(1) The capital cost for a State Load Despatch Centre shall include the expenditure incurred or projected to be incurred during the control period, including Interest During Construction (IDC) and financing charges, any gain or loss on account of Foreign Exchange Rate Variation (FERV) during construction and Incidental Expenditure During Construction (IEDC) in line with the CAPEX plan:
Provided that the value of the assets not in use shall not form part of the capital cost.
(2) The capital cost admitted by the Commission after prudence check shall form the basis for determination of charges:
Provided that prudence check may include scrutiny of the reasonableness of the capital expenditure, financing plan, IDC, IEDC, use of efficient technology, cost overrun and time over-run, and such other matters as may be considered appropriate by the Commission:
Provided further that the capital cost appearing in the books of accounts of the Power System Operation Company for the State Load Despatch Centre as on the date of transfer along with the approved capital expenditure plan for the control period shall be the basis for determination of charges.
1 Added sub-regualtion (5) vide Not No. HPERC-F(1)-3/2018 dated 22 nd November, 2018 published in the R H.P. dated 27 th November, 2018 at p. 6277-6283.
Compendium of HPERC Regulations, March 2021 13 1 [16. Additional Capitalisation.—(1) The capital expenditure incurred or projected to be incurred after the date of commercial operation may, in its discretion, be admitted by the Commission, subject to prudence check:
(2) The capital expenditure incurred on the following counts after the cut off date may, in its discretion, be admitted by the Commission, subject to prudence check:—
(a) liabilities to meet award of arbitration or for compliance of the order or decree of a court;
(b) change in law or compliance of any existing law;
(c) any expenses to be incurred on account of need for higher security and safety of the capital asset as advised or directed by appropriate Government agencies or statutory authorities responsible for national security/internal security;
(d) any liability for works executed prior to the Cut-off Date, after prudence check of the details of such undischarged liability, total estimated cost of package, reasons for such withholding of payment and release of such payments etc.;
(e) any liability for works admitted by the Commission after the Cut-off Date to the extent of discharge of such liabilities by actual payments;
(f) any additional capital expenditure, which has become necessary for efficient operation of the SLDC. The claim shall be substantiated with the technical justification duly supported by the documentary evidence like test results carried out by an independent agency in case of deterioration of assets, report of an independent agency in case of damage caused by natural calamities, obsolescence of technology, up-gradation of capacity for the technical reasons:
Provided that any expenditure on acquiring the minor items or the assets like tools and tackles, furniture, air-conditioners, voltage stabilizers, refrigerators, coolers, fans, washing machines, heat convectors, mattresses, carpets etc. bought after the date of commercial operation shall not be considered for additional capitalization for determination of fees and charges:
Provided further that if any expenditure has been claimed under Renovation and Modernisation (R&M) or repairs and maintenance under O&M Expenses, the same expenditure cannot be claimed under this regulation.]