Group captive power: your questions answered.

A group of consumers collectively own at least a quarter of a generating plant and collectively consume at least half of what it produces. In return, the electricity they draw is treated as their own power rather than as a purchase from a supplier, and is exempt from cross-subsidy surcharge and additional surcharge.

Because the exemption depends on ownership. The law requires that at least 26% of the plant is owned by the people actually consuming its output. A consumer who takes the power without holding the shares is simply buying electricity, and the surcharges apply in the ordinary way.

Rule 3 of the Electricity Rules, 2005, as substituted by the Electricity (Amendment) Rules, 2026. Most of the substituted rule took effect on 13 March 2026. The three provisions that matter most to you — the proportionate consumption cap, the exemption for a 26% holder, and the whole verification regime — took effect on 1 April 2026. FY 2026-27 is therefore the first year in which the complete framework applies.

No. These rules do not touch the tariff you pay Celestio, and they do not touch wheeling charges, wheeling losses or banking terms — those remain with the Karnataka Electricity Regulatory Commission. What these rules decide is whether you remain exempt from cross-subsidy surcharge and additional surcharge.

On balance, better. The most significant change is that one consumer's non-compliance can no longer strip captive status from the entire plant — the consequences are now contained to that consumer. The individual minimum has gone. Against that, there is now a firm ceiling on how much of your drawal can be counted as captive.

Two conditions must both be satisfied in every financial year. Consumers must hold not less than 26% of the ownership of the plant; and not less than 51% of all electricity generated must be consumed by those consumers.

No. Both are tested collectively, across all consumers taken together. You are not required to hold 26% yourself, and you are not required to consume 51% yourself.

Equity share capital carrying voting rights, or proprietary interest together with control — held either directly or through your subsidiary, your holding company, or another subsidiary of that holding company. Preference shares, unconverted debentures and loans do not count, however large the amount.

The financial year, 1 April to 31 March. Month-to-month variation does not matter in itself; what is tested is the position across the full year. Where ownership begins or ends part way through a year, the relevant part of the year may be used.

It limits how much of your drawal counts as captive. Your cap is your share of what the consumer group actually consumed during the year, measured by your share of the group's ownership. Anything above that is treated as an ordinary purchase of electricity and attracts surcharge.

Your eligible captive consumption is your ownership percentage, divided by the total ownership held by all consumers, multiplied by the total energy actually consumed by all consumers in that year. Celestio computes this for every consumer and reports it to you.

Correct, and this surprises most people. Your cap moves with what everybody else consumes, and it is only finally known after the financial year closes. One helpful consequence: the more the group consumes in total, the higher everyone’s cap becomes.

Only the excess is affected. That portion is treated as supply by a generating company and attracts cross-subsidy surcharge and additional surcharge. The rest of your consumption is unaffected, the plant's captive status is unaffected, no other consumer is penalised, and the excess still counts toward the group's 51%.

Nothing happens to you. The old rule that penalised under-consumption has been removed and there is no individual minimum. Please read the next answer, however.

It can. Because every cap is a share of the group total, if one consumer draws less then the group total falls, and everyone else’s share of that smaller total rises — which can push others above their caps even though their own drawal has not changed. This is why we schedule energy strictly in proportion, and why we ask you to tell us in advance about shutdowns, maintenance and any material change in your load.

Yes. A consumer holding not less than 26% of the plant is exempt from the proportionality rule entirely, and its full consumption qualifies as captive however high it runs. This turns on ownership alone, not on consumption.

A consumer, its subsidiaries, its holding company and that holding company's other subsidiaries are treated as a single consumer, for both ownership and consumption. The cap is applied at group level, and how the group divides its entitlement internally is the group's own decision.

One important qualification: shared promoters, common directors or a common trading name are not sufficient. The relationship must be a holding or subsidiary relationship as defined in the Companies Act, 2013.

Each entity reports its own consumption to its own distribution licensee, together with the group's consolidated captive entitlement and a declaration that its consumption forms part of the group's pool. The proportionality test is still applied only at group level, not entity by entity.

Charges levied by a distribution licensee on consumers who take power from a source other than the licensee. Qualifying as a captive consumer exempts you from both, and that exemption is the principal saving in this arrangement. If captive status is lost, they become payable.

For Celestio, the plant and all consumers are located within Karnataka, so verification is carried out by the nodal agency designated by the State Government, following the procedure that agency issues. Where a plant and its consumers span more than one State, the National Load Despatch Centre verifies instead. An appeal lies to a Grievance Redressal Committee constituted by the appropriate government.

No, provided a declaration is filed in the form the nodal agency prescribes. Celestio coordinates that filing. If the plant subsequently fails verification for that year, however, the surcharges become payable together with carrying cost calculated at the base rate of Late Payment Surcharge under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022.

This is the serious case. The entire electricity generated by the plant in that year — not merely the shortfall — is treated as supply by a generating company, and surcharges apply to all of it. This is why the collective consumption position is monitored continuously through the year rather than only at year end.

The rule places the obligation on the captive consumer, not on the generator. In practice Celestio carries out the monitoring, scheduling and filing on the group's behalf, but the legal duty rests with you. This is why the notification and data-sharing obligations in your power purchase agreement matter.

Yes. Where the ownership pattern changes during a financial year, proportionate consumption is calculated on your weighted-average shareholding across that year, not on your holding at any single date. A change made in the second month therefore affects the whole year. Please consult us before any transfer, fresh allotment or buy-back.

Transfers are governed by the shareholders' agreement and require prior discussion with Celestio. Beyond any contractual restriction, a transfer changes the ownership pattern for everyone: if it takes the consumer group below 26%, the plant loses captive status for the entire year and every consumer is affected.

Yes. Consumption through an energy storage system that stores energy generated by the captive plant is expressly treated as captive use under the amended rule.

Four things, and none of them is onerous.

Tell us in advance about planned shutdowns, maintenance windows or any material change in your load. Consult us before changing your shareholding in any way. Share meter and consumption data promptly when we request it for the annual filing. And keep the drawing entity and the shareholding entity the same — if the electricity connection you intend to serve stands in a different name from the entity holding the shares, please tell us now rather than later.