The document provided is a set of Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021, issued by the Ministry of Power, Government of India. The primary focus is on the adjustment of tariffs when there is a change in law, leading to changes in costs that require a change in tariff.
Key points from the document:
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Title and Scope: The rules are titled 'Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021'. They apply to generating companies and transmission licensees.
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Definitions:
- 'Act' refers to the Electricity Act, 2003.
- 'Agreement' is defined as a contract for purchasing, supplying, or transmitting electricity under the Act.
- 'Change in law' relates to any new legislation, amendments, or repeals that impact costs and necessitate a change in tariffs. This includes changes in interpretation by a competent court and changes in domestic taxes affecting costs.
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Adjustment of Tariff:
- When there is a change in law, the monthly tariff or charges should be adjusted and recovered according to the rules.
- The adjustment process involves calculating the change in cost due to the legal change, determining the applicable interest rate, and then adjusting the tariff accordingly.
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Calculation of Adjustment:
- The calculation involves identifying the incremental cost due to the change in law, determining the interest rate based on the central government's borrowing costs, and applying this to the adjusted tariff to recover the costs timely.
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Application of Rules:
- The rules come into effect upon publication in the Official Gazette.
- They apply to generating companies and transmission licensees.
The document outlines a systematic approach for adjusting tariffs in response to changes in law, ensuring that costs are fairly and promptly recovered from consumers. The adjustments are calculated based on the specific changes in law, interest rates, and other relevant factors, ensuring a fair distribution of costs among stakeholders.
