Electricity (Amendment) Rules, 2026 notified to clarify captive power framework
The Ministry of Power on 14 March 2026 notified the Electricity (Amendment) Rules, 2026, amending Rule 3 of the Electricity Rules, 2005 on captive generating plants to reduce ambiguity and ease business.
Summary
The Ministry of Power notified the Electricity (Amendment) Rules, 2026 on 14 March 2026, amending Rule 3 of the Electricity Rules, 2005, which deals with captive generating plants. The definition of ownership now includes subsidiaries, holding companies and other subsidiaries of the holding company, and captive status will be verified for the entire financial year. In group captive plants set up by an Association of Persons, a member holding 26% or more ownership will have its entire consumption treated as captive. From 1 April 2026, States and UTs may designate a nodal agency to verify intra-state captive status, while the National Load Despatch Centre will verify inter-state cases. Cross-subsidy surcharge and additional surcharge will not be levied pending verification if users file the prescribed declaration, but become payable with carrying cost if the plant fails to qualify.
Key facts
- Notified
- 14 March 2026, Ministry of Power
- Amends
- Rule 3, Electricity Rules, 2005 (captive generating plants)
- Ownership
- Includes subsidiaries, holding company and its other subsidiaries
- Verification period
- Entire financial year
- AoP member with ≥26% ownership
- Entire consumption treated as captive
- Verifiers (from 1 April 2026)
- State/UT nodal agency (intra-state); NLDC (inter-state)
- Surcharges
- CSS and additional surcharge not levied pending verification, on declaration
Practice MCQs 2 questions
Under the Electricity (Amendment) Rules, 2026, which body will verify captive status in cases of inter-state captive consumption?
Show answer
Correct answer: B — National Load Despatch Centre
From 1 April 2026, inter-state captive status will be verified by the National Load Despatch Centre (NLDC); intra-state cases by a State/UT nodal agency.
Consider the following about the Electricity (Amendment) Rules, 2026: 1. They amend Rule 3 of the Electricity Rules, 2005, which governs captive generating plants. 2. In a group captive plant set up by an Association of Persons, a member holding 26% or more ownership will have its entire consumption treated as captive. Which of the above is/are correct?
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Correct answer: C — Both 1 and 2
Both statements are correct as per the Ministry of Power's release of 14 March 2026.