RERC Adopts Electricity Amendment Rules 2026 To Strengthen Captive Power Regulation In Rajasthan

The Rajasthan Electricity Regulatory Commission (RERC) has issued a suo-motu order to adopt the Electricity (Amendment) Rules, 2026, bringing important changes to the regulation of Captive Generating Plants (CGPs) in the state. The order, dated March 19, 2026, follows the Central Government’s notification on March 13, 2026, which replaced Rule 3 of the Electricity Rules, 2005, with updated provisions aimed at improving clarity and compliance in the captive power sector.

One of the key changes introduced in the amended rules is the expansion of definitions. The term “captive user” now includes consumption supported through Energy Storage Systems, reflecting the growing role of storage in modern power usage. The definition of “ownership” has also been broadened to include group entities, making it easier for related companies to qualify under captive arrangements. In addition, Special Purpose Vehicles (SPVs) are now treated as an Association of Persons (AoP), and rules have been introduced to ensure that each captive user consumes electricity in proportion to their ownership share.

A major feature of the amendment is the introduction of a formal verification system for determining captive status. As per the new rules, the State Government must appoint a Nodal Agency that will be responsible for verifying whether a power plant and its users meet the required captive criteria. This agency will also issue detailed procedures, including standard formats for declarations by users who seek temporary relief from cross-subsidy surcharges while their status is being verified.

The rules also require the creation of a Grievance Redressal Committee (GRC). This committee will act as an appellate body to handle complaints and appeals related to the decisions made by the Nodal Agency. This step is expected to provide a clear and structured mechanism for resolving disputes within the captive power framework.

While most provisions of the amendment came into force on March 13, 2026, the sections related to the Nodal Agency and the GRC will become effective from April 1, 2026. The Commission noted that Rajasthan Renewable Energy Corporation Limited (RRECL) had already issued a Standard Operating Procedure in 2025 for renewable energy captive sales, which supports the implementation of these new rules.

Using its authority under the Electricity Act, 2003, the Commission has directed the State Government to complete the designation of the Nodal Agency and the formation of the GRC before the April deadline. Once in place, the new system is expected to ensure better monitoring, transparency, and compliance in Rajasthan’s captive power sector.