The Ministry of Power has recently released a notification on June 30, 2023, introducing additional amendments to the Electricity Rules, 2005. Prior to the first amendment, a power plant could qualify as a captive generating plant if the captive user held at least twenty-six percent ownership. However, the present amendment modifies this provision by introducing an additional criterion. If the captive generating plant is established by an affiliate company, the captive user must hold no less than fifty-one percent of the ownership in that affiliate company.
Present amendment allows the consumption of electricity by the captive user to be either directly or through an Energy Storage System. Furthermore, the present amendment expands the scope of captive consumption by allowing subsidiary companies of existing captive users to be recognized as captive users, as per the definition outlined in the Companies Act, 2013.
According to this amendment, the duration of a license granted to an entity shall adhere to the terms and conditions outlined by the Appropriate Commission. For deemed licensees, the license period is fixed at twenty-five years from the date the Act comes into force.
Moreover, licenses granted by the Appropriate Commission and deemed licenses will be deemed renewed, unless revoked, for a period of twenty-five years at a time. However, if requested by the licensee, the renewal period can be for a lesser duration. It’s important to note that this rule does not apply to licenses granted to transmission developers selected through tariff-based bidding.