With a view to ensure that promoters source funds at optimum cost, the Central Electricity Regulatory Commission (CERC) has asked the Industrial Development Bank of India (IDBI) to work out the broad guidelines for using the return-on-capital-employed approach to determine power tariffs. Tariffs are now set by factoring in both the return on equity and the interest on loans.
The move to ask the IDBI to submit a proposal on the merits of having a single rate of return for the calculation of tariffs and suggestions on the rate itself followed a meeting of the CERC
