CEA to be verifying authority for inter-state captive power usage
New Delhi: The power ministry has amended the electricity rules designating Central Electricity Authority (CEA) as the verifying authority for such captive power generation plans, the users of which are located in more than one state. This was the third amendment to the rules in the past few months, whereby government is trying to streamline captive power generation.
"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," said a power ministry notification. In July, the ministry amended the norms saying that a captive power user, must hold a minimum of 26% stake in the captive generating plant.
The Electricity (Third Amendment) Rules, 2023, the ministry has said that "captive user" would be substituted by the phase "captive users", thereby clarifying that a minimum of 26% needs to be to be collectively held by captive users. Ramanuj Kumar, Partner, Cyril Amarchand Mangaldas said: "It settles all doubts regarding status of captive generating plants and shareholding norms that had arisen as a result of the previous amendment, and provides a further boost to the sector by making CEA the verifying authority for captive generating plants with inter-state characteristics." The move would ensure consistency on compliance of captive norms and reduce disputes and uncertainty for captive users and investors in the sector, he said.
These amendments are part of the government's move to streamline and reform the power sector. As per the previous amendment, the period of the license of a distribution licensee
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