(1) Interest and finance charges on loan capital shall be computed on the outstanding loans, duly taking into account the schedule of repayment in accordance with the terms and conditions of relevant agreements of loan, bond or non-convertible debentures. Exception can be made for the existing or past 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.
1 Subs. vide Not. No. HPERC/F(5)(3)(1)(Trans) dated 1 st November,2013 published in the R H.P.
dated 4 th November, 2013 at p. 4608 to 4618. Before substitution sub-regulation (2) read as under:
“(2)The rate of return on equity shall be computed by grossing up the base rate with the normal tax rate for the year 2010-11 applicable to the concerned transmission licensee company:
Provided that return on equity with respect to the actual tax rate applicable to the transmission licensee in line with the provisions of the relevant Finance Acts of the respective year during the tariff period shall be trued up separately for each year of the tariff period along with the tariff petition filed for the next tariff period.” 2 Subs. for “33.22%” vide Not. No. HPERC/F(5)(3)(1)(Trans) dated 1 st November,2013 published in the R H.P. dated 4 th November, 2013 at p. 4608 to 4616.
20 Compendium of HPERC Regulations, March 2021
(2) The rate of interest shall be the weighted average rate of interest calculated on the basis of the actual loan portfolio at the beginning of each year applicable to the project:
Provided that if there is no actual loan for a particular year but normative loan is still outstanding, the last available weighted average rate of interest shall be considered:
Provided further that if the transmission licensee does not have actual loan then the weighted average rate of interest of the transmission licensee as a whole shall be considered.
1[Provided further that if the Transmission Licensee as a whole does not have actual loan, then one (1) Year State Bank of India (SBI) MCLR/any replacement thereof as notified by RBI for the time being in effect applicable for one (1) Year period, as may be applicable as on 1st April of the relevant Year plus 200 basis points shall be considered as the rate of interest for the purpose of allowing the interest on the normative loan.]
(3) The interest rate on the amount of equity in excess of 30% treated as notional loan shall be the weighted average rate of the loans of the respective years and shall be further limited to the rate of return on equity specified in these regulations:
Provided that all loans considered for this purpose shall be identified with the assets created:
Provided further that the interest and finance charges of re-negotiated loan agreements shall not be considered, if they result in higher charges:
Provided further that the interest and finance charges on works in progress shall be excluded and shall be considered as part of the capital cost:
Provided further that neither penal interest nor overdue interest shall be allowed for computation of tariff.
(4) In case any moratorium period is availed of in any loan, depreciation provided for in the tariff during the years of moratorium shall be treated, as notional repayment of loan during those years and interest on loan capital shall be calculated accordingly.
2[(5) The transmission licensee shall make every effort to refinance the loan as long as it results in net benefit to the beneficiaries. The costs associated with such refinancing shall be borne by the transmission customers and any benefit on account of refinancing of loan and interest on loan shall be shared in the ratio of 2:1 between the transmission licensee and the transmission customers. Refinancing may also include restructuring of debt.]
(6) In respect of foreign currency loans, variation in rupee liability due to foreign exchange rate variation, towards interest payment and loan repayment actually incurred, in the relevant year shall be admissible; provided it directly arises out of such foreign exchange rate variation and is not attributable to the transmission licensee or its suppliers or contractors.
1 Ins. proviso 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. 6256-6264.
2 Subs. 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. 6256-6264. Before its substitution read as under:
“(5) The transmission licensee shall make every effort to refinance the loan as long as it results in net benefit to the beneficiaries. The costs associated with such refinancing shall be borne by the transmission customers and any benefit on account of refinancing of loan and interest on loan shall be passed on to the transmission customers. Refinancing may also include restructuring of debt.” Compendium of HPERC Regulations, March 2021 21 1[(7) The above interest computation shall exclude the interest on loan amount, normative or otherwise, to the extent of capital cost funded by consumer contribution, deposit work, capital subsidy or grant, carried out by transmission licensee.]
2 [21. Working Capital.—The Commission shall calculate the working capital requirement for the transmission licensee containing the following components:
(a) O&M expenses for one month;
(b) receivables for two months on the projected annual transmission charges;
and
(c) maintenance spares @ 15% of O&M Expenses for one month.]
3 [22. Interest Charges on Working Capital.—Rate of interest on working capital to be computed as provided hereinafter in these regulations shall be on normative basis and shall be equal one (1) Year State Bank of India (SBI) MCLR/any replacement thereof as notified by RBI for the time being in effect applicable for one (1) Year period, as may be applicable as on 1st April of the Financial Year in which the Petition is filed plus 300 basis points. The interest on working capital shall be payable on normative basis notwithstanding that the licensee has not taken working capital loan from any outside agency or has exceeded the working capital loan based on the normative figures.]