(1) The Power System Operation Company operating the State Load Despatch Centre may hedge foreign exchange exposure in respect of the interest on foreign currency loan and repayment of foreign loan acquired for the State Load despatch Centre’s system in part or full in the discretion of the Power System Operation Company.
(2) The Power System Operation Company 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 allowedagainst the hedged foreign debt.
(3) To the extent the Power System Operation Company 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 Power System Operation Company operating the State Load Despatch Centre or its suppliers or contractors.
(4) The Power System Operation Company shall recover the cost of hedging and foreign exchange rate variation on year-to-year basis as income or expense in the period in which it arises.