Chandigarh, March 17
The All India Power Engineers Federation (AIPEF) has raised alarm over the recently notified Electricity (Amendment) Rules 2026 relating to captive power, warning that they could severely undermine the financial stability of state power distribution companies (Discoms).
AIPEF Chairman Shailender Dubey stated that the amendments allow corporate groups to act as single captive users, enabling large industrial houses to source electricity directly from captive plants rather than Discoms. This, he cautioned, would trigger a large-scale migration of high-paying industrial consumers, depriving Discoms of crucial revenue streams.
Pending verification of captive status, the rules stipulate that cross-subsidy surcharge and additional surcharge will not be levied, a move AIPEF believes will result in significant losses for already financially stressed Discoms.
AIPEF Media Advisor V.K. Gupta explained that the government amended Rule 3 of the Electricity Rules, 2005 on March 14, with effect from April 1, 2026, to strengthen provisions for captive generating plants.
Dubey emphasized that the fallout could be severe massive loss of industrial consumers who traditionally subsidize other categories, increased burden of cross-subsidy on remaining consumers and risk of higher tariffs for common households and small businesses. He argued that the rules, in their current form, appear to favor large corporate consumers at the expense of ordinary electricity users and the financial health of Discoms.
The AIPEF has urged the central government to undertake a comprehensive review of the amendments and introduce modifications that safeguard Discom revenues while ensuring affordable and reliable electricity supply for all categories of consumers.
