1. The Relevance of Governance to Electricity Reform PRAYAS- PUNE ENERGYGROUP NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY Navroz Dubash, NIPFP Smita Nakhooda, WRI World Bank Energy Week 8 March 2006

2. Outline I.Linking Governance and Electricity II.An Introduction to the Electricity Governance Initiative (EGI) III.Preliminary Insights IV.Conclusions

3. Reform: A Rocky Road Popular protest - India, Philippines, Latinobarometro Polls Governments slowing and halting reform –South Africa, Korea, Indonesia

4. Political Objectives of Economic Reform Privatization: Private sector more likely to resist government interference Corporatization: Shed political and bureaucratic control Public Ownership: Ensure commitment to commercial goals  These measures only partially successful

5. A Governance Diagnosis Financial considerations dominate reform Shrinking space for public debate Inadequate scrutiny of prescriptions Equity and environment neglected Lack of democratic legitimacy

6. Objectives of the Electricity Governance Initiative Create space for democratic accountability –legislative, executive, regulatory processes Develop a common understanding of electricity governance Establish benchmarks of best practice Build Capacity to practice good governance –Government –Civil society

7. What do We Mean by Governance How we make decisions shapes what decisions get made Consider institutions and processes beyond the electricity sector Democratic Decision-Making –More than corporate governance or incentives –Higher transactions costs, but greater legitimacy

8. The EGI Toolkit A framework of research questions to generate qualitative indicators of governance Legislative, executive, regulatory levels Emphasize environmental and social concerns Transparency, participation, accountability and capacity (law and practice)

10. Insights from the Assessments INDIA Center for Policy Research INDONESIA Indonesian Institute for Energy Economics THAILAND Health Systems Research Institute PHILIPPINES Green Independent Power Producers

11. Open and Inclusive Policy Processes

12. Participation in Electricity Policy Making IndiaIndoThaiPhil Legislative Electricity Committee Clarity on process for decision-making Quality of participation and government responsiveness Inclusion of environmental considerations in reform

13. Attributes Assessed IndiaIndoThaiPhil Clarity of Process Clarity about the decision-maker Pre-laid out time-frame Clear format for decisions Timeframe for public input Use of public input specified Anticipation of feedback Specification of recourse mechanism Documentation of the process Ease of Access Breadth of Info. Information circulated with reasonable lead time Information online and at least one more form Efforts to reach disadvantaged communities Decision-Making Process

14. Attributes Assessed IndiaThaiPhil Quality of Participation Minimum number of stakeholder submissions xx Comments from a broad range of stakeholders xx Government Response Decisions and accompanying documents note participation process x Summary of results of participation Explanation of how public input was incorporated Participation and Government Response

15. The Regulatory Process

16. India (TN) IndoThaiPhil Selection of regulatory body members n/a Disclosure of Documents Procedure for Public Access Reasoned orders and decisions of the regulatory body Regulatory response to environmental and social petitions n/a Effective Regulatory Process

17. Selection of Regulatory Members Attributes AssessedIndiaThaiPhil Independence Well-defined procedure Xx Transparency Composition and eligibility criteria xx Differing tenures xx

18. Public Access to Documents Attributes Assessed IndiaIndoThaiPhil Well-indexed database of documentsx Simple procedure to obtainxx Reasonable costxxx Wide dissemination of information

19. Conclusions How decisions get made influences what decisions are made Electricity governance is tied to larger political processes and institutions Public engagement needs to be an explicit part of institutional design

20. The Electricity Governance Initiative http://electricitygovernance.wri.org Contact: Smita Nakhooda snakhooda@wri.org Navroz Dubash ndubash@nipfp.org.in