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Furthering TAP and Protecting Public Interest- Strategies and Challenges

Furthering TAP and Protecting Public Interest- Strategies and Challenges. Prayas - EGI Skill-share workshop for Tajikistan and Kyrgyzstan Delegates November 16-18, 2010, Pune, India Prayas Energy Group www.prayaspune.org/peg , energy@prayaspune.org. Regulation: Prayas perspective ..1.

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Furthering TAP and Protecting Public Interest- Strategies and Challenges

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  1. Furthering TAP and Protecting Public Interest- Strategies and Challenges Prayas - EGI Skill-share workshop for Tajikistan and Kyrgyzstan DelegatesNovember 16-18, 2010, Pune, IndiaPrayas Energy Groupwww.prayaspune.org/peg, energy@prayaspune.org Prayas - EGI Workshop Pune, Nov. 2010

  2. Regulation: Prayas perspective ..1 We see it as: “Ways and means employed by the society to ensure that rational decisions (from society’s point of view) are made.” (Prayas Presentation at World Bank, 1997) Hence… we see RCs as the key change in the governance set up of our country. Prayas - EGI Workshop Pune, Nov. 2010

  3. Regulation: Prayas perspective ..2 • Importance of independent regulatory process • Natural monopoly and cost-plus tariff framework • Shortage scenario, poor service quality • History of vested interests misusing authority / sector for narrow gains • RC is a key governance institution that should • Balance interests of all stakeholders • Enhance accountability of utilities, government and other actors • Instill confidence through fair, rational decisions Prayas - EGI Workshop Pune, Nov. 2010

  4. Strategy • Create Spaces for TAP processes • Early, Pro-active, Consistent efforts • Supported through consensus building • Develop Capabilities • Strategic use of spaces • Maintain and strengthen spaces • Analysis based interventions • Supported through consensus building Prayas - EGI Workshop Pune, Nov. 2010

  5. Strategy used by Prayas Utilities The State Reg Com (Public/Private) (Government) Wider Public Threat of / Political Analytical Insistence on Due Process Analytical Support and Offensive and Judicial Legitimacy Review Efforts in All Areas Prayas - EGI Workshop Pune, Nov. 2010

  6. Strategy & Challenges -1 • Analytical Offensive • Identify the Crucial issues (gross inefficiencies) • High attention to issues with high potential to influence • Analyse with no vested interests – present or perceived • Mix of Adversarial and Facilitative interventions • Criticise and Suggest way forward • Proactive, advanced interventions • Framing the processes (eg. Rules & Regulations) • Focus on long term, balanced development of the sector which will benefit all consumer categories and environment. Special focus on small consumers • Facilitate innovation Prayas - EGI Workshop Pune, Nov. 2010

  7. Analysis Outputs • Joint innovation • Electricity Governance Initiative, Electricity Supply Monitoring Initiative • Reports • Survey of Electricity Regulatory Commissions, Study of Distribution Quality of Service, Study of Bhivandi Distribution Franchisees • Policy & Regulatory Interventions • Books & booklets • Media articles Prayas - EGI Workshop Pune, Nov. 2010

  8. Strategy & Challenges -2 • Insistence on due process • Stringent monitoring • Utility performance • Compliance with Act, rules and regulations • Avoid …… • Verbal arguments, emotive approach • Alleging ill-intent Prayas - EGI Workshop Pune, Nov. 2010

  9. Strategy & Challenges -3 • Threat of Judicial/Analytical review • Be patient, consistent and persistent • Be realistic about expectations and constraints • Legal, Techno-economic, Administrative/ Managerial Prayas - EGI Workshop Pune, Nov. 2010

  10. Strategy & Challenges -4 • Wide support & Legitimacy • Consensus building • Work with all actors – Government, Utility, Regulator, Consumer organisations (farmers, industry organisations etc) Unions, & Media • De-mystify the sector • To give a perspective, not expertise • To be able to ask key questions • Convert to quantifiable identifiable impacts (eg. Talk about tariff impact, not just jargon based models) • Simplify, do not be simplistic • Repeat, repeat, repeat Prayas - EGI Workshop Pune, Nov. 2010

  11. Lessons & Precautions …1 • Strong intervention by NGOs / consumer bodies can lead to significant benefits We need to …… • Engage and intervene early in the process • RC’s are more willing and open as they are also learning • Need to set right precedents • More responsive in the initial stage • Be realistic about expectations and constraints • Legal, Techno-economic, Administrative/ Managerial • Long term, comprehensive perspective and actions Prayas - EGI Workshop Pune, Nov. 2010

  12. Lessons & Precautions …2 • Put burden of proof on RCs / utilities • Ask key questions • Demand tariff / financial impacts of key decisions (AP – LOLP) • Ensure due process is followed • Public hearing • Transparency • Seek wider support • Other groups (unions, farmers & industry organizations etc.) & Media. • We need to avoid …… • Verbal arguments, emotive approach • Alleging ill-intent Prayas - EGI Workshop Pune, Nov. 2010

  13. The balance sheet + Significant improvement in T, A, P Exposing gross inefficiencies and initiating remedial actions - Private utilities still remain unaccountable Power purchase and capital expenditure accountability – continuous challenge Not enough push for DSM / RE Access (electrification) remains neglected issue Prayas - EGI Workshop Pune, Nov. 2010

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