The Group Captive System: The Regulations!

So this is what the Act says about captive generating plants. It might not have called a group of users trying to own a power plant as a group captive generation plant. But then, it allows every shareholder, every owner, to use the power generated at his power plant as a captive consumer!


Exactly, to set the contentions of many Distribution and transmission companies to rest, the Electricity Rules 2005, tries to answer many of these questions by giving it a name and further defining who can call themselves a captive consumer. It further elaborates on what or who is a ‘Person’.


Here is the extract from the Electricity Rules 2005, seen and interpreted many times at many courts across the country. Let us take a look ourselves.


‘3. Requirements of Captive Generating Plant.

(1) No power plant shall qualify as a ‘captive generating plant’ under section 9 read with clause (8) of section 2 of the Act unless

1.     (a)  in case of a power plant

(i)  not less than twenty six percent of the ownership is held by the captive user(s), and

(ii)  not less than fifty one percent of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for the captive use:

Provided that in case of power plant set up by registered cooperative society, the conditions mentioned under paragraphs at (i) and (ii) above shall be satisfied collectively by the members of the cooperative society:

Provided further that in case of association of persons, the captive user(s) shall hold not less than twenty six percent of the ownership of the plant in aggregate and such captive user(s) shall consume not less than fifty one percent of the electricity generated, determined on an annual basis, in proportion to their shares in ownership of the power plant within a variation not exceeding ten percent;

(b)  in case of a generating station owned by a company formed as special purpose vehicle for such generating station, a unit or units of such generating station identified for captive use and not the entire generating station satisfy (s) the conditions contained in paragraphs (i) and (ii) of sub-clause (a) above including-




(To be continued…)