The Commission will set targets for the items or parameters that are deemed to be “controllable” and which will include-
(a) Availability of the transmission system;
(b) Operation and Maintenance Expenses which includes employee expenses, repairs and maintenance expenses, administration and general expenses and other miscellaneous expenses viz. audit fees, rents, legal fees etc;
(c) Financing cost which includes cost of debt including working capital (interest), cost of equity (return);
(d) Depreciation.
1 [10. True Up .- (1) The true up across various controllable parameters 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;
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 4616. Before its substitution reg. 10 read as under:
“10. True Up
(1) The true up across various controllable parameters shall be conducted as per principles stated below:
(a) 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
(b) at the end of the control period –
(i) the Commission shall review actual capital investment vis-à-vis approved capital investment;
(2) 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.Notwithstanding anything contained in these regulations, the gains or losses in the controllable items of ARR on account of force majeure factors 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.” Compendium of HPERC Regulations, March 2021 11
(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.]
1[10-A. Carrying Cost.—The transmission licensee, for the approved true-up of any year over and above that approved in the Tariff Order for that year, shall be entitled to a carrying cost at one (1) Year weighted average 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 of the relevant Year plus 300 basis points and for any true-up resulting in less than that approved in the Tariff Order for that year, the carrying cost shall be recovered at the same rate.]