CONSUMER PARTICIPATION IN REGULATORY REFORMS IN ELECTRICITY SECTOR: EXPERIENCE OF CUTS INTERNATIONAL UDAI S. MEHTA, CUTS INTERNATIONAL

Consumer Protection and Regulators Consumer protection is a primary mandate of all economic regulators universally To fulfil this mandate, regulators must ensure effective consumer participation in the regulatory process Depending on how effectively regulators fulfil their mandate vis-à-vis consumers, the regulatory process benefits from a higher degree of consumer involvement 2

Ladder of consumer participation in regulatory process Three steps can be identified in consumer engagement Information - Consultation – Partnership Information is the first step toward legitimate consumer involvement in the regulatory process. At this step, emphasis is placed on one-way flows of communication (from regulators to consumers) with no channel provided for feedback. Hence, when consumer participation is limited to information, consumers have little opportunity to influence the outcome of the decision-making process 3

Contd…… CONSULTATION Regulators rely on consultation with consumers as a source of non-binding advice to inform the regulatory process Consultations can either be conducted on an ad hoc basis or throughout the regulatory process In absence of formal mechanism, consultation may not be sufficient to ensure effective consumer participation, as it offers no assurance that consumer input will be taken into account in the decision-making process 4

Contd…… PARTNERSHIP “redistribution” of decision making power as consumers are granted the right to negotiate with the regulator. Effective partnership with consumers hinges on the appointment of consumer spokespersons representing the consumer constituency –Appointment of Consumer Advocates –Including consumer representatives on the Board of the regulatory institution 5

6 CUTS Interventions in South Asia CUTS–FES (Friedrich-Ebert-Stiftung) Project on Involvement of Consumers in Power Sector Reforms in Rajasthan, India ( ) A Pilot Project on Capacity Building on Electricity Sector in Bangladesh, Nepal and India ( ) (RESA Project)

Initiative Objectives 7 Advocacy at policy level Establishing a network down to grassroots level Creating an effective communication system For enhancing the consumer voice

CUTS FES PROJECT 8

Objectives Sensitise service providers, regulators and the consumers Mobilise community participation in the reform process Enhance capacities of CSOs and consumers 9

Strategy/Activities Awareness and Capacity Building Network Formation Consumers’ feedback and information gathering Raising policy issues at appropriate forums –At national level Central government Other consumers’ organizations –At the state level Rajasthan Electricity Regulatory Commission State Government Distribution Companies 10

Outcomes Institutional Spaces – Provided under regulatory framework Advisory Committee Grievance Redressal Mechanism –Created under the programme Chaupal baithaks (village meeting) Jan Sunwaiis (public meetings) Network –District level partners –Vidyut Sudhar Samitis (electricity reform councils) 11

Regulatory Reforms in Electricity Sector in South Asia (RESA Project) 12

13 RESA Project Activities: Project launch meeting & training programme, consumer base line survey, Reference group meetings, Territorial trainings, Grassroots interface meetings, advocacy seminar (India, Bangladesh and Nepal) Project Outputs: Territorial base paper, Territorial training manual, Vernacular handouts, E- newsletters, Poster, Policy briefs and Articles Highlights: GIM: 111 GIMs, Consumers reached (Rajasthan & West Bengal) and produced a video documentary – ‘Powered to Grow’ Effective participation of consumers, people’s representative, media and utility officials in project activities. RESA Initiative – ‘Bottom Up Approach’

Project Model 14

15 Impact & Outcome RESA Project

On Consumers Grassroots Interface Meetings (GIMs) were a phenomenal success. GIMs (111) reached out and sensitised close to 5100 consumers across project territories Recorded & registered their problems, their needs and challenges and subsequently came up with possible solutions. 16

On Civil Society and Utility Civil Society Organisations Strong network of capacitated grassroots civil society organisations Extended and strengthened the network from Local to Regional Level. Created 80 grassroots trainers equipped to undertake advocacy on Electricity Helped to initiate constructive dialogue on partnering consumer groups towards better consumer services, transparency and awareness building Utilities GIMs provided an effective platform for two-way communication between the utilities and consumers----- –helped authorities understand the ground realities and problems faced by consumers –helped consumers to understand various limitations/problems of the utilities 17

On Regulators, Policy Makers and Media Helped regulators, policymakers & decision makers get in touch with grassroots realities & issues. Developed a network amongst policy community, regulators, civil society representatives and media to tackle the challenges jointly. Media involved in all key activities resulting in media enthusiasm about power sector reforms and its importance. 18

19 WAY FORWARD TO STRENGTHEN CONSUMER PARTICIPATION

20 Milestones….. Consumers of electricity should also have the option of choosing their service providers from many –Need to promote: Competition; Open access; Private investment in this sector Enhanced and Effective Consumer participation in Regulatory processes –Regular Capacity building and Awareness programmes of CSOs and Consumers to be undertaken proactively by Electricity Regulatory Commissions. –ERCs to develop effective and innovative communication channels for communication with Consumers and Community –Improve on the existing formats of Public Consultations

21 Extension of GRM upto Local Supply Offices to bring it within reach of Grassroots Consumers –Necessary to : Do away with corruption in the system by removing the. scope for middlemen –Can be achieved through: Change in policy and regulations; Improved and transparent service delivery mechanisms at all levels of utilities. Undertake more Research Renewable Energy solutions; Improve Energy efficiency; Good Regulatory Practices from across the world; How to improve service delivery mechanism and How to harness Consumer power in improving the performance of this sector. Milestones……

Recognition of CUTS 22 The World Bank’s Water and Sanitation Programme-South Asia [WSP-SA] identified and documented the ‘CUTS-FES Model’ as one of the Best Practice to bring consumer voice into power sector reforms FES_Case_Study.pdf CUTS received the India Powers Award 2008 of the Council of Power Utilities under social community impact category for networking and outreach activities towards empowerment of consumers

USEFUL PUBLICATIONS Consumer Empowerment in Electricity Reforms in South Asia ccier.org/RESA/pdf/Consumer_Empowerment_in_Electricity_Reforms.pdf Powered to Grow: Video Documentary CUTS FES Report FES_Report_on_Power_Sector_Reforms.pdf Water and Sanitation Programme: World Bank Report 23

Asante sana