An Analysis Of The Electricity (Amendment) Rules, 2026 – Rule 3

On March 13, 2026, the Ministry of Power, Government of India, notified amendments to Rule 3 (Amendment) of the Electricity Rules, 2005 (Electricity Rules).¹ Rule 3 of the Electricity Rules prescribes the conditions under which a power plant qualifies as captive generating plant (CGP), enabling captive user(s) to avail exemptions from crosssubsidy and additional surcharges under the Electricity Act, 2003 (Electricity Act).² The Amendment will be effective from the date of its notification in the gazette of India, except for sub-rule 3 (2)(d)(ii), sub-rule 3(2)(d)(iii) and sub-rule 3(4) which will become effective from April 1, 2026.

The Amendment seeks to address prevailing interpretational ambiguities under Rule 3 and introduces certain substantive refinements to further enable group captive structures to fully access captive power benefits.³ We have analysed the Amendment and set out our observations below: