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The fixed charges include the annual interest and depreciation on the capital cost of generating plant, transmission and distribution network, building and other civil works, all types of taxes and insurance charges and salaries of high officials, management and clerical staff and compensation given to the workers.
The running or operating cost includes annual costs of fuel, lubricating oil, water, maintenance and repairs of equipment and salaries of operational and maintenance staff and salaries of supervisory staff engaged in the running of the plant.