The Centre has notified the Electricity (Amendment) Rules, 2026, revising the framework for captive power generation to reduce regulatory ambiguity and improve ease of doing business, the Union Ministry of Power said.
The amendments to Rule 3 of the Electricity Rules, 2005 clarify ownership norms by recognising group structures, including holding companies, subsidiaries and related entities, reflecting evolving corporate arrangements. The revised rules also provide greater flexibility for group captive projects, allowing users to draw power based on operational requirements without risking disqualification, subject to compliance with overall ownership and consumption conditions.
A verification framework has been introduced for determining captive status over a financial year, with state governments and the National Load Despatch Centre designated as nodal agencies for intra-state and inter-state cases, respectively. The rules also provide conditional relief from cross-subsidy and additional surcharges during the verification period. The government said the changes are expected to support industrial competitiveness and encourage investment in captive and non-fossil fuel-based power projects.
