Captive Power Rules Rewritten

Executive Summary

The Ministry of Power notified the Electricity (Amendment) Rules, 2026 vide G.S.R. 186(E) published in the Gazette of India (Extraordinary), Part II - Section 3(i) on 13 March 2026. The notification substitutes Rule 3 of the Electricity Rules, 2005 in its entirety and introduces the most substantive overhaul of the Captive Generating Plant (CGP) framework since the Electricity Rules, 2005 were first enacted. The amendment is made in exercise of the power conferred by Section 176(1) read with Section 176(2)(z) of the Electricity Act, 2003 (36 of 2003).

The amendment targets Rule 3, which prescribes the twin eligibility criteria - ownership and consumption - that a power plant must satisfy to qualify as a CGP and thereby avail exemptions from Cross-Subsidy Surcharge (CSS) and Additional Surcharge (AS). The reform is a direct response to regulatory and judicial disputes that had created structural uncertainty for industrial captive consumers and renewable energy