Section 10: Memorandum of Understanding.-

(1) The State Government and the State Distribution Licensees, shall, within a period not exceeding six months from the date of coming into force of this Act, enter into a memorandum of understanding for setting targets for key performance indicators and performance evaluation of the State Distribution Licensees for each financial year: Provided that the memorandum of understanding shall be aimed at providing greater autonomy to the State Distribution Licensees to perform and comply with its legal and regulatory obligations including but not limited to- (a) timely filing of aggregate revenue requirement and tariff petitions and adjustments on account of fuel and cost of power purchased by the State Distribution Licensee; (b) prudent investment and capital expenditure planning; and (c) financial management, to enable adequate and affordable electricity supply to consumers: Provided further that the memorandum of understanding shall provide for performance milestones for all the financial and operational parameters prescribed under this Act and State Electricity Distribution Management Statement. (2) The State Distribution Licensees shall submit every six months, a report to the State Government, on its operational and financial performance as required under various provisions of this Act: Provided that the report shall lay down the strategy and plan for achieving the performance milestones and actual performance against these performance milestones as prescribed by the State Government: 11 Provided further that the State Distribution Licensee shall indicate revised strategies and plans in case they fail to achieve the agreed milestones.