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Date: 01-Sep-2023 Category: Extra Ordinary State: Union Government Country: India

Electricity(Third Amendment)Rules,2023

Issued by Ministry of Power · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The Electricity (Third Amendment) Rules, 2023 amends the Electricity Rules, 2005.
  • The amendment clarifies the definition of 'captive user' and introduces a verification process for captive generating plants and users located in multiple states.

Key Changes

  • The words 'captive user' are substituted with 'captive user(s)' in sub-rule (1)(a)(i) of Rule 3 of the Electricity Rules, 2005.
  • The proviso under sub-clause (i) of clause (a) in sub-rule (1) of Rule 3 is omitted.
  • A new proviso is introduced in Explanation (b) of Rule 3, stating that consumption by a subsidiary or holding company of a company that is a captive user is also considered captive consumption.
  • A new sub-rule (3) is inserted in Rule 3, mandating the Central Electricity Authority (CEA) to verify the captive status of generating plants and users located in more than one state, following a procedure approved by the Central Government.

Impact Analysis

Captive Power Producers

  • Action Item: Companies should assess whether their subsidiary or holding company arrangements qualify as captive consumption under the amended rules.

Central Electricity Authority (CEA)

  • The CEA will need to allocate resources and develop expertise to effectively carry out the verification process.

Subsidiary and Holding Companies

  • Action Item: Subsidiary and holding companies should review their electricity consumption arrangements to determine if they can benefit from the amended rules.

Electricity Consumers

  • The clarification of captive user definitions may reduce disputes and litigation related to captive status.

Key Entities Referenced

Central Government: The Central Government, through the Ministry of Power, is responsible for making and amending electricity rules under the Electricity Act, 2003. Central Electricity Authority (CEA): The CEA is responsible for verifying the captive status of generating plants and users located in more than one state and must establish a verification procedure approved by the Central Government. Electricity Act, 2003: The principal legislation governing the electricity sector in India, which empowers the Central Government to make rules. Electricity Rules, 2005: The rules framed under the Electricity Act, 2003, which are being amended by the Electricity (Third Amendment) Rules, 2023. Companies Act, 2013: The legislation that defines 'subsidiary company' and 'holding company', which are relevant for determining captive consumption eligibility.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-02092023-248504 xxxGIDHxxx CG-DL-E-02092023-248504 xxxGIDExxx ऄसाधारण EXTRAORDINARY भाग II—खण् ड 3—ईप-खण्ड (i) PART II—Section 3—Sub-section (i) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 508] नइ ददल्ली, िुक्रिार, जसतम्ब र 1, 2023/भार 10, 1945 No. 508] NEW DELHI, FRIDAY, SEPTEMBER 1, 2023/BHADRA 10, 1945 जिद्यतु मत्रं ालय ऄजधसचू ना नइ ददल्ली, 1 जसतम्बर, 2023 सा.का.जन. 649(ऄ).—केन्द्रीय सरकार, जिद्युत ऄजधजनयम, 2003 (2003 का 36) की धारा 176 द्वारा प्रदत्त िजियों का प्रयोग करते हुए, जिद्युत जनयम, 2005 का और संिोधन करने के जलए जनम्न जलजखत जनयम बनाती ै, ऄथाात्: 1. संजिप्त नाम और प्रारंभ- (1) आन जनयमों का संजिप्त नाम जिद्युत (तीसरा संिोधन) जनयम, 2023 ै। (2) ये रािपत्र में ईनके प्रकािन की तारीख को प्रिृत्त ैोंगे। 2. जिद्युत जनयम, 2005, के जनयम 3 म,ें - (i). ईप-जनयम (1) म,ें खंड (क) के, ईप-खंड (i) म,ें "क जप्िि प्रयोिा" िब्दों के स्ट्थान पर, "क जप्िि प्रयोिा(ओं)" िब्द रखे िाएगं ;े (ii). ईप-जनयम (1) म,ें खंड (क) के, ईप-खंड (i) के तद्धीन परंतुक का लोप दकया िाएगा; (iii). स्ट्पष्टीकरण के, खंड (ख) म,ें दसू रे परंतुक के स्ट्थान पर, जनम्नजलजखत परंतुक रखा िाएगा, ऄथाता ्:- “परंत ु यै और दक कोइ कंपनी, िो एक क जप्िि प्रयोिा ै, की, कंपनी ऄजधजनयम, 2013 (2013 का 18) की धारा 2 के खंड (87) म ें यथापररभाजित सैायक कंपनी या कंपनी ऄजधजनयम 2013 (2013 का 18) की धारा 2 के खंड (46) म ेंयथापररभाजित धाररत कंपनी द्वारा दकया गया ईपभोग भी क जप्िि प्रयोिा द्वारा दकए गए क जप्िि ईपभोग के रूप म ेंस्ट्िीकाया ैोगा।”; 5643 GI/2023 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] (iv). ईप-जनयम (2) के पश्चात,् जनम्नजलजखत ईप-जनयम ऄंतःस्ट्थाजपत दकया िाएगा, ऄथाात:् - “(3) ऐसे ईत्पादन संयत्रों की क जप्िि प्राजस्ट्थजत, िैां क जप्िि ईत्पादन संयंत्र और ईसके क जप्िि प्रयोिा एक स े ऄजधक राज्यों म ें ऄिजस्ट्थत ै,ैं का सत्यापन केंरीय जिद्युत प्राजधकरण द्वारा केंरीय सरकार के ऄनुमोदन स े प्राजधकरण द्वारा िारी प्रदक्रया के ऄनुसार दकया िाएगा।”। [फा. स.ं 23/18/2022-अरएंडअर] पीयूि ससै, संयुक् त सजचि रिप्पणी : मूल जनयम ििा 2005 में, भारत के रािपत्र, भाग-II, खंड 3, ईप-खंड (i) म ें सा.का.जन 379 (ऄ), तारीख 8 िून, 2005 द्वारा प्रकाजित दकए गए थ े और ऄंजतम बार सा.का.जन 558 (ऄ), तारीख 26 िुलाइ, 2023 द्वारा संिोजधत दकए गए। MINISTRY OF POWER NOTIFICATION New Delhi, the 1st September, 2023 G.S.R. 649(E).—In exercise of the powers conferred by section 176 of the Electricity Act, 2003 (Act 36 of 2003), the Central Government hereby makes the following rules, further to amend the Electricity Rules, 2005, namely:- 1. Short title and commencement.- (1) These rules may be called the Electricity (Third Amendment) Rules, 2023. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Electricity Rules, 2005, in rule 3,- (i) in sub-rule(1), in clause (a), in sub-clause(i), for the words “captive user”, the words “captive user(s); and” shall be substituted; (ii) in sub-rule(1), in clause (a), in sub-clause(i), the proviso there under shall be omitted; (iii) in Explanation, in clause (b), for second proviso, the following shall be substituted, namely:- “Provided further that the consumption by a subsidiary company as defined in clause (87) of section 2 of the Companies Act, 2013 (18 of 2013) or the holding company as defined in clause (46) of section 2 of the Companies Act, 2013 (18 of 2013), of a company which is a captive user, shall also be admissible as captive consumption by the captive user.”; (iv) after sub-rule (2), the following sub-rule shall be inserted, namely:- “(3) 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.”. [F. No. 23/18/2022-R&R] PIYUSH SINGH, Jt. Secy. Note: The principal Rules were published 2005 in the Gazette of India, Part-II, Section 3, Sub-section (i) vide number G.S.R 379 (E), dated the 8th June, 2005 and was last amended vide G.S.R 558 (E), dated the 26th July, 2023. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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