Transcript Electricity Regulatory Commissions in India: Resources

Electricity Regulatory Commissions in India:
Resources, Transparency and Public Participation
Shantanu Dixit
Prayas, Pune, India
Workshop on Electricity
Governance in Asia
Bangkok, December 2003
[email protected]
Key Attributes of Effective pTAP
Transparency
Participation
Complete,
Mandatory
Public oriented, User
friendly,
Supported by
operating systems
Meaningful
Systemic,
Mandatory space
CSI capabilities
Effective TAP
Accountability
Direct
Autonomy and Authority
Multiple checks and
balances
TAPing the Electricity Governance:
Key institutions, processes and decisions
Institutions
Governments, Multi / Bilaterals,
Regulatory Commissions, Utilitites,
Associations & Unions
Electricity
Governance
Processess
Policy formulation, Legislation,
Rules / Regulations / Guidlines
Planning
Execution and Regulatory oversight
Decisions
Setting the objectives
Demand forecast & capacity addition
Power purchase / proejct development
Tariff revision
Reforms and restructuring decision
Importance of Regulatory Commissions
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Typically RC’s decide /approve
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Tariff
Capacity addition plans and power purchase agreements
Performance benchmarks for utilities (generation efficiency, T&D
losses etc.)
DSM / RE
RC’s role is important even in a ‘competitive’ sector
structure
Competitive bidding process
– Prevent market dominance
– Public benefits – access, environmental concerns
(In many countries, for several years, practically small consumers
would be under regulated monopoly structure)
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MERC and Enron’s Dabhol Project…1
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MERC established after Dabhol PPA
MSEB’s first tariff revision case
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MSEB forced to give critical data such as hour by
hour demand and generation from different plants
Based on this data PEG demonstrated that Dabhol’s
costly plant was generating electricity even when
not required / economical
MERC adopted ‘Merit order dispatch’ principle and
directed MSEB to use Dabhol – only when needed
MERC and Enron’s Dabhol Project…2
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Prayas – IPP Documents Case before MERC
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Enron strongly resisted making contracts public
Finally, over 10,000 pages of IPP’s confidential contracts were
made public. These include
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Financing contracts, construction contracts, O & M agreements,
and fuel supply & transportation agreements
MERC’s ‘Merit order’ directive exposed high cost of
Dabhol power (high of ~15 cents/kWH)
Strong political and public reaction leading to Godbole
Committee and subsequent stoppage of the project
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History of ERC’s in India
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1996 – Orissa State- Under WB Model
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1998 – Central Regulatory Commissions Act
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Public hearings on PPAs made mandatory
Consumer representatives
ERC’s to function in a transparent manner
Currently, ERCs in over 20 states as well as at
the central / federal level
ERCs: Important Governance Issues
(in addition to TAP)
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Mandate / Policy directions
Autonomy
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Selection procedures and fixed tenure
Financial and manpower
Authority
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Legal (investigation and enforcement)
Substantive (tariff, PPAs etc.)
A Good Beginning but Challenges
Galore: PEG study of ERCs in India
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Study looked at
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Resources
Transparency
Public participation
Government response / interference
Study process
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Covered 13 ERC including Central commission
Questionnaire based survey,Additional information from
regulations, annual reports and orders
Panel of Eminent Persons and their independent report
Comments by regulatory commissions
Nearly one year’s process
Issues covered in the study
1.
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7.
8.
Commission composition and tenures
Commission staff and resources
Consultants to the commission
Petitions, orders and appeals
Commission Advisory Committee
Transparency
Public Participation
Role of governments and interactions amongst ERCs,
governments and utilities
No Parameter / RC
1 No. of full financial years of operation (upto March
02)
2 No. of annual reports published
3 No. of permanent staff in technical, economic/
finance, legal category
4 No. of CAC meetings held is as per required by
law/regulations
5 No. of agricultural representatives in CAC
6 No. of research body/academic representatives on
the CAC
7 All orders are on the website
8 There is library/reading room with index (of petitions
etc.)
9 RCs Inform public of technical validation sessions,
non-public hearing proceedings
10 RCs produced any brochures/information packs for
consumer awareness
11 RCs have done any expenditure on consumer
education etc.
12 Presence of institutional mechanism such as
Consumer Advocate/Representatives
13 RCs have ordered for publication of old PPAs and
other key data
14 Documents published in local language
Regulations / Codes
Annual reports
KER WBE RE APE UPE HPE
C
RC RC RC RC RC
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3
2
3
3
1
3
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0
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0
1
1
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2
0
0
8
3
0
0
3
1
0
1
0
1
3
NA
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2
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Key findings of the study
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Autonomy and resources
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Commissions mainly consists of retired government
bureaucrats, judges and utility officers
Nearly 70% members retire before full term
Highly dependent on government for financial as
well as manpower resources
Appointments are not timely
Severe shortage of capable manpower
Key findings of the study
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……2
Petitions, Review and Appeals
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Largely Utility, Industry / business affaire, with
limited ‘public interest’ / class benefit cases
~ 90 % orders on petitions by utility or industry /
commercial consumers
Key findings of the study
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……3
Transparency
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Legal provisions but no effective ‘operationalising’
system
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No well classified index / library / reading room, Procedure and
responsibility for making documents available not fixed, All orders
may not be on the web-site
Little pro-proactive efforts
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Key documents (PPAs etc.) not easily disclosed, no email
group or ‘service list’ concept implemented
Key findings of the study
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……4
Public participation
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Largely limited to public hearings in important cases
Except in case of 2/3 commissions no ‘institutional’
mechanism for enhancing participation (e.g.
consumer representatives / advocates)
Similarly, local language documents are very limited
Except one commission, none has taken efforts for
capability building of civil society
Key findings of the study
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Even ERC’s may not follow simple statutory
requirements
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……5
Annual reports are not published
Less meetings of advisory committee than required
by regulations
Signs of possible regulatory softening, and
subversion already visible
In the nutshell
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ERCs – A key electricity sector governance
institution
‘Good governance’ principles accepted in
theory (to a certain extent in legal structure
also) but significant efforts needed for
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Operationalising TAP
Capability building of civil society
Strong, active intervention by civil society