HIMACHAL PRADESH ELECTRICITY REGULATORY COMMISSION, SHIMLA

Vidyut Aayog Bhawan, Block No. 37, SDA Complex, Kasumpti, Shimla- 171009

Notification
Shimla, the 14th day of March, 2024

No. HPERC-F(1)-68/2023.- In exercise of the powers conferred by Section 61, sub-section(1)

of Section 62, Clauses (a), (c) and (e) of sub-section (1) of Section 86 and Clause (zd) of sub-
section (2) of Section 181 of the Electricity Act, 2003 (36 of 2003), read with Section 21 of the
General Clauses Act, 1897 (10 of 1897), and all other powers enabling it in this behalf, the
Himachal Pradesh Electricity Regulatory Commission hereby makes the following regulations,
namely:-
REGULATIONS
PART-I
PRELIMINARY

1. Short Title and Commencement.- (1) These Regulations may be called the
Himachal Pradesh Electricity Regulatory Commission (Terms and Conditions for
Determination of Transmission Tariff) Regulations, 2023.
(2) These Regulations shall come into force on 1st April, 2024.

2. Scope and Extent of Application.- (1) These Regulations shall extend to the whole
of the State of Himachal Pradesh.

(2) These Regulations shall be applicable where the capital cost based tariff for the transmission
system is determined by the Commission under section 62, read with section 86 of the Act.

(3) These Regulations shall be applicable to all existing and future Transmission Licensees, and
their successors, if any, for determination of Aggregate Revenue Requirement, Tariff, in all
matters covered under these Regulations from 1st April, 2024 up to 31st March, 2029, unless
otherwise reviewed/extended:
Provided that for all purposes, including review matters pertaining to the
st
period till 31 March, 2024, the issues relating to determination of Aggregate Revenue
Requirement and Tariff shall be governed by the provisions of the Himachal Pradesh
Electricity Regulatory Commission (Terms and Conditions of transmission Tariff)
Regulations, 2011, including amendments thereto, as may be applicable.

(4) These Regulations supersede the ―Himachal Pradesh Electricity Regulatory Commission
(Terms and Conditions of transmission Tariff) Regulations, 2011‖ and amendments thereof.
 (5) Where tariff has been determined through transparent process of bidding in accordance with
the guidelines issued by the Central Government, the Commission shall adopt such tariff in
accordance with the provisions of the Act:
Provided that all Intra-State Transmission Projects i.e. Transmission Line
or Sub-station or both Transmission Line and Sub- station as a package (where the proposed
Transmission Line is associated with the proposed Sub-station) above the threshold limit of
Rs. 75 Crore (Rupees Seventy Five Crore) shall be developed through Tariff Based
Competitive Bidding (TBCB) in accordance with the guidelines issued by the State
Government:
Provided further that in case the State Government/ Transmission
Licensee intends to develop any Intra-State Transmission Project above the threshold limit
through cost plus approach due to some specific reasons, the State Government/
Transmission Licensee shall obtain prior approval of the Commission for the same.

3. Definitions.- (1) In these Regulations, unless the context otherwise requires, -

(a) “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 III to the Companies Act, 2013 as amended from time to time;
(ii) Cash flow statement, prepared in accordance with the Accounting Standard on
Cash Flow Statement (A5-3) of the Institute of Chartered Accountants of India
or Ind AS 7 issued by the Accounting Standard Board;
(iii) Cost records prescribed by the Central Government under Section 128(1) of
the Companies Act, 2013;
(iv) Together with notes thereto, and such other supporting statements and
information as the Commission may direct from time to time;
(v) Profit and loss account, complying with the requirements contained in Part-II
of Schedule III to the Companies Act, 2013;
(vi) Report of the statutory auditors;

(b) ―Act‖ means the Electricity Act, 2003 (36 of 2003);

(c) “Additional Capital Expenditure” means the capital expenditure incurred or

projected to be incurred, after the date of commercial operation of the project by
the Transmission Licensee in accordance with the provisions of these Regulations;
(d) “Additional Capitalisation” means the additional capital expenditure admitted by
the Commission after prudence check, in accordance with these Regulations;
(e) “Admitted capital cost” ‗means the capital cost which has been allowed by the
Commission for servicing through tariff after due prudence check in accordance
with these Regulations;
(f) ―Aggregate Revenue Requirement” or “ARR” means the costs pertaining to the
licensed business which are permitted, in accordance with these Regulations, to be
recovered from the tariffs and charges determined by the Commission;

(g) “Allocation Statement ” means for each financial year, a statement in respect of
each of the businesses of the licensee including inter-state & intra-state
transmission system, showing the amounts of any revenue, cost, asset, liability,
reserve or provision etc, which has been either—

(a) determined by apportionment or allocation between different businesses of the

licensee including the licensed business, together with a description of the
basis of the apportionment or allocation, or

(b) charged from or to each such other business together with a description of the
basis of that charge;

Provided that ‗Allocation Statement‘ shall not be construed as a substitute for

maintaining separate accounting statement for the licensed business and other
businesses of the Licensees;

(h) “Allotted Transmission Capacity” means the power transfer in MW between the
specified point(s) of injection and point(s) of drawal allowed to a long-term
customer on the intra-State transmission system under the normal circumstances
and allotted transmission capacity to a long-term transmission customer shall be
sum of the generating capacities allocated from the State generating stations and
inter-State generating stations and the expression "allotment of capacity" shall be
construed accordingly;

(i) “Appendix” means the appendix appended to these Regulations;

(j) ―Applicant‖ means a Transmission Licensee who has made an application for
determination of transmission charge in accordance with these Regulations and
includes a Transmission Licensee whose tariff is the subject of a review by the
Commission on Suo- motu basis or as part of a Truing-up exercise;

(k) ―Auditor‖ means an auditor appointed by a Transmission Licensee in accordance

with the provisions of sections 224, 233B and 619 of the Companies Act, 1956 (1
of 1956), as amended from time to time or Chapter X of the Companies Act, 2013
(18 of 2013) or any other law for the time being in force;

(l) ―Availability‖ in relation to a transmission system for a given period means the
time in hours during that period in which the transmission system is capable to
transmit electricity at its rated voltage and shall be expressed in percentage of total
hours in the given period;
(m) ―Bank Rate‖ means the one year marginal cost of lending rate (MCLR) of the
State Bank of India issued from time to time plus 350 basis points;
(n) ―Base year‖ means the financial year immediately preceding first year of the
Control Period and used for the purposes of these Regulations;

(o) ―Beneficiary‖ means the Transmission System User who has contracted the
transmission capacity on payment of transmission charges;
(p) “Central Commission” means the Central Electricity Regulatory Commission, as
referred to in sub- section (1) of section 76 of the Act;
(q) “Change in law‖ means occurrence of any of the following events having
implication for the transmission system operations covered by these Regulations:
a) enactment, bringing into effect, adoption, promulgation, amendment,
modification or repeal of any 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 transmission system regulated under these
Regulations;
f) any change in taxes or duties, or introduction of any taxes or duties levied by
the Central or any State Government excluding the change in taxes and duties
related to O&M expenses:
Provided that financial implication of change in law in relation to a
Transmission Service Agreement (TSA) shall be in line with the provisions of
TSA;

(r) ―Commission‖ means the Himachal Pradesh Electricity Regulatory Commission;

(s) “Competitive Bidding” means a transparent process for procurement of

equipment, services and works in which bids are invited by the Transmission
Licensee by open advertisement covering the scope and specifications of the
equipment, services and works required for the project, and the terms and
conditions of the proposed contract as well as the criteria by which bids shall be
evaluated, and shall include domestic competitive bidding and international
competitive bidding;
(t) ―Conduct of Business Regulations‖ means the Himachal Pradesh Electricity
Regulatory Commission (Conduct of Business) Regulations, 2005, as amended
from time to time;

(u) “Contracted Capacity” means the capacity in MW contracted by a long-term

Transmission System User as part of its long-term power procurement plan through
a power purchase agreement or arrangement, and shall be equivalent to the deemed
Transmission Capacity Right of a Transmission System User;

(v) ―Control period‖ means a multi-year period comprising of five financial years
from April 1, 2024 to March 31, 2029, and as may be extended by the Commission;

(w) “Cut-off date” means the last day of the financial year after thirty six months from
the date of commercial operation of the project;
(x) ―Date of commercial operation‖ or ―COD‖ means the date declared by the
Transmission Licensee from 0000 hour of which an element of the transmission
system is in regular service after successful charging and trial operation for
transmitting electricity at rated voltage and communication signal from sending end
to receiving end:
Provided that:
(i) Where the transmission line or sub-station is dedicated for evacuation of power
from a particular generating station, the generating company(ies) and
Transmission Licensee shall endeavour to ensure commissioning of the
generating station and the transmission system simultaneously as far as
practicable and shall ensure the same through appropriate Implementation
Agreement:
(ii) In case a transmission system or an element thereof is prevented from regular
service for reasons not attributable to the Transmission Licensee or its supplier
or its contractors, the Transmission Licensee shall approach the Commission
through an appropriate application for approval of the date of commercial
operation of such transmission system or an element thereof. The Commission
in such cases, may approve the date of commercial operation prior to the
transmission system or an element coming into regular service:
Provided that the date of commercial operation shall not be a date
prior to the scheduled date of commercial operation mentioned in the
implementation agreement or transmission service agreement or the investment
approval, as the case may be, unless mutually agreed to by all Parties;
(y) ―Day‖ means the 24 hour period starting at 0000 hour;
(z) ―De-capitalisation‖ means reduction in Gross Fixed Assets of the project as
admitted by the Commission corresponding to inter-unit transfer of assets or the
assets taken out from service;
(za) ―De-commissioning‖ means removal from service of a transmission system or
element thereof, after it is certified by any authorized agency, either on its own or
on an application made by the Transmission Licensee 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;
(zb) ―Default Trigger Date‖ means,-
(i) in case of non-payment of dues, one month after the due date of payment or
two and half months after the presentation of bill by the Transmission
Licensee, whichever is later; and
(ii) in case of non-maintenance of the payment security mechanism, shall be from
the next bank working day after the payment security mechanism due to be
replenished but is not done;
(zc) “Detailed Project Report Scheme” or "DPR Scheme" means a capital expenditure
Scheme with projected capital cost exceeding the limits specified in these
Regulations, for which the Licensee is required to obtain prior approval of the
Commission by submitting a Detailed Project Report (DPR) along with other
relevant documents as prescribed in these Regulations;
(zd) ―Distribution Licensee‖ means a licensee authorised to operate and maintain a
distribution system for supplying electricity to the consumers in his area of supply;
(ze) ―Due date‖ means the date by which the bill for the charges for the transmission
service provided by a Transmission Licensee are to be paid, in accordance with the
Transmission Service Agreement and in case not specified in the Transmission
Service Agreement, forty-five days from the date of presentation of the bill by such
Transmission Licensee:
Provided that if the due date for payment of any invoice falls on a
bank non-working day, the next bank working day shall be considered as due date
for payment;

(zf) ―Element‖ means an asset which has been distinctively defined under the scope of
the transmission project in the Investment Approval such as transmission lines
including line bays and line reactors, substations, bays, compensation device,
Interconnecting Transformers;

(zg) “Existing project” means a project declared under commercial operation prior to
the date of effectiveness of these Regulations;
(zh) ―Expansion project” shall include any augmentation of the existing transmission
system;

(zi) “Expected Revenue from Tariff and Charges” means the revenue estimated to
accrue to Transmission Licensee from the Regulated Business at the prevailing
tariffs and charges;
(zj) ―Expenditure Incurred‖ means the fund, whether the equity or debt or both,
actually deployed and paid in cash or cash equivalent, for creation or acquisition of
a useful asset and does not include commitments or liabilities for which no
payment has been released;
(zk) ―Extended Life‖ means the life of a transmission system or element thereof beyond
the period of useful life, as may be determined by the Commission on case to case
basis;
(zl) ―Financial year‖ means a period commencing on 1st April of a calendar year and
ending on 31st March of the subsequent calendar year;
(zm) “Force Majeure Event” means, with respect to any party, any event or
circumstance, or combination of events or circumstances, 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, shall include
the following events or circumstances:
(i) acts of God, including but not limited to lightning, landslide, storm, action
of the elements, earthquakes, flood, torrential rains, drought and natural
disaster or exceptionally adverse weather conditions;
(ii) strikes and industrial disturbances having a State-wide or extensive impact
in the area of supply of a Licensee, but excluding strikes and industrial
disturbances in the Licensee's own organization;
(iii) acts of public enemy, war (declared and undeclared), blockades, embargo,
invasion, armed conflict or act of foreign enemy, insurrections, riots,
revolution, sabotage, terrorist or military action, vandalism and civil
disturbance;
(iv) unavoidable accident, including but not limited to fire, explosion,
radioactive contamination and toxic chemical contamination;
(v) any shutdown or interruption of the Grid, which is required or directed by
the State or Central Government or by the Commission or by the
concerned Load Despatch Centre; and any shut down or interruption,
which is required to avoid serious and immediate risks of a significant
plant or equipment failure;
(vi) Delay in obtaining statutory approval for the project except where the
delay is attributable to project developer;

(zn) “Grid” means the high voltage backbone system of inter-connected transmission
lines, substations and generating plants;

(zo) “Implementation Agreement‖ means any agreement or covenant entered into (i)
between the Transmission Licensee and the generating company or (ii) between
Transmission Licensee and developer of the interconnected transmission system for
the execution of generation and transmission projects in a coordinated manner,
 laying down the project implementation schedule and mechanism for monitoring
the progress of the projects;
(zp) ―Intra-State Transmission System‖ means any system for conveyance of
electricity by transmission lines within the area of the State of Himachal Pradesh
and includes all transmission lines, sub-stations and associated equipment of the
Transmission Licensees in the State:
Provided that the definition of point of separation between a
transmission system and distribution system and between a generating station and
transmission system shall be guided by the provisions of the Regulations notified
by the Central Electricity Authority under clause (b) of Section 73 of the Act;

(zq) ―Investment Approval” means approval by the Commission conveying

administrative sanction for the project including funding of the project and the
timeIine for the implementation of the project.
Provided that the date of Investment Approval shall be reckoned
from the date of the approval by the Commission;

(zr) ―Kilowatt-Hour‖ or ―kWh‖ means a unit of electrical energy, measured in one

kilowatt or one thousand watts of power produced or consumed over a period of
one hour;
(zs) ―Late payment surcharge‖ means the charges payable by a user of a transmission
system to a Transmission Licensee on account of delay in payment of monthly
charges beyond the due date;
(zt) ―Licence‖ means a Licence granted by the Commission under Section 14 of the Act;

(zu) ―Licensed Business‖ means the functions and activities, which the licensee is
required to undertake in terms of the licence granted by the Commission or being a
deemed licensee under the Act;
(zv) ―Licensee‖ means a person who has been granted a licence and shall include a
deemed licensee;
(zw) ―Long-Term Customer‖ shall have the same meaning as defined in Himachal
Pradesh Electricity Regulatory Commission (Grant of Connectivity, Long-term and
Medium-term intra-State Open Access and Related Matters) Regulations, 2010 as
amended from time to time;
(zx) ―Long Term Access‖ shall have the same meaning as defined in Himachal Pradesh
Electricity Regulatory Commission (Grant of Connectivity, Long-term and
Medium-term intra-State Open Access and Related Matters) Regulations, 2010 as
amended from time to time;
(zy) ―MCLR‖ shall mean One Year Marginal Cost of Funds based Lending Rate;

(zz) ―Medium Term Open Access‖ shall have the same meaning as defined in Himachal
Pradesh Electricity Regulatory Commission (Grant of Connectivity, Long-term and
 Medium-term intra-State Open Access and Related Matters) Regulations, 2010 as
amended from time to time;
(zza) ―Mid-term Performance Review‖ means the review of performance of the
Transmission Licensee undertaken by the Commission for the year after the mid-
year of the control period and this shall also include the true up of the previous
control period and True Up of previous years of the control period;
(zzb) ―Non-Tariff Income‖ means income other than income from tariff derived by use
of assets of core business and may include proportion of income from other
business;
(zzc) ―Officer‖ means an officer of the Commission;

(zzd) ―Operation and Maintenance expenses‖ or ―O&M expenses‖ means the

expenditure incurred on operation and maintenance of the system by the
Transmission Licensee and includes the expenditure on manpower, repairs, spares,
consumables, insurance and overheads, but excludes CSR expenses;

(zze) ―Original Project Cost” means the capital expenditure incurred by the Transmission
Licensee within the original scope of the project up to the cut-off date as admitted
by the Commission;
(zzf) ―Other Business‖ means any business of the Transmission Licensee other than the
licensed/regulated business;
(zzg) ―Outstanding dues‖ means the dues of a Transmission Licensee, not stayed by a
competent court or Tribunal or dispute resolution agency as designated in the
Transmission Service Agreement, which remains unpaid by the beneficiary beyond
the due date;
(zzh) ―Payment Security Mechanism‖ means Letter of Credit or Letter of Credit backed
by Escrow Account as per the Transmission Service Agreement between the
Transmission Licensee and the distribution licensee or other user of transmission
system; or such other agreements by whatever name called and binding on the
distribution licensee or any other user of the transmission system for transmission
services and shall also include advance payment;
(zzi) ―Petitioner‖ means the Transmission Licensee, who has filed a Petition for
determination of Multi Year Tariff (MYT) or for True up or Mid-term Review in
accordance with the Act and these Regulations, and includes the Transmission
Licensee whose Tariff is the subject of a review by the Commission on a Suo-motu
basis or as part of a Truing-up exercise or Mid-term Review;

(zzj) ―Project‖ means all components and elements of the Transmission system including
communication system;

(zzk) ―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 Transmission Licensee has been
careful in its Judgments and decisions and vigilant in executing the project;
(zzl) ―Quarter‖ means the period of three months commencing on the first day of April,
July, October and January of each financial year in case of existing project, and in
case of a new project, in respect of the first quarter, from the date of commercial
operation to the last day of June, September, December or March, as the case may
be;
(zzm)―Rated Voltage‖ means the manufacturer‘s design voltage at which the transmission
system is designed to operate and includes such lower voltage at which any
transmission line is charged or for the time being charged, in consultation with
Transmission System Users;

(zzn) ―Regulated Business‖ means any electricity business, which is regulated by the
Commission;

(zzo) ―Scheduled Commercial Operation Date‖ or ―SCOD‖ means the date(s) of

commercial operation of a transmission system or element thereof and associated
system as indicated in the Investment Approval or as agreed in transmission service
agreement, whichever is earlier;

(zzp) “Short Term Open Access” shall have the same meaning as defined in Himachal
Pradesh Electricity Regulatory Commission (Grant of Connectivity, Long-term and
Medium-term intra-State Open Access and Related Matters) Regulations, 2010 as
amended from time to time;

(zzq) “Start Date” or “Zero Date” means the date indicated in the Investment Approval
for commencement of implementation of the project and where no date has been
indicated, the date of investment approval shall be deemed to be Start Date or Zero
Date;
(zzr) ―State‖ means the State of Himachal Pradesh;

(zzs) ―Tariff‖ means the schedule of charges for transmission of electricity together with
terms and conditions for application thereof;

(zzt) ―Terminal Liabilities‖ means terminal benefits such as Death-cum-Retirement

Gratuity, Ex- Gratia, Pension including Family Pension, Commuted Pension, Leave
Encashment, LTC, Dearness relief, Interim relief, Medical reimbursement
including fixed medical allowance in respect of pensioners etc.;

(zzu) ―Transmission System‖ means a line or a group of lines with or without associated
substation, and includes equipment associated with transmission lines and sub-
stations;
 (zzv) ―Transmission Capacity Rights‖ means the right of a Transmission System User to
transfer power in MW, under normal circumstances, between such points of
injection and drawal as may be set out in the Transmission Service Agreement;
(zzw)―Transmission Licensee‖ means a person granted a license for intra-state
transmission of electricity in the State and includes any person deemed to be a
Transmission Licensee for Intra-state transmission of electricity (including
dedicated transmission lines though operating in two States but primarily for the
conveyance of power with reference to the State);
(zzx) ―Transmission Loss‖ means the energy losses in the transmission system of a
Transmission Licensee;
(zzy) ―Transmission Service Agreement‖ or ―TSA‖ means the agreement, contract,
memorandum of understanding, or any such covenants, which contains the terms
and conditions under which a Transmission System User is entitled to access an
Intra-State Transmission System of a Transmission Licensee;

(zzz) ―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;
(zzza) ―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, with requisite metering system, telemetry and
protection system in service;

(zzzb) ―Useful life‖ in relation to a unit of a transmission system from the COD shall mean
the following, namely:-
i. AC and DC sub-station – 35 years
ii. Transmission line - 35 years;
iii. Communication System- 15 years

(zzzc) “User” means a Licensee, a Generating Company, a person who has set up a captive
generating plant, or a consumer availing open access, utilizing the transmission
system of a Transmission Licensee;

(zzzd) “Year” means financial year ending on 31" March, and

(i) ―Current Year‖ shall mean the year in which the petition for determination of
tariff is filed,
(ii) ―Previous Year‖ shall mean the year immediately preceding the current year,
(iii) ―Ensuing Year‖ shall mean the year following the current year; and

(2) The words and expressions occurring in these Regulations and not defined herein but
defined in the Act or Grid Code or State Grid Code shall bear the same meanings as
respectively assigned to them in the Act or Grid Code or State Grid Code and the words and
expressions used herein but not specifically defined herein or in the Act or Grid Code or
 State Grid Code shall have the meanings generally assigned to them in the electricity
industry.

(3) The words ―Application‖ or ―Petition‖ shall be interpreted synonymously.

PART-II
GUIDING PRINCIPLES

4. General Approach.- (1) In accordance with the principles laid down in these
Regulations, the Commission shall determine the aggregate revenue requirement (ARR) for
the transmission business.

(2) Tariff determined by the Commission and the directions given in the tariff order made by
the Commission shall be quid pro quo and mutually inclusive. The tariff determined shall,
within the period specified by it, be subject to the compliance of the directions to the
satisfaction of the Commission and their non-compliance shall lead to such amendment,
revocation, variation and alteration of the tariff, as may be ordered by the Commission.
(3) The tariff order shall, unless amended or revoked, continue to be in force for such period as
may be specified in the tariff order. In the event of failure on the part of the licensee to file
the Aggregate Revenue Requirement (ARR), the tariff determined by the Commission shall
cease to operate, unless allowed to be continued for a further period with such variations, or
modifications, as may be ordered by the Commission.

5. Multi Year Tariff (MYT) Framework.- (1) The Commission shall adopt multiyear
tariff framework for approval of ARR and expected revenue from tariffs and charges. The
ARR and tariffs will be determined for the control period.

(2) Multi-Year Tariff Petition comprising forecast of Aggregate Revenue Requirement for the
entire Control Period and expected revenue from existing tariff or Fees and Charges,
expected revenue gap or surplus, for each year of the Control Period, shall be submitted by
the Applicant:
Provided that Transmission Licensee shall also submit proposed tariff or
Fees and Charges for each year of the Control Period:
Provided further that performance parameters, whose trajectories have
been specified in these Regulations, shall form the basis for projection of Aggregate
Revenue Requirement for the Control Period:
Provided also that Multi-Year Tariff Petition shall also include truing up
for FY 2022-23 or for any financial year prior to FY 2022-23 for which truing-up is yet to be
completed, to be carried out under HPERC (Terms and conditions for Determination of
Transmission Tariff) Regulations, 2011, as amended from time to time.
 (3) The Multiyear Tariff framework shall be based on the following:-
(a) Business plan of the Transmission Licensee for the entire control period to be
submitted to the Commission for approval, prior to the beginning of the control
period;
(b) Trajectory for specific parameters shall be stipulated by the Commission, where the
performance of the applicant is sought to be improved through incentives and
disincentives.

6. Determination of Baseline.- The baseline values (operating and cost parameters) for
the base year of the control period shall be determined by the Commission and shall be
based on the approved values by the Commission, the latest audited accounts, estimate of
the actuals for the relevant year, prudence check and other factors considered appropriate by
the Commission. The Commission may re-determine the baseline values for the base year
based upon the actual audited accounts of the base year.

7. Segregation of Accounts.- The licensee shall maintain separate accounts and sub
balance sheets for each of the other businesses, Inter and Intra-state transmission systems
and also for those projects wherein the status with regard to nature of assets whether Inter-
State or Intra-State are not clear:
Provided that the licensee shall follow a reasonable basis for allocation of
all joint and common costs between the transmission business including Inter-state, Intra-
state transmission systems, under execution projects and the other business and shall submit
the Accounting Statements, as approved by its board of directors, to the Commission
alongwith his application for determination of tariff:
Provided further that where the sum total of the direct and indirect costs of
such other business exceeds the revenues from such other business or for any other reason,
no amount shall be allowed to be added to the aggregate revenue requirement of the licensee
on account of such other business.

8. Business Plan.- (1) The Transmission Licensee shall file a Business Plan along with
MYT Petition, for the Control Period of financial years from 1st April, 2024 to 31st March,
2029 for approval of the Commission on or before 30th November of the year preceding the
first year of the Control Period for a duration covering the entire Control Period along with
the MYT Petition. The Business Plan for the Transmission Licenses shall be for the entire
Control Period and shall, interalia, contain-
(a) Capital investment plan which should be commensurate with load growth and quality
improvement alongwith its cost-benefit analysis. The investment plan should also
include yearly phasing of capital expenditure alongwith the source of funding,
financing plan and corresponding capitalisation schedule;

(b) The appropriate capital structure of each scheme proposed and cost of financing
(interest on debt) and return on equity, terms of the existing loan agreements, etc;
 (c) Transmission loss reduction trajectory for each year of the Control Period, including
details of the measures proposed to be taken for achieving the target loss;
(2) The Capital Investment Plan covering the entire MYT Control Period will be submitted in
the following two parts:

(a) Ongoing schemes/works of the previous MYT Control Period (i.e. works / schemes
which are under construction or where full payments have not yet been made or
where Supply/Work Orders have not been placed). All spillover works will be
included in this;

(b) Schemes to be taken up in the order of priority giving the schedule over the full MYT
Control Period. The likely date of completion should also be given. This will also
include such schemes which were part of the Capital Investment Plan of the previous
MYT Control Period but could not be started and which the Petitioner considers
necessary to take up during the present Control Period.

(3) The capital investment plan shall be in conformity with the plans made by the
CEA/CTU/STU/ Distribution Licensee(s). The investment plan shall be scheme-wise. The
Petitioner shall submit the Detailed Project Reports (DPRs) for all the schemes as per Part
(a) and (b) above which shall include:

(a) Purpose of investment (i.e. replacement of existing assets, meeting load growth,
technical loss reduction, meeting reactive energy requirements, improvement in
quality and reliability of supply, etc);
(b) Broad Technical Specifications of the proposed investment and supporting details;
(c) Capital Structure;
(d) Capitalization Schedule;
(e) Financing Plan, including identified sources of investment;
(f) Physical targets;
(g) Cost-benefit analysis;
(h) Prioritization of proposed Investments:

Provided that DPRs will not be necessary for schemes under Rs. 10 Crore
for Transmission Business:

Provided further that the total capital expenditure on non-DPR schemes in

any year should not exceed 20% of that for DPR schemes during that year:

Provided further that the Transmission Licensee shall also submit all
details including DPRs and other approval documents, of Schemes funded through a Central
or State Grant or through Consumer Contribution or through Deposit works and/or Loan
convertible to grant on fulfillment of specified conditions, to the Commission prior to the
initiating execution of such Schemes:

Provided further that Transmission Licensee shall be required to ensure

that the procurement of the assets have been undertaken in a competitive and transparent
manner. Further, the assets so capitalized as a part of the approved capital investment plan
 under these Regulations should necessarily be geo-tagged and properly recorded in Fixed
Asset Register (FAR) for allowance of the capitalization of the same by the Commission:

Provided further that regarding the assets already capitalized as on 1st

April, 2024, Transmission Licensee shall prepare and submit to the Commission a time-
bound plan to undertake the geo-tagging in phased manner, preferably within the Control
Period, along with the MYT Petition:

Provided further that Transmission Licensee must provide access of the

details of geo- tagging to the Commission for online monitoring.

(4) The Commission shall approve the capital investment plan submitted by the Transmission
Licensee for the entire control period after doing prudence check. The same would be
considered for computation of ARR, wherein the amount of electricity transmitted by the
transmission system shall be projected considering the estimated growth plan of
transmission customer and any plans of new transmission system, based on network
expansion plans within the State.
(5) For each year of the control period, the Commission shall watch over the actual capital
expenditure and capitalization vis-à-vis the approved capital expenditure and capitalization
schedule. In the normal course, the Commission shall not revisit the approved capital
investment plan (capital expenditure and the capitalization schedule) during the control
period and adjustments to depreciation, interest on capital loan and return on equity on
account of variations for the actual capital expenditure incurred and capitalization done vis-
à-vis approved capital investment plan (capital expenditure and capitalization), shall be done
during the mid-term performance review and at the time of end of control period true up.

(6) 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 investment 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.

(7) Any licensee intending to establish, operate and maintain or augment capacity of a
transmission system not been approved in the Capital Investment Plan, shall file an
application/petition under affidavit to the Commission in accordance with HPERC (Conduct
of Business) Regulations, 2005, as amended from time to time, for approval of the project
capital cost and financing plan before taking up a project. The application/ petition of
transmission system for investment approval shall clearly provide the purpose of the project
as follows:
(a) The application/petition shall consist of information on system strengthening, load growth,
etc. as may be relevant for particular licensee, its cost-benefit analysis and other details such
as location of the project, site specific features, break up of capital cost, financial package,
performance parameters, commissioning schedule, reference price level, estimated
 completion cost including foreign exchange component (if any), environment standards
prescribed and to be achieved, etc:
Provided that where the Commission has given an approval to the
estimated capital cost and financing plan, the same shall act as a guiding factor for applying
prudence check on the actual capital expenditure while determining the ARR and Tariffs for
a particular licensee.

9. Specific Trajectory for Certain Variables.- (1) The Transmission Licensee in its
business plan filings shall submit and propose the trajectory for the achievement of quality
and reliability targets. The Transmission Licensee shall submit its performance on each
parameter in the form and manner laid down by the Commission.

(2) The Commission shall monitor the following parameters during the control period: -
(a) Transmission system availability;
(b) Transmission losses;
(c) transformer failure, across various capacities which represents the number of
transformer failures as a percentage of the total number of transformers in that
specified capacity within the transmission system, over a specified period of time. [

(3) The Commission shall stipulate a trajectory for certain variables having regard to the past
performance as also the performance of similarly situated licensees:
Provided that the variables for which a trajectory shall be stipulated, shall
include but shall not be limited to Transmission losses, Transmission system availability,
Transformer failure rate etc:
Provided further that this trajectory should provide for sharing of gains and losses
with the customers on account of superior and inferior performance as against the targets
prescribed.

10. MYT Petition for the Control Period.- (1) The applicant shall submit under
affidavit and in accordance with HPERC (Conduct of Business) Regulations, 2005, as
amended from time to time, the forecast of Aggregate Revenue Requirement and expected
revenue from tariff for each year of the Control Period, accompanied by fees applicable,
latest by 30th November of the year previous to the start of the Control Period in the formats
specified by the Commission.

(2) Forecast of Aggregate Revenue Requirement for each of the financial year of the Control
Period:
(a) For projecting different components of Aggregate Revenue Requirement for each
financial year of the Control Period, the Applicant shall develop a mathematical
model. For this purpose, applicant may utilize suitable macro-economic variables,
market indexes, past year's trends etc.
(b) Applicant shall further submit a soft copy of the above model with all the formulas
and linkages along with its MYT Petition for Tariff determination.
 (3) Forecast of expected revenue from tariff and charges:
(a) The applicant shall develop mathematical model for projecting the expected revenue
from tariff and charges based on prevailing transmission tariffs as on the date of
making the application and estimates of transmission capacity allocated to
Transmission System Users which includes Open Access Customers for each
financial year of the Control Period;
(b) The applicant shall submit a soft copy of the above model with all the formulas and
linkages along with its MYT Petition for tariff determination.

11. Preparation & submission of Annual Accounts, Reports etc.- (1) Every
Applicant shall prepare annual statement of accounts and also prepare annual reports and
statistics, giving an account of its activities during the current and previous year and likely
to be undertaken in the remaining years of the MYT Control Period, including the ensuing
year. The report of activities shall also indicate targets and achievements in respect of
various performance parameters. These reports shall be furnished to the Commission in
duplicate, by 30th November every year.
\

(2) The Commission may also direct the Applicants to submit the half yearly accounting
statements, as the Commission may require for reviewing their financial performance.
(3) The Commission may also direct the Applicants to submit to the Commission or such other
authority, as it may designate in this behalf, such additional information as the Commission
may require for the performance of its functions.
(4) The Commission at an appropriate time may specify the forms for preparation of separate
Regulatory accounts.

12. Tariff determination.- (1) The Commission shall determine the tariff/charges, of a
Transmission Licensee covered under Multi-year tariff framework for each financial year
during the Control Period, having regard to the following:
(a) The MYT principles specified under these Regulations; and
(b) The approved forecast of Aggregate Revenue Requirement and expected revenue
from tariff and charges for such financial year, including approved modifications to
such forecast; and
(c) Impact of truing up for previous financial year and performance review for the
current financial year; and
(d) Approved gains and losses to be allowed as pass through in tariffs.

(2) Tariff in respect of the transmission system may be determined for the whole of the
transmission system or for the individual transmission line / Sub-station:

Provided that:
(i) In case of commercial operation of all elements of a transmission system prior to 1st
April, 2024, the Transmission Licensee shall file consolidated petition in respect of
the entire transmission system for the purpose of determination of tariff for the
 period 1 st April, 2024 to 31 st March, 2029:

(ii) In case of commercial operation of elements of the transmission system on or

after 1 st April, 2024, the Transmission Licensee shall file a consolidated Petition,
combining all elements of the transmission system which are anticipated to
achieve commercial operation during the next two months from the date of
application.

(3) If the information furnished by the Transmission Licensee in the Petition is in accordance
with these Regulations, the Commission, in case of a new transmission system or element
thereof, through a specific prayer in the tariff application may consider granting interim
tariff of up to seventy per cent (70%) of the tariff claimed from the date of commercial
operation during the first hearing of the application:

Provided that in case the final tariff determined by the Commission is

lower than the interim tariff by more than 30%, the Transmission Licensee shall return the
excess amount recovered from the users with carrying cost.

13. Mid-term Performance Review.- (1) A Petition for Mid-term Review and Truing-up
of the Aggregate Revenue Requirement for the previous Years of the Control Period and/or
for the previous control period, shall be filed by 30th November, 2026 by the Transmission
Licensee:
Provided that the Petition shall include 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, including Cost Accounting Reports or extracts
thereof, as it may require to assess the reasons for and extent of any difference in operational
and financial performance from the approved forecast of Aggregate Revenue Requirement
and expected revenue from Tariff and charges:
Provided further that if the Petition is not filed within the specified
timelines and/or data sought by the Commission for processing the Petition is not submitted
within the stipulated time, then the carrying cost due to consequential delay in issue of the
order, shall not be allowed to the Transmission Licensee.

(2) The scope of the Mid-term Review shall be a comparison of the actual operational and
financial performance vis-à-vis the approved forecast for the first three years of the Control
Period; and revised forecast of Aggregate Revenue Requirement, expected revenue from
existing Tariff, expected revenue gap, and proposed Tariffs for the fourth and fifth year of
the Control Period:
Provided that as part of the Mid-term Review, the Commission may, inter-
alia, modify the O&M expenses, capital expenditure related expenses, principles/basis of
tariff categorisation, applicability of charges and Transmission Tariff, as considered
appropriate based on the data made available for the first three years of the Control Period:
Provided further that necessary justification for the modifications made in
the Mid-term Review shall be elaborated in the Mid-term Review Order.
 (3) Upon completion of the Mid-term Review, the Commission shall pass an order recording-
(a) the approved aggregate gain or loss to the Licensee on account of controllable factors
for the previous years of the control period, and the amount of such gains or such
losses that may be shared in accordance with Regulation 19;
(b) the approved aggregate gain or loss to the Licensee on account of uncontrollable
factors for the previous years of the control period, and the amount of such gains or
such losses that were not recovered during the respective years and which may be
shared in accordance with Regulation 18;
(c) the approved modifications to the Aggregate Revenue Requirement and Tariffs or
Fees and Charges for the remainder of the Control Period.

14. True Up.- (1) The true up shall be conducted by the Commission, for the previous years
for which the actual/audited accounts are made available by the Transmission Licensee, at
the times and as per principles stated below:-
(a) at the times -
(i) for the previous years of the previous control period:- along with the petition for
determination of ARR-cum-transmission tariff for the control period;
(ii) for the previous years of the control period and for the previous control period:-
along with the mid-term performance review during the control period;
(iii) for the control period true up:- along with the mid-term performance review of the
next control period;
(b) as per principles -
(i) the Commission shall review actual capital investment vis-à-vis approved capital
investment;
(ii) depreciation and financing cost, which includes cost of debt including working
capital (interest), cost of equity (return) shall be trued up on the basis of
actual/audited information and prudence check by the Commission;
(iii) any surplus and deficit on account of O&M expenses shall be to the
account of the Transmission Licensee and shall not be trued up in ARR; and
(2) The gain or loss on account of other controllable factors, unless otherwise specifically
provided by the Commission shall be to the account of the Transmission Licensee.
(3) Notwithstanding anything contained in these Regulations, the gains or losses in the
controllable items of ARR on account of force majeure, change in law and change in taxes
and duties shall be passed on as an additional charge or rebate in ARR over such period as
may be laid down in the order of the Commission.

15. Carrying Cost or Holding Cost.- The Commission shall allow Carrying Cost or
Holding Cost, as the case may be, on the admissible amounts at the weighted average one-
year Marginal Cost of Funds-based Lending Rate (‗MCLR‘) prevailing during the
concerned Year as declared by the State Bank of India from time to time, plus 150 basis
points:
 Provided that in case of delay in filling the true-up Petition(s) by the
Transmission Licensee, Carrying Cost or Holding Cost shall not be allowed on the net
entitlement after the due date of filling the true-up Petition, i.e. 30th November, as per these
Regulations. However, in case the true-up results in surplus, the carrying cost shall be
applicable and recoverable from the Transmission Licensee.

16. Operational Norms.-Normative Annual Transmission System Availability

Factor (NATAF).- (1) For recovery of Annual Fixed Charges, NATAF shall be as
under:
(1) AC system: 98.00%;
(2) HVDC bi-pole link 95.00% and HVDC back-to-back station: 95.00%:

Provided that the normative annual transmission availability factor of the

HVDC bi-pole links shall be 85% for first twelve months from the date of commercial
operation.

(2) For Incentive, NATAF shall be as under:

(1) AC system: 98.50%;
(2) HVDC bi-pole link and HVDC back-to-back Station: 97.50%:

Provided that no Incentive shall be payable for availability beyond

99.75%:
Provided further that for AC and HVDC system, actual outage hours
shall be considered for computation of availability upto two trippings per year. After two
trippings in a year, for every tripping, additional 12 hours outage shall be considered in
addition to the actual outage hours:
Provided also that in case of outage of a transmission element affecting
evacuation of power from a generating station, outage hours shall be multiplied by a
factor of 2.

(3) Auxiliary Energy Consumption in the Sub-station:

The charges for auxiliary energy consumption in the substation for the purpose of air-
conditioning, lighting and consumption in other equipment shall be borne by the
Transmission Licensee and included in the normative operation and maintenance expenses.

17. Controllable and uncontrollable factors.- (1) For the purpose of these Regulations,
the term ―uncontrollable factors‖ shall comprise of the following factors, which were
beyond the control of the Applicant, and could not be mitigated by the Applicant:

(a) Force Majeure events;

(b) Change in law, judicial pronouncements, and orders of the Central Government, the
State Government or the Commission;
 (c) Economy wide influences such as unforeseen changes in inflation rates, taxes and
statutory levies;

(d) Delay in statutory clearances for land acquisition except where the delay is
attributable to the Transmission Licensee:

Provided that where the Applicant believes, for any variable not specified
above, that there is a material variation or expected variation in performance for any
financial year on account of uncontrollable factors, such Applicant may apply to the
Commission for inclusion of such variable at the Commission‘s discretion, under these
Regulations for such financial year.

(2) Some illustrative variations or expected variations in the performance of the Applicant,
which may be attributed by the Commission to controllable factors include, but are not
limited to the following:
(a) Variations in capitalisation on account of time and/or cost overruns/ efficiencies in
the implementation of a capital expenditure project not attributable to an approved
change in scope of such project, change in statutory levies or force majeure events;
(b) Variation in Interest and Finance Charges, Return on Equity and Depreciation on
account of variation in capitalisation, as specified in clause (a) above;
(c) Variations in Intra-State transmission losses of Transmission Licensee;
(d) Variations in performance parameters;
(e) Variations in interest on working capital;
(f) Variations in labour productivity;
(g) Variation in Operation & Maintenance expenses;
(h) Variation in Operating norms.

18. Mechanism for pass through of gains or losses on account of

uncontrollable factors.- The approved aggregate gain or loss to the Transmission
Licensee on account of uncontrollable factors shall be passed through, as an adjustment in
the tariff, as specified in these Regulations and as may be determined in the Order of the
Commission passed under these Regulations.

19. Mechanism for sharing of gains or losses on account of controllable

factors.- (1) The approved aggregate gain to the Transmission Licensee on account of
controllable factors shall be dealt with in the following manner:
(a) Two-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;

(b) The balance amount, which will amount to one-third of such gain, shall be utilised at
the discretion of the Transmission Licensee.
 (2) The approved aggregate loss to the Transmission Licensee on account of controllable factors shall
be dealt with in the following manner:

(a) One-third of the amount of such loss shall 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, which will amount to two-third of such loss, shall be absorbed by
the Transmission Licensee.

(3) The gain or loss on account of other controllable factors, unless otherwise specifically
provided by the Commission shall be to the account of the Transmission Licensee.

20. Determination of Tariff.- (1) Proceedings to be held by the Commission for

determination of tariff shall be in accordance with the HPERC (Conduct of Business)
Regulations, 2005, as amended from time to time.

(2) Notwithstanding anything contained in these Regulations, the Commission shall have, at all
times, the authority, either on Suo-motu basis or on a Petition filed by the Transmission
Licensee, to determine the tariff or Fees and Charges, including terms and conditions
thereof, of Transmission Licensee:
Provided that such determination of tariff or Fees and Charges 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 applicability of these
Regulations.

(3) 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:
Provided that the Applicant shall provide such information as the
Commission may require for satisfying itself that the guidelines issued by the Central
Government have been duly followed.

PART-III
PRINCIPLES FOR DETERMINATION OF
AGGREGATE REVENUE REQUIREMENT (ARR)

21. Capital cost.- (1) The Capital cost of the transmission system as determined by the
Commission after prudence check in accordance with these Regulations shall form the
basis for determination of tariff for existing and new projects.
(2) Only such capital expenditure as is incurred or proposed to be incurred with the
approval of the Commission, including that exempted from prior approval, shall be
considered after prudence check for tariff purposes.
(3) The final tariff shall be fixed based on the admitted capital expenditure of the
transmission system and shall include capitalised initial spares subject to a ceiling norm.

(4) The provisions of Accounting Standards (AS 10): Accounting for Fixed Assets of the
Institute of Chartered Accountants of lndia/IAS16: Property, Plant and Equipment
issued by the Accounting Standard Board, 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.

(5) In case of existing projects, the capital cost admitted by the Commission prior to 1st April,
2024 and the additional capital expenditure projected to be incurred for the respective year
of the Control Period, as may be admitted by the Commission, shall form the basis for
determination of tariff.

(6) The Capital Cost of a new project shall include the following:
(a) The expenditure incurred or projected to be incurred up to the date of
commercial operation of the project;
(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) Any gain or loss on account of foreign exchange risk variation pertaining to the
loan amount availed during the construction period;
(d) Interest during construction and incidental expenditure during construction as
computed in accordance with these Regulations;
(e) Capitalised initial spares subject to the ceiling rates in accordance with these
Regulations;
(f) Expenditure on account of additional capitalization and de-capitalisation
determined in accordance with these Regulations;
(g) Adjustment of revenue earned by the Transmission Licensee by using the assets
before the date of commercial operation;
(h) Expenditure on account of change in law and force majeure events:
Provided also that the Transmission Licensee shall submit documentary
evidence in support of its claim of assets being put to use:
Provided also that the Commission may undertake a verification to check
if the assets are put to use as submitted by the Transmission Licensee, independent of the
tariff determination process.
(7) The following shall be excluded from the capital cost of the existing and new projects:
(a) The assets forming part of the project, but not in use, as declared in the tariff
Petition;
 (b) De-capitalised Assets after the date of commercial operation on account of
replacement or removal on account of obsolescence or shifting from one project
to another project:
Provided that in case replacement of transmission asset is
recommended by State Load Despatch Centre, such asset shall be de- capitalised
only after its redeployment:

Provided further that unless shifting of an asset from one project

to another is of permanent nature, there shall be no de-capitalization of the
concerned assets.
(c) Any Consumer contribution or 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.
(d) Any capitalisation done by mere book entries / presentation in the financial
statements in order to comply with any statute / rules etc. and not in accordance with
the Capital Expenditure approved under these Regulations.

22. Prudence Check of Capital Cost.- The following principles shall be adopted for
prudence check of capital cost of the existing or new transmission projects:
(a) Scrutiny of the capital expenditure, in the light of capital cost of similar projects
based on past historical data, wherever available, reasonableness of financing
plan, interest during construction, incidental expenditure during construction, use
of efficient technology, cost over-run and time over-run, procurement of
equipment and materials through competitive bidding and such other matters as
may be considered appropriate by the Commission:

Provided that, while carrying out the prudence check, the

Commission shall also examine whether the Transmission Licensee has been
careful in its judgments and decisions in execution of the project.

(b) The Transmission Licensee shall furnish the capital cost for execution of the
existing and new projects, as per formats specified by the Commission, along
with tariff petition for the purpose of creating a database of benchmark capital
cost of various components.

(c) The Commission may get the capital cost of any project vetted by an independent
agency or an external expert. However, the same shall be considered as one of the
guiding factors only and shall not be binding on the Commission.

23. Interest During Construction (IDC) and Incidental Expenditure during

Construction (IEDC).- (1) Interest during construction (IDC) 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.
 (2) Incidental expenditure during construction (IEDC) shall be computed from the zero
date, 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 shall be
taken into account for reduction in incidental expenditure during construction.
(3) In case of additional costs on account of IDC and IEDC due to delay in achieving
the COD, the Transmission Licensee shall be required to furnish detailed justifications
with supporting documents for such delay including prudent phasing of funds in case
of IDC and details of IEDC during the period of delay and liquidated damages
recovered or recoverable corresponding to the delay.

(4) If the delay in achieving the COD is not attributable to the Transmission Licensee,
IDC and IEDC beyond SCOD may be allowed after prudence check and the
liquidated damages, if any, recovered from the contractor or supplier or agency shall
be adjusted in the capital cost of the transmission system.

(5) If the delay in achieving the COD is attributable either in entirety on in part to the
Transmission Licensee or its contractor or supplier or agency, in such cases, IDC and
IEDC beyond SCOD may be disallowed after prudence check either in entirety or on
pro-rata basis corresponding to the period of delay not condoned and the liquidated
damages, if any, recovered from the contractor or supplier or agency shall be retained
by the Transmission Licensee.

(6) The following shall be considered as controllable and uncontrollable factors for
deciding time over-run, cost escalation, IDC and IEDC of the project:-

(a) The ―controllable factors‖ shall include but shall not be limited to the following:-
(i) efficiency in the implementation of the project not involving approved
change in scope of such project, change in statutory levies or change in
law or force majeure events; and
(ii) delay in execution of the project on account of contractor or supplier or
agency of the Transmission Licensee.
\

(b) The ―uncontrollable factors‖ shall include but shall not be limited to the
following:-
(i) force Majeure events;
(ii) change in law; and
(iii) land acquisition, except where the delay is attributable to the
Transmission Licensee.

24. Initial spares.- Initial spares shall be capitalised as a percentage of the Plant and
Machinery cost, subject to following ceiling norms:-
 (i) Transmission line - 1.00%
(ii) Transmission Sub-station
 Green Field - 4.00%
 Brown Field - 6.00%
(iii) Series Compensation devices and - 4.00%
HVDC Station
(iv) Gas Insulated Sub-station (GIS)
 Green Field - 5.00%
 Brown Field - 7.00%
(v) C om m u n ic a t i o n System - 3.50%
(vi) Static Synchronous Compensator - 6.00%:

Provided that the Plant and Machinery cost shall be considered as the
original project cost excluding IDC, IEDC, Land Cost and Cost of Civil Works and the
Transmission Licensee, for the purpose of estimating Plant and Machinery Cost, shall
submit the break-up of head wise IDC and IEDC in its tariff application.

25. Additional Capitalisation within the original scope and upto the cut-off
date.- (1) The additional capital expenditure in respect of a new project or an existing
project 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 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 24 of these Regulations;
(d) Liabilities to meet award of arbitration or for compliance of the directions or order of
any statutory authority or order or decree of any court of law;
(e) Change in law or compliance of any existing law; and
(f) Force Majeure events:
Provided that in case of any replacement of the assets, the additional
capitalization shall be worked out after adjusting the gross fixed assets and cumulative
depreciation of the assets replaced on account of de-capitalization.

(2) The Transmission Licensee shall submit the details of works asset wise/work wise
included in the original scope of work alongwith estimates of expenditure, liabilities
recognized to be payable at a future date and the works deferred for execution.

26. Additional Capitalisation within the original scope and after the cut-off
date.- (1) The additional capital expenditure incurred or projected to be incurred in respect
 of an existing project or a new project on the following counts within the original scope of
work and 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 directions or order of
any statutory authority, or order or decree of any court of law;
(b) Change in law or compliance of any existing law;
(c) Liability for works executed prior to the cut-off date;
(d) Force Majeure events;
(e) Liability for works admitted by the Commission after the cut-off date to the extent
of discharge of such liabilities by actual payments; and
(f) Any additional capital expenditure which has become necessary for efficient
operation:
Provided that the approval of additional capital expenditure for efficient
operation shall be subject to submission of report on impact assessment done by any
reputed third-party technical expert/agency on the benefits realised from previous
investments under this head in the last five years.

(2) In case of replacement of assets deployed under the original scope of the existing project
after cut-off date, the additional capitalization may be admitted by the Commission, after
making necessary adjustments in the gross fixed assets and the cumulative depreciation,
subject to prudence check on the following grounds:-

(a) The useful life of the assets is not commensurate with the useful life of the project
and such assets have been fully depreciated in accordance with the provisions of
these Regulations;
(b) The replacement of the asset or equipment is necessary on account of change in law
or Force Majeure conditions;
(c) The replacement of such asset or equipment is necessary on account of obsolescence
of technology; and
(d) The replacement of such asset or equipment has otherwise been allowed by the
Commission:
Provided that the claim shall be substantiated with the technical
justification duly supported by documentary evidence like test results carried out by an
independent agency in case of deterioration of assets, damage caused by natural calamities,
obsolescence of technology, up-gradation of capacity for the technical reason such as
increase in fault level.

27. Additional Capitalisation beyond the original scope.- (1) The capital
expenditure, in respect of existing transmission system including communication
 system, incurred or projected to be incurred on the following counts beyond the original
scope, may be admitted by the Commission, subject to prudence check:-
(a) Liabilities to meet award of arbitration or for compliance of order or directions of
any statutory authority, or order or decree of any court of law;
(b) Change in law or compliance of any existing law;
(c) Force Majeure events;
(d) Need for higher security and safety of the transmission system as advised or
directed by appropriate Central/State Government Instrumentality or statutory
authorities responsible for national or internal security;
(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; and
(g) Any additional expenditure on items such as relays, control and instrumentation,
computer system, power line carrier communication, DC batteries, replacement due
to obsolescence 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:
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.,
bought after the cut-off date shall not be considered for additional capitalization for
determination of tariff w.e.f. 1st April, 2024:
Provided further that if any expenditure has been claimed under
Renovation and Modernisation or repairs and maintenance under (O&M) expenses, same
expenditure cannot be claimed under this Regulation.

(2) In case of de-capitalisation of assets of the Transmission Licensee, the original cost of such
asset as on the date of de- capitalisation shall be deducted from the value of gross fixed asset.
Corresponding loan as well as equity shall be deducted from outstanding loan and the equity
respectively in the year such de-capitalisation takes place. Corresponding adjustments in
cumulative depreciation and cumulative repayment of loan shall also be made duly taking
into consideration the year in which the assest was capitalised.

28. Additional Capitalisation on account of Renovation and Modernisation.-

(1) The Transmission Licensee intending to undertake renovation and modernization (R&M)
of the transmission system or element thereof for the purpose of extension of life beyond
 the originally recognised useful life for the purpose of tariff, shall file a petition 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, and any other
information considered to be relevant by the Transmission Licensee.
(2) Where the Transmission Licensee, makes an application for approval of its proposal for
renovation and modernisation (R&M), the approval may be granted after due
consideration of reasonableness of the proposed cost estimates, financing plan, schedule
of completion, interest during construction, use of efficient technology, cost-benefit
analysis, expected duration of life extension, consent of the beneficiaries or long term
customers, if obtained, and such other factors as may be considered relevant by the
Commission.

(3) After completion of the renovation and modernisation (R&M), the Transmission Licensee
shall file a petition for determination of tariff. Expenditure incurred or projected to be
incurred and admitted by the Commission after prudence check, and after deducting the
accumulated depreciation already recovered from the admitted project cost, shall form the
basis for determination of tariff.

29. Approval of capital cost.- The approved Capital Cost shall be considered for tariff
determination and if sufficient justification is provided for any escalation in the Project Cost,
the same may be considered by the Commission subject to prudence check:
Provided that in case the actual capital cost is lower than the approved
capital cost, then the actual capital cost will be considered:
Provided further that prudence check of capital cost may be carried out
based on the benchmark norms to be specified by the Commission from time to time:
Provided further that in cases where benchmark norms have not been
specified, prudence check shall be carried out as per clause (a) of Regulation 22 of these
Regulations:

Provided further that if the generating station is not commissioned on the

SCOD or actual COD whichever is later of the associated transmission system, the
generating company shall bear the transmission charges of the associated transmission
system corresponding to Long Term Access granted for the generating station or unit(s)
thereof, which have not achieved COD, if the transmission system is declared under
commercial operation by the Commission in accordance with these Regulations till the
generating station or unit(s) thereof is commissioned:

Provided further that if the associated transmission system is not

commissioned on SCOD of the generating station or actual COD whichever is later of the
generating station, the transmission licensee shall arrange the evacuation from the
generating station at its own arrangement and cost till the associated transmission system is
commissioned or otherwise till such alternate arrangement is made, the transmission
 licensee(s) shall pay to the generating station, the Annual Transmission Charge of the intra-
state transmission system, corresponding to the quantum of Long Term Access, for the
period for which the transmission system has got delayed:

Provided further that in cases where benchmark norms have been

specified, the Transmission Licensee shall submit the reasons for exceeding the capital cost
from benchmark norms to the satisfaction of the Commission for allowing cost above
benchmark norms.

30. Consumer Contribution, Deposit Work, Grant and Capital Subsidy.-(1)The

expenses on the following categories of works carried out by the Transmission Licensee
shall be treated as specified in sub-regulation (2):-
(i) Works undertaken from funds, partly or fully, provided by the users, which are in the
nature of deposit works or consumer contribution works;
(ii) Capital works undertaken with grants or capital subsidy received from the State or
Central Government; and
(iii) Other works undertaken with funding received without any obligation of repayment
and with no interest costs. works carried out by the Transmission Licensee after
obtaining the estimated cost from the users shall be classified as Deposit Works.

(2) The expenses on such capital expenditure shall be treated as follows:-

(a) normative O&M expenses as specified in these Regulations shall be allowed;
(b) the debt : equity ratio shall be considered in accordance with Regulation 31, after
deducting the amount of financial support received;
(c) provisions related to depreciation, as specified in Regulation 38, shall not be
applicable to the extent of such financial support received;
(d) provisions related to return on equity capital, as specified in Regulation 34 shall not
be applicable to the extent of such financial support received; and
(e) provisions related to interest on loan capital, as specified in Regulation 36 shall not
be applicable to the extent of such financial support received.

31. Debt-equity ratio.- For a Capital Investment Scheme declared under commercial
operation on or after 1st April, 2024, debt-equity ratio as on the date of commercial operation
shall be 70:30 of the amount of capital cost approved by the Commission, after prudence
check for determination of Tariff:

Provided that the Transmission Licensee shall substantiate such

investment of equity and debt through documentary evidence:

Provided further that 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
Transmission Licensee for determination of tariff:
 Provided further 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.

32. ARR for Transmission Licensee.- The aggregate revenue requirement for the
transmission business for each year of the control period shall contain the following items: -
(a) Operation and Maintenance Expenses;
(b) Return on Equity Capital;
(c) Tax on Return on Equity;
(d) Interest on Loan Capital;
(e) Interest on Working Capital; and
(f) Depreciation.
Less:
(i) Non-Tariff Income;
(ii) Short-term Open Access Charges; and
(iii) Income from other business to the extent specified in these Regulations.

33. Operation and Maintenance (O&M) Expenses.- (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; and
(d) other miscellaneous expenses, statutory levies and taxes (except corporate income
tax).
(2) O&M Norms.-

(a) The Transmission 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 per
long/medium term consumer, number of personnel per MW of capacity handled for
long/medium term consumers or number of personnel per transmission circuit
kilometer line length and number of sub-stations alongwith annual expenses per
personnel for employee expenses, combination of A&G expense per personnel and
A&G expense per long/medium term consumer (or per MW of capacity handled) 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 Transmission Licensee such as dearness
allowance, terminal liabilities 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 Transmission
Licensee as per clauses (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) Based on the proposal submitted by the Transmission 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; and

(i) Till such time the norms are fixed by the Commission, the trajectories of various
components of O&M expenses shall be submitted by the Transmission 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.
(3) The Transmission Licensee shall submit the O&M expenses for the control period as laid
down in the multiyear tariff filing procedure. The O&M expenses for the base year will be
approved by the Commission taking into account the latest available audited accounts,
business plan filed by the Transmission Licensee, estimates of the actuals for the base year,
actual O&M expenses for last five (5) years till base year subject to prudence check and any
other factors considered appropriate by the Commission.

(4) The O&M expenses for the nth year of 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;
A&Gn = Administrative and General Costs for the nth year;
R&Mn = Repair and Maintenance Costs for the nth year.

(5) The above components shall be computed in the manner specified below:

EMPn = (EMPn-1) x (1+Gn) x (1+CPIinflation);

R&Mn = K x (GFAn-1) x (1+WPIinflation); and
A&Gn = (A&Gn-1) x (1+WPIinflation) +Provision.

Where –
 (i) EMPn-1 - Employee Costs for the (n-1)th year;
(ii) A&Gn-1 - Administrative and General Costs for the (n-1)th year;
(iii) Provision: Cost for initiatives or other one-time expenses as proposed by the
Transmission Licensee and approved by the Commission after prudence check;
(iv) '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 Transmission Licensee's filing, benchmarking of repair and maintenance
expenses, approved repair and maintenance expenses vis-a-vis GFA approved by
the Commission in past and any other factor considered appropriate by the
Commission;
(v) CPIinflation - is the average increase in the Consumer Price Index (CPI) for
immediately preceding three years;
(vi) WPIinflation - is the average increase in the Wholesale Price Index (CPI) for
immediately preceding three years;
(vii) GFAn-1- Gross Fixed Asset of the Transmission Licensee for the (n-1)th year;
(viii) Gn is a growth factor for the nth year and it can be greater than or less than zero
based on the actual performance. Value of Gn shall be determined by the
Commission in the MYT tariff order for meeting the additional manpower
requirement based on Transmission Licensee's filings, benchmarking and any other
factor that the Commission feels appropriate:
Provided that repair and maintenance expenses as determined shall be
utilised towards repair and maintenance works only:
Provided further that, the impact of pay revision (including arrears) shall
be allowed on actual during the mid-term performance review or at the end of the control
period as per actual/ audited accounts, subject to prudence check and any other factor
considered appropriate by the Commission.

34. Return on Equity Capital.- (1) Return on equity shall be computed on 30% of the
capital base or actual equity, whichever is lower:
Provided that assets funded by consumer contribution, capital subsidies/
grants and corresponding depreciation shall not form part of the capital base. Actual equity
infused in the Transmission Licensee as per book value shall be considered as perpetual and
shall be used for computation in this Regulation:

Provided that accumulated depreciation, over and above debt repayment,

shall be used to reduce the equity base for return on equity after debt repayment is over.

(2) The return on the equity invested in working capital shall be allowed from the date of start of
commercial operation.

(3) Transmission Licensee shall be allowed 14.5% post-tax return on equity:

Provided that return on equity in respect of additional capitalization after

cut-off date beyond the original scope excluding additional capitalization due to Change in
 Law, shall be computed at the weighted average rate of interest on actual loan portfolio of
the transmission system.

35. Tax on Return on Equity.- (1) Income tax for Transmission Licensee for the regulated
business shall be allowed on Return on Equity, through the tariff charged to the
Beneficiary/ies, subject to the conditions stipulated in Regulation 34 of these Regulations:
Provided that no Income Tax shall be considered on the amount of
efficiency gains and incentive approved by the Commission, irrespective of whether or not
the amount of such efficiency gains and incentive are billed separately:

Provided further that no Income Tax shall be considered on the income

from any source that has not been considered for computing the Aggregate Revenue
Requirement:
Provided further that the deferred tax liability attributable to the regulated
business, only before 31st March, 2024 shall be allowed by the Commission, whenever they
get materialised, after prudence check.

(2) Income tax, if any, on the licensed business of the Transmission Licensee shall be treated as
expense and shall be recoverable from consumers through tariff. However, tax on any
income other than that through its licensed business shall not be a pass through, and it shall
be payable by the Transmission Licensee itself.

(3) Any under-recoveries or over-recoveries of tax on income shall be adjusted every year on
the basis of income-tax assessment, under the Income Tax Act, 1961, as certified by the
statutory auditors:
Provided that the benefits of tax-holiday, as applicable in accordance with
the provisions of the Income Tax Act, 1961 shall be passed on to the consumers.
(4) The Income Tax actually payable or paid shall be included in the ARR. The actual
assessment of Income Tax should take into account benefits of tax holiday, and the credit
for carry forward losses applicable as per the provisions of the Income Tax Act, 1961 shall
be passed on to the consumers.

(5) Tax on income, if any, liable to be paid shall be limited to tax on Return on Equity.
However, any tax liability on incentives due to improved performance shall not be
considered.

36. Interest on Loan Capital.- (1) The Transmission Licensee shall provide detailed loan-
wise, project-wise and utilization- wise details of all the pending loans.

(2) If the equity actually deployed is more than 30 % of the capital cost, equity in excess of 30%
shall be treated as normative loan:

Provided that where equity actually deployed is less than 30% of

the capital cost, the actual loan shall be considered for determination of interest on loan.
 (3) Actual loan or normative loan, if any, shall be referred as gross normative loan in this
Regulation.

(4) The normative loan outstanding as of 1st April of 2024 shall be computed by deducting the
cumulative repayment as approved by the Commission (basis as mentioned below) upto 31 st
March, 2023 from the gross normative loan.

(5) The repayment for the control period shall be deemed to be equal to the depreciation allowed
for the year.

(6) Notwithstanding any moratorium period availed by the Transmission Licensee, the
repayment of the loan shall be considered from the first year of the control period as per
annual depreciation allowed.
(7) The rate of interest shall be the weighted average rate of interest calculated on the basis of
actual loan portfolio at the beginning of each year of the control period, in accordance with
terms and conditions of relevant loan agreements, or bonds or non-convertible debentures:

Provided that if no actual loan is outstanding but normative loan is still

outstanding, the last available weighted average rate of interest shall be applicable:
Provided further that the interest on loan shall be calculated on the
normative average loan of the year by applying the weighted average rate of interest:
Provided further that exception shall be made for the existing loans which
may have different terms as per the agreements already executed, if the Commission is
satisfied that the loan has been contracted for and applied to identifiable and approved
projects.

(8) The Transmission Licensee shall make every effort to refinance the loan as long as it results
in net benefit to the users:

Provided that the cost associated with such refinancing shall be eligible to
be passed through in tariff and the benefit on account of refinancing of loan and interest on
loan shall be shared in the ratio of 50:50 between the Transmission Licensee and the users:
Provided further that the Transmission Licensee shall submit the
calculation of such benefit to the Commission for its approval.

37. Interest on Working Capital.- (1) The working capital shall cover,-
(i) Receivables equivalent to two months of annual fixed charges;
(ii) Maintenance spares @ 15% of annual operation and maintenance expenses; and
(iii) Operation and maintenance expenses for one month.

(2) Rate of interest on working capital shall be on normative basis and shall be considered at the
bank rate as on 1st April, 2024 or as on 1st April of the year during the tariff period 2024-29
in which the transmission system including system or element thereof, as the case may be,
is declared under commercial operation, whichever is later:
 Provided that in case of truing-up, the rate of interest on working capital
shall be considered at bank rate as on 1st April of each of the financial year during the
tariff period 2024-29.

(3) Interest on working capital shall be payable on normative basis notwithstanding that the
Transmission Licensee has not taken loan for working capital from any outside agency.

38. Depreciation.- (1) Depreciation shall be calculated for each year of the control period on
the original cost of the fixed assets of the corresponding year.
(2) Depreciation shall not be allowed on assets funded by capital subsidies, consumer
contributions or grants.
(3) The rate of depreciation for each of the components of the fixed assets based on the useful
life of the assets shall be as given in Appendix – I:
Provided that the salvage value of any category of assets given in
Appendix -I shall be 10% of the initial cost of the asset.
(4) The rate of depreciation should be based on Straight Line Method (SLM) over the useful
life of the assets, after factoring the salvage value of the assets:
Provided that Land shall not be treated as a depreciable asset and its cost
shall be excluded while computing 90% of the original cost of the asset.
(5) The Transmission licensee having fixed asset records for the assets procured before 31st
March, 2024 shall have one time option to adopt the new rates for the older assets, if opted
by the Transmission Licensee:
Provided that in case the Transmission Licensee does not have an asset
record to assess the date of commissioning of assets as per the categorization provided in
Appendix– I, the Commission shall allow the existing method of depreciation on the assets
already commissioned till the issue of last tariff Order:
Provided that record of the assets being commissioned by the
Transmission Licensee during the ongoing FY subsequently shall be properly maintained
by the Transmission Licensee and the computation of depreciation of such assets shall be
in accordance with sub-regulation (3) above.

(6) Depreciation shall be charged from the first year of operation of the asset:
Provided that in case the operation of the asset is for a part of the year,
depreciation shall be charged on proportionate basis.

(7) A provision of replacement of assets shall be made in the capital investment plan.

39. Non-Tariff Income.- (1) All income being incidental to electricity business and derived
by the licensee from sources, including but not limited to profit derived from disposal of
assets, rents, income from investment and miscellaneous receipts from the transmission
customers, excluding income to licensed business from the other business of the
Transmission Licensee shall constitute non-tariff income of the licensee.
 (2) 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 the
Annual Transmission Charges of the Transmission Licensee:
Provided that the Transmission Licensee shall submit full details of his
forecast of non-tariff income to the Commission in such form as may be stipulated by the
Commission from time to time.

(3) The indicative list of various heads to be considered for non tariff income shall be as under:-
(a) Income from rent on land or buildings;
(b) Income from sale of scrap;
(c) Income from statutory investments;
(d) Interest on delayed or deferred payment on bills;
(e) Interest on advances to suppliers/contractors;
(f) Rental from staff quarters;
(g) Rental from contractors;
(h) Income from hire charges from contactors and others;
(i) Income from advertisements, etc.;
(j) Miscellaneous receipts;
(k) Excess found on physical verification;
(1) Interest on investments, fixed and call deposits and bank balances; and
(m) Prior period income:

Provided that the interest earned from investments made out of

Return on Equity corresponding to the regulated business of the Transmission Licensee
shall not be included in Non-Tariff Income.

40. Income from Other Business.- Where the Transmission Licensee is engaged in any
Other Business under Section 41 of the Act, the income from such business will be
calculated in accordance with the Himachal Pradesh Electricity Regulatory Commission
(Treatment of Income of Other Businesses of Transmission Licensees and Distribution
Licensees) Regulations, 2005 and 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, duly audited and certified by the
Statutory Auditor, to the Commission alongwith his 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 for whatever reasons, no
 amount shall be allowed to be added to the Aggregate Revenue Requirement of the
Transmission Licensee on account of such Other Business.

41. Late Payment Surcharge.- The distribution licensee or a user of the transmission
system, as the case may be, shall make timely payments of bills raised by the Transmission
Licensee by assigning priority over and above all other payments. In case the payment of
any payable bill is delayed beyond a period of 45 days from the date of presentation of the
bill, a Late Payment Surcharge shall be payable on the payment outstanding after the due
date at the rate equal to the marginal cost of funds based on lending rate for one year of the
State Bank of India, as applicable on the 1st April of the Financial Year in which the period
lies, plus five per cent and in the absence of marginal cost of funds based lending rate, any
other arrangement that substitutes it, which the Central Government may, by notification, in
the Official Gazette, specify for the period for the first month of default:

Provided that if the period of default lies in two or more financial years,
the base rate of Late Payment Surcharge shall be calculated separately for the periods falling
in different year:
Provided further that the rate of Late Payment Surcharge for the
successive months of default shall increase by 0.5 per cent for every month of delay:
Provided further that the Late Payment Surcharge shall not be more than
three per cent higher than the base rate at anytime:
Provided further that all the bills payable by the distribution licensee or
the other user of the transmission system, as the case may be, to Transmission Licensee,
shall be time tagged with respect to the date and time of submission of the bill and the
payment made by the distribution licensee or the other user of the transmission system, as
the case may be, shall be adjusted first against the oldest bill and then to the second oldest
bill and so on so as to ensure that payment against a bill is not adjusted unless and until all
bills older than it have been paid for:
Provided further that all payments by the Distribution Licensee or the
other user of the transmission system, as the case may be, to the Transmission Licensee shall
be first adjusted towards Late Payment Surcharge and thereafter, towards monthly charges,
starting from the longest overdue bill:
Provided further that in case of non-payment of dues by the Distribution
Licensee or the other user of the transmission system, as the case may be, even after two and
a half months from the presentation of the bill by the Transmission Licensee, the power
supply to the defaulting entity shall be regulated in accordance with Electricity (Late
Payment Surcharge and Related Matters) Rules, 2022 notified by the Ministry of Power on
3rd June, 2022 and as amended from time to time.

42. Payment Security Mechanism.- (1) The Distribution Licensee or other user of the
transmission system, as the case may be, shall maintain unconditional, irrevocable and
adequate payment security mechanism.
 (2) In case of non-maintenance of Payment Security Mechanism, the Transmission Licensee
shall regulate power supply to the Distribution Licensee in accordance with Electricity (Late
Payment Surcharge and Related Matters) Rules, 2022 notified by the Ministry of Power on
3rd June, 2022 and as amended from time to time.

(3) The supply of power shall only be made if an adequate Payment Security Mechanism is
maintained or in the absence thereof, advance payment is made.

43. Safety Standards.- The Transmission Licensee shall develop a safety manual and
comply with Regulations framed in this regard by the Central Electricity Authority (CEA)
under section 53 and section 177 (2) (b) of the Act.

PART-IV
PRINCIPLES FOR DETERMINATION OF TRANSMISSION TARIFF/
CHARGES

44. Transmission Tariff/Charge.- (1) The transmission charges payable by the

transmission customers of the transmission system shall be designed to recover the
aggregate revenue requirement computed as annual fixed charges(AFC) by the Commission
for each year of the control period:

Provided that the Commission during the control period, through separate
notification in the Rajpatra Himachal Pradesh, may, after conducting a detailed study change
the existing transmission pricing framework in accordance with that adopted by the Central
Electricity Regulatory Commission or any other methodology as it considers appropriate
after following the due regulatory process.
(2) In addition to transmission charges, charges for reactive energy, as may be determined by
the Commission in the MYT order, shall also be payable by all the transmission customers
of the system.

45. Computation and Payment of Transmission Charge.- (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 or contracted capacity, as the case may be:

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.

(2) The transmission charge (inclusive of incentive) payable for AC System or part thereof for a
calendar month shall be computed in accordance with the following equation:-
For TAFM≤98%
 AFC x ( NDM / NDY ) x ( TAFM / 98%)
For TAFM: 98% <TAFM≤ 98.5%
AFC x ( NDM / NDY) x ( 1)
For TAFM: 98.5% <TAFM≤ 99.75%
AFC x ( NDM / NDY ) x (TAFM/98.5%)
For TAFM: ≥ 99.75%
AFC x ( NDM / NDY ) x (99.75% /98.5%)

Where,
AFC = Annual fixed charges specified for the year, in Rupees;
NATAF = Normative annual transmission availability factor, in per cent;
NDM = Number of days in the month;
NDY = Number of days in the year; and
TAFM = Transmission system availability factor for the month, in percent,
computed in accordance with Appendix-II to these Regulations.

(3) 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.

(4) The transmission charges shall be calculated separately for part of the transmission system
having different NATAF, and aggregated thereafter, according to their sharing by the long
term transmission customers.

46. Open Access Transactions.- All the matters related to Open Access Transactions shall
be dealt in accordance with Himachal Pradesh Electricity Regulatory Commission (Terms
and Conditions for Intra-State Open Access) Regulations, 2010 as applicable and as
amended from time to time.

47. Transmission losses.- 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 9, as a part of Multi Year Tariff
framework applicable to the Transmission Licensee.

48. Compliance with the directions by Transmission Licensee.- (1) Subject to the
directions issued by the National Load Despatch Centre or the Regional Load Despatch
Centre, the State Load Despatch Centre (SLDC) may, under Sub-section (2) of Section 32
and Sub-section (1) of Section 33, read with clause (b) of Section 40 of the Act, give such
 directions as it may consider appropriate, for maintaining the availability of the transmission
system and the Transmission Licensee shall duly comply with all such directions.

(2) The Commission, on an application filed by the State Load Despatch Centre (SLDC) and
after hearing the Transmission Licensee, if satisfied that the Transmission Licensee has
persistently failed to maintain the availability of the transmission system, may issue such
directions to the State Load Despatch Centre (SLDC) to take control of the operations of the
transmission system of such Transmission Licensee, for such period and on such terms, as
the Commission may decide.
(3) The directions given under sub-regulation (1) shall be without prejudice to any action which
may be taken against the Transmission Licensee under other provisions of the Act.

PART-V
TARIFF FILING PROCEDURE

49. Multi-Year Filings for the Control Period.- (1) The multiyear tariff filing shall be
in such form and in such manner as may be laid down by the Commission by an order and
also as per the provisions of the Conduct of Business Regulations.

(2) The Transmission Licensee shall also submit the multiyear tariff filing in electronic format
to the Commission.

50. Beginning of the Control Period - Business Plan Filings.- In the base year, prior
to the filing of multi-year ARR cum Tariff petition, the Transmission Licensee shall file a
business plan approved by its Board of Directors. The business plan shall be for the entire
control period and shall, inter-alia, contain –

(a) Capital Investment Plan.- This should be commensurate with load growth and
quality improvement proposed in the business plan. The investment plan should also
include corresponding capitalisation schedule and financing plan; The Commission
shall approve the system augmentation/ expansion plan submitted by the
Transmission Licensee, based on the load growth forecast/ generation evacuation
requirement during the control period. The capital investment plan shall be in
conformity with the plans made by the CEA/ CTU/ STU/ distribution licensee;
(b) Capital Structure.- The appropriate capital structure of each scheme proposed and
cost of financing (interest on debt) and return on equity, terms of the existing loan
agreements, etc;
(c) Operation and Maintenance (O&M) Expenses.- This shall include the costs
estimated for the base year, the actual expenses incurred in the previous two years
and the projected values for each year of the control period based on the proposed
norms for O&M cost, including indexation and other appropriate mechanism;
 (d) Depreciation.- Based on the useful life of the asset and capitalisation schedules for
each year of the control period;
(e) Performance Targets.- A set of targets proposed for controllable items such as,
availability of transmission system, transformer failure rate, and any other
parameters for quality of supply for each year of the control period for the purpose
of incentive / penalties. The targets shall be consistent with the capital investment
plan proposed by the Transmission Licensee;
(f) Proposals for Non-tariff.- Income with item-wise description and details;
(g) Proposals in respect of income from Other Business; and
(h) Other Information.- This shall include any other details considered appropriate by
the Transmission Licensee for consideration during determination of tariff.

51. Tariff Filing.- (1) The Transmission Licensee shall file an application for approval of
transmission tariff for each year of the control period consistent with the business plan, not
less than 120 days before the commencement of the first year of the control period or such
other date as may be directed by the Commission.
(2) The transmission tariff shall be determined for each year of the control period at the
beginning of the control period. The licensee shall also indicate the transmission losses to
provide for adjustment of losses in the system.

(3) The filings for transmission tariff shall contain the following: -
(a) the transmission system or network usage forecast for each year of the control
period, consistent with the business plan;
(b) proposals for transmission tariff design for each year of the control period, including
the losses to be charged and the procedure thereof;
(c) proposal for transmission tariff rate for the each year of the control period supported
by adequate justification;
(d) proposal for reactive energy charges; and
(e) expected revenue from the licensed business, non-tariff income and income from
other business and other matters considered appropriate by the Transmission
Licensee.
(4) The Transmission Licensee shall furnish to the Commission, such additional information,
particulars and documents as the Commission may require from time to time after such
filing of revenue calculations and tariff proposals.

(5) The Transmission Licensee shall publish, for the information of the public, the contents of
the application in an abridged form in such manner as the Commission may direct and shall
host the complete copy of the filing on its website and shall also provide copies of the
documents filed with the Commission to any person at a price not exceeding normal
photocopying charges.
52. Mid-term Performance Review and Review at the End of the Control
Period.- (1) Mid-term performance review-
(a) The Transmission Licensee shall make an application for mid-term Performance
Review within 120 days before the commencement of the fourth year of the Control
Period i.e. FY 2027-28;
(b) The scope of the mid-term Performance Review shall be a comparison of the actual
performance with the approved forecast of Aggregate Revenue Requirement and
expected revenue from tariff and charges The Transmission Licensee shall submit to
the Commission all information together with audited account; 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 performance from the approved
forecast; and
(c) The mid-term review shall comprise of the following.-
(i) True-up of previous Control Period;
(ii) A comparison of the actual/ audited performance with the approved forecast
for first two financial years of the Control Period, subject to the prudence
check including pass-through of impact of uncontrollable factors;
(iii) Review of controllable parameters;
(iv) Review of ARR for the balance of the control period in case of any major
change in uncontrollable and/ or controllable parameters; and
(v) Review of transmission charges on account of modification in ARR for the
balance control period.

(2) Review at the end of control period – The Transmission Licensee shall also make an
application for Comprehensive Review towards the end of the fourth Control Period on
availability of audited accounts. The comprehensive review shall be based as per the
principles laid down under these Regulations for various parameters of ARR:
Provided that the Transmission Licensee shall submit to the Commission
information in such format as may be stipulated by the Commission, together with the
audited accounts statements, extracts of books of accounts 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 expected
revenue from tariff and charges.

(3) Towards the end of the control period, the Commission shall review if the implementation
of the principles laid down in these Regulations has achieved their intended objectives.
While doing this, the Commission shall take into account, among other things, the industry
structure, sector requirements, consumer and other stakeholder expectations and the
licensee‘s requirements at that point of time. Depending on the requirements of the sector to
meet the objects of the Act, the Commission may revise the principles for the next control
period.
 (4) The end of the control period shall be the beginning of the next control period and the
licensee shall follow the same procedure, unless required otherwise by the Commission. The
Commission shall analyze the performance of the licensee with respect to the targets set out
at the beginning of the control period and based on the actual performance, expected
efficiency improvements and other factors prevalent, determine the initial values for the next
control period.

53. Disposal of Application.- (1) The Commission will process the filings made by the
Transmission Licensee in accordance with these Regulations and the Conduct of Business
Regulations as amended from time to time.
(2) Based on the Transmission Licensee‘s filings, objections/ suggestions from public and other
stakeholders, the Commission may, within 120 days of the receipt of the application,
complete in all respects, and after considering all suggestions and objections from public
and other stakeholders -
(a) issue, a tariff order with such modifications and/or such conditions, as may be deemed
just and appropriate containing, inter-alia targets for controllable items and
transmission tariffs for each year of the control period; or
(b) 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
thereunder or the provisions of any other law for the time being in force.

54. Publication.- The Transmission Licensee shall publish the tariff approved by the
Commission in the newspapers, having circulation in the area of supply, as the Commission
may direct. The publication shall, besides such other things as the Commission may require,
include a general description of the tariff changes.

PART-VI
MISCELLANEOUS

55. Sharing of Clean Development Mechanism (CDM) Benefits.- The proceeds of

carbon credit from approved CDM project shall be shared in the following manner, namely:-
(a) 100% of the gross proceeds on account of CDM to be retained by the project
developer in the first year (12 months) after the date of commercial operation of the
transmission system; and
(b) 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%, whereafter the
proceeds shall be shared in equal proportion, by the Transmission Licensee and the
users.

56. Deviation from ceiling tariff.- (1) The tariff determined in these Regulations shall be
a ceiling tariff. The Transmission Licensee and the beneficiaries or the long-term customer,
as the case may be, may mutually agree to charge a lower tariff.
 (2) The Transmission Licensee may opt to charge a lower tariff for a period not exceeding the
validity of these Regulations on agreeing to deviation from operational parameters,
reduction in operation and maintenance expenses, reduced return on equity and incentive
specified in these Regulations.
(3) If the Transmission Licensee opts to charge a lower tariff for a period not exceeding the
validity of these Regulations on account of lower depreciation based on the requirement of
repayment in such case the unrecovered depreciation on account of reduction of depreciation
by the Transmission Licensee during useful life shall be allowed to be recovered after the
useful life in these Regulations.

(4) The deviation from the ceiling tariff specified by the Commission, shall come into effect
from the date agreed to by the Transmission Licensee and the beneficiaries or the long-term
customer, as the case may be.
(5) The Transmission Licensee and the long term customer of transmission system shall be
required to approach the Commission for charging lower tariff in accordance with sub-
regulations (1) to (3). The details of the accounts and the tariff actually charged under sub-
regulations (1) to (3) shall be submitted at the time of true up.

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

58. Transitory provisions.- Notwithstanding anything to the contrary contained in these

Regulations –
(a) the tariff order issued by the Commission for the control period ending on the 31 st
March, 2023 shall continue to operate; and

(b) the proceedings (including review petition) for amendments, revocation, variation or
alteration of the said tariff order shall continue to be filed and dealt with as if the
repealed Regulations in respect of the said tariff determination continue to be in
force, and the provisions of these Regulations shall not apply.
59. Issue of Orders and Practice Directions.- (1) Subject to the provisions of the Act
and these Regulations, the Commission may, from time to time, issue orders and
practice directions, prescribe formats in regard to the implementation of these
Regulations and procedure to be followed on various matters, which the Commission
has been empowered by these Regulations to direct, and matters incidental or ancillary
thereto.

(2) Notwithstanding anything contained in these Regulations, the Commission shall have
the authority, either Suo-motu or on a petition filed by any interested or affected person,
to determine the tariff of any applicant.

60. Power to remove difficulties.- 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 Transmission Licensee to do or undertake such things which
appear to be necessary or expedient for the purpose of removing the difficulties.

61. 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.

62. Interpretation.- All issues arising in relation to the interpretation of these

Regulations shall be determined by the Commission and the decision of the
Commission on such issues shall be final.

63. Saving of Inherent power of the Commission.- 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.

64. Enquiry and Investigation.- All enquiries, investigations and adjudications under
these Regulations shall be done by the Commission in accordance with the provisions of the
Conduct of Business Regulations as amended from time to time.

65. Repeal and savings.- (1) The Himachal Pradesh Electricity Regulatory Commission
(Terms and Conditions for Determination of Transmission Tariff) Regulations, 2011 are
hereby repealed.

(2) Notwithstanding such repeal-

(a) anything done or any action taken or purported to have been done or taken under the
repealed Regulations shall, in so far as it is not inconsistent with the provisions of
these Regulations, be deemed to have been done or taken under the corresponding
provisions of these Regulations;
(b) the provisions concerning the tariff order made for the control period ending on the
31st March, 2024 and the provisions for conduct of the proceedings (including
review petitions) for its revocations, variation or alternation, as stood before such
repeal, shall continue to be in force.
By Order of the Commission,

Sd/-
(Chhavi Nanta), HPAS
Secretary
 Appendix-I
Depreciation Schedule
Sr. No. Asset Particulars Depreciation
Rate (Salvage
Value=10%)
SLM
A Land under full ownership 0.00%

B Land under lease

(a) for investment in the land 3.34%
(b) For cost of clearing the site 3.34%

C. Building & Civil Engineering works

(i) Offices and showrooms 3.34%
(ii) Temporary erections such as wooden structures 100.00%
(iii) Roads other than Kutcha roads 3.34%
(iv) Others 3.34%

D. Transformers, Kiosk, sub-station equipment & other fixed

apparatus (including plant)
(i) Transformers including foundations having rating of 100 KVA 5.28%
and over
(ii) Others 5.28%

E. Switchgear including cable connections 5.28%

F. Lightning arrestor
(i) Station type 5.28%
(ii) Pole type 5.28%
(iii) Synchronous condenser 5.28%

G. Batteries 5.28%

H. Underground cable and equipment

(i) Underground cable including joint boxes and disconnected boxes 5.28%
(ii) Cable duct system 5.28%

I. Overhead lines including cable support

(i) Lines on fabricated steel operating at terminal voltages higher than 5.28%
66 KV
(ii) Lines on steel supports operating at terminal voltages higher than 5.28%
13.2 KV but not exceeding 66 KV
(iii) Lines on steel on reinforced concrete support 5.28%
 (iv) Lines on treated wood support 5.28%

J. Meters 5.28%

K. Self propelled vehicles 9.50%

L. Air Conditioning Plants

(i) Static 5.28%
(ii) Portable 9.50%

M. Office furniture, equipment and fixtures

(i) Office furniture and furnishing 6.33%
(ii) Office equipment 6.33%
(iii) Internal wiring including fittings and apparatus 6.33%
(iv) Street Light fittings 5.28%

N. Apparatus let on hire

(i) Other than motors 9.50%
(ii) Motors 6.33%

O. Communication equipment
(i) Radio and high frequency carrier system 6.33%
(ii) Telephone lines and telephones 6.33%
(iii) Fibre Optic 6.33%

P. I. T Equipment including software, SCADA System 15.00%

Q. Any other assets not covered above 5.28%

Note: Where life of the particular asset is less than useful life of the project, the useful life of
such particular asset shall be considered as per the provisions of the Companies Act,
2013 and subsequent amendment thereto.
 Appendix II
Procedure for Calculation of Transmission System Availability Factor for a Month

1. Transmission system availability for a calendar month shall be computed by the respective
Transmission Licensee, and certified by the HPSLDC, separately for each AC and HVDC
transmission system. For the purpose of calculation of Transmission System Availability-
(i) AC transmission lines: Each circuit of AC transmission line shall be considered as one
element;
(ii) Inter-Connecting Transformers (ICTs): Each ICT bank (three single phase transformer
together) shall form one element;
(iii) Static VAR Compensator (SVC): SVC along with SVC transformer shall form one
element. However, 50% credit to inductive and 50% to capacitive rating shall be
given;
(iv) Bus Reactors/Switchable line reactors: Each Bus Reactors/Switchable line reactors
shall be considered as one element;
(v) HVDC Bi-pole links: Each pole of HVDC link alongwith associated equipment at
both ends shall be considered as one element; and
(vi) HVDC back-to-back Station: Each block of HVDC back-to-back Station shall be
considered as one element. If associated AC line (necessary for transfer of inter-
regional power through HVDC back-to-back Station) is not available, the HVDC
back-to-back Station block shall also be considered as unavailable.

2. The Availability of AC and HVDC portion of Transmission system shall be computed as

under:-

o * AVo + p * AVp + q * AVq + r * AVr

% Availability for AC system = ------------------------------------------------------- X 100
o+p+q+r

s * AVs + t * AVt
% Availability for HVDC system = -------------------------- X 100
s+t

Where

o = Total number of AC lines;

AVo = Availability of o number of AC lines;
p = Total number of bus reactors/switchable line reactors;
AVp = Availability of p number of bus reactors/switchable line reactors;
q = Total number of ICTs;
AVq = Availability of q number of ICTs;
r = Total number of SVCs;
AVr = Availability of r number of SVCs;
 s = Total number of HVDC poles;
AVs = Availability of s number of HVDC poles;
t = Total number of HVDC back-to-back Station blocks;
AVt = Availability of t number of HVDC back-to-back Station blocks.

3. The weightage factor for each category of transmission element shall be as under:-
(a) For each circuit of AC line –

(i) Surge Impedance Loading (SIL) for Uncompensated line multiplied by ckt-km;

SIL rating for various voltage levels and conductor configurations is given in
Appendix-III. However, for the voltage levels and/or conductor configurations
not listed in Appendix-III, appropriate SIL based on technical considerations
may be used for availability calculation under intimation to long-term
transmission customers/DICs;

(ii) For compensated AC line, SIL shall be as certified by HPSLDC considering the
compensation on the line; and

(iii) For shunt compensated line, the reduced value of SIL shall be taken in
accordance with the location of the reactor. Similarly, in case of the lines with
series compensation, the higher SIL shall be taken as per the percentage of
compensation.

(b) For each HVDC pole- The rated MW capacity multiplied by ckt-km;
(c) For each ICT bank – The rated MVA capacity;
(d) For SVC- The rated MVAR capacity (inductive and capacitive);
(e) For Bus Reactor/switchable line reactors – The rated MVAR capacity; and
(f) For HVDC back-to-back Station connecting two Regional grids- Rated MW capacity
of each block.

4. The availability for each category of transmission element shall be computed based on the
weightage factor, total hours under consideration and non-available hours for each element
of that category. The formulae for calculation of Availability of each category of the
transmission elements are as per Appendix-IV.

5. The transmission elements under outage due to following reasons shall be deemed to be
available:-
(i) Shut down availed for maintenance or construction of elements of another
transmission scheme. If the other transmission scheme belongs to the Transmission
Licensee, the HPSLDC may restrict the deemed availability period to that considered
reasonable for the work involved; and
(ii) Switching off of a transmission line to restrict over voltage and manual tripping of
switched reactors as per the directions of HPSLDC.
6. Outage time of transmission elements for the following contingencies shall be excluded
from the total time of the element under period of consideration:-
(i) Outage of elements due to acts of God and force majeure events beyond the control
of the Transmission Licensee. However, onus of satisfying the HPSLDC that
element outage was due to aforesaid events and not due to design failure shall rest
with the Transmission Licensee. A reasonable restoration time for the element shall
be considered and any additional time taken by the Transmission Licensee for
restoration of the element beyond the reasonable time shall be treated as outage time
attributable to the Transmission Licensee. Circuits restored through ERS (Emergency
Restoration System) shall be considered as available; and

(ii) Outage caused by grid incident/disturbance not attributable to the Transmission

Licensee, e.g., faults in sub-station or bays owned by other agency causing outage of
the Transmission Licensee‘s elements, and tripping of lines, ICTs, HVDC, etc. due
to grid disturbance. However, if the element is not restored on receipt of direction
from RLDC while normalizing the system following grid incident/disturbance within
reasonable time, the element will be considered not available for the period of outage
after issuance of RLDC‘s direction for restoration.
 Appendix-III
Surge Impedance Loading (SIL) of AC Lines

Sl. Line voltage Conductor SIL

No. (kV) Configuration (MW)

1 765 Quad Bersimis 2250

2 400 Quad Bersimis 691

3 400 Twin Moose 515

4 400 Twin AAAC 425

5 400 Quad Zebra 647

6 400 Quad AAAC 646

7 400 Triple Snowbird 605

8 400 ACKC(500/26) 556

9 400 Twin ACAR 557

10 220 Twin Zebra 175

11 220 Single Zebra 132

12 132 Single Panther 50

13 66 Single Dog 10
 Appendix-IV

FORMULAE FOR CALCULATION OF AVAILABILITY OF EACH CATEGORY OF

TRANSMISSION ELEMENTS