(1) The value base for the purpose of depreciation shall be the capital cost of the asset admitted by the Commission.
(2) The salvage value of the asset shall be considered as 10% and depreciation shall be allowed up to maximum of 90% of the capital cost of the asset.
4[(2-a) The salvage value for IT equipment and software shall be considered as NIL and 100% value of the assets shall be considered depreciable.]
(3) Depreciation shall be calculated annually based on Straight Line Method and at rates specified in Appendix-I to these regulations for the assets of the transmission system:
Provided that, the remaining depreciable value as on 31 st March of the year closing after a period of 12 years from date of commercial operation shall be spread over the balance useful life of the asset.
1 Ins. sub-regulation (7) 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:
“(21) Working Capital.- The Commission shall calculate the working capital requirement for the transmission licensee containing the following components: -
(a) O&M expenses for 1 month;
(b) maintenance spare @ 40% of repair and maintenance expenses for one month; and
(c) receivables for two months based on the projected annual transmission charges.” 3 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:
“(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 to the 3[Average Base Rate of State Bank of India for the last six months prior to the filing of the MYT petition plus 350 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.” 4 Add. sub-regulation (2-a) 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.
22 Compendium of HPERC Regulations, March 2021
(4) For transmission project which are in operation for less than 12 years, the difference between the cumulative depreciation recovered and the cumulative depreciation arrived at by applying the depreciation rates specified in this regulation corresponding to 12 years, shall be spread over the period up to 12 years, and the remaining depreciable value as on 31 st March of the year closing after a period of 12 years from date of commercial operation shall be spread over the balance useful life of the asset.
(5) For the project in operation for more than 12 years, the balance depreciation to be recovered shall be spread over the remaining useful life of the asset.
(6) Depreciation shall be chargeable from the first year of commercial operation.
In case of commercial operation of the asset for part of the year, depreciation shall be charged on pro rata basis.
1 [24. 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 annual transmission charges of the transmission licensee:
Provided that the transmission licensee shall submit full details of its forecast of non-tariff income to the Commission along with its application for determination of Aggregate Revenue Requirement. The non-tariff income shall interalia include:
(a) Income from rent on land or buildings;
(b) Income from statutory investments;
(c) Interest on advances to suppliers/contractors;
(d) Rental from staff quarters;
(e) Rental from contractors;
(f) Income from hire charges from contactors and others;
(g) Income from advertisements, etc.;
(h) Miscellaneous receipts like parallel operation charges;
(i) Deferred Income from grant, subsidy, etc., as per Annual Accounts;
(j) Excess found on physical verification;
(k) Interest on investments, fixed and call deposits and bank balances;
(l) Prior period income.]