, A1 being less than DE. Then, the
design energy to be considered in the formula in Regulation 49.4 of these
Regulations for calculating the ECR for the third financial year shall be moderated
as (A1 + A2 – DE) MWh, subject to a maximum of DE MWh and a minimum of A1
MWh.
iii. Actual energy generated (e.g., A1, A2) shall be arrived at by multiplying the net
metered energy sent out from the station by 100 / (100 – AUX).
53.6 In case the actual saleable energy in a year exceeds {DE x ( 100 – AUX ) * (100-FEHS) /
10000} MWh, the Energy Charge for the energy in excess of the above shall be billed equal to
the lowest variable charges of the central sector thermal power generating stations in the
north east region.
53.7 The Assam State Load Despatch Centre shall finalise the schedules for the hydro Generating
Stations, in consultation with the beneficiaries, for optimal utilization of all the energy declared
to be available, which shall be scheduled for all beneficiaries in proportion to their respective
allocations in the Generating Station.
Pumped Storage Hydro Generating Stations:
53.8 The fixed cost of a pumped storage hydro generating station shall be computed on annual
basis, based on norms specified under these regulations, and recovered on monthly basis as
capacity charge. The capacity charge shall be payable by the beneficiaries in proportion to
their respective allocation in the saleable capacity of the generating station, i..e, the capacity
excluding the free power to the home State:
Provided that during the period between the date of commercial operation of the first unit of
the generating station and the date of commercial operation of the generating station, the
annual fixed cost shall be worked out based on the latest estimate of the completion cost for
the generating station, for the purpose of determining the capacity charge payment during
such period.
53.9 The capacity charge payable to a pumped storage hydro generating station for a calendar
month shall be:
(AFC x NDM / NDY) (in Rupees), if actual Generation during the month is >= 75 % of the
Pumping Energy consumed by the station during the month and {(AFC x NDM / NDY) x
(Actual Generation during the month during peak hours/ 75% of the Pumping Energy
consumed by the station during the month) (in Rupees)}, if actual Generation during the
month is < 75 % of the Pumping Energy consumed by the station during the month. Where,
AFC = Annual fixed cost specified for the year, in Rupees
Provided that there would be adjustment at the end of the year based on actual generation
and actual pumping energy consumed by the station during the year.
53.10 The energy charge shall be payable by every beneficiary for the total energy scheduled to be
supplied to the beneficiary in excess of the design energy plus 75% of the energy utilized in
pumping the water from the lower elevation reservoir to the higher elevation reservoir, at a flat
rate equal to the average energy charge rate of 20 paise per kWh, excluding free energy, if
any, during the calendar month, on ex power plant basis.
53.11 Energy charge payable to the generating company for a month shall be:
= 0.20 x {Scheduled energy (ex-bus) for the month in kWh – (Design Energy for the month
(DEm) + 75% of the energy utilized in pumping the water from the lower elevation reservoir to
the higher elevation reservoir of the month)} x (100 – FEHS) / 100.
Where,
DEm = Design energy for the month specified for the hydro generating station, in MWh
FEHS = Free energy for home State, in per cent, as defined in regulation 41, if any.
Provided that in case the Scheduled energy in a month is less than the Design Energy for the
month plus 75% of the energy utilized in pumping the water from the lower elevation reservoir
to the higher elevation reservoir of the month, then the energy charges payable by the
beneficiaries shall be zero.
53.12 The generating company shall maintain the record of daily inflows of natural water into the
upper elevation reservoir and the reservoir levels of upper elevation reservoir and lower
elevation reservoir on hourly basis. The generator shall be required to maximize the peak
hour supplies with the available water including the natural flow of water. In case it is
established that generator is deliberately or otherwise without any valid reason, is not
pumping water from lower elevation reservoir to the higher elevation during off-peak period or
not generating power to its potential or wasting natural flow of water, the capacity charges of
the day shall not be payable by the beneficiary. For this purpose, outages of the unit(s)/station
including planned outages and the forced outages up to 15% in a year shall be construed as
the valid reason for not pumping water from lower elevation reservoir to the higher elevation
during off-peak period or not generating power using energy of pumped water or natural flow
of water:
Provided that the total capacity charges recovered during the year shall be adjusted on pro-
rata basis in the following manner in the event of total machine outages in a year exceeds
15%:
(ACC)adj = (ACC) R x (100- ATO)/85
Where,
(ACC)adj – Adjusted Annual Capacity Charges
(ACC) R – Annual Capacity Charges recovered
ATO - Total Outages in percentage for the year including forced and planned outages
Provided further that the generating station shall be required to declare its machine availability
daily on day ahead basis for all the time blocks of the day in line with the scheduling
procedure of Grid Code.
53.13 The concerned Load Despatch Centre shall finalise the schedules for the hydro generating
stations, in consultation with the beneficiaries, for optimal utilization of all the energy declared
to be available, which shall be scheduled for all beneficiaries in proportion to their respective
allocations in the generating station.
54 Scheduling
54.1 The methodology for scheduling and dispatch for the generating plant shall be as specified in
the Assam Electricity Grid Code Regulations/CEA technical standards for Connectivity to the
Grid Regulations and the intra state Availability Based Tariff regulations to be notified by the
Commission as amended from time to time. Until the intra-State Availability Based Tariff
regulations are notified by the Commission CERC Availability Based Tariff regulations would
be applicable
55 Deviation Settlement Mechanism (DSM) Charges.

55.1 DSM charges for intra-state transactions will arise after intra-state ABT is notified by the
Commission and becomes effective.
56 Metering and Accounting

56.1 Metering arrangements, including installation, testing and operation and maintenance of meters
and collection, transportation and processing of data required for accounting of energy
exchanges and average frequency on time block basis shall be organised by the State
Transmission Utility/ State Load Despatch Centres. All concerned entities (in whose premises
the special energy meters are installed), shall fully cooperate with the State Transmission
Utility/ State Load Despatch Centre and extend the necessary assistance by taking weekly
meter readings and transmitting them to the State Load Despatch Centre. The State Load
Despatch Centre shall issue the Accounts for energy on monthly basis as well as DSM charges
on weekly basis. DSM accounting procedures shall be governed by the orders of the
Commission.
56.2 The cost of additional investment required for metering and metering equipment for the purpose
of implementing intra state ABT shall be allowed to be passed through.
57 Demonstration of declared capacity

57.1 The Generating Company may be required to demonstrate the declared capacity of its
Generating Station as and when asked by the Assam State Load Despatch Centre. In the
event of the Generating Company failing to demonstrate the declared capacity, the capacity
charges due to the Generating Company shall be reduced as a measure of penalty.
57.2 The quantum of penalty for the first mis-declaration for any duration/block in a day shall be
the charges corresponding to two days fixed charges. For the second mis-declaration, the
penalty shall be equivalent to fixed charges for four days. For the third mis-declaration, the
penalty shall be equivalent to fixed charges for eight days and similarly for subsequent mis-
declarations in the year, the penalty shall be computed progressively.
57.3 The operating logbooks of the Generating Station shall be available for review by the SLDC,
as the case may be. These books shall keep record of machine operation and maintenance.
58 Billing and Payment of Charges

58.1 The Billing and Payment of Annual Fixed Charges, Energy Charges, Fuel Surcharge
Adjustments and Incentive for Thermal Generating Stations shall be done on a monthly basis
subject to adjustments at the end of the year.
58.2 The Billing and Payment of Capacity Charges and Energy Charges for Hydro Generating
Stations shall be done on a monthly basis.
58.3 In case the payment of bills is delayed beyond a period of two (2) months from the date of
billing, a late payment surcharge at the rate of 1.25 per cent per month shall be allowed to be
levied by the Generating Company.
58.4 For payment of bills of the generating company through letter of credit or otherwise, a rebate
of 1% shall be allowed if payment is made within 7 days of presentation of bills by the
Generating Company.

TRANSMISSION LICENSEE
59 Applicability
59.1 The Regulations contained in this Chapter shall apply in determining tariff for access and use
of the intra-State transmission system of a Transmission Licensee pursuant to a Bulk Power
Transmission Agreement or other arrangement entered into with a Transmission System User
on or after the date of notification of these Regulations.
Provided that the Commission may revise the norms contained in this Chapter or stipulate
alternative norms for particular cases, where it so deems appropriate, having regard to the
circumstances of the case:
Provided further that the reasons for such revision shall be recorded in writing:
Provided further that in case of an existing transmission system, the Commission shall
determine the tariff having regard to the historical performance of such transmission system
and on the basis of application for determination of Aggregate Revenue Requirement
submitted by the Transmission Licensees at the beginning of the Control Period with
reasonable opportunities for improvement in performance, if any.
59.2 The Commission shall be guided by the terms and conditions contained in this Chapter in
specifying the rates, charges, terms and conditions for use of intervening transmission
facilities pursuant to an application made in this regard by a Transmission Licensee under the
proviso to Section 36 of the Act.
60.1 The transmission charges for access to and use of the intra-State transmission system shall
comprise any of the following components or a combination of the following components:
a. transmission system access charges;
b. annual transmission charges;
c. per unit charges for energy transmitted; and
d. reactive energy charges.
Transmission system access charges
60.2 Any person who is eligible to apply for access to the intra-State transmission system shall be
entitled to obtain such access in accordance with the AERC (Terms and Conditions for Open
Access) Regulations, 2005, as amended from time to time and shall be liable to pay the
charges for obtaining such access as specified in this Regulation.
Explanation - For the purpose of this Regulation, such person who, being eligible for
transmission open access, has applied for allocation of transmission capacity rights and has
agreed to the carrying out of works for obtaining such access shall hereinafter be referred to
as the “intending Transmission System User”, and may include an existing Transmission
System User in respect of any increase in allocated transmission capacity rights applied for
by such existing user.
60.3 Where the access of the intending Transmission System User to the intra-State transmission
system entails works of transmission lines or other transmission assets dedicated to such
User, the Transmission Licensee shall be entitled to recover, through the transmission system
access charges, all expenses reasonably incurred on such works for providing access to such
intending Transmission System User.
60.4 Where the access of the intending Transmission System User entails other works, not
covered under Regulation 60.3 relating to the intra-State transmission system, the
Transmission Licensee shall recover the expenses relating to such works through annual
transmission charges for each year of the Control Period, in accordance with Regulation
60.10below:
60.5 Where any works for obtaining access has been carried out by the intending Transmission
System User, the Transmission Licensee shall be entitled to recover supervision charges at
the rate of 15 per cent of the cost of labour employed for carrying out such works and shall
not be entitled to recover any other expenses with regard to such works carried out by the
intending Transmission System User.
Provided that such supervision charges shall form part of the Non-Tariff Income of the
respective Transmission Licensee and also shall be treated as O&M expense incurred by the
intending transmission system users, which shall be capitalised in the respective year of asset
capitalisation.
60.6 The works for providing access to the intra-State transmission system shall be maintained by
the Transmission Licensee for the duration of the Bulk Power Transmission Agreement
between the Transmission Licensee and the Transmission System User:
60.7 Where the Transmission System User has paid for the works carried out to provide him
access to the intra-State transmission system, the Transmission System User shall be entitled
to the depreciated value of such works paid for by him upon termination of the Bulk Power
Transmission Agreement:
Provided that where the Transmission System User has carried out the works to provide him
access to the intra-State transmission system of the Transmission Licensee, the
Transmission System User shall be entitled to retain such works upon termination of the Bulk
Power Transmission Agreement.
60.8 The transmission system access charges may be recovered by any one of the following
methods, in accordance with the terms of the Bulk Power Transmission Agreement:
a. As a one-time payment by the Transmission System User at the time of obtaining access;
or
b. As a series of payments over the duration of the Bulk Power Transmission Agreement; or
c. As any combination of (a) and (b) above.
60.9 Any dispute between the Transmission Licensee and the intending Transmission System
User with regard to the works to be carried out to give access to the intending Transmission
System User or with regard to the transmission system access charges shall be referred to
the Commission for adjudication or to such other forum as may be stipulated.
Annual transmission charges for each year of the Control Period

60.10 The annual transmission charges for each financial year of the Control Period shall provide
for the recovery of the aggregate revenue requirement of the Transmission Licensee for the
respective financial year of the Control Period, as reduced by the amount of non-tariff income
and income from Other Business, as approved by the Commission and comprising the
following:
Aggregate revenue requirement:

a) Return on Equity Capital;
b) Interest on Loan Capital;
c) Depreciation;
d) Operation and maintenance expenses;
e) Interest on working capital and deposits from Transmission System Users;
minus:
f) Non-tariff income; and

g) Income from Other Business, to the extent specified in these Regulations
Provided that in case of competitively awarded transmission system projects in
pursuance of Section 63 of the Act and in accordance with guidelines for competitive
bidding for transmission, the annual transmission charges shall be as per the Annual
Transmission Service Charges (TSC) quoted by such competitively awarded
transmission projects.
60.11 The annual transmission charges of the Transmission Licensee shall be determined by the
Commission on the basis of an application for determination of aggregate revenue
requirement or application for adoption of annual transmission charges in case of
competitively awarded transmission system project, as the case may be, made by the
Transmission Licensee in accordance with Chapter 3 of these Regulations.
61 Multi-Year Tariff
61.1 Except where exempted by the Commission, the Regulations contained in Chapter 3 of these
Regulations shall apply to all Transmission Licensees and Transmission System Users in the
State with effect from April 1, 2016.
62 Financial Principles
Regulations shall apply to all Transmission Licensees in the State with effect from April 1,
2016.

63.1 Each Transmission Licensee shall submit a Capital Investment Plan, as part of MYT Petition,
to the Commission in accordance with Regulation 6of these Regulations including complete
details of its capital expenditure projects.
63.2 Separate prior approval of the Commission shall be required for all capital expenditure
schemes of a value exceeding Rs. 10Crore.
63.3 The Commission shall review the Capital Investment Plan submitted by the Transmission
Licensee taking into consideration the prudence of the proposed expenditure and estimated
impact on transmission charges in accordance with Regulation Error! Reference source not
found..
63.4 The Transmission Licensee shall submit, along with the MYT Petition or along with the
Petition for Annual Performance Review, as the case may be, details showing the progress of
capital expenditure projects, together with such other information, particulars or documents as
the Commission may require to assess such progress.
64 Capital Cost
64.1 For the purpose of determination of tariff, the Capital Cost for a Transmission Project and
additional capitalisation thereof, shall be allowed in accordance with the provisions outlined
under Regulation 28 and Regulation 29 respectively.
projects and/or original cost of fixed assets capitalized.
64.2.1 The amount of any contributions made by Transmission System Users towards works for
access to the intra-State transmission system of the Transmission Licensee shall be deducted
from the original cost for such project for the purpose of calculating the Equity Capital as
provided in these Regulations.
65 Norms for operation

65.1 Target availability for full recovery of annual transmission charges
(a) AC system : 98 per cent
(b) HVDC bi-pole links & HVDC back to back stations : 95 per cent
For incentive consideration:
(a) AC system : 98.5 per cent
(b) HVDC bi-pole links & HVDC back to back stations : 96 per cent
Provided that for new HVDC station NATAF shall be considered as 95% for first three years
of operations for the purpose of incentive:
Provided that no incentive shall be payable above the availability of 99.75%:
Provided further that the computation of incentive/disincentive shall be undertaken during
annual performance review and at the end of Control Period.
66 Calculation of Aggregate Revenue Requirement

66.1 Aggregate Revenue Requirement of Transmission Licensee shall comprise of following
components, viz.,
a) Return on Equity Capital;
b) Interest on Loan Capital;
c) Depreciation;
d) Operation and maintenance expenses;
e) Interest on working capital and deposits from Transmission System Users.
Less
g) Non-tariff income; and
h) Income from Other Business, to the extent specified in these Regulations.
66.2 Return on Equity Capital

66.2.1 The Transmission Licensee shall be allowed a return on equity capital, as specified in
Regulation 33 of these Regulations.
66.3 Interest on Loan capital
66.3.1 The Transmission Licensee shall be allowed interest on the Loan Capital, as specified in
66.4 Depreciation
66.4.1 The Transmission Licensee shall be permitted to recover depreciation on the value of fixed
assets used in the Transmission Business as specified in Regulation 32 of these Regulations.
66.5 Operation and Maintenance expenses
66.5.1 The norms for O&M expenses for existing and new Transmission Licensees have been
stipulated for the Control Period on the basis of circuit kilometre of transmission lines and
number of bays in the substation of the Transmission Licensee, as given below:
Explanation: For the purpose of deriving normative O&M expenses under these Regulations,
the “Bay” shall mean a set of accessories that are required to connect an electrical equipment
such as Transmission Line, Bus Section Breakers, Potential Transformers, Power
Transformers, Capacitors and Transfer Breaker and the feeders emanating from the bus at
Sub-station of Transmission Licensee. Further, the Bays referred herein shall include only the
Bays at the Transmission substation and shall exclude any Bays of the Generating Station
switchyard whose maintenance is usually the responsibility of the Generating Company.
Provided that for deriving the O&M expenses of a year, the circuit kilometre of transmission
lines and number of bays in the substation of the Transmission Licensee added during the
year shall also be considered.
66.6 Existing Transmission Licensee
66.7 Operation and Maintenance (O&M) expenses shall comprise of the following
a) Salaries, wages, pension contribution and other employee costs;
b) Administrative and general expenses including insurance charges if any;
c) Repairs and maintenance expenses;
66.8 The O&M expenses for the first year of the Control Period shall be approved by the
Commission taking into account the actual O&M expenses for last five years till Base Year
subject to prudence check and any other factors considered appropriate by the Commission.
66.9 The O&M expenses for the nth year and also for the year immediately preceding the Control
Period shall be approved based on the formula given below:-
Where –
66.10 The above components shall be computed in the manner specified below:
EMPn = (EMPn-1) x (1+Gn) x (CPIinflation)
R&Mn = K x (GFA n-1) x (WPIinflation) and
A&Gn = (A&Gn-1) x (WPIinflation) + Provision
Where -
 Provision: Cost for initiatives or other one-time expenses as proposed by the
Distribution Licensee and validated by the Commission.
control period shall be determined by the Commission in the MYT Tariff order based
on licensee‟s filing, benchmarking of repair and maintenance expenses, approved
repair and maintenance expenses vis-à-vis GFA approved by the Commission in past
and any other factor considered appropriate by the Commission;
 CPIinflation – is the average increase in the Consumer Price Index (CPI) for
 GFAn-1 --- Gross Fixed Asset of the transmission licensee for the n-1th year;
based on licensee‟s filings, benchmarking, and any other factor that the Commission
feels appropriate:
66.11 O&M Norms for New Transmission Licensee

For the New transmission licensees, the year-wise O&M norms shall be determined on case
to case basis:
Provided that the same shall not be applicable to those new projects which are awarded on a
competitive bidding basis.
Explanation: The term "New Transmission Licensee" shall mean the transmission licensee(s)
for which Transmission Licence is granted by the Commission prior to or after the date of
effectiveness of these Regulations, and whose transmission project assets are commissioned
after March 31, 2016.
66.12 O&M Sharing between two Transmission Licensees

66.13 For such Transmission Licensees whose bays are installed in the premises of and maintained
by another Transmission Licensee, the O&M expense for such assets shall be allowed in
accordance with the norms applicable for the Transmission Licensee who performs the O&M
of such assets:
Provided that the Transmission Licensees shall mutually agree on sharing of such allowed
O&M expenses:
Provided further that Transmission Licensees shall project addition of such assets over the
Control Period separately in their Capital Investment Plan to be submitted in accordance with
Regulation Error! Reference source not found..
66.14 Interest on working capital

66.15 The Transmission Licensee shall be allowed interest on the estimated level of working capital,
as specified in Regulation 36 of these Regulations.
67 Non-Tariff Income
67.1 The amount of non-tariff income relating to the Transmission Business as approved by the
Commission shall be deducted from the aggregate revenue requirement in determining
annual transmission charges of the Transmission Licensee:
Provided that the Transmission Licensee shall submit full details of its forecast of non-tariff
income to the Commission along with its application for determination of aggregate revenue
requirement.
68 Income from Other Business

68.1 Where the Transmission Licensee has engaged in any Other Business, an amount equal to
one-third of the revenues from such Other Business after deduction of all direct and indirect
costs attributed to such Other Business shall be deducted from the aggregate revenue
requirement in calculating the annual transmission charges of the Transmission Licensee:
Provided that the Transmission Licensee shall follow a reasonable basis for allocation of all
joint and common costs between the Transmission Business and the Other Business and
shall submit the Allocation Statement to the Commission along with its application for
determination of tariff:
Provided further that where the sum total of the direct and indirect costs of such Other
Business exceed the revenues from such Other Business, no amount shall be allowed to be
added to the aggregate revenue requirement of the Transmission Licensee on account of
such Other Business.
69 Computation and Payment of Transmission Charge

69.1 The Annual Transmission Charges for the Transmission Licensee shall be determined, based
on the norms as specified in these Regulations and recovered on monthly basis as
transmission charge from the users who shall share the Transmission Charge in proportion of
the allotted transmission capacity.
Provided that the charges payable by the Transmission System Users may also take into
consideration factors such as voltage, distance, direction, quantum of flow and time of use, as
may be specified by the Commission in its order.
69.2 The transmission charge (inclusive of incentive) payable for a calendar month for a
transmission system or part thereof shall be computed in accordance with the following
equation:
For AC system:
a) For TAFM < 98%

AFC x (NDM/NDY) x (TAFM/98%)
b) For TAFM: 98%< TAFM < 98.5%
AFC x (NDM/NDY) x (1)
c) For TAFM: 98.5%< TAFM < 99.75%
AFC x (NDM/NDY) x (TAFM/98.5%)
d) For TAFM > 99.75%
AFC x (NDM/NDY) x (99.75%/98.5%)
For HVDC bi-pole links and HVDC back-to-back Stations:
a) For TAFM < 95%
b) For TAFM: 95%< TAFM < 96%
AFC x (NDM/NDY) x (1)
c) For TAFM: 96%< TAFM < 99.75%
d) For TAFM > 99.75%
AFC x (NDM/NDY) x (99.75%/96%)
Where,
AFC = Annual Fixed Cost specified for the year in Rupees
NATAF = Normative annual Transmission availability factor, in per cent
TAFM = Transmission System availability factor for the month, in percent computed in
accordance with Appendix II.
69.3 The monthly Transmission Tariff as determined by the Commission as per Regulation 69.2
above shall be shared by all long-term and medium-term open access customers on monthly
basis (including existing Distribution Licensees) in the ratio of their allotted capacities.
69.4 The transmission licensee shall raise the bill for the transmission charge (inclusive of
incentive) for a month based on its estimate of TAFM. Adjustments, if any, shall be made on
the basis of the TAFM to be certified by the SLDC within 30 days from the last day of the
relevant month.
70 Open Access Transactions

70.1 All the matters related to Open Access Transactions shall be dealt in accordance with Assam
Electricity Regulatory Commission (Terms and Condition for Open Access) Regulations, 2005
as applicable and as amended from time to time.
71 Transmission losses
71.1 The energy losses in the transmission system of the Transmission Licensee, as determined
by the State Load Despatch Centre and approved by the Commission, shall be borne by the
Transmission System Users pro-rata to their usage of the intra-State transmission system:
Provided that the Commission may stipulate a trajectory for reduction of transmission losses
in accordance with Regulation 7,as a part of Multi Year Tariff framework applicable to the
Transmission Licensee.
Provided that for difference between the actual level of transmission losses, as determined by
the State Load Despatch Centre and the approved level, the transmission ARR shall be
adjusted proportionately..
72 Payment Modalities and Payment Security

72.1 State Transmission Utility (STU) shall raise monthly bill for Intra-State Transmission Charges
on every Transmission System User (TSU) on 1st working day of the Month for the
Transmission Charges of preceding month.
72.2 The monthly bill for transmission tariff for each calendar month shall be payable on 14th day
of subsequent calendar month by the TSUs.
72.3 All TSUs shall ensure timely payment of Transmission Tariff to STU so as to enable STU to
make timely settlement of claims raised by Transmission Licensees.
72.4 Where there is delay in payment by any TSU, late payment surcharge at the rate of 1.25%
per month or part thereof shall be applicable.
72.5 For payment of bills of the transmission licensee through letter of credit or otherwise, a rebate
of 1% shall be allowed if payment is made within 7 days of presentation of bills by the
Transmission Licensee.

DISTRIBUTION WHEELING BUSINESS
73 Separation of accounts
73.1 The distribution licensee shall segregate the accounts of the licensed business into Wheeling
Business and Retail Supply Business and submit separate ARRs for respective businesses.
The ARR for wheeling business shall be used to determine wheeling charges recoverable from
open access consumers and the ARR for Retail Supply Business to determine retail supply
tariff for sale of electricity to different categories of consumers of the licensee which will be
inclusive of wheeling charges.
Provided that till such time the accounts are segregated as per provisions of these regulations,
the distribution licensee shall prepare an allocation statement to apportion costs and revenues
to respective business. The allocation statement shall be approved by the Board of Directors of
the distribution licensee and accompanied with an explanation of the methodology which
should be consistent over the control period.
74 Applicability
74.1 The Regulations contained in this Chapter shall apply in determining tariff payable for usage
of distribution wires of a Distribution Licensee by a Distribution System User.
75 Components of Aggregate Revenue Requirement for Distribution Wheeling

Business
75.1 The wheeling charges for Distribution Wheeling Business of the Distribution Licensee shall
provide for the recovery of the Aggregate Revenue Requirement, as provided in Regulation
79 of these Regulations and shall comprise the following:
Aggregate Revenue Requirement:
a. Return on Equity Capital;
b. Interest on Loan Capital;
c. Depreciation;
d. Operation and maintenance expenses;
e. Interest on working capital and deposits from Distribution System Users; and
f. Provision for Bad and doubtful debts.
Wheeling charges = Aggregate Revenue Requirement, as above, minus:

g. Non-tariff income; and
h. Income from Other Business, to the extent specified in these Regulations, and
i. Receipts on account of additional surcharge on charges of wheeling.
75.2 The wheeling charges of the Distribution Licensee shall be determined by the Commission on
the basis of an application for determination of tariff made by the Distribution Licensee in
accordance with Chapter 3 of these Regulations.
Provided that the Wheeling Charges may be denominated in terms of Rupees/kWh or
Rupees/kW/month, for the purpose of recovery from the Distribution System User, or any
such denomination, as stipulated by the Commission from time to time.
Regulations shall apply to all Distribution Licensees in the State with effect from April 1, 2019.

77.1 The Distribution Licensee shall submit a Capital investment plan, as part of the MYT Petition,
to the Commission in accordance with Regulation Error! Reference source not found. of
these Regulations including complete details of its proposed capital expenditure projects:
77.2 The Commission shall review the Capital Investment Plan submitted by the Distribution
Licensee taking into consideration the prudence of the proposed expenditure and estimated
impact on transmission charges in accordance with Regulation Error! Reference source not
found..
77.3 The Distribution Licensee shall submit, along with the MYT Petition or along with the Petition
for Annual Performance Review, as the case may be, details showing the progress of capital
expenditure projects, together with such other information, particulars or documents as the
Commission may require to assess such progress.
78 Capital cost
78.1 The approved Capital Investment Plan of the Distribution Licensee shall be the basis for
determining the annual allowable capital cost for each financial year for any capital
expenditure project initiated on or after April 1, 2019.
78.2 For each capital expenditure project, the sum total of annual allowable capital cost from the
date of commencement of such project till the date of commissioning shall be the original cost
of such project.
78.3 The provisions of the Statements of Accounting Standards (AS10): Accounting for Fixed
Assets of the Institute of Chartered Accountants of India shall apply, to the extent not
inconsistent with these Regulations, in determining the original cost of capital expenditure
projects and/or original cost of fixed assets capitalised.
78.4 The capital cost shall be allowed as provided in Regulation 28.
78.5 The amount of any contributions made by consumers and Distribution System Users towards
works for access to the distribution system of the Distribution Licensee shall be deducted from
the original cost for such project for the purpose of calculating the Equity Capital, as provided
in these Regulations.

79.1.1 The Distribution Licensee shall be allowed a return on equity capital on Distribution Wheeling
Business, as specified in Regulation 33 of these Regulations.
79.2.1 The Distribution Licensee shall be allowed interest on the Loan Capital, as specified in
79.3 Depreciation
79.3.1 The Distribution Licensee shall be permitted to recover depreciation on the value of fixed
assets used in the Distribution Business as specified in Regulation 32 of these Regulations.
79.4.1 The Distribution Licensee shall be allowed O&M expense as provided in Regulation 37 of
these Regulations.
79.5 Interest on security deposits
st
79.5.1 Interest on security deposits shall be at the SBI base rate as on 1 April of the respective
financial year.
79.6.1 The Distribution Licensee shall be allowed interest on the estimated level of working capital,
79.7 Provision for Bad and doubtful debts

79.7.1 The Commission may allow a provision for bad and doubtful debts upto 1% of the amount
shown as receivables in the audited accounts of the Distribution Licensee, duly allocated for
the Wheeling Business:
Provided that where the amount of such provisioning for bad and doubtful debts exceeds five
(5) per cent of the amount shown as receivables in the audited accounts of the Distribution
Licensee duly allocated for the Wheeling Business, no such appropriation shall be allowed
which would have the effect of increasing the provisioning beyond the said maximum.
80.1 The amount of non-tariff income relating to the Distribution Business as approved by the
Commission shall be deducted from the Aggregate Revenue Requirement in determining the
wheeling charges of Distribution Wheeling Business of the Distribution Licensee:
Provided that the Distribution Licensee shall submit full details of its forecast of non-tariff
income to the Commission along with its application for determination of wheeling charges.

81.1 Where the Distribution Licensee has engaged in any Other Business, an amount equal to
costs attributed to such Other Business shall be deducted from the Aggregate Revenue
Requirement in determining the wheeling charges of Distribution Wheeling Business of the
Distribution Licensee:
Provided that the Distribution Licensee shall follow a reasonable basis for allocation of all joint
and common costs between the Distribution Business and the Other Business and shall
submit the Allocation Statement to the Commission along with its application for determination
of wheeling charges:
Business exceed the revenues from such Other Business, no amount shall be allowed to be
added to the Aggregate Revenue Requirement of the Distribution Licensee on account of

such Other Business
82 Determination of Wheeling Charges

82.1 The Commission shall specify the wheeling charge of Distribution Wheeling Business of the
Distribution Licensee in its Order passed under sub-section (3) of Section 64 of the Act:
Provided that the charges payable by a Distribution System User under this Chapter 8 may
comprise any combination of fixed/demand charges, and variable charges, as may be
stipulated by the Commission in such Order.
83 Receipts on account of Additional surcharge

83.1 The amount received by the Distribution Licensee by way of additional surcharge on charges
of Distribution Wheeling Business, as approved by the Commission in accordance with the
AERC (Terms and Conditions for Open Access) Regulations 2005, as amended from time to
time, from Distribution System users, shall be deducted from the aggregate revenue
requirement in calculating the wheeling charges of such Distribution Licensee.
84 Wheeling losses
84.1 The Distribution Licensee shall be allowed to recover, in kind, the approved level of technical
losses arising from the operation of the distribution system:
Provided that the Commission may stipulate a trajectory for wheeling losses in accordance
with Regulation Error! Reference source not found.:
Provided that any variation between the actual level of wheeling losses and the approved
level shall be dealt with, as part of the Annual Performance Review, in accordance with the
mechanisms provided in Regulation 9.
85 Wires Availability
85.1 The target Wires Availability for full recovery of Return on Equity Capital for Wheeling
Business shall be as under:
a) Rural Areas: 90 percent
b) Towns and cities: 95 percent
Provided that the Commission may stipulate a trajectory for achieving the target Availability
for Wheeling Business of the Distribution Licensee:
Provided further that for every 1 percent under-achievement in Wires Availability, Rate of
Return on Equity Capital shall be reduced by 0.1%:
Provided further that for every 1 percent over-achievement in Wires Availability, Rate of
Return on Equity Capital shall be increased by 0.1%.
85.2 Wires Availability shall be computed in accordance with the following formula:
Wires Availability = (1- (SAIDI / 8760)) x 100
Where
Provided that the SAIDI shall be calculated in accordance with the definition specified in
AERC (Distribution Licencees' Standards of Performance) Regulations, 2004, Period for
Giving Supply and Determination of Compensation) Regulations, 2005, as amended from
time to time.
85.3 Wires Availability shall be measured over the course of a year and shall be expressed in
percentage terms.
CHAPTER 9: COMPONENTS OF ARR AND TARIFF FOR RETAIL

SUPPLY BUSINESS
86 Applicability
86.1 These Regulations shall apply for determination of tariff for retail supply of electricity by a
Distribution Licensee to its consumers:
87.1 The tariff for retail supply by a Distribution Licensee shall provide for recovery of the
aggregate revenue requirement of the Distribution Licensee for each year of the Control
Period, as approved by the Commission and comprising the following: -
87.2 Aggregate revenue requirement:
(a) Return on Equity Capital;
(b) Interest on Loan Capital;
(c) Depreciation;
(d) Cost of own power generation /power purchase expenses;
(e) Transmission charges;
(f) Operation and Maintenance expenses;
(g) Interest on working capital and on consumer security deposits; and
(h) Provision for Bad and doubtful debts.
Revenue requirement from sale of electricity = Aggregate revenue requirement, as
above, minus:
(i) Non-tariff income;
(j) Income from Other Business, to extent specified in these Regulations;
(k) Receipts on account of cross-subsidy surcharge.
87.3 The tariff for retail supply by the Distribution Licensee shall be determined by the Commission
on the basis of an application for determination of tariff made by the Distribution Licensee in
accordance with Chapter 3 of these Regulations.
87.4 Provided that the Commission may determine tariff for Zones/Circles/Divisions or for the
groups of Zones/Circles/Divisions of a Distribution Licensee based on the performance
parameters as may be stipulated by the Commission.
87.5 The Distribution Licensee shall be allowed to offer a rebate to the consumers on tariff and
charges determined by the Commission:
Provided that the Distribution Licensee shall submit details of such rebates to the Commission
every quarter, in the manner and format, as stipulated by the Commission from time to time.
Provided that the impact of such rebates on the Distribution Licensee shall be borne entirely
by the Distribution Licensee and impact of such rebate shall not be allowed by the
Commission to be passed through to the consumers, in any form.
Provided that such rebates should not to be offered selectively to any consumer/s, and shall
have to be offered to the entire consumer category/sub-category/consumption slab in a non-
discriminatory manner.
Regulations shall apply to all Distribution Licensees in the State with effect from April 1, 2019.

89.1 The Distribution Licensee shall submit a detailed Capital investment plan, and physical
targets for each year of the Control Period for meeting the requirement of load growth,
reduction in distribution losses, increase in collection efficiency, metering, consumer services,
etc. to the Commission for approval, along with the MYT Petition:
89.2 The Distribution Licensee shall submit the Capital Investment Plan in accordance with
Regulation Error! Reference source not found. of these Regulations.
89.3 The Commission shall approve the Capital investment plan in accordance with the principles
specified in these Regulations.
90 Capital Cost
90.1 The approved Capital Investment Plan of the Distribution Licensee shall be the basis for
determining the annual allowable capital cost for each financial year for any capital
expenditure project initiated on or after April 1, 2019.
90.2 For each capital expenditure project, the sum total of allowable capital cost from the date of
commencement of such project till the date of commissioning shall be the original cost of such
project:
projects and/or original cost of fixed assets capitalised.
90.4 The amount of any contributions made by consumers and Distribution System Users towards
works for Retail Supply by the Distribution Licensee shall be deducted from the original cost
for such project for the purpose of calculating the Equity Capital, as provided in these
Regulations.
90.5 The capital cost shall be allowed as provided in Regulation 28.
91 Sales forecast
91.1 The Distribution Licensee shall submit a monthly forecast of the expected sales of electricity
to each tariff category/sub-category and to each tariff slab within such tariff category/sub-
category to the Commission for approval along with the MYT Petition, as specified in these
Regulations.
91.2 The sales forecast shall be consistent with the load forecast prepared as part of the long-term
power procurement plan under Chapter 4 of these Regulations and shall be based on past
data and reasonable assumptions regarding the future:
Provided that where the Commission has stipulated a methodology for forecasting sales to
any particular tariff category, the Distribution Licensee shall incorporate such methodology in
developing the sales forecast for such tariff category.

92.1.1 The Distribution Licensee shall be allowed a return on equity capital as specified in
92.2.1 The Distribution Licensee shall be allowed interest on the Loan Capital, as specified in
Regulation 34of these Regulations.
92.3 Depreciation
92.3.1 The Distribution Licensee shall be permitted to recover depreciation on the value of fixed
assets used in the Distribution Business as specified in Regulation 32 of these Regulations.
92.4 Cost of power generation/power purchases
92.4.1 The Distribution Licensee shall be allowed to recover the cost of power generated by the
Generation Business or purchased from approved sources for supply to consumers based on
the power procurement plan of the Distribution Licensee, as per Regulation Error! Reference
source not found. and in the manner as stipulated in Chapter 4 of these Regulations.
92.5 Transmission charges

92.5.1 The Distribution Licensee shall be allowed to recover transmission charges payable for
access to and use of the intra-State transmission system in accordance with the tariff
approved by the Commission under Chapter 7 of these Regulations.
92.7 The Distribution Licensee shall be allowed O&M expense as provided in Regulation 37 of
these Regulations.
92.8.1 The Distribution Licensee shall be allowed interest on the estimated level of working capital,
92.9 Provision for Bad and doubtful debts

92.9.1 The Commission may allow a provision for bad and doubtful debts upto 1% of the amount
shown as receivables in the audited accounts of the Distribution Licensee, duly allocated for
the Supply Business:
Provided that where the amount of such provisioning for bad and doubtful debts exceeds five
(5) per cent of the amount shown as receivables in the audited accounts of the Distribution
Licensee duly allocated for the Wheeling Business, no such appropriation shall be allowed
which would have the effect of increasing the provisioning beyond the said maximum.
93.1 The amount of non-tariff income relating to the Retail Supply Business as approved by the
Commission shall be deducted from the Aggregate Revenue Requirement in calculating the
tariff from retail supply of electricity of the Distribution Licensee:
Provided that the Distribution Licensee shall submit full details of its forecast of non-tariff
income to the Commission along with its application for determination of tariff.
Provided further that, while considering the Delayed Payment Surcharge earned from
consumer as part of Non-Tariff Income, the amount of Delayed Payment Surcharge paid to
Long Term Power suppliers shall be deducted.

94.1 Where the Distribution Licensee has engaged in any Other Business, an amount equal to
costs attributed to such Other Business shall be deducted from the Aggregate Revenue
Requirement in calculating the tariff from retail supply of electricity by the Distribution
Licensee:
Provided that the Distribution Licensee shall follow a reasonable basis for allocation of all joint
and common costs between the Distribution Business and the Other Business and shall
submit the Allocation Statement to the Commission along with its application for determination
of tariff:
Business exceed the revenue from such Other Business, no amount shall be allowed to be
added to the aggregate revenue requirement of the Distribution Licensee on account of such
Other Business.
Provide also that nothing contained in this Regulation shall apply to a local authority engaged,
before the commencement of the Act, in the business of distribution of electricity.
95 Receipts on account of cross-subsidy surcharge

95.1 The amount received by the Distribution Licensee by way of cross-subsidy surcharge, as
approved by the Commission in accordance with the AERC (Terms and Conditions for Open
Access) Regulations 2005, as amended from time to time, shall be deducted from the
Aggregate Revenue Requirement in calculating the tariff for retail supply of electricity by such
Distribution Licensee.
96 Distribution Losses
96.1 The Distribution Licensee shall be allowed to recover the approved level of distribution losses
arising from the Retail Supply of electricity, excluding wheeling losses:
Provided that the Commission may stipulate a trajectory for distribution losses for Retail
Supply of electricity in accordance with these Regulations:
Provided that any variation between the actual level of distribution losses and the approved
level shall be dealt with, as part of the Annual Performance Review and at the time of final
truing up at the end of the Control Period.
97 Supply Availability
97.1 Supply Availability shall comprise of the following parameters in the proportion as mentioned
below:
a) Base load Supply Availability 75 percent

b) Peak load Supply Availability 25 percent
97.2 Target Supply Availability for full recovery of Return on Equity Capital for Retail Supply of
electricity is in the range of 85 percent to 95 percent, as may be determined by the
Commission:
Provided that the Commission may stipulate a trajectory for achieving the target Supply
Availability for Retail Supply of electricity:
Provided that for every 1 percent under-achievement in Supply Availability, rate of Return on
Equity Capital shall be reduced by 0.1%.
Provided that for every 1 percent over-achievement in Supply Availability, rate of Return on
Equity Capital shall be increased by 0.1%.
97.3 Base load Supply Availability shall be computed in accordance with the following formula:
= (Actual Contracted Base Load Supply in MW) ÷ (Base load in MW)
Provided that the base load shall be calculated based on unrestricted demand of a
Distribution Licensee for the retail supply of electricity.
97.4 Peak load Supply Availability shall be computed in accordance with the following formula:
= (Actual Contracted Peak Load Supply in MW) ÷ (Peak load in MW)
Provided that the peak load shall be calculated based on unrestricted demand of a
Distribution Licensee for the retail supply of electricity.
CHAPTER 10: Terms and Conditions of Determination of ARR and

Tariff of SLDC
98 Applicability
98.1 These Regulations shall apply for determination of fees and charges to be collected by the
SLDC from the users of intra-state transmission system (i.e. Generating companies,
transmission and distribution licensee, trading companies and open access consumers)
98.2 The transmission licensee notified as State Transmission Utility by the State Govt. as per
Section 39(1) of the Act and entrusted with the operation of SLDC shall submit separate ARR
for its transmission business and SLDC business, as long as it remains under its control, as
per provisions of these regulations. The ARR for each business shall be based on the audited
accounts of the corresponding business. After a Government company or an authority or a
corporation is established or constituted for operation of SLDC by or under any State Act, as
may be notified by the State Govt. as per provisions of Section 31 of the Act, the ARR for
SLDC business shall be submitted by such Government company, authority or corporation, as
the case may be, as per provisions of these regulations.
98.3 The Commission may require the STU or the Government company/Authority/Corporation
established for operation of SLDC or the SLDC itself to submit such details/information as
may be required for determination of SLDC charges. Further, the Commission may give
directions to SLDC in relation to the role and functioning of SLDC
99 Application for Registration with SLDC

99.1 Each of the users of intra-State transmission system, which come under the purview of SLDC,
shall register themselves with the SLDC, within a month of coming into force of these
Regulations, by filing an application to the SLDC along with the fee of Rs 10,000 (Rupees Ten
Thousand only) or such amended fees as may be decided by the Commission from time to
time.
99.2 The new users of intra-State transmission system coming under the purview of SLDC, shall
submit an application to the SLDC, at least one month before the proposed date of
connection to the Intra-State transmission system, along with the above-mentioned Fee.
99.3 After being satisfied with the completeness and correctness of the information furnished in the
application, the SLDC, shall register the application in its records and duly intimate the
applicant regarding such registration.
99.4 The SLDC shall maintain consolidated information about all the users connected to the Intra-
State transmission system and being monitored / serviced by it, on a separate web-page on
their web-site.
100 Petition for determination of SLDC Charges

100.1 The SLDC shall provide to the Commission, full details of its calculations of its Aggregate
Revenue Requirement for the ensuing financial year, not later than four months before the
commencement of the said ensuing Year.
100.2 The total annual expenses and return on equity of the SLDC for each financial year of the
Control Period shall be worked out on the basis of expenses and return allowed in terms of
these Regulations.
100.3 The SLDC shall also file the proposed allocation of charges to all the users of intra State
Transmission System being monitored and serviced by it in line with these Regulations. SLDC
shall further forward a copy of its petition for determination of Aggregate Revenue
Requirement along with the proposal for allocation of charges to all the users of intra State
Transmission System being monitored and serviced by it.
100.4 The SLDC shall provide the details of calculation of the expenses and other related
information in the formats as specified by the Commission from time to time.
100.5 The SLDC shall also furnish the details of capital investment plan for the control period. For
capital investment schemes costing above Rupees One Crore, approval of the Commission
shall be obtained in respect of each of such schemes prior to commencement of works.
100.6 The Aggregate Revenue Requirement and other details filed by the SLDC shall be scrutinised
and as a result of such scrutiny, the Commission may call for such further information and
clarification as may be required.
100.7 Based on the information furnished by SLDC and after due examination, scrutiny and
consultation process, the Commission will approve the Aggregate Revenue Requirement
covering the expenses of the SLDC and determine the SLDC Charges.
100.8 In the event of non-revision of SLDC charges during any year, any variation (shortfall or
excess) in recovery of SLDC charges shall be carried forward to the next financial year and
adjusted as may be decided by the Commission.
100.9 The SLDC shall submit periodic returns containing operational and cost data, as may be
prescribed by the Commission.
100.10 All filings and application for determination of SLDC Charges shall be made in conformity with
the stipulations made in these Regulations
101 Levy of SLDC Charges

101.1 All expenses incurred by the SLDC, established by the State Government under Section 31 of
the Act, shall be accounted for separately;
Provided that if on the date of publication of these Regulations, the State Transmission Utility
(STU) is operating the State Load Despatch Centre and performing the functions under the
Act, as provided under sub-clause (2) of Section 31 of the Act, the STU shall maintain
separate accounts for expenses related to operation of the State Load Despatch Centre;
Provided further that till such time the accounts are not segregated, the STU shall apportion
its costs on the basis of an Allocation Statement to be submitted to the Commission with all
relevant details.
102 Annual SLDC Charges

102.1 The annual charges to be recovered by the SLDC shall include the component of Return on
Equity and also the following expenses:
a. O&M expenses;
b. Return on Equity
c. Depreciation;
d. Lease Charges
e. Interest and Finance charges;
f. Income Tax, if any;
g. Interest on working capital, if any;
h. Any other expenses incidental to discharging the functions of SLDC as deemed
appropriate by the Commission;
minus
i. Non-tariff income including but not limited to interest on investment, fees/charges
other than SLDC charges, Income from sale of scrap, etc.
103 Operation and Maintenance Expenses

103.1 Operation and Maintenance (O&M) expenses shall comprise of the following:-
a. Salaries, wages, pension contribution and other employee costs;
b. Administrative and general expenses including insurance charges if any;
c. Repairs and maintenance expenses;
103.2 The O&M expenses for the first year of the Control Period will be approved by the
Commission taking into account actual O&M expenses of the previous years and any other
factors considered appropriate by the Commission.
103.3 The O&M expenses for the nth year and also for the year immediately preceding the Control
Period shall be approved based on the formula given below:-
Where –
103.4 The above components shall be computed in the manner specified below:
EMPn = (EMPn-1) x (1+Gn) x (CPIinflation)
R&Mn = K x (GFAn-1) x (WPIinflation) and
A&Gn = (A&Gn-1) x (WPIinflation) + Provision
Where -
 Provision: Cost for initiatives or other one-time expenses as proposed by the SLDC and
validated by the Commission.
control period shall be determined by the Commission in the MYT Tariff order based on
SLDC‟s filing, benchmarking of repair and maintenance expenses, approved repair and
maintenance expenses vis-à-vis GFA approved by the Commission in past and any
other factor considered appropriate by the Commission;
 CPIinflation – is the average increase in the Consumer Price Index (CPI) for immediately
preceding three years;
th
 GFAn-1 --- Gross Fixed Asset of the transmission licensee for the n-1 year;
based on SLDC‟s filings, benchmarking, and any other factor that the Commission feels
appropriate:
104 Basis for collection of SLDC charges

104.1 The annual SLDC charges as determined by the Commission shall be allocated between the
Beneficiaries using the intra-State transmission system on the basis of contracted
transmission capacity.
Provided further that SLDC shall be entitled to levy and collect fee and charges for any other
services rendered to the users and power exchanges as specified in any other regulations.
104.2 The Short-term open access customers using the intra-State transmission system shall
however pay only such scheduling charges to the SLDC as may be specified by the
Commission.
105 Billing of SLDC Charges:

105.1 The SLDC shall furnish necessary monthly bills at the rate of one twelfth of the annual
charges as approved by the Commission, to the users of intra State Transmission System
being monitored and serviced by it for each billing month within seven days after the last day
of the preceding month;
Provided that for the purpose of billing and collection of the prescribed charges, a fraction of a
MW shall be treated as one full MW.
105.2 The Beneficiaries shall make payment to the SLDC of the amounts due within one month of
the date of receipt of the bill.
105.3 Disputes arising out of billing of SLDC charges shall be, as far as possible, settled by mutual
negotiations. If the disputes are not resolved through mutual negotiations within sixty (60)
days of the receipt of the bills, the matter shall be referred to the Commission through a
petition by either of the parties. The decision of the Commission shall be final and binding on
all the parties.
105.4 Pending resolution of the dispute, 90% of the bill amount shall be paid under protest within
the due date.
CHAPTER 11: GRANT OF SUBSIDIES BY STATE GOVERNMENT

106 Manner of provision of subsidy by State Government
106.1 Pursuant to Section 65 of the Electricity Act, 2003 in case the State Government requires
grant of any subsidy to any consumer or class of consumers in the tariff determined under
Section 62 of the Act, the State Government shall, notwithstanding any direction which may
be given under Section 108 of the Act, pay, in advance in the manner as may be specified, by
the Commission the amount to compensate the person affected by the grant of subsidy in the
manner the Commission may direct,, as a condition for the licence or any other person
concerned to implement the subsidy provided for by the State Government:
Provided that no such direction of the State Government shall be operative if the payment is
not made in accordance with the provisions contained in this section and the tariff fixed by
State Commission shall be applicable from the date of issue of orders by the Commission in
this regard.
CHAPTER 12: MISCELLANEOUS

107 Hearing
107.1 The Commission may hold hearing(s) on the ARR/tariff filing and hear such persons as the
Commission may consider appropriate to decide on such ARR/tariff filing.
107.2 The procedure of hearing on the ARR/Tariff filing shall be as per the provisions of the AERC
(Conduct of Business) Regulations, 2004 as amended from time to time or in the manner as
the Commission may decide from time to time.
108 Issue of Orders and Directions

108.1 Subject to the provision of the Act and these regulations, the Commission may, from time to
time, issue orders and directions in regard to the implementation of these regulations and
procedure to be followed on various matters.
109 Interpretation
109.1 If a question arises relating to the interpretation of any provision of these regulations, the
decision of the Commission shall be final.
110 Sharing of CDM Benefits

110.1 The proceeds of carbon credit from approved CDM project shall be shared in the following
manner, namely-
(i) 100% of the gross proceeds on account of CDM to be retained by the project developer in
the first year after the date of commercial operation of the generating station or the
transmission system or the distribution system, as the case may be;
(ii) in the second year, the share of the beneficiaries shall be 10% which shall be
progressively increased by 10% every year till it reaches 50%, where after the proceeds shall
be shared in equal proportion, by the generating company or the transmission or distribution
licensee, as the case may be, and the beneficiaries.
111 Norms of operation to be ceiling norms

111.1 Norms of operation specified in these regulations are the ceiling norms and shall not preclude
the generating company or the transmission licensee or the distribution licensee, as the case
may be, and the beneficiaries and the long-term transmission and distribution customers from
agreeing to the improved norms of operation and in case the improved norms are agreed to,
such improved norms shall be applicable for determination of tariff.
112 Power to Amend

112.1 The Commission may, at anytime, vary, alter, modify or amend any provisions of these
Regulations.
113 Power to remove difficulties

113.1 If any difficulty arises in giving effect to any of the provisions of these regulations, the
Commission may, by a general or special order, not being inconsistent with the provisions of
these regulations or the Act, do or undertake to do things or direct the generating company or
the licensee to do or undertake such things which appear to be necessary or expedient for the
purpose of removing the difficulties. Power to Relax The Commission may in public interest
and for reasons to be recorded in writing, relax any of the provision of these regulations.
114 Power to Relax

114.1 The Commission may by general or special order, for reasons to be recorded in writing, and
after giving an opportunity of hearing to the parties likely to be affected may relax any of the
provisions of these regulations on its own motion or on an application made before it by an
interested person.
115 Saving of Inherent Powers of the Commission

115.1 Nothing in these regulations shall be deemed to limit or otherwise affect the inherent power of
the Commission to make such orders as may be necessary for ends of justice or to protect
consumers‟ interest or to prevent the abuse of the process of the Commission.
115.2 Nothing contained in these regulations shall limit or otherwise affect the inherent powers of
the Commission from adopting a procedure, which is at variance with any of the provisions of
these regulations, if the Commission, in view of the special circumstances of the matter or
class of matters and for reasons to be recorded in writing, deems it necessary or expedient to
depart from the procedure specified in these regulations.
115.3 Nothing in these regulations shall, expressly or by implication, bar the Commission to deal
with any matter or exercise any power under the Act for which no regulations have been
framed, and the Commission may deal with such matters, powers and functions in a manner it
thinks fit.
116 Repeal
116.1 Save as otherwise provided in these Regulations, the “Assam Electricity Regulatory
Commission (Terms and Conditions for determination of Multi Year Tariff) Regulations, 2015
and amendments thereof" are hereby repealed.
116.2 Notwithstanding such repeal, any proceedings before the Commission pertaining to the period
till FY 2018-19, including review Petitions, shall be governed by the “Assam Electricity
Regulatory Commission (Terms and Conditions for determination of Multi Year Tariff)
Regulations, 2015 and amendments” thereof.
S.K. ROY
Secretary,
Assam Electricity Regulatory Commission

AERC MYT Regulations, 2018

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Assam Electricity Regulatory Commission (Terms and Conditions

for determination of Multi Year Tariff) Regulations, 2018

1 Short title, extent, applicability and commencement

(5) “Applicant” means a Generating Company or Transmission Licensee or Distribution

𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 = 10000 × 𝐷𝐶𝑖 / {𝑁 × 𝐼𝐶 × 100 − 𝐴𝑈𝑋𝑛 } %

(20) “Date of Commercial Operation” means:

(31) “Event” means an unscheduled or unplanned occurrence in the intra-State transmission

(38) “Implementation Agreement‟ means the agreement, contract or memorandum of

(45) “New Generating Unit/Station” means a Generating Unit/Station declared under

(47) “Normative Annual Plant Availability Factor” or “NAPAF” in relation to a thermal

𝑃𝑙𝑎𝑛𝑡 𝐿𝑜𝑎𝑑 𝐹𝑎𝑐𝑡𝑜𝑟 = 10000 × 𝐴𝐺𝑖 / {𝑁 × 𝐼𝐶 × 100 − 𝐴𝑈𝑋𝑛 } %

(67) “Transmission Service Agreement” means the agreement, contract, memorandum of

CHAPTER 2: GENERAL PRINCIPLES

3 Object, Scope of Regulations and Extent of Application

(i) Supply of electricity by a Generating Company to a Distribution Licensee:

4 Multi-Year Tariff Framework

Generating Companies, Transmission Licensee, SLDC, Distribution Wheeling Business and

(i) Before commencement of Control Period, a forecast of the Aggregate Revenue

5 Control Period and Baseline

6 Capital Investment Plan

6.7 Purpose of investment shall include:

i. for a generation company - generation capacity growth, replacement of assets,

7 Forecast of Aggregate Revenue Requirement

a) In the case of a Generating Company, estimates of expected energy generation and

8 Specific trajectory for certain variables

9 Annual Performance Review and True Up

b) Annual Performance Review: a comparison of the performance targets estimated to

a) The approved aggregate gain or loss to the Generating Company or Transmission

10 Controllable and uncontrollable items

11 Mechanism for pass through of gains or losses on account of Uncontrollable

12 Mechanism for pass through of gains or losses on account of Controllable items

CHAPTER 3: PROCEDURE FOR DETERMINATION OF TARIFF

14 Procedures relating to making an application for determination of Tariff

15 Review at the End of Control Period

16 Determination of Generation Tariff

New Generating Stations

Own Generating Stations

17 Determination of Tariff for Transmission, Distribution Wheeling Business, Retail

a. an application made by a Licensee under the proviso to sub-section (1) of Section 36 of

18 Time limit for making an application for determination of Tariff

20 Publication of Approved Tariff

21 Communication of Tariff Order

22 Adherence to Tariff Order

CHAPTER 4: ELECTRICITY PURCHASE AND PROCUREMENT

24 Power procurement guidelines

25 Power procurement plan

h. Short-term power procurement proposed shall be in accordance with Regulation 27 of

26 Approval of power purchase agreement/arrangement

27 Additional Short-term power procurement

CHAPTER 5: FINANCIAL PRINCIPLES

a. Coal-based fired thermal generating stations – 4.0%

29 Additional capitalization and de-capitalization

b. Change in law or compliance of any existing law;

29.5 Renovation & Modernisation:

A. Interest during Construction (IDC):

B. Incidental Expenditure during Construction (IEDC):

30 Treatment of Consumer contribution, Deposit work and Grant

33 Return on Equity Capital

34 Interest on loan capital

36 Interest on Working Capital