Regulatory Update: Electricity (Amendment) Rules, 2023 - Captive Power Plants

Recently, the Ministry of Power ('MoP') vide its notification dated June 30, 2023, has notified the Electricity (Amendment) Rules, 2023 ("Amendment Rules") which has inter alia amended the provisions relating to captive generating power plants. The Amendment Rules provide that if a captive generating plant is established by an affiliate company, then the captive user must hold no less than 51% of the ownership in that affiliate company, instead of the earlier 26% for all.

Further, while notifying the recent Amendment Rules, the alphabet 's' was dropped from the word 'user', which has caused a lot of confusion among the stakeholders. Earlier Rule 3(1)(a)(i) of the unamended Electricity Rules, 2005 provided that in order to qualify as a captive generating plant, captive users (and not captive 'user') have to hold at least 26% of ownership in the power plant. Few articles interpreted that in view of this amendment, henceforth collective holding of 26% by multiple