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On March 13, 2026, the Ministry of Power, Government of India, notified amendments to Rule 3 (Amendment) of the Electricity Rules, 2005 (Electricity Rules).1 Rule 3 of the Electricity Rules prescribes the conditions under which a power plant qualifies as captive generating plant (CGP), enabling captive user(s) to avail exemptions from crosssubsidy and additional surcharges under the Electricity Act, 2003 (Electricity Act).2 The Amendment will be effective from the date of its notification in the gazette of India, except for sub-rule 3 (2)(d)(ii), sub-rule 3(2)(d)(iii) and sub-rule 3(4) which will become effective from April 1, 2026.
The Amendment seeks to address prevailing interpretational ambiguities under Rule 3 and introduces certain substantive refinements to further enable group captive structures to fully access captive power benefits.3 We have analysed the Amendment and set out our observations below:
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