Foreign exchange rate variation need not be apportioned between debt and equity after capital cost calculation under tariff regulations.

Foreign exchange rate variation, once calculated and added to capital cost, was not shown to require apportionment between debt and equity under the tariff regulations. The provisions cited addressed the method of calculating foreign exchange variation and permitted recovery directly from beneficiaries, but they did not create any rule, regulation, statute, or precedent mandating a post-calculation debt-equity split. The challenge to the apportionment methodology therefore lacked a legally sustainable basis, and reopening the issue for an earlier tariff period would also unfairly shift the burden to consumers long after the relevant period.

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Issues: Whether foreign exchange rate variation, after being calculated and added to capital cost, had to be apportioned between debt and equity or could be recovered only in respect of debt liability under the tariff regulations.

Analysis: The regulatory provisions relied upon did not provide for apportionment of foreign exchange rate variation in any particular debt-equity ratio. Regulation 1.13(a) dealt with the methodology for calculation of foreign exchange rate variation, while Regulations 1.3 and 1.7 permitted recovery directly from beneficiaries. No rule, regulation, statute, or precedent was shown to require post-calculation apportionment between debt and equity, and the claim was unsupported by a legally sustainable basis. The dispute also concerned tariff for an earlier period, and revisiting the apportionment would unfairly pass the burden to consumers long after the relevant period.

Conclusion: The challenge to the apportionment methodology failed, and the appeals were not fit for interference.

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