Govt Notifies Electricity (Third Amendment) Rules, 2023

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The Ministry of Power notified the third amendment to Electricity Rules 2005. The new amendments were aimed at dealing with the issues of the captive power generation plants in India.  

As per the new notification, the criteria for the captive electricity generation plants changed. The earlier provisions of the rules had said that no power plant should qualify as a ‘captive generating plant’ if not less than 26% of the ownership was held by the captive users. The latest notified amendments proposed to change the word ‘captive user’ to ‘captive users’.

It also batted for removing sub-clause (i) of clause (a) of Sub Rule, which discusses a criterion for captive power generation firms. The new norms also asked for the inclusion of another clause under the criteria for captive power plants after Clause 2.

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 The new Clause 3 talked about the location of captive power plants. The newly added provision of the notified rules said, “The captive status of such generating plants, where captive generating plant and its captive user(s) are located in more than one state, shall be verified by the Central Electricity Authority as per the procedure issued by the Authority with the approval of the Central Government.” 

The ministry had notified the second amendment to the principal rules 2005 on July 26. In this amendment, it made changes in subsidy accounting and payment, the framework for financial sustainability and others. Interestingly, in its first amendment, which was notified on June 30, the ministry used the word ‘captive user’ instead of the word captive user(s) as used in the original rules of 2005.   

Experts monitoring the electricity regulations claimed that with the third amendment of Electricity Rules 2005, the ministry had returned to its earlier version of the act with the usage of the word ‘captive users’. 

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