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2 TTiE GAZETTE OF INDIA: DflRAoRD 1NARY lPanr II
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4 THE GA.reTTE OF INDIA : DIRAORDINARY IPARr [-SEC. 3(i)l

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6 THE GAZETTE OF INDIA : D(TRAORDINARY [Perr I[-Ssc. 3 (Dl

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er$q {i6{, .:rc{ qF{s

MINISTRY OF POWER
NOTIFICATION
New Delhi, the 8th June, 2005
G.S.R.379(E).-In exercise of powers conferred by section 176 of the
Electricity Act, 2003 (Act 36 of 2003), the Central Government hereby
makes the following rules, namely:-

1 Short title and commencement.-

(1) These rules shall be called the Electricity Rules, 2005.
(2) These Rules shall come into force on the date of their
publication in the Official GazeLte.

2. Definitions.-

In these rules, unless the context otherwise, requires:

(a) "Act" means the Electricity Act, 2003;

(b) the words a:rd expressions used and not defined herein but
ieir:te,: ;: :.:,,: ts.t:\ llili! l-;a,'t, th,;l rnearlirrq aESIqneC tO their,
.": ri.r n I
I qrq II-s!-63[) qK(fimtrH: q€ItmlT 7

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-
(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 co-operative 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,
in prdportion to their
determined on an annual basis,
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
uhit or units of such generating statioh 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 -
Explanation :-
(1) The electricity required to be consumed by captive
users shali be determined with reference
to such
I THE GAATTEOF INDIA: EXTRAORDINARY [Penr II-Sec. 3 (i)t

generating unit or units in aggregate identified for

captive use and not with reference to generating
station as a whole; and

(2) the equity shares to be held by the captive user(s) in

the generating station shall not be less than twenty six per
cent of the proportionate of the equity of the company
related to the generating unit or units identified as the
captive generating plant.

Illustration: In a generating station with two units of 50

MW each namely Units A and B, one unit of 50 MW namely
Unit A may be identified as the Captive Generating Plant.
The captive users shall hold not less than thifteen percent
of the equity shares in the company (being the twenty six
percent proportionate to Unit A of 50 MW) and not less
than fiftv one percent of the electricitv generated in Unit A
deterrnineC on an annua! basis is to tre consumed by the
captive users.
t

(2) It shall be the obligation of the captive users to ensure that

the consumption by the Captive Users at the percentages
mentioned in sub-clauses (a) and (b) of sub-rule (1) above is
maintained and in case the minimum percentage of captive use
is not complied with in any year, the entire electricity generated
shall be treated as if it is a supply of electricity by a generating
company.
Explanation.- (1) For the purpose of this rule.-
(a) "Annual Basis" shall be determined based on a

financial Year;
t i{rII Il-lsus 3(D l qlrtr i6I 1rifqt{ : 3I{IlqI{l:T 9

(b) "Captive User" shall mean the end user of the

electricity generated in a Captive Generating plant
and the term i'Captive Use" shall be construed
accordingly;
(c)"Ownership" in relation to a generating station
or power plant set up by a company or any other
body corporate shall mean the equity share capital
with voting rights. In other cases ownership shall
mean proprietary interest and control over the
generating station or power plant;
(d) "Special Purpose Vehicle" shall mean a legal
entity owning, operating and maintaining a
generating station and with no other business or
activity to be engaged in by the legal entity.

4. Distribution System.- The distribution system of a distribution

licensee in terms of sub-section (19) of section 2 of the Act shall also
include electric line, sub-station and electrical plant that are primarily
maintained for the purpose of distributing electricity in the area of
supply of such distribution licensee notwithstanding that such line,
sub-station or electrical plant are high pressure cables or overhead
lines or associated with such high pressure cables or overhead lines; or
used incidentally for the purposes of transmitting electricity for others.

5. Compliance with the directions by Transmission Licensee.-

(1) The National Load Despatch Centre, Regional Load Despatch

Centre, as the case may be, or the State Load Despatch Centre, may,
under section 26, sub-section (3) of section 28, sub-section (1) of
section 29, sub-section (2) of section 32 and sub-section (1) of section
33 read with clause (b) of section 40 of the Act, give such directions,
nqt(iJct'
t0 THE GAATTE OF INDIA EXTRAORDINARY
[Panl II-Sac. 3 (i)l

as it
may consider appropriate for maintaining the availability of the
transmission system of a Transmission Licensee and the Transmission
Licensee shall duly comply with all such directions.

(2) The Appropriate Commission, on an application filed by the

National Load Despatch Centre, the Regional Load Despatch Centre or
the State Load Despatch Centre and after hearing the Transmission
Licensee, if satisfled that the Transmission Licensee has persistently
failed to maintain the availability of the transmission system, may
issue such directions to the National Load Despatch Centre, the
Regional Load Despatch Cdntre or the State.Load Despatch Centre to
take control of the operations of the transmission system of such
Transmission Licensee for such period and on such terms, as the
Commission may decide.

(3) The direction under sublrules (1) and (2) above shall be without
prejudice to any other action which may be taken against the
Transmission Licensee under other provisions of the Act.

6. The surcharge . under section 38 : The surcharge on

transmission charges under section 38, the manner of progressive
reduction of such surcharge and the manner of payment and utilization
of such surcharge to be specified by the Central Commission under
sub-clause (ii) of clause (d) of sub-section (2) of section 38 shall be in
accordance with surcharge on the charges for wheeling, the manner of
progressive reduction of such surcharge and the manner of payment
and utilization of such surcharge as may be specified by the
Appropriate Commission of the State in which the consumer is located
under sub-section (2) of section 42 of the Act.
I qrr [-qE3 (i)l qRil 6I iTtFI;l : niETtntor

7 Consumer Redressa! Forum and Ombudsman.- (1) The

distribution licensee shall establish a forum for redressal of
grievances of consumers under sub-section (5) of section 42
which shall consist of officers of the licensee.

(2) The Ombudsman to be appointed or designated by the State

Commission under sub-section (6) of section 42 of the Act shall
be such person as the State Commission may decide from time
to time.

(3) The Ombudsman shall consider the representations of the

consumers consistent with the provisions of the Act, the Rules
and Regulations made hereunder or general orders or directions
given by the Appropriate Government or the Appropriate
Commisslon in this regard before settling their grievances.

(+) (a) The Ombudsman shall prepare a report on a six monthly

basis giving details of the nature of the grievances of the
consumer dealt by the ombudsman, the response of the
Licensees in the redressal of the grievances and the opinion of
the ombudsman on the Licensee! compliance of the standards of
performance as specified by the Commission under section 57 of
the Act during the preceding six months.

(b) The report under sub-clause (a) above shall be fonararded

to the State Commission and the State Government within 45
days after the end of the relevant period of six months.

8. Tariffs of generating companies under section 79.- The

tariff determined by the Central Commission for generating
companies under clause (a) or (b) of sub-section (1) of section
,-7 E6C i"f"n--*Q
t2 THE GA.ETTE OF INDIA : D$RAORDINARY II-Src. 3 (r)l
[Paxr

79 of the Act shall not be subject to re-determination by the

State Commission in exercise of functions under clauses (a) or
(b) of sub-section (1) of section 86 of the Act and subject to the
above the State Commission may determine whether a
Distribution Licensee in the State should enter into power
Purchase Agreement or procurement process with such
generating companies based on the tariff determined by the
Central Commission,
t

9 Inter-State trading Licence.- A licence issued by the Central

Commission under section 14 rcad with clause (e) of sub-section
(1) of section 79 of the Act to an electricity trader for Inter-State
Operations shall also entitle such electricity trader to undertake
purchase of electricity from a seller in a State and resell such
electricity to a buyer in,the same State, without the need to take
a separate licence for intra-state trading from the State
Commission of such State.

10. Appeal to the Appellate Tribunal.- In terms of sub-section

(2) of section 111 of the Act, the appeal against the orders
passed by the adjudicating olficer or the appropriate commission
t
after the coming into force of the Act may be filed within forty-
five days from the date, as notified by the Central Government,
on which the Appellate Tribunal comes into operation.

11. Jurisdiction of the courts.- The Jurisdiction of courts other

than the special courts shall not be barred under sub-section (1)
of section 154 till such time the special court is constituted under
sub-section (1) of section 153 of the Act.

t2. Cognizance of the offence- (i) The police shall take

cognizance of the offence punishable under the Act ona
tqrlh-sB3 l qRil ifi Ifqq? : ltr{llqf{ll l3

complaint in writing made to the police by the Appropriate

Government or the Appropriate Commission or any of their
officer authorized by them in this regard or a Chief Electrical
Inspector or an Electrical Inspector or an authorized officer of
Licensee or a Generating Company, as the case may be,

(2) The police shall investigate the complaint in accordance

with the general law applicable to the investigation of any
complaint. For the purposes of investigation of the complaint the
police shall have all the powers as available under the Code of
Criminal Procedure, 1973.

(3) The police shall, after investigation, forward the report

along with the complaint filed under sub-clause (1) to the Court
for trial under the Act.

(4) Notwithstanding anything contained in sub-clauses (1), (2)

and (3) above, the complaint for taking cognizance of an offence
punishable under the Act may also be filed by the Appropriate
Government or the Appropriate Commission or any of their
officer authorized by them or a Chief Electrical Inspector or an
Electricql Inspector or an authorized officer of Licensee or a
Generating Company, as the case may be directly in the

appropriate Court,

(5) Notwithstanding anything contained in the Code of Criminal

Procedure 1973, every special court may take cognizance of an
offence referred to in sections 135 to 139 of the Act without the
accused being committed to it for trial'
l4 T.I IE GA.MTTE OF INDIA : EXTRAORDINARY [Pet rIl-Src.3(i)l

(6) The cognizance of the offence under the Act shall not in
any way prejudice the actions under the provisions of the Indian
Penal Code.

13. Issue of Orders and Practice Directions,-

The Central Government may from time to time issue Orders and
practice directions in regard to the implementation of these rules
and matters incidental or ancillary thereto as the Central
Government may consider appropriate.

lF.No.23tUl2O04-R& Rl
AJAY SHANKAR, Addl. SecY

Pirred hy lir. tlanag.r. (i 11 .l Indii ttess, Rrrrg Road. \tay3purr, N€w D'lhr-l10064
rnd Publisl'cd b} $e Cootroller of Publicalions' l)elhi-l10054