Electricity Governance Toolkit Draft Indicatorspdf.wri.org/egi_toolkit_1-1.pdf · Case Study...

National Institute of Public Finance and Policy

World Resources Institute

THE ELECTRICITY GOVERNANCE TOOL

Benchmarking Best Practice and Promoting Accounthe Electricity Sector

Pilot Version 1.1 � January 2006

Contacts:

Smita Nakhooda Navroz K. Dubash ShantCoordinator Senior Fellow MembInstitutions and Governance Governance and Public Policy PrayaProgram National Institute of Public AmritWorld Resources Institute Finance and Policy Athaw10 G Street NE (Suite 800) 18/2 Satsang Vihar Marg DeccaWashington, DC 20002 New Delhi 110 067 Pune 4USA India India Tel: +1-202-729-7756 Tel: +91-11-2656-9303, Ext.142 Tel: [email protected] [email protected] shanta

Prayas-Pune: Initiatives in Health, Energy, Learning and

Parenthood

KIT

tability in

anu Dixit er�Energy Group

s- Pune a Clinic ale Corner n Gymkhana 11-004

91(20) 25420720 [email protected]

mailto:[email protected]



NOTE ON VERSION 1.1 OF THE ELECTRICITY GOVERNANCE TOOLKIT

This pilot indicator toolkit methodology attached has been developed after an extensive external review process during 2004, and pilot tested in Thailand; India; Indonesia and the Philippines in 2005.

This version of the methodology has undergone one round of presentation and language edits for clarity since its pilot release in February 2005. WRI, NIPFP and Prayas will complete one more round of revisions to this toolkit, before releasing a final version of the indicator toolkit in late 2006. The final version of the methodology will incorporate comments and feedback received at the Electricity Governance Forum in March 2006, and through a second international review of this version of the toolkit.

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Note to Reviewers of the Electricity Governance Initiative Methodology

Thank you for making time to review the indicator framework of the Electricity Governance Initiative. The pilot indicator toolkit methodology attached has been developed after an extensive external review process during 2004, and pilot testing in Thailand, India, Indonesia, and the Philippines in 2005. This version (1.1) of the methodology has undergone one round of presentation and language edits for clarity following the pilot testing, but has not, as yet, been substantively revised to incorporate the results of the pilot test. Our intention in circulating this version for review is to receive global feedback to complement the lessons learnt from the Asia pilots prior to undertaking a substantive revision. In your review, it would be extremely helpful if you could provide feedback on the following points:

- Is the content of the indicators appropriate to the country/regional context with which you are most familiar, or are important elements of the decision-making process left out? Please suggest either new topics for indicators or changes to existing indicators.

- How clear are the indicators and their purpose, and do you have any suggestions to make it easier to use?

To assist the review process, we wish to share some of the feedback we have already received from the Asia pilot assessments that we are already planning to incorporate into our next round of revisions. We welcome comments on the proposed revisions presented below. Of course, we also look forward to additional substantive feedback on the content and the scope of the toolkit as discussed above. We would appreciate it if you could provide your comments by 20 March 2006. We intend to have a final version of the electricity governance toolkit available for in late July 2006. Proposed Revisions: Refining the Indicator Framework: The indicators are currently organized around three �pillars� � policy, regulation, and environmental and social aspects (ESA) of electricity. We propose to reorganize the indicators in the ESA �pillar� of the indicator framework to merge them with policy and regulatory processes and issues as appropriate. The organizing structure presented in Figure 1 (right) would make for a clearer framework. This revision would also make research easier for the assessment teams, as all indicators that address the same issue area or process would be presented together rather than in two different sections of the toolkit.

Figure 1

Policy Regulatory ESA ESA

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Separating Environmental from Social: Experiences with reform often suggest that social concerns carry more political weight in the electricity sector than local or international environmental agendas do, and linking these priorities of public benefit can offer strategic advantages. For this reason, environmental and social considerations are linked in many of the indicators. In practice, however, these considerations are dealt with very differently and it is difficult to capture both aspects within one indicator. We therefore propose to separate indicators social aspects from environmental aspects of capacity and institutional mandate (e.g. a separate indicator ESA 5(a) addressing the regulator�s capacity to evaluate social issues distinct from an indicator ESA 5(b) addressing regulatory capacity to address environmental issues). Unbundling the Elements of Quality and Principles of Good Governance: Many of the indicators address have too many �elements of quality� that address too many aspects of a process or issue; this can render the indicators a bit opaque and takes away from their diagnostic value. It might be better to have a greater number of more discrete indicators, each of which has a clear diagnostic function. On a related note, each indicator in this version of the toolkit has been tagged with a dominant principle of good governance (Access to Information, Access to Participation, Access to Justice, Capacity). For the final version of the toolkit we propose to tag each element of quality with a principle of good governance instead of tagging at the indicator level, because individual elements of quality often address different principles. Greater Emphasis on Practice: the indicator set would benefit from a greater emphasis on the practice of good governance � to what extent are the laws, policies or administrative guidelines that exist in theory complemented by practices that ensure access to information, participation or justice. To this end we are considering complementing indicators that addresses the existence of a requirement (e.g. RP 6(a) - legal provisions to preserve the autonomy of a regulatory body) with an indicator that addresses practice (e.g. RP 6(b) that would assess the extent to which the regulatory body actually functions autonomously). In this vein, indicators need to more consistently capture whether public input once collected through participation mechanisms was in fact considered, and whether there was a clear basis on which input was either incorporated or disregarded. Similarly, when addressing transparency, indicators need to consistently address both whether there provisions to make pertinent information available exist, and the extent to which people are able to access this information. Case Study Indicators and Aggregating Results: Many of our indicators draw on case study research; clearer guidance and provisions are needed to ensure that case studies are selected and the indicators are applied on a consistent basis. In addition, some of the indicators are based on more than one piece of research and more than one case study. Clearer guidelines are needed to explain the basis on which a value is assigned to the indicator. Mechanics of the Toolkit: The worksheets need to be simpler to complete and work with, and tied more closely to the indicator summary report sheets. Clear guidelines for the explanation section of the indicator may also be helpful, reminding teams to address each element of quality, and including an indicative word count (e.g. 100 - 250 words). Part of this solution is also technology based as working with the worksheets in MS Word is not user friendly; Adobe Form software will be much easier for teams to work with. A glossary of terms used in the toolkit may also be a very helpful complement.

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About the Electricity Governance Initiative (EGI)

The Electricity Governance Initiative (EGI) is a collaborative undertaking of the World Resources Institute (WRI) in partnership with the Prayas Energy Group (PEG) in Pune and the National Institute for Public Finance and Policy, in India. This toolkit is a pilot methodology that will be used to conduct pilot assessments of governance of the electricity sector in countries including India, Thailand, Indonesia and the Philippines. The methodology will be revised based on lessons learned from this pilot phase. The toolkit metric to measure good process in the electricity sector is designed to help organizations in civil society across the world to collect substantiated information as a basis for constructive dialogue with sector officials and government representatives to improve overall governance in the electricity sector.

The World Resources Institute

The World Resources Institute (WRI) is an environmental think tank that goes beyond research to create practical ways to protect the earth and improve people�s lives. WRI meets global challenges by using knowledge to catalyze public and private action. In all of its policy research and work with institutions, WRI seeks to build bridges between ideas and action, meshing the insights of scientific research, economic and institutional analyses, and practical experience with the need for open and participatory decision-making. WRI is the coordinating body and secretariat for the EGI. Crescencia Maurer and Smita Nakhooda contributed to the development of the EGI toolkit.

The Prayas, Energy Group (PEG), Pune

Prayas is a registered charitable trust based in Pune, India. Its activities cover four substantive areas of Health, Energy, Learning and Parenthood, and Resources and Livelihoods. The Prayas Energy Group (PEG) is mainly engaged in policy analysis and advocacy in the electricity sector and capability-building of institutions in civil society. Its past work includes analysis of the power purchase agreement between Dabhol Power Company (DPC) and the Maharashtra State Electricity Board (MSEB); the development of a least-cost integrated resource plan (IRP) for the state of Maharashtra, India; an analysis of agricultural power consumption and subsidy; a study of the regulatory aspects of the Orissa (India) model of power sector reforms, and a critique of the activities of, and lending by, multilateral development banks for the energy sector in India. In recent years, PEG has focused on issues relating to power sector reforms and regulation. The research team at PEG includes Shantanu Dixit, Girish Sant, Subodh Wagle and N. Sreekumar.

The National Institute for Public Finance and Policy

The National Institute of Public Finance and Policy (NIPFP) in India is a centre for applied research in public finance and public policy. Its main aim is to contribute to policy-making in spheres relating to public economics. NIPFP also has a governance program that focuses on infrastructure, the political economy of research management, and global governance and infrastructure development. At NIPFP, work on the EGI is led by senior fellow Dr. Navroz Dubash.

The Electricity Governance Initiative (EGI) has been supported by the C. S. Mott Foundation, the Netherlands Ministry of Foreign Affairs, the Renewable Energy and Energy Efficiency Partnership and the U. K. Foreign and Commonwealth Office, the U.S. Agency for International Development, and the Wallace Global Fund.

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Acknowledgements The development of the Electricity Governance toolkit has been a collaborative undertaking. Dr. Carlos Rufin and Dr. Thomas Smith were key contributors to the development of the governance framework and initially worked to develop the indicators. Many colleagues within the contributing organizations have supported this initiative, particularly Frances Seymour, Nathalie Eddy, Karin Krchnak and Elena Petkova at WRI. The toolkit has also benefited greatly from the inputs and review of many experts who participated in the review workshop held at New Delhi and through email. These include: Amal-Lee Amin � U.K. Foreign and Commonwealth Office / Renewable Energy and Energy Efficiency Partnership; Albab Akanda � Asian Development Bank; Minerva Baylon � University of the Philippines; Ruth Bell � Resources for the Future - USA; Bhavna Bhatia � The World Bank Group; John Byrne � University of Delaware Center for Environmental and Energy Policy; Maristela B. dela Cruz-Cardenas � Freedom from Debt Coalition, Philippines; Pramod Deo � Maharashtra State Electricity Regulatory Commission; Ellen Dragotto � United States Department for International Development; Tira Foran; Dr. Madhav Godbole, former Union Home Secretary, Government of India; Anjula Gurtoo � Indian Institute of Management; Christopher Greacen � Palang Thai; Chuenchom Sangarasri Greacen � Palang Thai; Mohinder Gulati � World Bank Group; Siswanto Hadiatmo � PLN, Indonesia; Rachmat Harijanto � PLN, Indonesia; Asclepias R. S. Indriyanto � Indonesian Foundation for Energy Economics; Balawant G. Joshi � Deloitte Touche Tomahtsu; Amit Kapur - J. Sagar Associates, Advocates & Solicitors (Policy and Regulatory Projects); J. D Kulkarni � Tata Power; Priti Malhotra � REEEP Secretariat South Asia; Sudha Mahalingam � Institute for Defense Studies and Analysis; Nepomuceno A. Malaluan � Action for Economic Reforms; Sansana Malaiarisoon � Thailand Environment Institute; Somrudee Nicro �Thailand Environment Institute; S. L. Rao, former Chairman of the Central Electricity Regulatory Commission; M. Thimma Reddy � Centre for Environment Concerns; Athena Ronquillo � Greenpeace, Philippines; A. K. Sachan � Central Electricity Regulatory Commission; Leo Saldhana � Environment Support Group; Daljit Singh; Anubut Sangarasri � Palang Thai, Thailand; Samrat Sengupta � Worldwide Fund for Nature, India; N. Seshadri � United States Agency for International Development, India; Subodh Shah � Reliance Energy Limited; Ms. Sairung Thongplon; Confederation of Consumer Organisation; Mr. Fabby Tumiwa � Working Group on Power Sector Restructuring; Dewi Sri Wahyunie � PLN, Indonesia; Bambang Adi Winarso - Directorate General of Electricity and Energy Utilization; Davida Wood � United States Agency for International Development.

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CONTENTS

Applying the indicator framework

8

Schematic of Indicators

9

Indicator Summary Tables o Section A � Policy-Making Process (PP) 10 o Section B � Regulatory Process (RP) 12 o Section C � Environmental and Social Aspects (ESA)

14

Baseline Survey Indicators

19

Policy Process (PP) Indicators

26

Regulatory Process (RP) Indicators

56

Environmental and Social Aspects (ESA) Indicators

86

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APPLYING THE INDICATOR FRAMEWORK VERSION 1.1 The indicator framework of the EGI consists of a baseline survey of the key facts about the electricity sector, and over 60 indicators assessing questions of good governance in the sector. These include 28 priority indicators and over 30 indicators addressing additional questions of process, structure and substantive issues related to the policy-making and regulatory processes and to the environmental and social aspects.

We propose to adopt the implementation methodology tested in TAI, which has two important components. First, the assessments are conducted by a team of groups (which typically have diverse expertise in fields such as the electricity sector, economics, law, the environment, etc).

The second important component is the �Advisory Group�. Assessment teams will organize �Advisory Groups� consisting of electricity sector government officials and other key actors such as sector experts and academics. The function of the Advisory Group is to provide overall guidance and to review the final assessment report before it is released to the public. Detailed guidance notes on the implementation methodology are included as an appendix to this toolkit and are adapted from TAI methodology.

The toolkit is flexible, so that it can be used in different national contexts. National groups will take on the toolkit and make it useful. The timing of implementation is largely at the discretion of national groups. National teams usually focus their assessment on issues and cases that are aligned with their priorities. National assessment teams are asked to use care in documenting and justifying how they answer indicators (which values are chosen), by following the detailed explanatory and guidance notes included in each indicator worksheet. Supplementary guidelines on documentation and compilation of the assessment reports will be provided as an appendix to this toolkit.

National coalitions will choose how to use the assessment reports, as its use must complement ongoing work by civil society on issues related to the electricity sector. These include engaging with government officials and others on a systematic basis to argue for the formalization of access to information; and participation, not as a special favor but as a tangible principle and process for governance that is increasingly becoming international standard practice.

Sound research and documentation are the keys to a credible and transparent assessment. Hence, assessment teams should extensively document various cases studies, interview details, reference documents, etc. and detailed explanations (e.g. about choice of case study, basis of assigning values) should be provided in the �Explanation and Justification� and �Sources of Information� parts of the indicator questions.

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SCHEMATIC OF INDICATORS

BASELINE INDICATORS:

MAPPING THE ELECTRICITY SECTOR

POLICY PROCESSES REGULATORY PROCESS ENVIRONMENTAL AND SOCIAL ASPECTS

Institutional / Procedural Institutional / Procedural Institutional / Procedural

! Legislative Committee ! Authority and Autonomy ! Clarity about Jurisdiction for environmental clearance ! Executive ! Selection and Removal

! Independence and Reporting of Electricity Ministry / Department

! Financial + Human Resources ! Executive, regulatory and legislative mandates and capacity ! Function and Jurisdiction

! Conflict of Interest ! Setting minimum environmental standards ! Reform and policy change

processes ! Transparency ! Appeals ! Inclusion of environment in sector

planning and reform ! Planning Agencies ! Training ! Donor Agencies ! Use of Consultants ! Environmental Impact Assessment ! Role of Consultants ! Procedural clarity ! Redress mechanisms ! Capacity of Civil Society ! Pro-activeness ! Regulatory responsiveness to social

or environmental claims ! Availability of relevant background Information

! Disclosure of and access to documentation ! Engagement of service provider

with the public ! Quality of participation, debate, and clarity of policy processes

! Representation of weak stakeholders ! Capacity of civil society to address

social and environmental aspects ! Media coverage ! Space for public participation and civil society capacity ! Judicial or administrative forums

! Basis for orders and decisions ! Dissemination of decisions

Key Substantive Issues Key Substantive Issues Key Substantive Issues ! Asset Evaluation ! Performance Reporting ! Impact on Labour ! Privatization ! Tariff Philosophy ! Access to electricity ! Subsidies ! Licensing ! Affordability ! Independent Power Production ! Consumer Service and Quality

of Supply ! Project-affected people

! Extent of Competition ! Low Environmental Impact Technologies and Renewables

! Reporting of Environmental and Social Performance

! Reporting on Greenhouse Gases

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Electricity Governance: Indicators Version 1.1 Summary Tables

Section A �Policy Process

Indicator Assessed Attributes Governance

Principle Pg. No.

Institutional and Procedural Issues

PP 1 Capacity of Legislative Committee • Existence of committee • Trained staff • Opportunities for training • Financial resources • Authority to call for evidence

Capacity 27

PP 2 Procedures of Legislative Committee ** PRIORITY INDICATOR **

• Disclosure of interests • Reasoned reports • Active, with regular meetings • Public consultations and open

proceedings • Public availability of submissions • Public availability of own documents • Formal mechanism for communication

with executive

Accountability and Redress

28

PP 3 Independence of Electricity Ministry / Department from the Executive ** PRIORITY INDICATOR **

• Criteria for appointment • Fixed tenure and removal procedure • Disclosure of interests • Rules about Conflict of Interests

Capacity 29

PP 4 Annual reports of the Electricity Ministry / Department

• Financial report • Review of progress • Public availability • Dissemination in Local language


30

PP 5 Advisory Committees to the Electricity Ministry / Department

• Role and mandate • Wide and balanced representation • Access to financial resources • Periodic meeting with public

notification

Participation

31

PP 6 Distinct planning / policy agency • Existence • Mechanism for consultation by executive • Authority to seek information • Availability of resources • Requirements for transparency • Requirements for consultation

Capacity 33

PP 7 Debate on Reform / Restructuring Law or other key Policy Change Law ** PRIORITY INDICATOR **

• Adequate time for debate • Attendance of members • Duration of debate • Availability of transcripts


35

PP 8 Role of donor agencies during policy reform ** PRIORITY INDICATOR **

• Information about policy positions • Availability of loan documents and

conditions

Transparency 37

• Information about financial disbursement

• Information about technical assistance PP 9 Clarity about decision-making process on

reforms or policy change • Clarity about the process • Ease of access and breadth of

distribution

Transparency 39

PP 10 Scope of background policy information available to the public about government analysis and stakeholder views ** PRIORITY INDICATOR **

• Breadth • Ease • Timeliness

Transparency 41

PP 11 Scope of background / supporting information available to public regarding use of consultants

• Availability of terms of reference • Availability of budget • Availability of selection procedure • Availability of report • Ease of availability • Timeliness of availability

Transparency 42

PP 12 Independent review of recommendations by consultants

• Provision for independent review • Clear process for review • Clear outreach strategy • Clear revision process


43

PP 13 Capacity of Organizations in Civil Society ** PRIORITY INDICATOR **

• Number of organizations • Techno-economic capacity • Proactive engagement and strategic

capacity • Grass-roots links • Capacity for ongoing learning • Networking • Broad credibility

Capacity 44

PP 14 Quality of public participation process during reform or policy decisions ** PRIORITY INDICATOR **

• Public notification • Public registries of documents • Use of communication tools • Opportunity for consultation • Outreach to vulnerable communities

Participation

46

PP 15 Quality of participation by stakeholders and government responsiveness

• Quantity of input • Breadth of input • Notification of public participation by

government • Summary of public participation • Response to public participation

Participation 47

PP 16 Quality of media coverage about reform or policy decisions

• Volume of coverage • Local language coverage • Balance of coverage • Quality of coverage

Transparency 48

Key Substantive Issues

PP 17 Methodology for asset valuation / balance sheet restructuring during reforms

• Disclosure of methodology • Justification • Independent scrutiny


49

PP 18 Process of privatization and bidding ** PRIORITY INDICATOR **

• Release of request for proposals • Release of information provided to the

bidders • Release of decision criteria and

decision-making process

Transparency 50

11

• Justification for final selection PP 19 Transparency in allocation of subsidies • Public criteria for allocation

• Public process for allocation • Reporting on disbursement

Transparency 51

PP 20 Accountability regarding subsidies • Monitoring system • Accountability for monitoring • Procedure for review


52

PP 21 Independent Power Producers • Legislative involvement • Competitive bidding • Tariff impacts • Public consultation

Transparency 53

PP 22 Competition Policy • Mechanisms for prevention of market power

• Scrutiny of competition pre-conditions • Adequate public consultation • Transparent mechanisms

Transparency 54

Analytical Questions 55

Section B � Regulatory Process


Principle Pg. No.


RP 1 Institutional structure for regulatory decisions

** PRIORITY INDICATOR **

• Regulatory decision through executive or independent commission

Capacity 57

RP 2 Authority of the regulatory body


• Seek information • Investigations • Penalising defaulters • Enforcement of orders

Capacity 58

RP 3 Functions / jurisdiction of the regulatory body


• Clarity about functions / jurisdictions • Are any critical functions not entrusted

to the regulatory body?

Capacity 59

RP 4 Selection of regulatory body members


• Independence • Well-defined procedure • Transparency • Composition and eligibility criteria • Differing tenures

Information 61

RP 5 Conflict of interests of regulatory body members

• Legal recognition of conflict issues • Preventive provisions


63

RP 6 Autonomy of regulatory body • Fixed tenure of members and removal procedures

• Financial autonomy • Human resources

Capacity 64

RP 7 Appeal Mechanism • Are appeals allowed? • On what grounds? • By whom? • Before which forum?


65

12

RP 8 Training of regulatory body members and staff

• Certainty and regularity • Fields of training (legal, technical and

financial) • Diversity of perspectives

Capacity 67

RP 9 Information available to public regarding use of consultants

• Terms of reference • Budget • Selection process • Final reports

Information 69

RP 10 Procedural certainty about regulatory process and decisions

• Clear, well laid-out rules of procedure • Clear, well laid-out rules for

substantive decision-making

Information 70

RP 11 Pro-activeness of regulatory body


• Use of penal powers • Suo motu petitions • Discussion papers (public debate)

Capacity 71

RP 12 Disclosure of documents in possession of regulatory body


• Legal provisions • Operating procedures

Information 72

RP 13 Procedure for public access to regulatory body documents


• Well-indexed database • Simple, well-defined procedure • Reasonable cost • Wide dissemination

Information 73

RP 14 Space for public participation in the regulatory process

• Open proceedings • Public right to participate

Participation 74

RP 15 Institutional mechanism for representation of interests of weaker sections / stakeholders


• Is special attention given to this? • Routine v/s ad-hoc considerations • Availability of diverse institutional

structures

Participation 75

RP 16 Capacity building of weaker stakeholders • Capacity building activities by different agencies

• Availability of financial and analytical resources

Capacity 76

RP 17 Interventions by civil society in the regulatory process


• Public interest cases and appeals • Active organizations

Participation 77

RP 18 Orders and decisions of the regulatory body


• Reasoned orders • Response to public comments


78

RP 19 Dissemination of regulatory body�s decisions

• Easy availability • Timely availability • Local language

Information 79


RP 20 Periodic performance reports by licensees / utilities

• Filing requirement • Consequences of non-filing • Easy availability • Timely availability • Local language • Reliable • Comprehensive

Information 80

13

RP 21 Tariff philosophy


• Existence • Based on detailed analysis • Provision for mitigating adverse

impacts • Simple language • Public participation


82

RP 22 Licensing • Clarity about requirement • Clarity about process • Clear provisions regarding

o Amendment / Revocation o Dispute resolution o Compliance / performance

monitoring


83

RP 23 Consumer service and quality of supply • Well-defined standards of performance • Monitoring of supply quality • Periodic public review • Consumer grievance redress

mechanism


84


Section C � Environmental and Social Aspects


Principle Pg. No.


ESA 1 Clarity of authority and jurisdiction to grant environmental clearances / approvals for power sector projects


• Provisions in law / implementing regulations

• Definition of how authority is shared across jurisdictions

• Adequacy of access to relevant information

Information 87

ESA 2 Clarity and transparency of executive�s mandates on Environmental and Social aspects


• Reference to environmental and social performance of sector in description of responsibilities of executive

• Guidance on how executive will cooperate or consult with regulators or other authorities

• Commitments to reporting on sector performance


Information 89

ESA 3 Scope and transparency of regulator�s environmental and social mandates


• Reference to environmental and social responsibilities in documents describing role and mandate of regulatory body

• Certification or assurance of the mitigation of impacts

• Consideration of social and environmental issues in tariff setting


Information 91

14

ESA 4 Executive�s capacity to evaluate environmental and social issues

• Specific budgetary resources to support social and environmental issues

• Existence of dedicated staff • Expertise of staff • Availability of training

Capacity 93

ESA 5 Regulator�s capacity to evaluate environmental and social issues



Capacity

94

ESA 6 Legislative Committee capacity to assess environmental and social issues




Capacity 95

ESA 7 Public participation in setting minimum environmental performance standards in electricity sector laws and policies

• Minimum environmental performance standards for the electricity sector in regulatory policies and laws

• Evidence of consultation in determining standards

• Evidence of communication of public input

• Existence of explanation of existing standards

• Regular reporting on industry compliance with standards

Participation 96

ESA 8 Inclusion of environmental considerations in national power sector plan


• Analysis of environmental considerations in most recent plan

• Inclusion of project-specific impacts and broader sectoral impacts

• Adequacy of public access to relevant information

• Mechanisms to seek public input • Inclusion of less-privileged and

affected populations • Communication of how public input is

incorporated

Participation 98

ESA 9 Inclusion of environmental considerations in sector reform process

• Inclusion of environmental considerations in official documents, before reform

• Broad framing of environmental issues • Access to documents • Adequacy of public comment period • Effort to reach affected and less-

privileged populations • Mechanisms to seek public input • Availability of public comments

Participation 100

ESA 10 Public participation requirements in environmental impact assessment (EIA) laws and procedures

• Participation mandate at scoping stages

• Use of more than one mechanism

Participation 102

15

• Adequacy of time period for comment • Release of full and summary reports,

prior to approval • Existence of guidelines to define

adequate public consultation ESA 11 Comprehensiveness of environmental

impact assessment (EIA) policies, laws and procedures

• Are requirements for project-level environmental impact assessment (EIA) detailed in electricity policy, regulations or guidelines?

• Are requirements for project-level social impact assessment detailed in electricity policy, regulations or guidelines?

• Have strategic environmental assessment(s) been carried out? / existence of guidelines

Capacity 104

ESA 12 Regulatory Response to Environmental and Social Petitions or Complaints


• Have formal cases or evidence of environmental or social complaints been accepted by regulatory agencies?


105

ESA 13 Quality of engagement by electricity provider with organizations in civil society and with potentially-affected populations


• Existence of specific department / staff to engage with the public

• Requirement to engage public is defined in corporate policy

• Support to vulnerable weaker sectors to enable engagement

• Availability of information on how public can lodge complaints

• Disclosure of its own EIAs • Do EIAs include non-technical

summary and summary of public consultation?

Participation 106

ESA 14 Capacity of civil society to address environmental and social aspects of decision-making by electricity sector

• At least one CSO has used appeal or redress mechanisms

• Existence of independent CSO assessment of social / environ. implications of sector policy

• Records of CSO participation in official consultations

• CSO input on most sector EIAs • Evidence of CSOs specializing in

sector issues or providing legal support

Capacity 107

ESA 15 Quality of judicial or administrative forums addressing social and environmental claims


• Issuing binding decisions to redress social and environmental damages

• Independence and impartiality • Training • Access to information • Definition of triggers for claims and

standing in laws

Accountability and Redress Mechanisms

108

ESA 16 Accessibility of judicial or administrative forums that address social and environmental claims

• Geographic • Temporal • Linguistic • Economic

Accountability and Redress Mechanisms

109

16

• Amicus briefs from non-parties


ESA 17 Assessment of job losses linked to policy changes or reforms in the electricity sector

• Evidence of assessment of employment impacts

• Assessed before making changes • Measures to address impact • Creation of redress mechanisms for

workers


110

ESA 18 Participation in decision-making about access to electricity

• Consultation with relevant socio-economic sectors on developing access objectives

• Efforts to reach vulnerable groups • Use of more than one participation

mechanism • Public input referenced in relevant

planning or policy processes

Participation 112

ESA 19 Scope for project-affected people to exercise their rights


• Existence of explicit requirements or procedures for consultation of project affected people in project review and approval

• Efforts to educate potentially affected people on their rights

• Use of more than one participation mechanism

• Free Prior Informed Consent

Participation 113

ESA 20 Participation in decision-making related to affordable electricity tariffs

• Attention to low income and rural consumers in tariff setting principles

• Efforts to communicate impacts and reasons for tariff changes to low income or differentially impacted groups

• Use of more than one participation mechanism to get their input

Participation 115

ESA 21 Participation in development of policies to promote low environmental impact management and technology options

• Executive decision-making considers such options, including co-generation, demand-side management, creation of energy savings companies, grid-connected or distributed renewable energy, improved fossil fuel efficiency, pollution control, or reductions in distribution losses.

• Consultation with stakeholders and interest groups

• Use of more than one participation mechanism

Participation 117

ESA 22 Reporting on environmental and social performance of the electricity sector

• Annual reviews, include attention to a broad set of environmental and social issues

• Regular reporting and disclosure of performance data

• Use of range of outreach media • Development of public information for

non-technical audience

Information 119

17

ESA 23 Disclosure and monitoring of contributions by electrical sector to national greenhouse gas emissions

• Regular reporting on sector�s cumulative and annual greenhouse gas (GHG) emissions

• Data or baselines to quantify electrical sector�s contributions to national GHG

• Inclusion of sector in UNFCCC reports

• Courts uphold public right to this information

Accountability 121


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BASELINE SURVEY INDICATORS FOR THE ELECTRICITY SECTOR

A set of quantitative indicators that map key facts about the electricity sector is essential in order for our qualitative assessment of governance to be meaningful, because the sector�s governance processes must be set in the context of the present realities of its condition. To this end, the indicator toolkit includes a set of baseline survey indicators, which map key facts about the national electricity sector to provide a snapshot of its condition. This section collects key facts about: I. The structure of the national electricity sector II. Policy and legislation processes III. Regulation IV. Generation V. Access, transmission and distribution VI. Economic importance VII. Investment VIII. Privatization The exercise of collecting facts about process and performance in the sector will allow mapping key characteristics of THE national electricity sector, and facilitate assessment of the quality of governance of the sector. Please provide adequate explanations in case the answers are for specific conditions / geography, etc. For example, if for certain issues, information is provided for a particular state then clearly mention so in the explanatory note. I. STRUCTURE: Please provide names of relevant institution / agency in the box below.

Policy: Government Authorities

Regulation: Government authorities etc

Utilities

Generation / Power Producers:

Distributors: Transmission

Consumers

Note: Include timeframe of the formation of various institutions.

19

Top 5 Most important events in the sector during the past five years

Top 5 Most controversial issues in the sector at present

1. 2. 3. 4. 5.

1. 2. 3. 4. 5.

II. POLICY / LEGISLATION: Freedom of Information Act: Yes No Electricity Legislation: Federal Provinces/states? Other ______________

Legislative System: Parliamentary Parliamentary bodies responsible for relevant legislation: 1) ________________________ 2) ________________________ 3) ________________________

Cameral / bicameral

Legislative bodies and caucuses responsible for drafting / recommending legislation 1) ___________________ 2) ___________________ 3) ___________________ State government agencies implementing and enforcing electricity policies

1) ________________________________ 2) ________________________________ 3) ________________________________ 4) ________________________________

Government body in charge of sector planning: __________________________ Main source of bills and laws for the sector: _____________________________ Government body overseeing sector: ___________________________________ Government body overseeing renewable electricity: _______________________ Government body overseeing rural electrification: _________________________

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Electricity Tariffs set by: _____________________________________________ Sector Carbon / Emission Tracking Environmental Impact Assessments (EIA) legally required for sector EIA Guidelines exist for: Generation

Transmission Distribution None Any other key characteristics of the policy and legislative framework of your country: _________________________________________________________________ III. REGULATION: Federal Provinces / States Other ______________ Type of Regulation: Cost plus Performance Based Competitive Other Independent Regulator Yes No

Responsibilities: Tariff Permissions Licensing Awarding Concessions Adjudication Other Universal service mandate Yes No Contracted Regulation Companies: 1) ________________ 2) ________________

Responsibilities: Tariffs Permitting Licensing Awarding Concessions Adjudication Other End-user efficiency programs 1) ______________________________ 2) ______________________________ Efficiency rate of sector: ____________________ Estimated rate of non-technical losses / electricity theft: _____________ percent Regulatory Body for Appeals: Exists Name: ____________________

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Does not exist Reporting Responsibilities for Utilities:

Comprehensive Limited None Reporting on Environmental Performance? Yes No Any other key characteristics of regulation of your electricity sector: _________________________________________________________________ IV. GENERATION: Total Installed Generation Capacity (MW): ________________ Fuel Mix:

Oil ______% Coal ______% Petroleum / Diesel ______% Natural Gas/ LPG ______% Large Hydro ______% New Renewables: ______%

Wind ______% Solar ______% Small Hydro ______% Biomass ______% Cogeneration ______% Hydrogen ______%

Other ______%

Independent Power Producers allowed

Who issues IPP contracts ____________

How many IPP contracts ____________

Portion of IPPs in Renewables / Cogeneration ___________ %

Any other key characteristics of generation in your electricity sector: _________________________________________________________________ V. ACCESS, TRANSMISSION AND DISTRIBUTION Population access to electricity: ______% Urban Population access to electricity: ______% Rural Population access to electricity: ______% Distribution and transmission losses: ______%

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National Grid Coverage: ______%

Rural Electrification Program Rural electrification subsidies? What sort? Reliability of electricity service:

Reliable Occasional brownouts Planned load-shedding

Frequent service interruptions Any other key characteristics of access, transmission and distribution in your electricity sector: _________________________________________________________________ VI. ECONOMIC: Sector Contribution to GNP: US$__________ = ________%

Net Electricity Exporter Net Electricity Importer NA Financial state of Sector: Revenues as proportion of Cost: ___________________

Debt level (as % of annual revenue): _______________

Main Sources of Technical Assistance Projects (ODA / MDB): ___________________________ Use of Integrated Resource Planning Strategies for Sector: Electricity Tariff: Household Urban ________ Monthly Income: __________ Avg Use: __________ Household Rural ________ Monthly Income: __________ Avg Use: __________ Commercial ________ Avg Use: __________ Average percentage change of the electricity tariff over the past year: ____________% Variability = (Present Tariff � Tariff at same time last year) / Present Tariff

Steady Tariff Tariff changes frequently Highly volatile tariff changes Energy Intensity ($US): __________ Projected Demand-side Growth: _____% Any other key characteristics of the economic profile of your electricity sector: ______________________________________________________________________________

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VII. INVESTMENT Average annual investment in electricity sector: US$ _______ Domestic Investment: ________% Foreign Investment: ______% Top Public Investors 1) ____________ Top Private Investors 1) ___________ 2) ____________ 2)____________ 3) ____________ 3)____________ 4) ____________ 4)____________ 5) ____________ 5)____________ Sources of Public Support for the Sector: Bonds Taxes Tariffs Other: _______________________________

Structural Adjustment Lending for electricity sector Which Multilateral Development Banks have funded electricity sector projects? If these banks have been involved with any of the top 5 controversies in section (i) check the box on the right 1) ____________________________________________________________________ 2) ____________________________________________________________________ 3) ____________________________________________________________________ 4) ____________________________________________________________________ 5) ____________________________________________________________________ Which Private Banks are funders 1) ____________________________________________________________________ 2) ____________________________________________________________________ 3) ____________________________________________________________________ 4) ____________________________________________________________________ 5) ____________________________________________________________________ Any other key characteristics of investment in your electricity sector: _________________________________________________________________

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VIII. PRIVATISATION:

Privatized When (Year):________ Under Consideration None

Transmission separate from Generation?

Distribution separate from Transmission?

Are there Private Generators? Generating Companies: 1)___________________ Market Share: ______%

2) ___________________ Market Share: ______% 3) ___________________ Market Share: ______%

Are there Private Distributors? Distributing Companies: 1) ___________________ Market Share: ____% 2) ___________________ Market Share: ____% 3) ___________________ Market Share: ____%

Transmission Privatized? Transmission Companies:

1) ___________________ Market Share: ____% 2) ___________________ Market Share: ____% 3) ___________________ Market Share: ____%

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Electricity Governance Toolkit Version 1.1

Section A � Policy Process Overview Policy processes establish the parameters for the function and performance of the electricity sector, and are the key to the governance of the sector. This section of the indicator toolkit asks questions about how policies are developed and adopted. It looks at the major institutions involved, including the legislative and executive branches of government, the ministries responsible for electricity operations and sector planning, and international donor institutions. These indicators ask questions about the selection criteria for representation in these institutions, their reporting standards and requirements, clarity of their role and mandate, and the extent to which there is systemic space for public consultation and participation. In addition, the indicators explore the extent of civil society capacity to engage in the policy formulation process. The quality of policy processes will affect regulatory processes as well as social and environmental aspects of the electricity sector�s performance. This section also looks at contentious case study policy issues in the policy process, including privatization and bidding processes, asset evaluation, the allocation of subsidies, and the introduction of Independent Power Production. The importance and relevance of these issues will differ from country to country, and are designed to be responsive to national priorities. Guidance for Assessments Apply these indicators at the appropriate level for policy-making in electricity: federal or state/provincial. If electricity policy is decided both at the federal level and the state/province level, then apply these indicators for the federal level and also for at least two states/provinces.

Some indicators focus on the legislative process, while others are more applicable to executive process. Consequently, identify one legislative process and one executive process to which these indicators can be applied. Where the electricity sector is in the midst of structural reforms, reform legislation and important reform-based executive decisions would likely be a good choice.

Select the appropriate institutional focus for each decision. For legislative decisions, it is likely to be the Energy Committee or an equivalent body. For executive decisions, it is likely to be the Ministry of Power or a planning agency.

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Section A – Policy Process

PP 1 - Legislative Committee Capacity Access Principle: Capacity Relevance of the indicator: In any democratic political framework, legislative bodies play a critical role by defining macro policies within which the executive, regulatory bodies and all other stakeholders operate. Since not all legislators can be expected to focus equally on all issues, many parliamentary procedures allow for specialised sub-committees of Parliamentarians, who are tasked with scrutinizing issues placed before legislatures. These Legislative Committees often hold hearings, consider a range of points of view, and ultimately provide recommendations and feedback to the legislature at large. As such, the Legislative Committee process is an important mechanism that allows for detailed scrutiny of specific sectors and issues. Depending on the country situation, there may be different nomenclature for legislative committees with responsibility for the electricity sector (standing committee, sub-committee etc.). Since electricity is a technically and economically complex sector, legislative committee members and their staff must have adequate capacity to play their policy direction setting and oversight role. Special efforts may well be needed to empower legislative members in this regard.

Values Select Explanation and Justification Not applicable/not assessed (0) There is no mechanism of legislative oversight through committee process or there is a committee but none of the four indicators of capacity exist

(i) Low

There is a mechanism of legislative oversight through committee process but only one indicator of capacity exists

(ii) Low-Middle

There is a mechanism of legislative oversight through committee process and two indicators of capacity exist

(iii) Medium

There is a mechanism of legislative oversight through committee process and three indicators of capacity exist

(iv) Medium – High

There is a mechanism of legislative oversight through committee process and all four indicators of capacity exist

(v) High

Guidance for assessment teams: Features essential for enhancing capacity of legislative members are: • Access to knowledge: Trained staff and access to documentary resources to examine policy issues of relevance to the electricity

sector. • Knowledge Enhancement: Periodic opportunities for knowledge enhancement (e.g. training courses, conferences etc.) for

legislators and staff. • Financial Resources: Availability of adequate financial resources to hire experts and undertake studies. These financial resources

must be predictable and under the control of the committee. • Authority: Authority to call relevant elected representatives or appointed officials in order to seek information and answers, and

exercise that authority in practice. Assessment teams will have to obtain the formal documents under which an electricity legislative committee has been established to ascertain its role, the resources allocated to it, and its authority. In addition, interviews with legislators and staff will be necessary to assess the capacity of staff, opportunities for knowledge enhancement, the availability of financial resources, and the formal authority to call elected representatives or officials.

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Section A – Policy Process * PRIORITY INDICATOR *

PP 2 – Effective Functioning of Legislative (Electricity) Committee Access Principle: Accountability and Redress Mechanism

Relevance of the indicator: PP1 stressed the importance of legislative committee capacity. This indicator examines how effectively the legislative committee functions with respect to its internal processes. To be effective, legislative committees should be active, demonstrate mechanisms to ensure independence, and have procedures in place to ensure that they hear a wide range of views. All these factors are necessary to ensure that the legislative committee is able to provide informed, thoughtful and useful feedback to the legislative assembly as a whole.

Values Select Explanation and Justification Not applicable/not assessed (0) There is no mechanism of legislative oversight through committee process or the process has not a single element of effective process

(i) Low

A legislative committee that examines electricity exists but it meets only one or two elements of effective process

(ii) Low-Middle

A legislative committee that examines electricity exists but it meets only three or four elements of effective process

(iii) Medium

A legislative committee that examines electricity exists but it meets five or six elements of effective process


A legislative committee that examines electricity exists and it meets seven or eight elements of effective process

(v) High

Guidance for assessment teams: Key elements of effective legislative committee process are: • Disclosure of interests: Committee members are required to disclose their past links and commercial interests in the electricity

sector industry before joining the committee. • Reasoned Reports: The committee prepares reasoned reports and regular proceedings. Reasoned reports are those that explain the

logic and thinking behind the committee’s pronouncements. • Active Committee: The committee is active in its functioning. Activity can be gauged by examining whether it meets regularly,

and produces reports on a timely basis. • Proactive Committee: The Committee is proactive in identifying and considering a range of issues relevant to electricity. • Public consultations: The Committee undertakes periodic public consultations that include a broad range of opinions, interests

and voices. Only calling “experts” for a hearing does not count as public consultation. • Transparency of submissions to Committee: Documents brought before the committee are made public. • Transparency of Committee reports: Reports and recommendations of the committee are public documents. • Reporting by executive: The executive branch (electricity department / ministry) is required to present an action taken report or a

similar response to the committee’s recommendations in a time bound manner, and regularly does so. Assessment teams will have to obtain detailed documentation pertaining to the functioning of legislative committees. Key documents include records and proceedings of meetings, submissions to the committee and reports produced by the committee. To assess whether the committee is active, examine the number of meetings of the committee, the purposes of those meetings, and assess whether significant events in the electricity sector have been proactively addressed in legislative committee meetings.

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PP 3 - Independence of Energy Department / Ministry Access Principle: Capacity Relevance of the indicator: The staff of an electricity ministry/department is charged with implementing legislative decisions. They frequently have considerable latitude in interpreting legislative mandates, which raises the risk that certain stakeholder groups may unduly influence them. To avoid this danger, it is important that staffing policies safeguard the independence of the executive. These staffing policies may well be common for all government servants. This indicator examines selected minimum standards necessary for the energy department or ministry to be considered independent from stakeholder influence.

Values Select Explanation and Justification Not applicable/not assessed (0) The staffing policies for electricity department / ministry does not meet even one element of quality (described in the explanatory note)

(i) Low

The staffing policies for electricity department / ministry meet only one element of quality

(ii) Low-Middle

The staffing policies for electricity department / ministry meet only two elements of quality

(iii) Medium

The staffing policies for electricity department / ministry meet three elements of quality


The staffing policies for electricity department / ministry meet all four elements of quality

(v) High

Guidance for assessment teams: Elements of quality in independent decision-making: • Clear criteria: There are well laid out, transparent (public) criteria for appointment of staff positions within the concerned energy

/ department / ministry. • Predictable tenure: The tenure of the staff is fixed / pre-determined and there is a well laid out procedure (including criteria) for

removal before the expiry of term. • Disclosure of interests: Appointees on positions in the ministry / executive are required to disclose their past and current links

with the energy industry such as any shareholding in related companies or any employment / commercial / advisory relationship, etc.

• Conflict of interest rules: There are clear rules for preventing conflict of interest, such as a ban on staff entering into a commercial relationship with any energy related business for a few years after leaving the ministry / executive.

This indicator should be applied to the rules governing the top three tiers within a ministry or department. Assessment teams will need to obtain procedural rules that guide functioning of the relevant department/ministry. These rules will provide the basis for scoring this indicator.

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PP 4 - Annual reports of the Electricity Ministry / Department Access Principle: Accountability and Redress Mechanism

Relevance of the indicator: Production of an annual report by an electricity ministry / department is necessary to ensure accountability of the executive. Good annual reports should enable the general public as well as other stakeholders to understand what the ministry has done in the last year and what its plans are for the future. Annual reports are also useful for assessing the progress made toward achieving important objectives / goals set for the ministry.

Values Select Explanation and Justification Not applicable/not assessed (0) The electricity department / ministry does not prepare annual report or the report does not satisfy even one element of good quality in reporting

(i) Low

The electricity department / ministry prepared annual report but satisfies only one element of quality in reporting

(ii) Low-Middle

The electricity department / ministry prepared annual report but satisfies only two elements of quality in reporting

(iii) Medium

The electricity department / ministry prepared annual report but satisfies three elements of quality in reporting


The electricity department / ministry prepared annual report and satisfies all four elements of quality in reporting

(v) High

Guidance for assessment teams: Elements of quality in reporting by the ministry / department include: • Financial reporting: Detailed financial reporting, including how much public revenue is being spent on the ministry

(administration / establishment expenses, equipment expenses, consulting expenses, etc.), and details about the subsidies and grants paid to various groups / companies.

• Review of Progress: Detailed review of progress made in the context of past policy initiatives / decisions by the ministry, and direction of future initiatives, projects and decisions.

• Easy Availability: Availability of the report to the general public in a timely and easy manner, specifically immediately after it is finalized, through a web-site and for sale at a nominal cost.

• Local Languages: The report should be available in local languages. Assessment teams should access the most recent available annual report through the ministry. In the event that there are convincing reasons that the most recent year is exceptional for some reason, then the team may decide to supplement their analysis by examining past annual reports for an additional year or two.

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PP 5 - Advisory Committees to the Electricity Ministry / Department Access Principle: Participation Relevance of the indicator: An Electricity Ministry may appoint one or several advisory committees to assess particular matters of policy making. When used well, such advisory committees can be useful vehicles for bringing in additional expertise or stakeholder views. However, when used poorly, advisory committees may also perpetuate bad advice, be a vehicle for undue influence, or serve simply to provide legitimacy to a decision already taken. Since advisory committees are often an important supplementary vehicle for decision making, it is important to look at the underlying features of such committees to establish whether or not they are likely to serve a productive role.

Values Select Explanation and Justification Not applicable/not assessed (0) An advisory committee attached to the electricity ministry has no structural features for effective functioning

(i) Low

An advisory committee attached to the electricity ministry has only one structural feature for effective functioning

(ii) Low-Middle

An advisory committee attached to the electricity ministry has two or three structural features for effective functioning

(iii) Medium

an advisory committee attached to the electricity ministry has four or five structural features for effective functioning


An advisory committee attached to the electricity ministry has six or seven structural features for effective functioning

(v) High

Guidance for assessment teams: Structural features for effective functioning of advisory committees are: • Clear mandate: Clear role and sufficiently broad mandate to enable the committee to provide comments / suggestions about the

policy making process as well as substance. In particular, the mandate should allow the committee sufficient discretion so that it does not appear to be a rubber-stamp of a decision that is already made.

• Balanced composition: Wide and balanced representation from all stakeholders, especially public interest groups. Advisory committees are subject to capture like any other government process. To guard against this, the committee should have representation from a broad group of stakeholders. Although many issues are technical, committees should ideally include representation from technically minded public interest groups.

• Financial resources: Access to financial and analytical resources to undertake studies. In order to do a credible job, advisory committees will require resources to conduct independent research and inquiry.

• Regular meetings: Regular meetings are a signal that a committee is seriously deliberating an issue, and is more than simply a rubber stamp.

• Public disclosure of minutes: Disclosure of minutes is an important device of accountability and a mechanism for ensuring that advisory committees have not been captured.

• Public disclosure of documents: Documents made available to the committee should also be publicly available. This transparency will allow the public to gauge whether the committee’s findings were substantiated by available information or whether they were delivered without any such references.

• Transparent feedback from executive: Responses of the executive to deliberations of the advisory committee are disclosed along with minutes. Including a response by the executive provides the public with full information on how the deliberations and findings of the advisory committee are being utilized.

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Assessment teams will have to ascertain whether any advisory committees have been appointed in the recent past. If more than one such committee has been appointed, it is advisable to choose one that has been in operation sufficiently long to establish a track record. If possible, selecting a committee that has recently completed its work is preferable, as members may be more willing to speak out, and the assessment will also have a basis to note in comments whether and how the committee’s recommendations were used.

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PP 6 - Distinct planning / policy agency Access Principle: Capacity Relevance of the indicator: Whatever the structure of the electricity industry, a separate planning agency serves a useful function. Given the technical complexity of the sector, it is important to have a separate agency outside the policy-making structure and outside the operational structure that looks at long-term considerations. These include, for example, whether investment in generation and transmission capacity is adequate to meet projected needs, and whether the mix of generation capacity adequately addresses concerns of risk (such as fuel price risk) and energy security. In brief, national public energy planning is required to address those issues to which public monopoly operators and/or private operators in a competitive market give inadequate attention.

Values Select Explanation and Justification Not applicable/not assessed (0) There is no distinct planning / policy agency (i)

Low A distinct planning / policy agency exists but there is no well-defined mechanism that requires the executive to consult this body on major policy issues or to evaluate how the executive responds to recommendations / decisions of the agency

(ii) Low-Middle

A distinct planning / policy agency exists with clear consultation and executive response mechanisms but the agency meets no requirements of effective functioning

(iii) Medium

A distinct planning / policy agency exists with clear consultation and executive response mechanisms but the agency meets only one or two requirements of effective functioning.


A distinct planning / policy agency exists with clear consultation and executive response mechanisms and the agency meets three or more requirements of effective functioning.

(v) High

Guidance for assessment teams: The first part of this indicator (i.e. values up to 3) assesses if a distinct planning agency exists and how the executive responds to recommendations or decisions of this body. The mechanism requiring consultation with the planning body could be in the form of a statutory requirement for consultation or a system of periodic meeting between executive and planning agency. Similarly, the mechanism to evaluate how the executive responds to recommendations or decisions of the agency could be in the form of a specific requirement that the annual report of the ministry (or planning agency) should report on the recommendations or decisions made by the planning agency and the executive’s response to the same. Another such mechanism could be that the legislative committee for electricity has an explicit mandate to look into this issue. The second part of the indicator assesses if the agency meets requirements for its effective functioning: • Authority to seek information: Authority to seek information from the executive as well as other electricity sector agencies and

exercise of this authority in practice. This information will be contained in the legal instrument (statute or law) establishing the planning agency. To assess whether this authority is exercised in practice, interview selected officials in the planning agency and request information on specific instances when they have asked for information, and what has been received.

• Adequate resources: Availability of adequate resources for information collection and studies. Scrutinize the budget of the planning agency to ascertain budgetary availability for independent analysis, and examine whether it has been growing or shrinking over time.

• Transparency in functioning: Requirement to make the planning agency’s analysis, studies and recommendations public and exercise of this requirement in practice. Examine the operating rules of the agency.

• Consultation procedures: Requirement to consult stakeholders and other public before major policy recommendations or decisions. Discuss with stakeholders their perception of the planning agency, and the extent to which it provides a useful and viable avenue for meeting stakeholder concerns regarding planning of the sector.

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Assessment teams will have to first establish whether a distinct electricity planning agency exists. It may also be possible that this task is subsumed under a broader economic planning agency, in which case the agency should be scored as existing but the fact that it is part of a larger body should be noted. To assess both the degree and form of communication between the planning agency and the executive, scrutinize the legislation or other instrument under which the planning agency was established. To assess requirements of effective functioning, obtain the operating rules for the planning agency, and supplement the formal information in these rules with interviews with planning agency staff.

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Section A – Policy Process ** PRIORITY INDICATOR **

PP 7 - Debate on Reform / Restructuring Law Access Principle: Accountability and Redress Mechanism

Relevance of the indicator: This indicator assesses one of the most important aspects of the reform / restructuring process, i.e. enactment of a law setting a new legal framework for the electricity sector. The overarching law governing the electricity sector should set the policy direction, and is critical in ensuring that there is space to address public interest concerns. Moreover, the nature and characteristics of the debate during enactment of the reform / restructuring law is often an illuminating pointer to the quality of governance in a country.

Values Select Explanation and Justification Not applicable/not assessed (0) The reform / restructuring decision was taken without legislative approval (through means such as ordinance / presidential decree etc.)

(i) Low

The reform / restructuring law was enacted through the legislature but the process meets only one criterion for effective legislative process

(ii) Low-Middle

The reform / restructuring law was enacted through the legislature but the process meets only two criteria for effective legislative process

(iii) Medium

The reform / restructuring law was enacted through the legislature but the process meets three criteria for effective legislative process


The reform / restructuring law was enacted through the legislature but the process meets all four criteria for effective legislative process

(v) High

Guidance for assessment teams: As a first step, identify which law provides a defining legal framework for the electricity sector, and then apply the criteria below retrospectively. Four crucial ingredients of effective legislative process may be considered: • Duration of debate: Any legislation on a complex; dynamic sector such as electricity requires significant time for analysis. Hence

it is important to assess the time available for legislators to study and understand the whole range of issues arising out of such legislation. At the same time, if the legislation is unduly delayed beyond the time required to understand issues, it is a signal of ineffective legislative process. As a general guideline, a minimum of a month and a maximum of a year should be considered a reasonable window for the purpose of this indicator, subject to specific country contexts.

• Attendance of members: For legislation as important as electricity reform, it is desirable that a large number of legislative members from both ruling as well as opposition parties are present during the debate. Attendance of members should be considered satisfactory if significantly more members than the minimum or quorum requirement are present from the ruling as well as the opposition parties. Since it is unrealistic to cite a single number for all countries, please specify the percentage above quorum obtained in practice.

• Composition of speakers: The composition of speakers during a parliamentary debate is another important pointer to the importance attached by legislators to the electricity legislation. This could be considered satisfactory if a broad range of parliamentarians espousing a wide range of views, including opposition members, had opportunity to participate in the debate.

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• Availability of transcripts: Availability of transcripts of the debate is important for post-facto analysis of the positions of different legislators and political parties. This is essential to enhance their accountability. This should be considered satisfactory if such transcripts are made available to public within 2 months after the debate.

Information necessary to assess this indicator will be available in legislative records. In addition, it will be helpful to interview key legislators. Since Parliamentary procedures differ widely from country to country, please document and justify any deviations in scoring from the suggested guidelines above, specifically with regard to specific time periods (e.g. Duration of debate to exceed one month but less than one year, availability of transcripts within 2 months, etc.)

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PP 8 - Role of donor agencies during national policy reform Access Principle: Information Relevance of the indicator: In many countries, donor agencies have played an important role in initiating and promoting reforms. Donor agencies may stimulate reform, require it through loan conditions, or may endorse a government’s decision to reform and seek commitment to that decision through loan conditions. Among donors, multilateral agencies such as the World Bank and Asian Development Bank typically play a larger role in initiating policy change through conditions attached to loans. Key documents in which these positions are articulated are Country Assistance Strategies (which are not binding on governments) policy loans (which until recently were referred to as Structural Adjustment Loans), and, occasionally, investment loans for particular projects. In addition, technical assistance, which is often carried out by smaller bilateral donor agencies as well as by the big multilateral agencies, can be very influential in shaping policy decisions.

Values Select Explanation and Justification Not applicable/not assessed (0) Donor agencies are involved in electricity policy-making, but their involvement meets no conditions of transparent donor engagement

(i) Low

Donor agencies are involved in electricity policy-making, but their involvement meets only one condition of transparent donor engagement

(ii) Low-Middle

Donor agencies are involved in electricity policy-making, and their involvement meets two conditions of transparent donor engagement

(iii) Medium

Donor agencies are involved in electricity policy-making, and their involvement meets three conditions of transparent donor engagement


Donor agencies are involved in electricity policy-making, and their involvement meets all four conditions of transparent donor engagement

(v) High

Guidance for assessment teams: Elements of transparent donor engagement include:

• Transparency on policy positions: Information about donor positions on policies in the electricity sector – such as that articulated in Country Assistance Strategies – is/were publicly available.

• Transparency on conditions: Loan documents that include binding conditions on loan disbursements are publicly available during the period when the loan is active. Disclosure ex post is inadequate since only if the information is available at the time of decision making will it support greater participation.

• Transparency about disbursement: Information about financial disbursement related to loan conditions – amount of disbursement, whether disbursement is withheld, and why – is publicly available.

• Transparency about technical assistance: Information about technical assistance projects, including lists of projects, project documents, and information on outreach, is publicly available.

To apply this indicator, first identify the multilateral donor agencies most active in the electricity sector. In assessing availability of information, “publicly available” means documents were available either through electronic sources or through in person requests to the relevant agency by any member of the public who sought access to them. Once the relevant agencies are identified, conduct interviews with industry insiders, key stakeholders and donor agency staff to ascertain that the key donor agency documents relevant to the electricity sector are readily accessible. These documents might include country assistance strategies, policy loan documents, investment loan documents, technical assistance documents, and workshop reports. Then, based on internet searches, documentary records, and personal requests to donor agencies, establish if these documents were available at the time of donor engagement on a specific issue. It is important to ascertain whether documents were actually available within the relevant time frame; a scrutiny of donor policies on transparency alone is not enough. Since in many cases the assessment will be carried out after the fact, it may be a challenge to ascertain the degree of transparency that existed in the past. Supplement requests for documents with stakeholder interviews and donor agency staff interviews to make an independent assessment of the degree of transparency that existed at the time

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the strategy process/loan/workshop was under way.

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PP 9 - Clarity on process for decision-making on reforms or policy change Access Principle: Information

Relevance of the indicator: If a wide range of interests is to be represented in determining a policy change, it is important that a range of stakeholders know well in advance how the process for public input is structured and how they can contribute to decision-making. While this indicator examines the clarity of the process, the quality of the public participation process itself is covered in a subsequent indicator.

Values Select Explanation and Justification Not applicable/not assessed (0) The process of decision-making is neither well defined nor is information on the process widely distributed

(i) Low

The process of decision-making has at least three elements of a well-defined process but information on the process is insufficiently widely distributed (less than two elements of broad distribution)

(ii) Low-Middle

The process of decision-making has at least three elements of a well-defined process and information on the process is sufficiently widely distributed (at least two elements of broad distribution)

(iii) Medium

The process of decision-making has all elements of a well-defined process and information on the process is sufficiently widely distributed (at least two elements of broad distribution)


The process of decision-making has all elements of a well-defined process and information on the process is well distributed (all three elements of broad distribution)

(v) High

Guidance for assessment teams: Elements of a well-defined process include clear information on:

• who (which institutions/agencies) will make decisions; • what is the time-frame for making decisions; • what is the format for those decisions; • what is the time-frame for input; • how input will be used; • how and when will feedback be provided to the public; • what is the mechanism for appeal against a decision; and • which systems exist for documenting the decision making process.

Elements of a process for which information is sufficiently broadly distributed are:

• the information must be circulated prior to the initiation of the reform process; • it must be available electronically on the internet; and • demonstrated efforts must be made to reach out to disadvantaged communities.

To apply this indicator, first establish a well-defined and significant policy decision that has recently been undertaken or is well underway. Examples could include an omnibus reform process, or sub-decisions such as the decision to unbundle or privatize utilities, establish market arrangements, establish regulatory agencies, etc. To ascertain details of the process, seek government documents that lay out the process of reform, and also scrutinize web sites. It may be helpful to access government web-masters to get details on web postings (date of posting of particular documents). In addition, conduct interviews with decision-makers, with industry insiders and with civil society groups, making sure to cover disadvantaged communities, to assess their perception on clarity of the process and the extent of outreach.

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PP 10 - Scope of information available to the public Access Principle: Information Relevance of the indicator: In any policy process, background documents should provide the information base for decision-making. These documents include both government documents and stakeholder documents (consultant reports are an important third category dealt with separately in the next indicator). Transparent access to these documents is important for several reasons: it is an assessment of whether the decision was informed; whether the knowledge base was skewed toward one or another set of interests; and whether the decision was consistent with the knowledge base or ultimately dictated by interests over knowledge. Ultimately, transparency of the knowledge base facilitates accountability for the decision based on the factual content and interpretation of the documents.

Values Select Explanation and Justification Not applicable/not assessed

(0)

No information is available on background documents that provide the basis for policy decision

(i) Low

Information available to the public meets only one of the criteria.

(iii) Medium

Information available to the public meets all three criteria of breadth, ease, and timeliness

(v) High

Guidance for assessment teams: Apply this indicator to the same policy process identified for PP 9: Clarity on Decision Making. In applying this indicator, the relevant criteria for transparency of background information are:

• Breadth of availability: It is important that transparency extend both to government documents and stakeholder views. • Ease of Access: To be useful, documents must be easily available to the public. For example, documents should be posted on a

website, available in a library or reading room, and readily produced on demand from a ministry. • Timeliness of availability: Was this information available to the public prior to the decision being taken, and was the public

informed through websites, media, etc. of the availability of the information? To apply this indicator, check websites and seek records of website postings available with legislative or executive. Also conduct interviews with government officials, industry insiders, and stakeholders to assess the three criteria of breadth, ease and timeliness.

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PP 11 - Scope of information available to public regarding use of consultants Access Principle: Information

Relevance of the indicator: Consultants often play a key role in any major policy change. Taking the example of electricity reform and restructuring, since most countries have historically operated with vertically integrated nationally owned monopolies, most elements of the standard electricity reform prescription are new. Consequently, governments often contract with consultants to help with reform design, who in turn are often supported by donor agencies. Many key decisions about sectoral reform are made by consultants, or are made de facto through the terms of reference that guide consultants. There are several reasons why availability of these documents is important. Scrutiny of the terms of reference will allow the public to assess if a range of alternative reform options, as well as their implications for financial, social, and environmental outcomes, have been considered. Availability of consultant reports will help ensure that decision-makers do not falsely represent the findings of consultant reports. Transparency is also likely to provide some measure of external accountability on consultants and stimulate them to produce quality reports. For all these reasons, it is important that consultant reports be made available to the general public, above and beyond their scrutiny by policy-makers.

Values Select Explanation and Justification Not applicable/not assessed (0) No details of consultants (other than the name of the firm) involved in reform and restructuring are public information

(i) Low

Substantial details of the consulting arrangement (at least two from among terms of reference, budget, and procedure for selecting consultant) are easily available to the public and on a timely basis

(iii) Medium

Substantial details of the consultant arrangement and the final consultant report are readily available to the public and on a timely basis

(v) High

Guidance for assessment teams: For the purposes of this indicator, definitions are as follows: • Ease of availability: To be useful, documents must be easily available to the public. For example, documents should be posted on

a website, available in a library or reading room, and readily produced on demand from a ministry. • Timeliness: Was this information available to the public prior to the decision being taken, and was the public informed through

websites, media, etc. of the availability of the information? To apply this indicator, seek information on consultant arrangements and reports from official sources as appropriate, and undertake interviews with industry insiders to establish whether this information was available at the time of decision-making.

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PP 12 - Review of consultants’ recommendations by third parties Access Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Independent review is one important mechanism to solicit broader input on consultant recommendations, and assess the implications of recommendations for stakeholder groups. It provides an opportunity for stakeholders to undertake or commission their own analysis, thereby contributing to a more complete debate, prior to the implementation stage.

Values Select Explanation and Justification Not applicable/not assessed (0) There is no provision for independent review of consultant recommendations in the decision process

(i) Low

The process allows for independent review, but does not specify a clear process, including an outreach strategy and revision process

(iii) Medium

The process mandates an independent review, and spells out a clear process, including an outreach strategy and revision process

(v) High

Guidance for assessment teams: A useful review process should take the following considerations into account:

• Process for review: The terms of reference for the consultant contract should be explicit about the scope for, and need for, independent review of the consultant’s work. If not enshrined in the terms of reference, then the commissioning agent should otherwise have clearly indicated that the consultant’s work is open for scrutiny, and have allotted a reasonable time for doing so, before the report is finalized and the results incorporated into policy decisions.

• Outreach strategy: The consultant’s report should be adequately disseminated to stakeholders in order for all stakeholders to provide their own comments and input.

• Revision process: The consultant must be required to seriously consider the comments by stakeholders and, preferably, justify in writing the decisions enshrined in the final report.

For the chosen policy process, ascertain the consultants commissioned. Obtain documentary evidence such as consultant reports, evidence of outreach on those reports, independent analysis undertaken, and revisions of the reports. In addition, consultant terms of reference may explicitly spell out whether or not a review was envisioned. Consultants themselves are likely to be good sources of information on how their work was used. In addition, industry insiders, government staff who commission consultant reports, and donors (who often pay for consultants) can provide additional information on the existence and extent of a systematic review.

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PP 13 - Capacity of civil society organizations Access Principle: Capacity Relevance of the indicator: Civil society organizations (CSOs) can play a critical role in governance of electricity. Within the electricity policy process, too often narrow financial and technical considerations are dominant. Civil society organizations will have to ensure that social and environmental concerns are not under-represented. Moreover, private sector companies are frequently highly active in ensuring that their interests are heard in the private sector. Governments are often limited in their capacity to assess the validity of private sector interests and concerns, and the extent to which there are trade-offs with the public good. Civil society organizations are an essential counter-balance to private interests as part of a multi-stakeholder debate on electricity policy.

Values Select Explanation and Justification Not applicable/not assessed (0) There are no CSOs active in electricity policy who demonstrate two capabilities

(i) Low

There are at least two CSOs active in electricity policy, each of which demonstrates more than three capabilities

(ii) Low-Middle

There are at least two CSOs active in electricity policy each of which demonstrates four or more capabilities

(iii) Medium

There are at least four CSOs active in electricity policy each of which demonstrates four or more capabilities


There are at least six CSOs active in electricity policy each of which demonstrates four or more capabilities

(v) High

Guidance for assessment teams: To be effective in policy processes, civil society organizations must demonstrate several capabilities:

• Techno-economic analytical capacity: CSOs must be able to engage in policy debate based on informed positions and sound analysis. A good gauge of capacity is whether CSOs have submitted quality and deliberated comments on significant recent legislation or policy formulation processes.

• Proactive engagement and strategic capability: While many CSOs are adept at reacting to policy proposals, to bring about long term change it is often necessary to set agendas rather than simply react to others’ agendas. Evidence of agenda setting may include behind the scenes lobbying to introduce new legislation or new policies.

• Grass-roots links: Policy positions are often strengthened – substantively and politically – by adequate grassroots connections. Do civil society groups active in electricity demonstrate such links?

• Ongoing learning capacity: Electricity is a dynamic sector. Do civil society groups have the connections to sources of ongoing learning – academics, knowledge resources, international contacts – to enable them to stay current with debates?

• Networking: Since not all CSOs bring the same strengths and the same experience, the overall effectiveness of civil society is often enhanced by efficient and sustained coordination through a network. Does an effective network exist, that provides a basis for information sharing, joint strategizing and collaborative work?

• Broad credibility: For certain types of advocacy from the “inside” rather than the “outside” broad credibility with a wide range of stakeholders – government, private sector and other CSOs – is an important asset. Credibility may be measured by participation in networks, requests to participate in official and other events, and requests to participate on official committees and panels.

To implement this indicator, begin by identifying active CSOs CSOs can include non-governmental organizations, labour unions, academic institutions, and social movements. For the purpose of this indicator, CSOs must be active in policy (as distinct from

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regulation alone). This indicator complements ESA 14, which deals with CSO capacity specifically on social and environmental issues related to electricity. Since this indicator may well constitute a sort of self-assessment for the team, the team will have to safeguard the credibility of the assessment not only by applying a high standard of documentation and evidence, but also by drawing on opinions of CSO capacity held by sector stakeholders and seeking careful Advisory Panel review of this indicator.

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PP 14 - Quality of public participation process during reform or policy decisions Access Principle: Participation Relevance of the indicator: A strong process for public participation is an essential element of good governance in electricity. Public participation allows for otherwise marginal voices to be heard and interests to be represented, and provides an avenue for civil society input as well as a check against abuses. To be effective, however, public participation cannot be in name alone. It must be structured carefully so as to provide a realistic mechanism for broad participation.

Values Select Explanation and Justification Not applicable/not assessed (0) No well laid out procedure for public participation (i)

Low Adequately laid out process of public participation including one or two elements of quality

(ii) Low-Middle

Adequately laid out process of public participation including three or four elements of quality

(iii) Medium

Adequately laid out process of public participation including five or six elements of quality


Well laid out process of public participation including all seven elements of quality

(v) High

Guidance for assessment teams: This indicator should be applied to the same process used for Indicators 9 (Clarity on Process for Decision Making) and 10 (Availability of Background Documents)

Elements of quality in a good public participation process include:

• public registries of available documents; • communication of draft decision; • wide use of diverse communication tools to reach a broad range of stakeholders, which may include newsletters, media, internet,

public meetings, etc.; • adequate time for public consideration and preparation of positions; • opportunity for consultation and feedback; • clear communication on the results of participation; • outreach to affected and vulnerable communities.

Conduct interviews with officials and a broad range of stakeholders such as power sector industry (public and private), citizen groups, and different categories of user groups (industrial, commercial, residential, agriculture, etc.) and seek documentation of the public participation process.

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PP 15 - Quality of participation by stakeholders and government responsiveness Access Principle: Participation Relevance of the indicator: Even if public participation processes are well structured, they will only have an impact on outcomes if a sufficiently broad range of stakeholders participate actively, and if decision-makers actually incorporate inputs into the final decision. In this sense, this indicator complements the earlier two on civil society capacity and on the quality of public participation processes.

Values Select Explanation and Justification Not applicable/not assessed (0) No input was received from stakeholders or public participation did not meet even one element of quality in either public participation or responsiveness

(i) Low

Either participation or responsiveness met one element of quality (ii) Low-Middle

Participation and responsiveness both met one element of quality (iii) Medium

Participation and responsiveness both met two elements of quality


Participation met two elements of quality and responsiveness met three elements of quality

(v) High

Guidance for assessment teams: Key elements in measuring the quality of participation are:

• Quantity of participation: At minimum, a public participation process should lead to a minimum set of comments or submissions as an indicator that stakeholders are engaged in decision-making. For a substantial piece of legislation or policy, consider 10 submissions to be a minimum set of comments indicative of reasonable participation.

• Breadth of participation: comments and analyses are submitted by a broad range of stakeholder groups that include not only the power industry and industrial users, but also public interest NGOs, labour, consumer groups, and other sectoral consumers such as farmers. As a rule of thumb, sufficient breadth might be indicated if at least 20% of comments or five strong comments are submitted from non-industrial groups. For the purpose of this indicator, a comment should be counted if it makes at least one substantive or analytical point. Rhetorical comments that do not explain causes for disagreement, while they serve useful purposes in other contexts, should be discounted for the purpose of this indicator.

Key elements in measuring responsiveness of policy-makers are:

• Notification of public participation: Do official decisions or accompanying documents discuss whether and how public input was solicited?

• Summary of public participation: Do official decisions or accompanying documents summarize the results of that participation? • Response to public participation: Do official decisions explain how public input was incorporated into the final decision? Apply this indicator to the same process as was used to examine PP 14 on quality of public participation process, drawing on information and documents obtained in assessing PP14. To apply this indicator, scrutinize the participation by stakeholders to assess the quality of participation and the responsiveness of stakeholders as outlined above.

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PP 16 - Quality of media coverage about reform decisions Access Principle: Information Relevance of the indicator: Degree and type of media coverage is a good indicator of the potential for broader public engagement and debate. The better the information in the media, the more likely public views are to filter up to parliamentarians and/or to the executive. Conversely, the lack of coverage by media excludes one important avenue for transparency. Moreover, flawed or biased media coverage is also problematic, as it potentially fails to expose all sides of an issue.

Values Select Explanation and Justification Not applicable/not assessed (0) Media coverage does not meet even one element of quality (i)

Low Media coverage meets one or two elements of quality (iii)

Medium Media coverage meets all three elements of quality (v)

High

Guidance for assessment teams: This indicator should be applied to a carefully defined sample of newspapers for a limited set of days. It is important that this sample should be selected in close conformity with the following guidelines.

First, identify a significant legislative or executive decision of relevance to the electricity sector announced on a given day. Pick a one week span of time covering a period three days before and three days after this date, to capture both discussion prior to the event and immediately following. Second, identify the two largest circulation newspapers (regardless of language) and obtain copies of these papers for the seven selected days.

Elements of quality in media coverage include:

• Volume of coverage: If there was an average of four or more articles on the reform debate per newspaper during the seven days sample period, count this as an element of quality.

• Quality of coverage: From among the two sets of seven newspapers, select ten detailed articles in order to make this assessment. Assess the quality of coverage by looking for citations of specific documents, quotes by opposing stakeholders, officials and independent analysis. Since this is necessarily a qualitative judgment, document the basis for your assessment in the notes.

• Balance of coverage: Assess the balance of coverage in the various papers. Using the same ten articles picked for the quality of coverage assessment, examine if articles give only one point of view, or more than one viewpoint. Document the basis for your judgment.

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PP 17 - Methodology for Asset valuation / balance sheet restructuring during reforms Access Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Asset valuation of an existing utility is a necessary step if the utility is to be “unbundled” and eventually privatized. Asset valuation is a process of balance sheet restructuring that allows clear financial accounting of the various components of a vertically integrated utility, and is intended to allow possible purchasers to evaluate their bids. From the public perspective, asset valuation can affect debt servicing and therefore tariff rates (if tariffs are based on costs), as well as the relative burden on the public versus the private sector. For these reasons it is important that the methodology for asset valuation be subject to disclosure, justified and independently scrutinized.

Values Select Explanation and Justification Not applicable/not assessed (0) The methodology for asset valuation is entirely non-transparent (i)

Low The methodology is disclosed and justified but the application of the methodology is not explained and the valuation is not subject to independent professional scrutiny

(ii) Low-Middle

The methodology is disclosed and justified, the application is explained, but the valuation is not independently scrutinized

(iii) Medium

The methodology for asset valuation is disclosed and justified, the application is explained and independently scrutinized, but the review is not made public


The methodology for asset valuation is disclosed and justified, the application is explained and independently scrutinized, and the results of scrutiny are made public

(v) High

Guidance for assessment teams: Typically, the Ministry that governs the functioning of a utility (normally a Power Ministry or equivalent) would undertake asset valuation. If a regulatory agency is in place, this responsibility would fall to the regulator. Frequently, a consulting firm will be involved as well. Relevant information on the process of asset valuation, as well as on justification and scope for scrutiny, will be available with the governing Ministry or regulator. • Disclosure and justification of methodology: Asset valuation can be a complex business involving complicated judgments on

valuing assets. Consequently, it is important to have full disclosure of the methodology used and the justification for picking a particular approach to asset valuation.

• Explanation of method application: Since asset valuation methods are not straightforward to apply, it is also necessary to have an explanation of the various assumptions that are made in the course of applying the methodology.

• Independent scrutiny: Since asset valuation is highly technical, the degree of accountability is greatest if the decisions made regarding valuation are reviewed by a competent third party.

• Public disclosure of review: The asset valuation process provides greatest scope for transparency if the results of independent review are also publicly available from the ministry or regulator upon request.

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PP 18 - Process of Private Sector Involvement Access Principle: Information Relevance of the indicator: Where electricity sectors are subject to privatization or other forms of private sector involvement such as management contracts, the process through which the terms of private involvement are reached is of considerable public importance. Transparency in the process is an important tool to limit opportunities for corruption and graft, and to ensure that the public received a fair price for assets (in the case of full privatization) or does not pay unnecessarily high prices (in the case of a management contract). Transparency also allows scrutiny by civil society and other stakeholders, including possible competitors, and, ultimately, the prospect of appeal.

Values Select Explanation and Justification Not applicable/not assessed (0) No information on the bidding process is publicly disclosed (i)

Low One key element of the privatization process is publicly disclosed (ii)

Low-Middle

Two key elements of the privatization process are publicly disclosed

(iii) Medium

Three key elements of the privatization process are publicly disclosed


Key elements of the privatization process are public, and the successful bid is publicly justified on the basis of these elements

(v) High

Guidance for assessment teams: Key elements of processes to bring in the private sector involvement include: • Request for proposals • Information provided to the bidders • Decision criteria and decision-making process To apply this indicator, seek to obtain details on the private participation process from the relevant administrator, normally the ministry concerned or the regulator. Request the key decision criteria described above. Public disclosure here means that the information was publicly posted (for example, on a website), and/or this information was readily available on request at the time of the bidding process. If there is a substantial cost involved, or if a bond has to be posted to obtain the necessary information, then this cost should be interpreted as excluding public access to the information.

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PP 19 - Transparency in allocation of subsidies Access Principle: Information

Relevance of the indicator: Subsidies may be used for a range of purposes that assist low income groups and other interests who lay claim to subsidies or support policy objectives such as increasing access to electricity. Often, subsidy programs are socially beneficial and useful, but are subject to capture, misallocation and persistence beyond their useful life. Transparency in the subsidy process is an important component of reducing the risks of these outcomes.

Values Select Explanation and Justification Not applicable/not assessed (0) There are no public criteria and there is no public process for allocation of subsidies

(i) Low

There are criteria for allocation of subsidies but no process for allocation

(iii) Medium

There are both criteria and a process for subsidy allocation, and regular reporting on disbursement of subsidies

(v) High

Guidance for assessment teams: Select an important existing subsidy – one that uses substantial public funds, and that has considerable public visibility as evidenced by frequent media reports – and assess it for the purpose of this indicator. To examine the criteria and process, check any existing law and implemented regulations. Reporting on subsidies should include, at minimum, to whom the subsidy went, the amount, and for what purpose.

“Public criteria” for subsidy allocation would be criteria that are laid down in executive decisions or procedures, and information on these procedures is publicly available on request to the executive. A “public process” for allocation of subsidies would include a transparent process for applying the public criteria, including justification of the subsidy allocation, explanation of how allocation conforms to the criteria, and monitoring of disbursement. This indicator may also be applied to subsidies used to provide financial support to utilities being privatized or assisting loss-making public sector companies in meeting their financial obligations during the transition period.

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PP 20 - Accountability regarding subsidies Access Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Subsidies are susceptible to being captured by groups for which they are not intended or for purposes other than those they are intended to achieve. For this reason, it is important that subsidy mechanisms be constantly scrutinized to ensure that they are meeting their original purposes.

Values Select Explanation and Justification Not applicable/not assessed (0) No requirement to monitor effectiveness of subsidies in meeting stated goals

(i) Low

Requirement to monitor, with clear accountability for the monitoring role

(iii) Medium

In addition to the above, clear stipulation of procedure for public review of allocation of subsidies and reallocation in case of non-compliance.

(v) High

For the same subsidy program as selected in PP 19, seek program documents that describe implementation of the subsidy program. Scrutinize documents to find evidence of requirements to monitor subsidy effectiveness, and a clear definition of who is responsible for doing this monitoring. What measures do the program documents put in place for actions to be taken in case monitoring reveals that the program goals are not being met? Is there a procedure to review the subsidy, or to undertake retargeting? In addition to document review, interview officials responsible for implementation, and beneficiaries of the program to understand how these provisions work in practice.

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PP 21 - Independent Power Producers Access Principle: Information Relevance of the indicator: Independent Projects / Producers (IPP) have typically preceded any fundamental restructuring of the electricity sector. Many of these projects have been criticized on economic, social and environmental grounds. In addition, due to the large volume of funds often associated with such projects, there have been several allegations about corruption and other bad practices that have surrounded many IPP deals. Since IPPs are a significant component of many power sectors in a restructured environment, and because they have become controversial symbols of governance issues in the sector, they are important to scrutinize.

Values Select Explanation and Justification Not applicable/not assessed (0) The IPP process meets none of the elements of quality (explained below)

(i) Low

The IPP process meets only one of the elements of quality (ii) Low-Middle

The IPP process meets only two or three elements of quality (iii) Medium

The IPP process meets four or five elements of quality (iv) Medium – High

The IPP process meets all six elements of quality (v) High

Guidance for assessment teams: Key elements of quality that are critical for ensuring a rational IPP policy: • Legislative approval: The legislative body was involved in the IPP policy development, either in the form of a debate, new

amendments in the existing legislation, or through the legislative committee process. • Competitive bidding: The IPP projects are awarded on the basis of competitive bidding. • Adequate demand analysis: The need for a new IPP project is established based on transparent and detailed analysis about the

demand-supply scenario. Detailed analysis implies analysis of base load versus peak load requirements, capacity addition from other projects, improvements in the performance of existing plants, already contracted power purchases, sound basis for demand projections, etc.

• Analysis of financial impact: Before finalizing the project and entering into a power purchase agreement, it is important that a detailed analysis of the tariff impact of new IPPs is undertaken and the analysis is made public. Detailed analysis implies consideration of aspects such as sensitivity to foreign exchange rate change, fuel cost variations, and demand projections. Also, such an analysis should clearly put forth various assumptions regarding the plant performance and financial assumptions made for tariff projections.

• Adequate public consultations during policy development: A decision to introduce an IPP policy must be based on adequate public consultation. Adequate public consultations include making background documents available to the public, giving the public an opportunity to make comments / objections, and publishing executives / legislatives decisions on the public inputs.

• Adequate public consultations prior to project approval: Public consultations must also be held prior to approving a power purchase agreement with an IPP, as well as after the relevant details are worked out between a promoter and the power purchaser.

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PP 22 - Design of Competitive Mechanisms Access Principle: Information Relevance of the indicator: The introduction of competition is often a central goal in reforms of the electricity sector. In principle, competition can alleviate regulatory burdens by putting downward pressure on prices, and stimulate greater efficiency in the sector. In practice, however, introducing competition has proven to be difficult. Would-be competitors, whether incumbents or potential entrants, often prefer to be shielded from competition in the hope of earning higher and more stable profits. For their part, governments prefer the higher privatization prices paid for monopolistic companies. Competitive processes are subject to corruption in the absence of strong and well-designed oversight. Finally, markets are often too small or too poorly designed to create sufficient competition. The result of flawed competition is often borne by consumers directly, in the form of higher rates, or indirectly, through higher fiscal burdens following state intervention to mitigate flawed competition (as happened in California). Competition thus brings promise of some gains, but also the potential for substantial downside risk, making scrutiny of competitive processes essential.

Values Select Explanation and Justification Not applicable/not assessed (0) The design of competitive mechanisms meets none of the elements of quality (explained below)

(i) Low

The design of competitive mechanisms meets one or two elements of quality

(iii) Medium

The design of competitive mechanisms meets all three elements of quality

(v) High

Guidance for assessment teams: Key elements of quality that are critical for ensuring a rational competition policy are: • Consideration of existing conditions during policy development: Conditions for existence of competition, such as market size,

are explicitly considered during policy development. • Safeguards against market power: Mechanisms for the prevention of market power abuse are in place where wholesale or retail

markets exist. These mechanisms include: the investigation and mitigation of market power explicitly assigned to an entity (regulator agency, antitrust commission, or the like); explicit market share limitations written into the law; or a law explicitly establishing other mechanisms for prevention or mitigation of market power (e.g., price bids in the wholesale market must be based on variable costs only, or obligation to divest assets).

• Public consultations on policy development: Adequate public consultations are held during competition policy development. To be effective, consultations would require making background documents available to the public, giving the public the opportunity to make comments / objections, and publication of executive / legislative decisions on the public inputs.

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Section A - Policy Process Analytical Questions

Many questions of governance require an element of judgment and are inherently subjective. For this reason, we suggest implementers document as carefully as possible the reasons for their assessments under each indicator. In addition, however, there are some important issues related to governance that are particularly challenging to capture through an indicator framework, but that are too important to ignore. This section deals with those questions. We suggest implementers keep these questions in mind as they conduct interviews and scan through documents, in order to write brief prose assessments of the following issues.

1. What are the roles of different actors in the initiation and promotion of a major policy change, such as the decision to proceed with reform and restructuring in the electricity sector?

Initiation of policy change can come from many sources � government, industry, academics, civil society, and donors. In most cases, this initiation occurs through informal processes, which precede any formal decision-making process. For this reason, the origins of major policy changes are very difficult to assess through an indicator framework. Similarly, promotion of a policy change more often than not will occur through informal and back channels rather than through formal consultative processes.

It is important to attempt to assess the originators and the drivers of reform. An understanding of the roles of actors will contribute to an understanding of whose interests are likely to be served by policy change, and, therefore, to an understanding of the governance systems necessary to make sure the public interest is also served. To address this question, the assessment team will need to examine the public information available, both formally through the media and reports, as well as informally through interviews with important sector actors and observers. Who played a role in raising the possibility of reforms, which individuals or groups were in opposition, why, and how did the process move forward, if indeed it did? 2. How do key actors in the sector � government, regulators, private sector, civil society � develop their knowledge, opinions, and ultimately positions, about the electricity sector? Electricity policy is a fast moving, and heavily debated and contested issue. Indeed, the extremely rapid pace at which privatization, regulation and competition came to replace vertically integrated monopolies as the standard policy prescription in the electricity sector is a testament to the pace of change in the sector. However, many of these elements continue to be contested. In this context of incomplete and fast-moving knowledge, there are several dangers to sensible policy making. Besides the possibility that the knowledge may be incomplete and/or flawed, there is also the danger that knowledge itself can be selectively used to promote some interests over others. For these reasons, capacity is an essential complement to transparency and participation in the sector. However, while indicators can measure a number of workshops, and numbers of comments filed, it is much more difficult to understand how participants in electricity obtain the information that this capacity is built on.

Accordingly, to complete the picture of capacity, it is important to examine how legislators and their staff, government officials, regulators, industrial users, donors, power sector industry, NGOs and consumers obtain and update their information. One important source of information is the international debate in technical journals. Frequently, however, specialist consulting firms will be the source of much information, often synthesized from technical sources and complemented by personal experiences. How is this information disseminated, through what vehicles? Is the same information accessible to all? Is the information systematically biased in one direction or another, or toward one perspective or another? Who funds information gathering and dissemination, and to what use is it put?

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Electricity Governance Indicators Version 1.1 Section B � Regulatory Process (RP)

Overview of the Regulatory Process: The Policy Process (PP), covered in Section A, defines the structure and broad contours of the electricity sector. This Section B looks at another important component of the governance chain, the Regulatory Process (RP). Regulatory process is the critical mechanism available to ensure that the economic, financial, social and environmental aspects of performance in the electricity sector are aligned. Regulatory bodies should permit and foster a healthy and efficient sector that is able to achieve the national goals as reflected in policy formulation. One of the critical functions of the RP is to balance the interests of key stakeholders such as investors, labour and consumers. A credible and predictable regulatory process and approach is essential for this purpose. RP encompasses key decisions and considerations in the sector, including tariff setting, licensing for power plants and other infrastructure services, or the setting of service as well as efficiency standards. Effective regulation should lead to technical efficiency, reliable high quality of service, and cost efficiency. Effective regulation is also expected to lead to enhanced confidence in the sector and to promote investment. The indicators in Section B assess key RP characteristics including: the authority and autonomy of the regulatory body; issues relating to the selection process and conflicts of interest; provisions regarding confidentiality of documents and systems for easy dissemination of public documents; room for participation in the RP and interest of civil society in regulatory interventions. In addition, given the specific responsibilities assigned to the regulatory body, there are indicators to assess the openness of procedures for issuing licenses; the rigor of reporting requirements for licensees and utilities; the overarching tariff philosophy; and the quality of consumer service and supply. These RP indicators could be applied to the body responsible for regulatory decisions, which may be a separate commission /board or a dedicated cell within the executive. Guidance for Assessments Regulatory functions are discharged by either a division or department of the ministry responsible for the electricity sector or through independent regulatory commissions. In several cases, as part of broader electricity sector restructuring, many countries have adopted the model of independent regulatory commissions. In both cases, the basic elements of good governance in the RP are the same and the RP indicators below could be applied in either case. The regulatory indicators are all intended to be applied to same body. In case there is more than one electricity sector regulator in the country (say, one at the federal level and a few at the state / province level), all indicators should be applied to one regulatory body either at the federal level or in a selected state. Depending on the resources available and objective of assessments, teams could apply the entire set of indicators to more than one regulatory body, if found desirable. Most of the information required for assessment can be obtained from the relevant electricity law; rules and regulations made under the law (by the ministry); rules and regulations developed by regulatory commissions; and regulatory commissions� orders and annual reports. In addition, interviews with regulatory members and staff, civil society and consumer groups that have filed cases before the commission, and the utility staff responsible for regulatory interface would be valuable. Press reports, academic papers, and sector conferences are also important sources of information. NOTE: In all indicators under this RP section, the entity responsible for regulatory decisions (either within a ministry or as a separate regulatory commission) is referred to as �regulatory body�. Assessment teams should clearly specify whether RP indicators are applied to a body / cell within a ministry.

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Section B � Regulatory Process * PRIORITY INDICATOR *

RP 1 - Institutional structure for regulatory decisions

Governance Principle: Capacity Relevance of the Indicator: One of the mechanisms often envisaged to enhance decision-makers� consistency and accountability is to have a separate, dedicated body, (regulatory commission or board, etc.), responsible for regulatory decisions. Experiences across countries indicate that the institutional structure of a regulatory body separate or independent from the concerned energy / electricity ministry leads to increased transparency and public participation in electricity sector decision-making. Hence, this EG toolkit considers the existence of an independent regulatory body a desirable structure to improve sector governance. Of course, just the existence of an independent commission is not sufficient; it must be complemented by several other specific features, covered in subsequent indicators in this Section B. In all subsequent indicators under this RP section, this separate body responsible for regulatory decisions (either within the ministry or as a separate regulatory commission) is referred to as �regulatory body�. The RP indicators should be applied to separate / independent regulatory commissions. In case such a separate body does not exist, the indicators could still be applied to a body or cell within the executive department which is responsible for most regulatory functions such as tariff determination, issue of license. Assessments teams should clearly specify if the RP indicators are applied to a body / cell within a ministry or to a separate / independent regulatory commission, if one exists. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Regulatory decisions are made through normal executive decision-making processes within the ministry

(i) Low

Most regulatory decisions are made through normal executive decision-making processes within the ministry. BUT for some critical, pre-defined decisions, a separate cell or group with specific responsibility is created within / by the ministry

(iii) Medium

An independent regulatory body is responsible for regulatory decision-making and oversight

(v) High

Guidance for assessment teams: The information about the existence of independent regulatory commissions should be available from media reports, discussions with electricity sector experts and from the relevant electricity sector law. A value of 5 should be considered only if the particular regulatory commission is created and operates pursuant to specific provisions in the relevant electricity law. The existence of a separate group or department within the ministry should be recognized only if there is a well-defined delegation of regulatory authority to this group through a particular law or through government rules and regulations.

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RP 2 - Authority of the regulatory body Governance Principle: Capacity Relevance of the Indicator: For the regulatory body to be effective and independent, it is essential that the regulatory body have sufficient legal authority and �teeth�. In the absence of sufficient legal authority the regulatory body will not be able to get crucial information or the decisions, or orders of the body may not to be complied with. This indicator refers to legal authority in procedural matters, whereas the next indicator (RP 3) refers to �functions� of the regulatory body, which are substantive areas of authority, like tariff-setting or approval of power purchase agreements (i.e. jurisdiction). Values Select Explanation and Justification Not applicable / Not assessed

(0)

The regulatory body does not have even one well-defined element of authority

(i) Low

The regulatory body has one well-defined element of authority

(ii) Low-Middle

The regulatory body has two well-defined elements of authority

(iii) Medium

The regulatory body has three well-defined elements of authority (iv) Medium � High

The regulatory body has all the four well-defined elements of authority

(v) High

Guidance for assessment teams: The four well-defined elements of authority for the regulatory body are:

• Full legal authority to seek information and evidence from all stakeholders; • Authority to investigate all matters under its jurisdiction; • Authority to penalize defaulters or parties responsible for breach of order; • Authority to enforce or require others to comply with its decisions / orders.

Relevant law / rules and regulations should clearly allow the regulatory body to exercise authority. There should be very limited restrictions to the body�s use of a particular authority. For example, regulatory bodies could have one or all of the following �penal� authorities � levy of fines and penalty for non-compliance; imprisonment of concerned officers / individuals for non-compliance with orders etc. In the justification / explanation column, assessment teams should discuss the status of each element of authority by referring to the specific provision in the law / rule / regulation and applicable restrictions / limitations. If in the opinion of the assessment team the restrictions / limitations are major (i.e. likely to render its authority ineffective) then this should be clearly stated and that authority should not be considered applicable to the regulatory body while assigning the value.

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RP 3 - Functions / Jurisdiction of the Regulatory Body Governance Principle: Capacity Relevance of the Indicator: This indicator focuses on functions / jurisdiction or substantive authority of the regulatory body. Functions imply the mandate or tasks entrusted to the regulatory body and may include: approval of tariff revision; approval of power purchase and/or fuel cost; ensuring fair competition; prevention of market power / monopoly; setting service standards. A regulatory body that scores highly on indicators RP 1 and 2 -- independent regulatory body and legal authority-- can still be rendered ineffective if its substantive mandate is very limited / narrow. For example, in certain cases the electricity reform act or privatization concession / license (which are issued by the government) may have pre-decided key parameters such as power purchase costs / procedures or possible efficiency gains. In such cases the role of the regulatory body is very limited and the �real� decision-making process remains non-transparent and non-participatory. This indicator assesses the extent of substantive authority (functions) and freedom of decision-making entrusted to the regulatory body. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Functions of the regulatory body are not clearly defined and there is considerable ambiguity about the jurisdiction of regulatory body

(i) Low

Functions of the regulatory body are clearly defined but three or more critical functions are not entrusted to the regulatory body

(ii) Low-Middle

Functions of the regulatory body are clearly defined but two critical functions are not entrusted to the regulatory body

(iii) Medium

Functions of the regulatory body are clearly defined but one critical function is not entrusted to the regulatory body

(iv) Medium � High

Functions of the regulatory body are clearly defined and all the essential critical functions are entrusted to the regulatory body

(v) High

Guidance for assessment teams: This indicator assesses two aspects of �functions� entrusted to the regulatory body. First, the indicator assesses whether the functions of the regulatory body are clearly defined in the applicable laws, rules, regulations or decrees. It is desirable that such legal instruments should leave no ambiguity about the mandate of the regulatory body. Ambiguity about such crucial matters often leads to a decision-making process that is more susceptible to subversion / capture. If there is such ambiguity for major functions, then a value of one should be assigned for this indicator. The second aspect covered by this indicator is the range of functions entrusted to the regulatory body. For the regulatory body to be effective it is essential that the mandate is sufficiently wide. Of the many possible functions that a regulatory body can perform, determining those which are critical and those which are not depends on the particular country scenario and includes considerations such as market structure (monopoly v/s competition); industry structure (integrated v/s unbundled utilities) and ownership (public sector v/s private sector). For example, if the reform model requires all distribution utilities to purchase power from a power exchange, then the function of regulating power purchase is not critical but the function of designing / regulating the power exchange becomes critical. Similarly, if the reform model is based on retail competition (i.e., allowing consumers to choose suppliers and negotiate prices), then ensuring fair

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competition becomes a more critical function than tariff-setting.. Some of the other critical functions for the regulatory body could be issuing licenses, and setting quality and consumer service standards. Teams may find it helpful to review critical functions identified by earlier assessments (available at http://electricitygovernance.wri.org) Before assigning a value to this indicator, assessment teams should develop a list of critical functions and clearly explain the reason for each entry in the list. The assessment teams should also list the critical functions entrusted to the regulatory body and state the basis for this determination. Apart from the study of all legal instruments, discussions with regulatory body members / staff, utilities, and consumer groups (actively intervening in the regulatory process) would help clarify the two aspects considered in this indicator in terms of functions and range of functions entrusted to the regulatory body. In some cases the legal instruments themselves entrust particular critical functions to the regulatory body but leave very little freedom for regulatory decision-making. In effect, this renders the body unable to perform those functions. For example, if the electricity law says that the regulatory body should set tariffs, but the privatization concession / license makes it obligatory for the regulatory body to consider only certain specified values for key performance parameters (e.g. T & D losses or capital investments), then in such a case it should be assessed that the regulatory body does not have the function of tariff-setting.

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http://electricitygovernance.wri.org/


RP 4 - Selection of regulatory body members Governance Principle: Access to Information and Transparency Relevance of the Indicator: Decisions of the regulatory body are crucial for the development of the electricity sector and the welfare of consumers and often the decisions of the regulatory body have very significant economic implications for the utilities. Also, as seen in the earlier indicators, to foster an effective regulatory process it is desirable that the regulatory body have significant procedural authority and substantive functions. To make effective use of such authority and adequately discharge the responsibilities cast on the regulatory body it is essential that members of the regulatory body are qualified / capable and free from influence of vested interests. Hence, a proper selection process for selecting members of the regulatory body is crucial. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The selection process of regulatory body members has only one element of effective selection process

(i) Low

The selection process of regulatory body members has only two elements of effective selection process

(ii) Low-Middle

The selection process of regulatory body members has only three elements of effective selection process

(iii) Medium

The selection process of regulatory body members has four elements of effective selection process


The selection process of regulatory body members has all the five elements of effective selection process

(v) High

Guidance for assessment teams: This indicator focuses on five key elements that make the selection process effective and a value is assigned depending on how many of these elements are present in a particular selection process. None of these elements is �sufficient� on its own, but a combination can lead to an improved selection process. These five elements are:

• Independence of the selection process � The selection process should be independent in the sense that the process should not give any particular stakeholder an opportunity for undue influence. Typical examples of such mechanisms are selection through an independent selection committee or through a standing body responsible for selection / appointments of top government bureaucrats / public sector companies. The composition of the selection committee can vary from country to country. If for a particular case such a mechanism exists but the assessment teams consider the composition of the selection committee to be severely flawed (to the extent of rendering it ineffective), then the teams can consider this element to be non-applicable. Teams must provide a proper explanation for this assessment and suggest a preferred composition.

• Well-defined process �The selection process should be clearly laid out. The relevant legal instruments must specify key aspects of the selection process: who will select; when and how nominations will be called for; when and how actual appointments will be made; etc.

• Transparency � The selection process should be transparent, at least to the extent of publicizing the background of short-listed candidates (before final selection is made) in terms of their past employment, qualifications and interests in the electricity or related sectors, etc.

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• Composition and eligibility of members �The legal instruments must clearly specify the composition of the regulatory body (in terms of how many members and their backgrounds / expertise) and the eligibility criteria for members (in terms of educational background, professional experience, etc.).

• Differing tenures: To minimize the possibility of undue influence on the selection process by any particular political formation, it is desirable that the legal instruments specify varying / differing tenures of the regulatory body members (i.e. different members retire at different times, hence avoiding the possibility of all members being appointed during the term of the same government / administration).

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RP 5 - Conflict of interests of regulatory body members Governance Principle: Accountability and Redress

Relevance of the Indicator: In order to ensure regulatory credibility and fairness it is crucial to prevent conflict of interests of regulatory body members. Conflict of interests could be of diverse nature. For example, a member may have substantial financial interests in the electricity sector or he/she may have been an employee of one of the utilities to be regulated. In such cases it is more likely that the decisions of the regulatory body would favour the narrow interests of its members than the broader public interest. Hence, it is essential to assess if adequate legal provisions exist to prevent conflict of interests. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The applicable law, rules or regulations do not explicitly recognize issues of conflict of interests of regulatory body members, and hence does not have explicit provisions to prevent such conflict

(i) Low

The applicable law, rules or regulations do explicitly recognize issues of conflict of interests of regulatory body members, and have at least two of the four elements / provisions to prevent such conflict of interests.

(iii) Medium

The applicable law, rules or regulations do explicitly recognize issues of conflict of interest of regulatory body members and have adequate provisions to prevent such conflict of interests

(v) High

Guidance for assessment teams: Typically, to prevent such conflicts of interest the legal instruments of the selection process should specify that before appointing any candidate as a member of the regulatory body, he/she must disclose his/her financial and/or other interests in the electricity or related sectors to the appointing authority / selection committee. Typical provisions to address such conflicts of interest are that a member:

• Financial: should not have any financial interests in any organization or utility related to / doing business in the electricity sector;

• Commercial: cannot take any commercial employment with an electricity sector entity for a few years after retiring; • Term: cannot be re-appointed to the regulatory body; • Regulatory Representation: cannot represent the interests of any party before the regulatory body in future.

The provisions to prevent conflicts of interest should be considered adequate i.e. value V, if the assessment team finds that existing provisions effectively prevent conflicts of interest. In other words, if there are more than 2 provisions for preventing such conflicts but the team believes they are insufficient, then the teams must provide specific suggestions of provisions they consider necessary, while assigning value III for this indicator.

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RP 6 - Autonomy of regulatory body Governance Principle: Capacity Relevance of the indicator: To ensure that the regulatory body functions without the influence of or interference from various stakeholders, it is essential that the regulatory body is autonomous. If the regulatory body does not have sufficient autonomy it is likely that it will be ineffective in fostering a rational, credible regulatory process and would become vulnerable to undue influences or pressures from different stakeholders. Hence, this indicator assesses the extent of autonomy available for the regulatory body. Values Select Explanation and Justification Not applicable/ Not assessed (0) The regulatory structure does not have even one element of autonomy

(i) Low

The regulatory structure has one or two elements of autonomy

(iii) Medium

The regulatory structure has all the three elements of autonomy

(v) High

Guidance for assessment teams: The three elements of autonomy of the regulatory body are:

• Fixed tenure: Assurance of fixed tenure of members of the regulatory body could be judged from the appointment and removal provisions in the relevant statutes. Typical examples of legal provisions to ensure fixed tenure is appointment for a fixed number of years and removal only after elaborate legal procedure, often involving judgment from a sitting judge of senior court on specified grounds such as moral turpitude or insolvency.

• Financial autonomy: Availability of adequate financial resources is crucial to ensure effective functioning of the regulatory body. For example, in some cases regulatory bodies themselves are allowed to raise required resources by charging a fee to licensees or a cess on electricity sales. In some cases, budgets prepared by the regulatory body are considered to be approved by the executive, which has the responsibility to make available sufficient resources in a timely manner. The procedural freedom to the regulatory body to increase / adjust such fees / cess / budget and to actually utilize these resources also needs to be considered. Though financial autonomy is desirable, there is no doubt that the regulatory body must be accountable for its expenditure. For this purpose, such bodies are subject to standard government audit and accounting norms. Assessment teams need to take this distinction into account while applying this indicator.

• Human resources: Freedom to the regulatory body in terms of human resources available. Adequate human resources --either permanent staff or consultants-- should be available to the regulatory body. The regulatory body should also have freedom to select its own staff and consultants, as well as to decide their remuneration. Adequacy of human resources could be judged on the basis of projected versus actually sanctioned staff strength and freedom to appoint consultants.

Assessment teams should research the applicable legal instruments to assess how many of the three elements of autonomy are applicable to the regulatory body. If there are similar regulatory bodies for other sectors (water, telephone, gas, etc.) then comparison will also be useful for this purpose.

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Section B – Regulatory Process

RP 7 - Appeal mechanism Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: From the governance standpoint, it is essential that regulatory decisions can be appealed before a separate body. This ensures accountability of the regulatory body and also leads to increased stakeholder confidence in the overall regulatory process. This indicator assesses whether such appeals are allowed under the statutes and, if so, then on what grounds. This indicator complements questions about the overarching judicial system for the sector addressed in ESA 15 and ESA 16. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The order / decision of the regulatory body cannot be challenged in the form of review or appeal before another authority or court of law.

(i) Low

The order / decision of the regulatory body can be challenged in the form of review or appeal before another authority or court of law but only by parties to the original decision

(ii) Low-Middle

The order / decision of the regulatory body can be challenged in the form of review or appeal before another authority or court of law by any affected person, but only on the grounds of procedural violations

(iii) Medium

The order / decision of the regulatory body can be challenged in the form of review or appeal before another authority or court of law � by any affected person but there is no clarity regarding the grounds for such an appeal


The order / decisions of the regulatory body can be challenged in the form of review or appeal before another authority or court of law � by any affected person and it there are specific provisions that such appeal / review could be on procedural as well as substantive grounds

(v) High

Guidance for assessment teams: This indicator assesses two important aspects of the appeal mechanism pertaining to decisions of the regulatory body: the party who can appeal and the grounds of appeal. In some cases, an appeal is permissible only on grounds of procedural violation (i.e. no proper affidavit, no public hearing). In this form, the scope of appeal is very limited, and in most cases where such procedural violation is proved the appellate body will at most direct the regulatory body to reconsider the decision but will not modify or change the body�s decision. In some cases statutes allow for appeal on substantive grounds as well, implying that an appeal can be filed on grounds such as inadequate analysis or non-application of mind. This type of appeal involves more in-depth scrutiny of the decision / order of the regulatory body, hence making it more accountable. Appeals on substantive grounds before the normal court of law may not be desirable as the courts may not be sufficiently capable of appreciating the complex techno-economic issues often involved. Allowing the courts to substitute their own judgment in place of that

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of an expert regulatory body may be counter-productive. To address this concern in some countries, appeals against the decisions of the regulatory body go before a special tribunal, which consists of not just legal experts but experts from other fields as well (e.g. economics, finance, technical). But such special appellate tribunals increase the costs of the regulatory process and may not be suitable for countries with limited resources and at the nascent stage of power sector development. Depending on the country, the assessment teams must form an opinion about the suitability of appeals before special appellate tribunals. If the assessment teams decide that such a tribunal is desirable but absent, then a value of 3 should be given. If assessment teams consider that such a special tribunal is not required, and the normal court of law is appropriate for appeals on substantive grounds, then a value of 5 should be considered. Also if such a tribunal already exists and has the authority to consider substantive appeals, then again a value of 5 should be considered.

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RP 8 - Training of regulatory body members and staff Governance Principle: Capacity Relevance of the indicator: In recent years the electricity sector in many countries has witnessed rapid changes in market structure, industry structure and ownership. The role of regulator has been made more complex by changes in the financial sector, in technology, and growing dependence across countries. This means the regulatory body must address very complex issues. Continuous capability building of members and staff of the regulatory body is crucial to ensure that it has the capacity to addresses such complex issues. Also, to avoid the possibility of indoctrination in any one perspective, it is desirable that training modules use diverse faculty representing different perspectives and viewpoints. Hence, this indicator focuses on the availability of such training for members and staff of the regulatory body. The underlying rationale for this indicator is that regulatory body members and staff should have access to training that:

• Is available on a regular and planned basis; • covers multiple fields (technical, financial, legal) rather than being restricted to one specialized field; • includes diverse perspectives on important issues such as market structure, competition, tariff philosophy, subsidies, etc.,

though use of faculty with diverse backgrounds; It is not enough that such opportunities be offered � they must also be taken advantage of. Therefore, to meet the High element of quality, regulatory body participation in a minimum number of the training opportunities offered should be required or strongly encouraged. Teams should attempt to ascertain the extent to which these training opportunities are attended by regulatory body members. Only the courses / training actually attended by different members and staff of the regulatory body should be considered while applying this indicator. For example, if multiple courses in different fields are offered but the regulatory staff have not attended a single course, then value 1 should be assigned. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Regulatory body members and staff have not attended any of the specialized technical, legal, financial training courses

(i) Low

Regulatory body members and staff have limited and ad-hoc access to specialized training and in only one of the following fields: technical, legal, financial

(ii) Low-Middle

Regulatory body members and staff have access to specialized technical, legal, financial courses (covering more than one field), but such opportunities are ad-hoc

(iii) Medium

Adequate training facilities and institutions to train regulatory body members and staff exist so as to regularly improve their capacity to understand and/or analyze technical, legal, financial issues


Facilities and institutions to train regulatory body members and staff are available and staff of the regulatory body attends such courses on regular basis so as to improve their capacity to understand and/or analyze technical, legal, financial issues. AND systematic, pro-active efforts are made to expose regulatory body members and staff to different viewpoints and perspectives through use of diverse faculty

(v) High

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Guidance for assessment teams: The three attributes of training available to the regulatory body members and staff are:

• The certainty and regularity of training opportunities (ad-hoc or routine, planned); • The fields in which such training is available (technical, legal, financial); • The diversity of training viewpoints / perspectives.

Availability of training opportunities can be assessed based on information about training institutes and courses, as well as actual attendance / participation at such courses in the last three years. The assessment teams may interview members and staff of the regulatory body to determine which of the three training opportunity attributes they had in the recent past, and how many found such training useful. Teams should also investigate whether the regulatory body has any documented policy about providing training to its staff and members. Indicator ESA 5 from Section 3, related to environmental training and capacity of the regulatory body, would be useful to review the background research conducted for ESA 5 for this indicator and vice versa.

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Section B – Regulatory Process

RP 9 - Information available to public regarding use of consultants

Governance Principle: Access to Information and Transparency Relevance of the indicator: Consultants often play a key role in the regulatory process and assist / advise the regulatory body on many key issues, such as tariff revision or power purchase. Transparency in the choice and performance of these consultants is, therefore, crucial to ensure transparency and representation of interests of stakeholders in the process as a whole. Values Select Explanation and Justification Not applicable / Not assessed

(0)

No details of the consultants (other than the name of the firm), involved in assisting the regulatory body are public information

(i) Low

Substantial details of the consulting arrangement (at least two from among terms of reference, budget and procedure for selecting consultant) are readily available to the public and on a timely basis

(iii) Medium

Substantial details of the consultant arrangement and the final consultant report are readily available to the public and on a timely basis

(v) High

Guidance for assessment teams: Definitions for the purposes of this indicator: !

!

Ease of availability: to be useful, documents must be easily available to the public. For example, documents should be posted on a web site, available in a library or reading room, and readily produced on demand. Timeliness: teams will need to determine whether this information was available to the public with reasonable lead time prior to the decision being taken, and if the public was informed of the information�s availability through web sites and at least one other communication medium.

To apply this indicator, seek information on consultant arrangements and reports from the regulatory body. Assessment teams could seek relevant information for all consulting assignments awarded by the regulatory body in, say, the last year.

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RP 10 - Procedural certainty about regulatory process and decisions Governance Principle: Access to Information and Transparency Relevance of the indicator: To enhance credibility of the regulatory process for all stakeholders, it is essential that the regulatory body functions in a predictable manner. This indicator attempts to assess the extent to which the regulatory body has laid out clear rules / regulations / guidelines to establish such certainty. Values

Select Explanation and Justification

Not applicable / Not assessed

(0)

Proceedings before the regulatory body are neither governed by well-laid-out rules of procedure nor are governed by clear rules about substantive decision-making

(i) Low

Proceedings before the regulatory body are either governed by well-laid-out rules of procedure or they are governed by clear rules about substantive decision-making

(iii) Medium

Proceedings before the regulatory body are governed by well-laid-out rules of procedure as well as by clear rules about substantive decision-making, prepared by the regulatory body

(v) High

Guidance for assessment teams: This indicator considers two aspects of regulatory certainty: procedural certainty and certainty about substantive decision-making. Procedural certainty relates to well-laid-out, defined rules of procedure for filing of cases / petitions, public hearings, etc. Certainty about substantive decision-making includes regulations / guidelines, which will govern substantive aspects of the regulatory process like principles of tariff determination, principles of power purchase approval, parameters for evaluation of capital and other expenditure by licensees, etc. The extent of flexibility or rigidity of such rules / regulations / guidelines is not covered in this indicator, as the desirability or otherwise of such an approach would be country-specific. To apply this indicator, assessment teams will have to scrutinize various rules / regulations / guidelines / orders issued by the regulatory body in this regard.

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RP 11 - Pro-activeness of the regulatory body Governance Principle: Capacity Relevance of the indicator: The electricity sector is complex and dynamic. For effective regulation the regulatory body must work in a proactive manner. A regulatory body that only responds to cases / petitions filed before it is less likely to be effective than a regulatory body which takes initiatives to address the challenges before the sector. This indicator seeks to capture characteristics a proactive regulatory process. Values Select Explanation and Justification Not applicable / Not assessed (0) In the last three years, there is not a single instance (of the types described below) of pro-activeness of the regulatory body

(i) Low

In the last three years, there are one to five instances (of the types described below) of pro-activeness of the regulatory body

(iii) Medium

In the last three years, there are more than five instances (of the types described below) of pro-activeness of the regulatory body

(v) High

Guidance for assessment teams: Proactiveness and initiative of the regulatory body can be assessed based on certain types of events or decisions the body makes. Some of these typical events / instances are described below. Assessment teams should determine how many such events / instances have taken place in the last three years and evaluate them accordingly. Assessment teams should describe each such event that it considers an instance of �proactiveness�. If the regulatory body has existed for less than three years this indicator should not be applied, for in this initial period where the regulatory body is faced with the challenge of building institutions proactivity will be difficult. Events / instances indicative of �pro-activeness� of the regulatory body are: •

•

•

Use of penal powers: Has the regulatory body used its penal powers to force compliance with its orders? If yes, how many times and for which cases? Suo-motu petitions: Suo-motu petitions are petitions / cases initiated by the regulatory body on its own to address certain anomalies or issues before the electricity sector. Has the regulatory body adopted this route, and if so, how many times? Discussion papers / studies / conferences: These are effective ways to generate public debate and consultation about issues of long-term and vital importance. Has the regulatory body used any of these tools, and if so, how many times? Note: It is essential that such papers / studies / conferences should not be a direct fall-out of any legal requirement or case / petition filed before the regulatory body, but instead should be the outcome of its own initiative.

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RP 12 - Disclosure of documents in the possession of the regulatory body Governance Principle: Access to Information and Transparency Relevance of the indicator: Transparency in decision making is a fundamental principle of good governance. Hence, it is essential to assess if all documents / information which forms the basis of decisions / orders of the regulatory body are available to public. This indicator also assesses restrictions, if any, on making documents public (i.e., if there is any system of classifying documents as confidential, secret, etc.). Values Select Explanation and Justification Not applicable / Not assessed

(0)

By law / rules / regulations, all documents in the possession of the regulatory body are considered confidential or the body is bound to keep confidential all documents for which any stakeholder claims confidentiality

(i) Low

All documents (or documents for which any party claims confidentiality) in the possession of the regulatory body are expected to be confidential, but, the regulatory body has authority to make documents public even if any party has claimed confidentiality

(ii) Low-Middle

There are no clear provisions about which documents in the possession of the regulatory body are public or confidential. Decisions regarding these documents depends on the concerned official

(iii) Medium

There is a presumption that all documents / information in the possession of the regulatory body are expected to be public unless the certain documents are classified as �confidential� by the body, but there are no well-defined procedures and rules to determine �confidentiality�


There is a presumption that all documents / information in the possession of the regulatory body are public unless certain documents are classified as �confidential� by the regulatory body and there are clear procedures and rules to define such �confidentiality�

(v) High

Guidance for assessment teams: Assessment teams should study applicable law, rules, and regulations of the regulatory body to assess the extent of transparency relating to sharing of documents with the public. If the regulatory process is subjected to any overarching �right to information� types of statutes, then these should also be studied. Any case law or judgments of the court that have significant impact on these issues should also be considered. In case this indicator is applied to a body / cell within executive (which is not a separate / independent commission), then the operating procedures / rules of executive regarding disclosure of documents should also be studied.

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RP 13 - Procedure for public access to regulatory body documents Governance Principle: Access to Information and Transparency Relevance of the indicator: Availability of regulatory body documents to the public is certainly important. But for effective use of such access to information it is equally essential that at the operational level there are no difficulties / hurdles in actually exercising this right to information and obtaining relevant documents. Hence, this indicator focuses on operational issues / practices regarding document sharing. Values Select Explanation and Justification Not applicable / Not assessed

(0)

None of the four elements of desired procedure for public access to regulatory body documents are present

(i) Low

Only one element of desired procedure for public access to regulatory body documents is present

(ii) Low-Middle

Only two elements of desired procedure for public access to regulatory body documents are present

(iii) Medium

Three elements of desired procedure for public access to regulatory body documents are present


All the four elements of desired procedure for public access to information are present

(v) High

Guidance for assessment teams: Four elements are crucial to remove operational hurdles and to encourage various stakeholders to use their right to information. The elements of desired procedure are: • Well-indexed database of documents � This will ensure that people know what documents are available to the public. • Simple, well-defined procedure for inspecting / obtaining documents � Absence of such procedure discourages people from

exercising their right to information, as they are required to spend significant time and effort to obtain documents. Also the lack of such procedure becomes a tool for officials to deny information.

• Reasonable cost � The cost for assessing (inspection or obtaining copies) the documents should be reasonable, as too high a cost would again discourage actual exercise of the right to information. The reasonability of cost could be judged on the basis of considerations such as expenses from photocopying documents or administering the document disclosure system.

• Wide dissemination of information regarding the preceding three elements � Publicization through measures such as advertisements, brochures, websites and newsgroups is essential to inform and encourage people to use such procedures. Absent dissemination, there is a danger that few people will be aware of the measures, and consequently not utilize them, despite the presence and simplicity of the procedure.

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RP 14 - Space for public participation in the regulatory process Governance Principle: Participation Relevance of the indicator: This indicator assesses the extent to which proceedings before the regulatory body are open, and an ordinary person�s right to participate in the proceedings - another crucial component of the good governance process. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The law / rules / regulations mandate that proceedings before the regulatory body will not be open for the public and the public cannot participate in the proceedings

(i) Low

By law, unless the regulatory body makes a special order, proceedings before the body are not open to the public and the public has no right to participate in the proceedings

(ii) Low-Middle

The law does not specify whether proceedings before the regulatory body are open to the public or if the public can participate in the proceedings

(iii) Medium

By law, all proceedings before the regulatory body are open to the public, but the public has no right to participate in such proceedings


By law, all proceedings before the regulatory body are open to the public, and the public has the right to participate in such proceedings

(v) High

Guidance for assessment teams: This indicator assesses two aspects of participation by the public in the regulatory process. In some cases, the relevant statutes may allow for all proceedings before the regulatory body to be open, implying that any member of the public can sit in the hearing / meeting room during the proceedings before the regulatory body but may not be allowed to contribute any input to the record (i.e. they are not allowed to participate). �Allowed to participate in the proceedings� means the public has a right to make submissions and filings that become part of the record of the proceedings before the regulatory body. Here, �public� means any interested or affected party or person.

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RP 15 - Institutional mechanism for representation of the interests of weaker sections / stakeholders Governance Principle: Participation Relevance of the indicator: Past experiences indicate that even though people have a right to participate the interests of the weaker sections or stakeholders are often not adequately represented in the regulatory process. Therefore it becomes essential to determine if the regulatory process has special arrangements to enhance participation of such sections. Values Select Explanation and Justification Not applicable / Not assessed

(0)

No special efforts / arrangements are made to ensure that the interests of weaker sections / stakeholders are represented during the regulatory process

(i) Low

There is no permanent institutional arrangement to ensure that the interests of weaker sections / stakeholders are adequately represented in the regulatory process, but on certain occasions the regulatory body makes ad-hoc arrangements for this purpose

(ii) Low-Middle

One institutional arrangement exists to ensure that the interests of weaker sections / stakeholders are adequately represented in the regulatory process

(iii) Medium

Two institutional arrangements exist to ensure that the interests of weaker sections / stakeholders are adequately represented in the regulatory process, or there is only one institutional arrangement but the regulatory body also makes additional ad-hoc arrangements for important cases


Three institutional arrangements exist to ensure that the interests of weaker sections / stakeholders are adequately represented in the regulatory process, or there are two institutional arrangements and the regulatory body also makes ad-hoc arrangements for important cases

(v) High

Guidance for assessment teams: A number of institutional arrangements could be used for enhancing participation of the weaker sections:

• Appointment of �consumer representatives� to represent the interests of consumers before the body in all proceedings; • Requirement that the regulatory body staff makes submissions on behalf of the weaker sections; • A separate government institution with a specific mandate to represent the interests of the weaker sections in proceedings

before the regulatory body; • A requirement that the concerned government ministry / department�s (e.g. social / rural development, employment

development) views be heard when the regulatory decision is likely to have significant impact on weaker / marginalized sections.

In addition to these arrangements there may be other such mechanisms used in the country. To ensure that over time these structures / institutions are not subverted or diluted, it is desirable to have multiple mechanisms in force. Note: This indicator will not be applicable if people have no right to participate in the regulatory process (i.e., if the value assigned to RP 14 is (i) or (ii), i.e., the proceedings before the regulatory body are not open to the public in general).

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RP 16 - Capacity building of weaker sections / stakeholders Governance Principle: Capacity Relevance of the indicator: In addition to allowing the weaker sections to participate in the regulatory process and making arrangements to ensure their representation in the process, it is essential to develop the capabilities of such sections to make their own representations and to take up their own issues independently. Unless this is done, such weaker sections will have to perpetually depend on the support of the various mechanisms discussed in RP 15 (i.e., consumer representatives or regulatory body staff with specific mandate). Doing so may compromise their interests in the long term. Values Select Explanation and Justification Not applicable/not assessed

(0)

Regulatory body or other government agency does not undertake any activity to build capacity of weaker sections or to provide financial, technical and legal support

(i) Low

Regulatory body or other government agency either undertakes some activities to enhance the capacity of weaker sections to participate in the regulatory process or provides financial, technical and legal support for making representations before the body

(iii) Medium

Regulatory body or other government agency undertakes activities both to enhance the capacity of weaker sections to participate in the regulatory process and also provides financial, technical and legal support for representations before the body

(v) High

Guidance for assessment teams: This indicator assesses two key ways of enhancing the capability of weaker sections / stakeholders:

• Information - whether the regulatory body or other government agency undertakes any activities such as training courses, preparation of informational brochure and other literature, etc;

• Support - whether the regulatory body or the other government agency provides technical, legal and financial support for making representations by the weaker sections.

For example, in some cases the regulatory body or other government agency may provide free legal advice to eligible petitioners, waive petition fees and charges, or provide financial support to perform studies, etc. While assessing this indicator, assessment teams should consider the normal / standard / routine practices of the relevant agency and the assessment should not be based on any one ad-hoc effort by the relevant agency. Weaker sections / stakeholders are defined as socio-economically vulnerable / weaker groups such as indigenous communities, low income groups, rural population, informal, small industry / commercial establishments.

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RP 17 - Interventions by civil society in the regulatory process Governance Principle: Participation Relevance of the indicator: Many of the earlier indicators assessed procedures and mechanisms aimed at enhancing public participation in the regulatory process. From the standpoint of governance and apart from procedures and mechanisms, the actual practice of good governance principles is also critical. In other words, the procedures and mechanisms for public participation are only meaningful to the extent to which civil society organizations are able to make use of these measures. This indicator attempts to assess the quantum and depth of public participation in the regulatory process. This indicator relates to PP 13 and ESA 14. Values Select Explanation and Justification Not applicable/not assessed

(0)

During the last two years there were no cases filed before the regulatory body by consumers or civil society organizations / groups

(i) Low

During the last two years cases pertaining to �private interests� were filed by consumers / groups

(ii) Low-Middle

During the last two years between one and three �public interest� cases were filed by civil society organizations / groups

(iii) Medium

During the last two years more than three �public interest� cases were filed by civil society organizations or at least one �public interest� appeal was filed against the orders / decisions of the regulatory body


During the last two years, apart from meeting the above criteria, more than two civil society organizations / groups were involved in the �public interest� cases / appeals

(v) High

Guidance for assessment teams: Assigning values for this indicator requires the consideration of three parameters:

• Number of cases filed � Only cases initiated by consumers or civil society organizations should be considered. For example, groups� submissions to the regulatory body in response to a tariff-increase petition filed by the utility should not be considered. Such groups� appeals against the order of the regulatory body should also be counted as separate cases.

• Nature of cases filed � Cases filed before the regulatory body can be of two types: (1) �Private interest� cases whose outcome would primarily benefit a particular consumer or set of consumers, and/or (2) "Public interest� cases whose outcome would be in the long-term interest of more than one consumer category.

• Number of civil society organizations involved � This parameter corresponds to a value of 5, as the filing of cases before the regulatory body by more than two organizations indicates broader public participation in the regulatory process.

Assessment teams should try to discuss the impact or relevance of the values in three earlier indicators (RP 13,14 and 15) on the value for this indicator. For example, if this indicator has a low value then is this the result of low values in earlier related indicators?

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RP 18 - Orders and decisions of the regulatory body Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Unless stakeholders know the basis for regulatory decisions and the consequences resulting from their comments / objections, they will not have faith in the decisions of the regulatory body and may not be satisfied with the outcome. Also, requiring the regulatory body to provide reasons for its decisions and to respond to public comments / objections is essential to promote accountability. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There is no legal requirement that any order / decision of the regulatory body must contain reasons and must respond to public comments / objections

(i) Low

There is a legal requirement but orders / decisions of the regulatory body either lack sufficient reasons or fail to respond to public comments / objections

(iii) Medium

There is a legal requirement and orders / decisions of the regulatory body contain sufficient reasons and respond to public comments / objections

(v) High

Guidance for assessment teams: Analyze the legal provisions (laws, rules, regulations or decrees) requiring the regulatory body to give reasoned orders and responses to public comments / objections. Subsequently, teams will have to form an opinion about the �sufficiency� or quality of reasoning the regulatory body provides via its orders. For this purpose, teams must select three representative orders / decisions of the regulatory body and evaluate whether, on balance, these orders contain sufficient reasoning. The assessment team�s opinion about the sufficiency / quality of reasoning must be clearly supported with examples of what teams consider to be good- or bad-quality reasoning. For the purpose of this indicator, selection of orders / decisions could be from important / high profile orders / decisions made in the last one year. Care must be taken to ensure that the indicator assesses only the quality of reasoning and not the merit of the decision itself. In other words, assess whether the decision was correct or incorrect from the particular standpoint of any stakeholder category.

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RP 19 - Dissemination of regulatory body�s decisions Governance Principle: Access to Information and Transparency Relevance of the indicator: To enhance the credibility of the regulatory process and ensure that the regulatory body�s decisions are widely available, an effective dissemination process is essential. This indicator assesses how the regulatory body disseminates its orders / decisions. Values Select Explanation and Justification Not applicable / not assessed

(0)

Dissemination process of the regulatory body�s orders / decisions has no elements of quality

(i) Low

Dissemination process of the regulatory body�s orders / decisions has one or two elements of quality

(iii) Medium

Dissemination process of the regulatory body�s orders / decisions has all the three elements of quality

(v) High

Guidance for assessment teams: The three elements of quality for effective dissemination process are: • Easy availability � All orders / decisions of the regulatory body should be easily accessible to stakeholders through measures such

as making copies available for sale at the regulatory body�s office (or in case of a large geographical area, at locations such as public libraries), posting orders / decisions on the regulatory body�s website, etc.

• Timely availability - All orders / decisions should be made available to stakeholders as soon as possible after finalization / communication to the parties directly involved. The time taken to make orders / decisions available on official websites is a good basis for determining whether these orders / decisions are made public in a timely manner.

• Local language � In many countries the regulatory body�s official / usual language is different from the common local language. If orders / decisions are only available in the official language most people will not be able to use them effectively. Hence it is important to assess whether orders / decisions are available in local languages.

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RP 20 - Periodic performance reports by licensees and utilities Governance Principle: Access to Information and Transparency Relevance of the indicator: For the regulatory process to be effective it is essential that the regulatory body and all stakeholders have access to utility performance parameters on a routine basis. A good regulatory process ensures this through a binding requirement for the utilities to file periodic performance reports. This indicator assesses the existence of such reporting requirements and the quality of such reporting in terms of the contents of the reports and the methods of their dissemination. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Utilities (electricity companies) are not required to file periodic performance reports with the regulatory body

(i) Low

Utilities are required to file periodic performance reports, but the consequences of non-filing / delayed filing are not defined

(ii) Low-Middle

Utilities are required to file periodic reports and consequences of non-filing / delayed filing are defined, but the reports meet only one or two elements of quality for effective reporting

(iii) Medium

Utilities are required to file periodic reports, and consequences of non-filing / delayed filing are defined. But the reports meet only three or four elements of quality for effective reporting


Utilities are required to file periodic reports, consequences of non-filing / delayed filing are defined, and the reports meet all the five elements of quality for effective reporting

(v) High

Guidance for assessment teams: Typically utility performance reports are called annual reports, annual revenue requirement (ARR), annual performance review, etc. In some cases utilities may be required to file such reports less regularly (every 3-5 years) depending on the regulatory approach / structure. Usually these reports are filed with the regulatory body or some government department / authority (e.g., the department of energy). A binding requirement to file performance reports along with clearly-defined consequences of not filing these reports are two primary indicators. A few additional aspects also need to be considered to make the reporting requirement effective. The five elements of quality for effective periodic reporting are: •

•

•

•

Easy availability � Reports are considered easily accessible if they are available to the stakeholders for sale at the office of the utility / regulatory body (or, in case of large geographical area, at other locations like public libraries, etc.), and posting on the website. Timely availability � Reports are considered available in a timely manner if they are made accessible to stakeholders within 3 � 6 months from the end of the reporting period (if the reporting period is one year or longer). Local language � In many countries, business / industry language is different from the common local language. If reports are available only in the business language the public cannot use them effectively. It is therefore important to determine if reports are available in the local language. Reliable � Reports are considered reliable if there are few instances where utilities change the parameters / data presented in earlier reports, there is a several-year history of reports being prepared in a consistent manner, and if various assumptions / basis of parameters are explained therein.

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• Comprehensive � The report is considered comprehensive if the information / data essential for assessing the utility performance is provided. Examples of such information include various utility cost components (human resources, interest, power purchase, fuel cost, etc.), performance of generation plants, details of transmission and distribution system, transmission and distribution losses, revenue from different consumer category, connected load, and demand patterns. The nature of information expected in the report will depend on the market structure and regulatory approach. For example, instances of cost-plus regulation would require many more details pertaining to expenditure by the licensee than would instances of incentive- / performance-based regulation.

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RP 21 - Tariff philosophy Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Regulatory certainty and predictability are important requirements for enhancing the confidence of all stakeholders in the regulatory process. Certainty and predictability also enable stakeholders to plan advance actions to meet the regulatory expectations or to minimize adverse effects. An overarching tariff philosophy / principles that guide periodic tariff revision are important in this regard. . Usually tariff philosophy is very broadly defined in the policy document or the rules / orders of the regulatory body. These principles typically cover issues such as how to address cross-subsidization, incentive- or performance-based regulation, which costs will be included in tariff, and which benchmarks (if any) will be used. Existence of such overarching principles also increases the regulatory body�s accountability. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Tariff determination is not based on or guided by predetermined tariff philosophy / principles

(i) Low

Tariff determination is guided by predetermined tariff philosophy / principles, but meets only one element of quality

(ii) Low-Middle

Tariff determination is guided by predetermined tariff philosophy / principles, but meets only two elements of quality

(iii) Medium

Tariff determination is based on / guided by predetermined tariff philosophy / principles, but meets only three elements of quality


Tariff determination is guided by predetermined tariff philosophy / principles, and meets all the four elements of quality

(v) High

Guidance for assessment teams: Considering the significant impact of the tariff philosophy / principles on the regulatory process, the following four elements are essential:

• Detailed Analysis: Tariff philosophy requires a detailed analysis of cost drivers, projected efficiency gains, and economic impact on different stakeholders such as utilities, governments and different consumer categories;

• Mitigating Adverse Impacts: the philosophy explicitly suggests / includes measures to mitigate any adverse impacts on different stakeholders such as weaker sections and/or utilities;

• Simple Language: the tariff philosophy is presented in simple language, is well-defined, and generally minimizes varied / conflicting interpretation;

• Consultation on Tariff Principles: Tariff philosophy / principles were adopted after a proper public participation process. A proper public participation process involves sharing background analysis and drafts with the public - especially weaker sections, soliciting their comments / objections, and providing reasons for accepting / rejecting public comments.

In this context, indicator ESA 20 from Section C (Public participation in decision making for affordability) is also relevant and the research for each would be complementary.

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RP 22 - Licensing Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Issuing distribution or other types of licenses / concessions or approving power purchase agreements is a major function of the regulatory body. The regulatory body�s decisions on these issues have major financial significance. Determining the precise features of a good / desirable license or power purchase agreement substantially depends on the country�s unique situation, and is therefore beyond the scope of this toolkit. But to develop a broad sense of the licensing process adopted by the regulatory body, this indicator assesses some of its general features. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There are no clear rules regarding requirement and exemption of the license

(i) Low

There are clear rules regarding requirement and exemption of the license, but the licensing process is not well-defined

(ii) Low-Middle

There are clear rules regarding requirement and exemption of the license and the licensing process is well-defined, but the license / contract meets only one element of good licensing

(iii) Medium

There are clear rules regarding requirement and exemption of the license and the licensing process is well-defined, but the license / contract meets only two elements of good licensing


There are clear rules regarding requirement and exemption of the license and the licensing process is well-defined, and the license / contract meets all three elements of good license / contract

(v) High

Guidance for assessment teams: Review legal instruments (law, rules, regulations etc.) as well as two recent licensing / power purchaser agreement approval process conducted by the regulatory body. Procedural clarity (covered in the first two values of this indicator) could be judged from the legal instruments, whereas actual cases (i.e., license, PPA) should be reviewed for �elements of quality�. The three elements of quality that relate to the existence of clear provisions in the license / agreement are:

• Amendment / revocation / suspension; • Dispute resolution; • Compliance / performance-monitoring.

Because desirable provisions for these three aspects will significantly depend on each country�s specific country, assessments teams should provide a detailed itemization of which issues have clear provisions and which do not.

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RP 23 - Consumer service and quality of supply Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: From a consumer perspective, the quality of service and electricity supply is very important. Typical parameters for assessing the quality of consumer service include: accuracy of metering and billing; bill payment facilities; time taken for new connections; and procedure and time for increase in load. Typical parameters for assessing quality of supply include: voltage; frequency and duration and frequency of interruptions, load-shedding, etc. Ensuring reliable and high quality electricity supply and efficient service is one of the important aspects of the regulatory process. This indicator assesses the mechanisms adopted by the regulatory process to meet this responsibility. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There are no well-defined standards of performance for consumer service and quality of supply

(i) Low

There are well-defined standards of performance for consumer service and quality of supply, but they are not mandatory

(ii) Low-Middle

There are mandatory, well-defined standards of performance for consumer service and quality of supply. But they meet only one element of effective implementation

(iii) Medium

There are mandatory, well-defined standards of performance for consumer service and quality of supply and they meet two or three elements of effective implementation


There are mandatory, well-defined standards of performance for consumer service and quality of supply and they meet all four elements of effective implementation

(v) High

Guidance for assessment teams: In addition to the existence of well-defined, mandatory standards of performance, this indicator assesses the existence of three key elements of effective implementation to ensure high quality of supply and efficient consumer service: • Monitoring Performance: Existence of a systematic mechanism to monitor actual performance in terms of consumer service and

quality of supply; • Compliance Reviews: Periodic reviews are undertaken to evaluate the electricity company�s compliance with the standards of

performance. • Review Data Available to Public: During periodic reviews base documents / data (such as actual performance levels) are made

available to the public, and the public has an opportunity to make comments and suggestions; • Consumer grievance: Existence of well-defined procedures and forums for addressing consumer grievances, regarding service

and quality of supply.

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Section B - Regulatory Process

Analytical Questions

Many questions of governance in the electricity sector require an element of judgment and are inevitably subjective. Therefore, we ask assessment teams to document as carefully as possible the reasons for their choice of value under each indicator. In addition, however, there are some important issues related to governance that are particularly challenging to capture through an indicator framework, but that are too important to ignore. This section deals with those questions. We suggest assessment teams keep these questions in mind as they conduct interviews and scan through documents, in order to write brief prose assessments of the following issues: 1. To what extent (if at all) has the regulatory process in your country helped civil society organizations to improve the decision-making process for the benefit of the broader public interest? As discussed in earlier sections of this toolkit, a regulatory process with higher degree of transparency, accountability and space for public participation, coupled with civil society capacity is expected to contribute more to the good governance of the electricity sector. Over 20 indicators in this section attempt to assess the status of these four key good governance principles for the regulatory process. Based on the results of this assessment and practical experience in your country, do you feel that the regulatory process in your country has helped civil society organisations to improve the decision-making process in the electricity sector for the benefit of the broader public interest? Please explain in detail the reasoning behind your opinion and also elaborate on key factors that contributed to enhancing or preventing such improvements in the decision-making process, using representative case studies and empirical evidence to support your opinion. 2. What are the perceptions of major stakeholders about the influence of �informal efforts� and/or �extraneous factors� on regulatory decision-making?

Any regulatory or governance process, howsoever well-designed, cannot be completely free from the influence of informal efforts and/or extraneous factors, which at times become very crucial factors that determine the various outcomes of the regulatory process. But a higher degree of quality on the four good governance principles considered in this toolkit certainly contribute to limiting the scope and adverse impacts of such informal processes and extraneous efforts. Thus, the honest perceptions of major stakeholders about the extent to which outcomes of the regulatory process are dependent on these two factors point to the general state of governance in the electricity sector. To answer this question, the assessment teams will have to interview a range of stakeholder representatives from different stakeholder categories such as utilities, government and regulatory officials, civil society organisations, consumer groups, NGOs, industry associations and the media. Teams are encouraged to briefly describe actual examples and/or empirical evidence, on which such perceptions are based. Also if such perceptions are cases / decision specific then explain these cases in greater detail. For example, it is possible that in your country a particular decision (say tariff revision) is not influenced by any extraneous considerations, but decisions about new capacity addition may be so influenced. �Informal processes� refer to processes outside the formal legal rules of engagement and interactions, say one on one lobbying with the regulatory members. �Extraneous factors� are those which are again not enshrined formally in the rulebook or are the factors, that the regulatory process is designed to avoid, such as election considerations or vested interests and corruption.

Electricity Governance Indicators Version 1.1 Section C � Environmental and Social Aspects (ESA)

Overview Environmental and social considerations tend to be neglected in electricity sector policy development, particularly in reform processes. By focusing on economic considerations and financial health, reform processes may lock the electricity sector into environmentally unsustainable paths. Experiences with reform suggest that social concerns carry more political weight in the electricity sector than do local or international environmental agendas, and linking these two priorities of public benefit can offer strategic advantages. Environmental and Social Aspects (ESA) need to be considered early in decision- and policy-making processes so that they are adequately and appropriately addressed. Guidance for Assessments The following indicators assess the extent to which social and environmental considerations are included in the executive, legislative and regulatory institutional mandates, and the extent to which these institutions have the capacity to meet these mandates. The indicators also assess the existence of minimum environmental performance standards, the comprehensiveness of the requirements of Environmental Impact Assessments (EIAs), and the extent to which access to redress is available for sector social and environmental issues. These indicators also allow you to ask questions regarding the processes surrounding key social and environmental issues that may be particularly pertinent in your country. These issues include: job losses from sector restructuring and privatization; access to electricity; the treatment of people and communities affected by sector infrastructure projects; the affordability of electricity; the development of renewable energy resources; and the requirements of social and environmental reporting in the sector. The importance of issues will vary from country to country, and the indicators allow you to tailor responses accordingly. Each indicator includes extensive notes to explaining the indicator’s pertinence and how to collect research information.

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Section C – Environmental and Social Aspects * PRIORITY INDICATOR *

ESA 1 - Clarity of authority and jurisdiction to grant environmental clearances / approvals for power sector projects

Governance Principle: Access to Information and Transparency Relevance of the indicator: There is often little or no coordination across departments / ministries or between federal / central and state / local governments to grant approvals or exercise authority over environmental issues. There is a lack of transparency about where authority lies and when it is exercised, and there are few formal checks and balances between these institutions. Accountability for environmental clearances and approvals is very important to the public interest because the institution’s decisions determine whether and what environmental conditions are imposed on electricity projects. This indicator assesses whether there are clear provisions in law, regulation implementation, or executive policy to establish which public sector entities have the authority to grant or issue environmental approvals for major power sector projects and define how such authority is to be shared across jurisdictions. It also assesses the extent to which the public has access to this information. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There are no provisions designating authority over environmental approvals for power sector projects.

(i) Low

There are provisions designating authority for environmental approvals for power sector projects, but they do not define if and how such authority is to be shared across jurisdictions

(ii) Low-Middle

There are provisions establishing what public sector entities have authority to grant environmental approvals for power sector projects and how authority will be shared across jurisdictions. These provisions meet at least one element of quality for transparency.

(iii) Medium

There are provisions establishing what public sector entities have authority to grant environmental approvals for power sector projects and how authority will be shared across jurisdictions. These provisions meet at least two to three elements of quality for transparency.


There are provisions establishing what public sector entities have authority to grant environmental approvals for power sector projects and how authority will be shared across jurisdictions. These provisions meet at more than three elements of quality for transparency.

(v) High

Elements of quality for transparency: • Available in Gazette: Provisions published in the official government journal / gazette • Low Cost or Web Access: Provisions posted on the websites of public sector agency with principal authority for granting

environmental approvals OR they can be obtained free of charge (or at very low cost) upon request • Accessible Format: Public sector agency with principal authority explains and disseminates provisions in a format that is

accessible to public interest organizations and the general public (brochure, poster, information sheets, etc.) • Available in Public Office or Library: Provisions may be obtained in a government public information office or public library

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• Timely Disclosure Of Approvals; Public sector agency with principal authority discloses projects granted approvals in a timely fashion (within 30 days of approval)

• Comprehensive Disclosure: Principal authority discloses all projects requesting / pending approval Guidance for assessment teams: “Shared Jurisdiction” refers to shared authority between line ministries or central versus local governments. The assessment team will need to rely largely on the collection of documentary evidence and a review of relevant legal provisions to answer this indicator question. The clear divisions or laws to review are those that establish division of power or authority between central / federal versus state / local jurisdictions as well as the framework laws and supporting / implementing regulations that establish / delineate the areas of authority of the power sector ministry / department versus that of the environmental ministry / department.

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ESA 2 - Clarity and transparency of the executive’s environmental and social mandates Governance Principle: Access to Information and Transparency Relevance of the indicator: The degree to which electricity sector policy and planning processes formally acknowledge the executive’s environmental and social responsibilities --and how these interact with related authorities-- reflects the importance of these concerns to the executive. It is also a way to gauge the degree to which critical institutions or structures in the electricity sector integrate social and environmental issues. In this indicator, “executive agency” refers to the executive body responsible for power sector planning and policy. The term “mandate” is used to describe the legal purposes or parameters within which an organization is entrusted to perform a service and is used to indicate the extent to which environmental and social considerations are included. This indicator looks at whether documents that describe the executive agency’s roles and responsibilities define environmental responsibilities, and includes guidance on when and how they should cooperate with other regulators or authorities (such as government agencies responsible for environment, health, gender, education, etc.) The extent to which electricity sector policy-makers publicly communicate these environmental and social responsibilities further demonstrates their commitment to addressing the sector’s environmental and social quality public interest concerns. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Documents describing the executive agency’s roles and responsibilities do not mention environmental and social issues.

(i) Low

Documents describing the executive agency’s roles and responsibilities mention the environment and social issues, but they do not clearly define terms for cooperation with other agencies or their role in assuring environmental or social performance.

(ii) Low-Middle

Documents describing the executive agency’s role define specific environmental and social responsibilities of the executive, and include guidance on when and how the executive will cooperate with other authorities and regulators. But no elements of quality for information disclosure are met.

(iii) Medium

Documents describing the executive agency’s roles and responsibilities define specific environmental and social responsibilities of the executive and include guidance on when and how they should cooperate with other authorities. Disclosure of this information meets at least one element of quality.


Documents describing the executive agency’s roles and responsibilities define specific environmental and social responsibilities of the executive and include guidance on when and how they should cooperate with other authorities. Disclosure of this information meets at least two elements of quality.

(v) High

Elements of quality for information disclosure: • Regular Reporting: Environmental and social aspects of performance of the electricity sector are regularly reported publicly • Low Cost: Documents related to the executive’s environmental and social responsibilities are available free or at low cost to the

public

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• Available in Range of Formats: Documents related to the executive’s environmental and social responsibilities are provided in a range of printed and electronic forms

• Wide Dissemination: Efforts are made to disseminate this information using various media or outlets (in public offices / libraries, or via the internet, radio, newspapers)

• Outreach to Weaker Groups: Special and systematic efforts are made to target documents, audio-visual materials, or meetings to marginalized socioeconomic or cultural groups

Guidance for assessment teams: Assessment teams should review reform legislation as well as major policy and planning documents. The main focus of this indicator is the degree of clarity about the executive’s role versus that of the electricity regulator, or the environmental regulator or authority is the main focus of this indicator. Important roles for the executive that might be set out in such documents include:

• setting environmental and social performance standards for power plants • decisions on distribution services and transmission infrastructure • developing sector and project level impact assessment policies and guidelines • establishing criteria for the evaluation of the environmental and social costs or benefits of particular policy actions/proposals • expanding access to electricity for areas and households • helping keep costs of electricity affordable for the poor

These are illustrative examples and will vary widely from country to country. Assessment teams are not expected to judge the substantive quality of the social and environmental responsibilities taken on by the executive or regulator; instead they need only to assess the degree to which these responsibilities are clearly communicated to the public. A disjunct may emerge between the scope / transparency of the social mandate and the clarity of the environmental mandate. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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ESA 3 – Scope and transparency of the environmental and social mandates of the regulatory body Governance Principle: Access to Information and Transparency Relevance of the indicator: Many regulatory decisions (e.g., setting electricity prices; approving licenses for power plants; setting performance standards for service quality, etc.) have environmental and social impacts. Since electricity is traditionally generated and transmitted using conventional technologies such as coal and fossil fuel thermal power plants or hydro-electricity connected to a national grid, standard regulatory mechanisms are often not conducive to renewable energy, energy efficiency or distributed generation sources. These circumstances may require different forms of price controls and investment incentives, particularly since regulatory decisions can directly impact social issues such as affordability and access to electricity. Addressing these environmental and social considerations requires deliberate, concerted efforts on the part of regulators. It is therefore important that environmental and social considerations be included as part of the mandate of the regulatory body. The term “mandate” is used to describe the legal purpose or parameters within which an organization is entrusted to perform a service. This indicator looks at whether laws and documents that describe the regulatory body’s roles and responsibilities define environmental and social responsibilities. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Documents describing the roles and responsibilities of the regulatory body do not mention environment or social issues.

(i) Low

Documents describing the roles and responsibilities of the regulatory body mention general environmental and social responsibilities but these responsibilities are framed very vaguely, and specific priorities and considerations are not defined.

(ii) Low-Middle

Documents describing the roles and responsibilities of the regulatory body make reference to specific environmental or social responsibilities, but the regulator meets none of the elements of quality for transparency.

(iii) Medium

Documents that describe the roles and responsibilities of the regulatory body make reference to specific environmental or social responsibilities. The regulator meets one or two of the elements of quality for transparency.


Documents that describe the roles and responsibilities of the regulatory body make reference to specific environmental or social responsibilities. The regulator meets three or more of the elements of quality for transparency.

(v) High

Elements of quality for transparency: • Published in Government Journal: Description of regulator’s environmental and social responsibilities is published in the official

government journal • Available on Website: Documents related to the regulator’s environmental and social responsibilities are posted on the regulator’s

website • Low Cost: Documents related to the regulator’s environmental and social responsibilities are available to the public free or at low

cost

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• Available in a Range of Formats: Documents related to the regulator’s environmental and social responsibilities are provided in a range of forms / formats that are accessible to the general public and civil society organizations (brochures, poster, information sheets, public service announcements, etc.)

• Wide Dissemination: The regulator has disseminated information regarding its environmental and social responsibilities through various media / outlets (public offices / libraries, internet, radio, newspapers, etc.)

• Outreach to Weaker Groups: The regulator has made systematic / planned efforts to disseminate information regarding its environmental and social responsibilities to marginalized / less privileged populations (indigenous groups, women’s associations, representatives of low-income consumers, etc.).

Guidance for assessment teams: Assessment teams should review the basic foundational documents that present the mandate, roles and responsibilities of the independent regulatory body or unit responsible for electricity sector oversight (pricing, licensing, and representation of public interest concerns). Assessment teams are expected to judge both the scope (breadth) of the regulator’s environmental and social mandate, as well as the degree to which these can be accessed by, or are communicated to, the public. A disjunct may emerge between the scope / transparency of the social mandate and the clarity of the environmental mandate. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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Section C – Environmental and Social Aspects

ESA 4 - Executive’s capacity to evaluate environmental and social issues Governance Principle: Capacity Relevance of the indicator: The existence of the necessary financial resources and staff expertise to adequately address social and environmental issues either within the executive branch responsible for electricity, or by implementing clear systems and procedures to utilize staff and resources of related ministries / departments (e.g. Health, Environment, Water, etc) is a measure of commitment and capacity to address sustainability. In this indicator, “executive agency” refers to the executive body responsible for power sector planning and policy. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The executive exhibits none of the elements of capacity to assess the environmental and social problems or issues in the electricity sector.

(i) Low

The executive exhibits at least one element of capacity to assess environmental and social problems or issues in the electricity sector.

(iii) Medium

The executive exhibits two or more elements of capacity to assess the environmental and social problems or issues in the electricity sector

(v) High

Elements of capacity to be assessed: • Financial: Specific budgetary resources are explicitly earmarked or directed to support research or investigation into

environmental and social issues or problems • Expertise: Systems are set up for the executive to utilize the staff and expertise of related government bodies. Specific systems

exist to facilitate collaboration with the agency responsible for the environment and at least two of the following agencies: health, water, gender, rural development / agriculture, education, oil/gas/ petroleum (if separate).

• Designated Point Person: At least one staff person has explicit responsibility to address the environmental and social aspects of policies and performance in the electricity sector

• Training; Evidence of staff training on environmental and social issues / problems in the past two years. Guidance for assessment teams: Assessment teams will need to rely on a diverse set of information sources, including staff directories or lists, interviews with former or current executive staff, and, to the extent possible, planning or other documents that detail budgetary expenditures and staff resources. The aim should be to gain a sense of the general state of capacity for a relatively recent time period (within the last five years). A disjunct may emerge between the scope / transparency of the social mandate and the clarity of the environmental mandate. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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ESA 5 – Regulator’s capacity to evaluate environmental and social issues Governance Principle: Capacity Relevance of the indicator: The existence of the necessary financial resources and staff expertise within the regulatory body (or executive branch unit responsible for oversight of the electricity sector) to adequately address environmental and social problems is a measure of institutional commitment as well as capacity to address sustainability. While the regulatory body may not be expected to take responsibility or have internal capacity for all environmental and social issues, resources and clear systems should exist to enable the regulator to draw on the capacity ofpublic agencies such as those responsible for environment, water, health, gender, or similar issues. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Regulatory body exhibits no elements of capacity to assess environmental and social problems or issues

(i) Low

Regulatory body exhibits at least one element of capacity to assess environmental and social problems or issues

(iii) Medium

Regulatory body exhibits two or more elements of capacity to assess environmental and social problems or issues

(v) High

Elements of capacity to be assessed: • Financial: Specific budgetary resources are explicitly earmarked or directed to support research or investigation into

environmental and social issues or problems • Expertise: Systems are set up for the executive to draw on the staff and expertise of related government bodies. Specific systems

exist for collaboration with the agency responsible for the environment and at least two of the following agencies: health, water, gender, rural development / agriculture, education, oil/gas/ petroleum (if separate).

• Designated Point Person: At least one staff person has explicit responsibility to address the environmental and social aspects of policies and performance in the electricity sector

• Training: Evidence of staff training on environmental and social issues / problems in the past two years. Guidance for assessment teams: Assessment teams will need to rely on diverse sources of information, including staff directories or lists, interviews with former or current executive staff, and, to the extent possible, planning or other documents that detail budgetary expenditures and staff resources. The aim should be to gain a sense of the general state of capacity for a relatively recent time period (within the last five years). A disjunct may emerge between the scope / transparency of the social mandate and the clarity of the environmental mandate. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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ESA 6 -Capacity to assess environmental and social issues in the legislative committee for electricity Governance Principle: Capacity Relevance of the indicator: Legislative or parliamentary committees responsible for drafting and/or passing electricity sector reforms or reviewing electricity sector policies, play a crucial role in creating the institutions and policy frameworks that govern the electricity sector. The institutions and policies created through legislative processes establish sector priorities. In addition, legislative bodies balance or ensure oversight on the executive decision-making process. However, a legislative or parliamentary body’s ability to exercise oversight and effectively balance the executive on environmental and social matters is, in part, determined by the quality and availability of its resources and the expertise represented. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Relevant legislative committee exhibits no elements of capacity to assess environmental and social issues

(i) Low

Relevant legislative committee exhibits at least one element of capacity to assess environmental and social issues

(iii) Medium

Relevant legislative committee exhibits two or more elements of capacity to assess environmental and social issues

(v) High

Elements of capacity to assess environmental and social issues:

• Expertise: Committee members or their staff possess relevant expertise, such as specialized higher education or past experience/work on both environmental and social issues / problems

• Designated Point Person: Certain committee members or legislative staff have explicit responsibilities for addressing the environmental and social aspects of electricity sector policies and performance

• Financial: Specific budgetary resources are explicitly available to support research or investigation of environmental and social issues

• Training: Evidence of training /education on environmental and social issues/problems in the past two years Guidance for assessment teams: “Relevant legislative committee” refers to the principal legislative committee responsible for drafting and/or passage of electricity sector legislation (or reviewing electricity policies). Assessment teams will need to draw on diverse sources of information, including staff directories or lists, interviews with former and current members of the legislative committee or parliament, or related staff. To the extent possible, teams should review documents that detail the committee’s budgetary expenditures and staff resources. The focus of the documentation should be to verify budgetary resources and the expertise, training, and responsibilities to gain a sense of the general status or state of capacity for a relatively recent time period (within the last five years). A disjunct may emerge between the scope / transparency of the social mandate and the clarity of the environmental mandate. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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ESA 7 – Public participation in setting minimum environmental performance standards Governance Principle: Participation Relevance of the indicator: This indicator attempts to measure the existence of environmental performance standards for the electricity sector and the degree of public access to the regulations themselves, as well as the public’s influence over this standard-setting process. Environmental performance standards for the electricity sector can include: limits on power plant emissions; pollution control measures; targets for reduction of technical transmission losses; and efficiency requirements for appliances. While these standards are often technically complex, they have great significance for local environmental quality, human health, and economic efficiency. The public sector authority with primary responsibility for the development of these performance standards differ in each country (e.g. with the environmental department, the power sector department, the health department, or a joint or inter-ministerial body). The extent to which this body can explain its relevance and importance to a non-technical audience and include the general public while developing these standards reflects the government’s commitment to open decision-making. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There are no minimum environmental performance standards for the electricity sector defined in framework law(s) or implementing regulations

(i) Low

Minimum environmental performance standards for the electricity sector are defined in framework law(s) or policies. They meet none of the elements of quality.

(ii) Low-Middle

Minimum environmental performance standards for the electricity sector are defined in framework law(s) or policies. They meet only one element of quality.

(iii) Medium

Minimum environmental performance standards for the electricity sector are defined in framework law(s) or policies. They meet two elements of quality.


Minimum environmental performance standards for the electricity sector are defined in framework law(s) or policies. They meet more than two elements of quality.

(v) High

Elements of quality: • Basis for Standards: Documentation exists that explains the basis for existing performance standards • Evidence of Public Consultation: Documentary or other evidence that either the legislative or executive branch consulted the

public during the process that determined the environmental performance standards • Explanation of Use of Public Input: Documentary evidence that executive or legislative branch communicated / explained how

public inputs were incorporated • Reporting on Utility Compliance: Regular reporting or disclosure (annual, semi-annual, every two years, every five years) on

utility / industry compliance with performance standards Guidance for assessment teams: This indicator should be applied to the most recently approved / established performance standards applicable to the power sector activities. The team should identify the public sector authority with primary responsibility for the development of these performance standards: was it the environmental agency, the power sector authority, the health authority, or a joint (inter-ministerial) body? The team should also make sure to note when the standards were established or last updated. As a first step, the assessment team should assess official documentation explaining the existing environmental performance standards. As a second step, the assessment team

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should seek to evaluate the process used to define the standards. Interviews with current or former staff primarily responsible for the performance standards, civil society groups that followed the process, or media/press accounts may be necessary. The assessment team should make note of the degree to which the indicator score reflects the quality of the process versus the degree of access to information.

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ESA 8 - Inclusion of environmental considerations in the national plan for the electricity sector Governance Principle: Participation Relevance of the indicator: A sector-level development plan set out the macro-level development objectives the government seeks to achieve through investment in and development of power sector services and infrastructure. The extent to which environmental considerations are integrated is an important indicator of how much of a priority these issues are for the executive responsible for electricity. Since these plans are often intended to present a “blue print” for electricity sector development, the extent to which there is a deliberative and inclusive process for developing the plan will also impact the extent to which environmental issues are considered. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Environmental considerations are not explicitly included in the most recent electricity sector development plan

(i) Low

Environmental considerations are explicitly addressed or analyzed in the most recent electricity sector development plan. But the framing is very general and does not define any specific priorities or considerations. Public access to these documents meets none of the elements of quality

(ii) Low-Middle

Environmental considerations are explicitly addressed or analyzed in the most recent electricity sector development plan, but the framing is very general and does not define any specific priorities or considerations. Public access to these documents meets more than one element of quality

(iii) Medium

Environmental considerations are explicitly addressed or analyzed in the most recent electricity sector development plan, and addresses both project-specific impacts and broader sectoral impacts. Public access to these documents meets only one of the elements of quality


Environmental considerations are explicitly addressed or analyzed in the most recent electricity sector development plan and addresses both project-specific impacts and broader sectoral impacts. Public access to these documents meets more than one element of quality

(v) High

Elements of quality to be assessed:

• More than one mechanism employed to seek public inputs into draft of plan • Evidence of systematic effort to seek inputs into plan from less-privileged or potentially affected populations • Reasonable public comment period (relative to needs and national / international practice – please specify) • Agency that developed plan released or made available public comments provided • Agency that developed plan communicated how public input was incorporated into final plan within 3 months of decision

Guidance for assessment teams: “Project-specific impacts” include direct environmental impacts associated with the development of power plants, transmission lines. “Broader sectoral” impacts include energy efficiency, fuel and technology choices, and greenhouse gas emissions.

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The assessment team should only apply this indicator if a sector-level equivalent of a strategic or master plan exists and was developed during the last five years. The team should carefully analyze the plan documents and include a careful / detailed justification of which environmental considerations have been included. The team should then look for supporting documentation such as press releases, workshop agendas and participant lists, and records of public hearings to re-construct the public participation process. This should be followed with interviews of government staff responsible for leading the development of the plan, as well as civil society groups that followed the development of the plan (if such individuals can be identified).

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Section C – Environmental and Social Aspects ESA 9 - Inclusion of environmental considerations in sector reform process

Governance Principle: Participation Relevance of the indicator: Decisions to radically alter the organizational and institutional structures of the electricity sector have important implications for the public interest, including the environment. It is therefore important that explicit attention be paid to the environment in undertaking reform. The most important environmental interests at stake include the degree to which sector reforms preserve or enhance incentives for energy efficiency, encourage improvements in power generation that enhance local air quality and reduce greenhouse gas emissions, or limit destruction of natural habitats. Without explicit attention to the environment during or after the reform processes, it is unlikely that environmental benefits will result. This indicator is only relevant if your electricity sector is undergoing, about to undertake or has recently undertaken electricity sector reform processes. Research for this indicator is closely related to research needed for indicator PP 7. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Environmental considerations are not explicitly addressed or analyzed in publicly available documents, that pre- or post-date the reform process

(i) Low

Environmental considerations are addressed in official documents, that post-date passage of reform legislation, but are framed in very narrow terms. Public access to these documents meets only one element of quality

(ii) Low-Middle

Environmental considerations are addressed in official documents after passage of reform legislation, but framed in very narrow or vague terms. Public access to these documents meets more than one element of quality

(iii) Medium

Environmental considerations are explicitly addressed in official documents after passage of reform legislation, and framed broadly and include mention of specific environmental priority issues. Public access to these documents meets only one element of quality


Environmental considerations are explicitly addressed in official documents before passage of reform legislation, but framed broadly and include mention of specific environmental priority issues. Public access to these documents meets more than one element of quality

(v) High

Elements of quality to be assessed: • Less versus more restrictive confidentiality rules applied to reform-related documents • Adequate public comment period (relative to national / international practice) • Evidence of effort to reach less privileged or potentially affected populations • More than one mechanism employed to seek public input into plan when it was in draft form • Agency that developed plan made available public comments received in consultations or in response to public postings • Agency that developed plan communicated how public input was incorporated into final plan within 3 months of the decision Guidance for assessment teams:

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This indicator should be applied to the legislative process by which a major reform effort has occurred during the last five years targeted at the electricity sector (including corporatization of state-owned utilities; unbundling of integrated utilities; creation of a regulatory body; privatization of transmission; generation or distribution services or utilities, creation of a power pool or power exchange / dispatch agency). If multiple reforms have taken place, then the assessment team should assess the reform effort, which it considers most significant or far-reaching. The assessment team should identify the main executive agency/ies leading the reform process, and the committees responsible for drafting the reform legislation. If donor agencies funded or supported this reform effort, documentation from these sources should also be examined. This indicator measures attention to environmental issues in official documentation that lays out the rationale, need and objective of the proposed reform. Media reporting on the selected reform process is also relevant. An effort should be made to review documentation, that pre- and post-dates the reform process.

100

Section C – Environmental and Social Aspects ESA 10 - Public participation requirements in environmental impact assessment laws and procedures

(optional) ∗ Governance Principle: Participation Relevance of the indicator: Most countries have established environmental impact assessment (EIA) laws and policies in the last 10 to 15 years. EIA laws and policies are sometimes codified through a national framework law and supplemented with sector or project specific guidelines and procedures. In other cases, both the law and procedure are sector specific, or defined at the state or provincial level. Regardless of how EIA laws and policies are defined, there is a great deal of variation with regard to legal requirements or guarantees relating to public disclosure and consultation. EIAs are an attempt to survey and assess the environmental consequences of proposed development activities in the electricity sector, and their findings can have profound consequences for project-affected people. Public participation in EIA processes and access to EIA findings are therefore important. Values Select Explanation and Justification Not applicable / not assessed

(0)

Relevant policies, implementing regulations or guidelines that establish the framework for conducting EIAs do not include any elements of quality for participation

(i) Low

Relevant policies, implementing regulations or guidelines that establish the framework for conducting EIAs include at least one element of quality for participation.

(ii) Low-Middle

Relevant policies, implementing regulations or guidelines that establish the framework for conducting EIAs include two elements of quality for participation.

(iii) Medium

Relevant policies, implementing regulations or guidelines that establish the framework for conducting EIAs include three elements of quality for participation


Relevant policies, implementing regulations or guidelines that establish the framework for conducting EIAs include four or more elements of quality for participation.

(v) High

Elements of quality to be assessed: • Public participation at scoping; Public participation is mandated at the scoping or draft stage of the EIA process • Use of more than one public participation mechanism (hearings, stakeholder / community meetings, on-line commentary, etc) is

specified • Adequate comment period: Adequate time period (relative to national / international standards) is given for public input and

comment on draft and/or final EIAs • Public release of EIA reports: Full and summary reports of the EIA are released to the public before a decision to approve a

development activity / project • Public Consultation Guidelines: Guidelines exist establishing what constitutes adequate public consultation in an EIA process • Disclosure of Public Comments on EIA: Summary or full public comments received on EIAs are routinely disclosed • Public comments addressed in final EIA report: Final report discusses how public comments or input informed the findings /

recommendations

∗ IF THERE IS A COMPLETED OR ONGOING PROCESS TO ASSESS THE STATE OF ENVIRONMENTAL GOVERNANCE BY THE ACCESS INITIATIVE IN YOUR COUNTRY THIS INDICATOR SHOULD BE OMITTED.

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• Free Prior Informed Consent: Principle of Free Prior Informed Consent (FPIC) is incorporated into EIA guidelines for consultation

Guidance for assessment teams: Assessment teams need to gather documentation about EIA policies and procedures that are relevant to the electricity sector. Such EIA laws and procedures are often established broadly in national (or state level) law or policy and complemented by detailed EIA regulations or guidelines for specific sectors (e.g., electricity, mining, forestry) or project types (power plants, etc). If no such national or sectoral EIA policies or procedures are in place, the indicator is not applicable. The most important documents are the official laws, policies and guidelines that establish EIA procedures. Teams should document the dates of official adoption of these laws/ polices. Teams should try to verify (via interviews with officials that review electricity sector EIAs, or a sampling of recent EIAs) whether these processes and reports meet minimum requirements established by law for public consultation and disclosure. If there is significant divergence between policy and practice, the assessment team should provide the score based on dated policies, but clearly describe in their report and explanatory notes how general practice has changed. In the electricity sector EIA policies and guidelines are likely to focus on power plants, and distribution systems (such as high voltage transmission lines). However, “Strategic EIA” guidelines may also exist for the assessment of policies, programs, sector, or landscape-level decisions. If such guidelines exist for the electricity sector, the assessment team will need to decide whether to apply the indicator to the strategic EIA policies / guidelines or to traditional project-level EIA policies. They may also apply the indicator to both sets of EIA procedures, and assign separate scores.

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ESA 11 - Comprehensiveness of EIA laws, policies and procedures (Optional)∗ Governance Principle: Capacity Relevance of the indicator: Most countries have EIA policies and procedures to assess and mitigate potential project-level impacts on the environment. However, traditional EIA policies and procedures have many short-comings. For example, they fail to assess the cumulative impacts of multiple development activities within the electricity sector, or to fully consider social impacts. As a result, EIA policies and procedures are evolving to include assessment of “strategic” decisions (such as a proposed policy, or sectoral development plan) in order to help integrate environmental and social considerations into the final form of these decisions. In the electricity sector, a shift towards a more comprehensive approach to EIA is more likely to ensure attention to issues of public interest. Values Select Explanation and Justification Not applicable / Not assessed

(0)

National or electricity sector laws and policies are in place that specify or require EIAs for electricity sector activities, and exhibit none or one element of comprehensiveness

(i) Low

National or electricity sector laws and policies are in place that specify or require EIAs in the electricity sector and exhibit two to three elements of comprehensiveness

(iii) Medium

National or electricity sector laws and policies are in place that specify or require EIAs in the electricity sector and exhibit four elements of comprehensiveness

(v) High

Elements of comprehensiveness to be assessed: • Requirements for EIA: Electricity sector policies, regulations or guidelines exist that detail requirements for project-level EIA • Social Impact Guidelines: Electricity sector policies, regulations or guidelines exist that detail requirements for project-level

social impact assessment • Strategic Assessment Guidelines Exist: Strategic assessment guidelines or requirements are in place for electricity sector

programs, plans, and policies • Strategic Assessments Conducted: Strategic assessment(s) have been carried out for the electricity sector in the last five years that

evaluate environmental and / or social impacts at a sector or landscape scale Guidance for assessment teams: This indicator assesses formal requirements or procedures for social, environmental and strategic impact assessments, and also asks for evidence of the actual conduct of strategic impact assessments. Assessment teams should draw on the same set of documents gathered to evaluate the information disclosure and participation requirements in ESA 10. Additional background research will be necessary to verify whether there is any evidence that strategic EIAs have been carried out in the last five years that examine proposed electricity sector policies, plans or programs, or consider the cumulative impacts of multiple electricity sector projects. This will require interviews with staff from units responsible for long-term planning and development of the electricity sector, a review of planning documents and studies completed within the last five years, or (if available) a review of any public registries that record completed or submitted impact assessment reports.

∗ THIS INDICATOR IS OPTIONAL IF THERE IS A RECENTLY COMPLETED OR ONGOING ASSESSMENT OF ENVIRONMENTAL GOVERNANCE BY THE ACCESS INITIATIVE (TAI) IN YOUR COUNTRY. YOU WILL NEED TO DETERMINE WHETHER THE BROADER TAI ASSESSMENT ADRESSES THE COMPREHENSIVENESS OF EIA LAWS AND POLICIES (SOCIAL, ENVIRONMENTAL AND STRATEGIC IMPACT ASSESSMENT) AND IF THESE ADDRESS THE POWER SECTOR.

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ESA 12 – Regulatory response to environmental and social claims Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: This indicator is intended to assess whether the regulatory body in the electricity sector (or the closest equivalent) recognizes the relevance or legitimacy of environmental and social claims. Electricity sector officials may not always recognize social or environmental issues as relevant to the operations of the electricity sector. But many regulatory decisions can have potentially far reaching effects (both positive and negative) on the environment and on human welfare, so t is important that agencies overseeing the electricity sector recognize the relevance of these claims to sector performance. For example, electricity regulatory bodies make decisions about technical distribution losses, energy conservation and demand side management, and renewable energy that have major environmental implications. Similarly, regulatory decisions about electricity prices can make household electricity services unaffordable for low income consumers, so claims regarding the impacts of electricity prices, the need to balance these impacts with cost recovery or profit should be considered. Values Select Explanation and Justification Not applicable / Not assessed

(0)

At least one formal case or evidence of an environmental or social complaint or petition filed within the last five years. But regulatory body refuses to address environmental issues

(i) Low

More than two formal cases of evidence of an environmental or social complaint or petition filed within the last five years. But in at least one case the regulatory body has refused to address the claim because it has an environmental or social basis

(iii) Medium

Two or more formal cases of evidence of an environmental or social complaint or petition within the last five years have been accepted for review by regulatory body (or relevant executive branch office/unit)

(v) High

Guidance for assessment teams: If the regulatory body operates at the provincial or state level, then the team should choose one state regulator as a case study. If there is no independent regulatory body, this indicator should be applied to the unit within the executive branch responsible for oversight of electricity sector performance. If no such “oversight” unit exists, then the indicator is not applicable. The assessment team should rely to the extent possible on registries or documents that record official claims presented to the regulatory body. This should be supplemented with interviews of regulatory staff and civil society organizations to verify whether the regulatory body (or closest equivalent) has accepted any claims on environmental and social grounds. In the explanation, the assessment team should note whether the regulator has been particularly responsive (or unresponsive) to environmental claims as these often are perceived to have less legitimacy than social claims.

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ESA 13 - Electricity provider engagement with civil society organizations and potentially-affected populations

Governance Principle: Participation Relevance of the indicator: The direct interface between civil society organizations and electricity service providers can be an important component of the electricity sector decision chain. As community-based and other civil society groups grow increasingly well versed in sector issues and adamant about being included in decision-making, they are increasingly well-placed to take their demands directly to service providers and exert influence. For example, community organizations have sometimes approached distribution companies to discuss expansion of service / access, or improvements in metering systems. This indicator seeks to address the degree to which service providers allow formal space for this engagement to be constructive (beyond just taking consumer grievance claims). For simplicity, this indicator focuses on the most important utility or private sector electricity distributor in terms of population coverage or volume of revenues generated. Values Select Explanation and Justification Not applicable / Not assessed

(0)

The most important electricity provider meets none of the elements of quality for effective engagement with civil society

(i) Low

The most important electricity provider meets one element of quality for effective engagement with civil society

(ii) Low-Middle

The most important electricity provider meets two elements of quality for effective engagement with civil society

(iii) Medium

The most important electricity provider meets three elements of quality for effective engagement with civil society


The most important electricity provider meets four or more elements of quality for effective engagement with civil society

(v) High

Elements of quality to be assessed: • Designated Department: A department exists --or at least one specific staff person is appointed-- with responsibility for engaging

and consulting the public (distinct from a public relations or consumer grievance function). • Corporate Policy defines when and on what issues the service provider seeks to engage the public or potentially affected

communities, and this policy is publicly posted (either electronically on the internet or at a public information office). • Support for weaker groups: Evidence that corporation / utility provides resources to more vulnerable or weaker socio-economic

sectors to enable their engagement / participation in a consultation process initiated / led by the utility / provider. • Information on how groups can file complaints: Service provider communicates or supplies information on how collective groups

of customers or populations potentially affected by its actions / development activities can file complaints. Guidance for assessment teams: If the sector is unbundled, apply the indicator to a utility / company engaged in distribution. Try to select a utility that is a dominant player in its sub-sector, or covers a significant share of the population. This indicator will require an interview or direct communications with the selected service provider, and with representatives of communities or civil society organizations that have interacted with the service provider. Resources for vulnerable groups may include covering travel and lodging costs associated with a consultation, or support with translation. To test availability of information about filing complaints, the team should rely on an Internet search, visit the corporate public information office (if that exists), or directly request the information from the service provider.

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ESA 14 – Capacity of civil society to address the environmental and social aspects of decision-making Governance Principle: Capacity Relevance of the indicator: Open and participatory decision-making is only meaningful the extent to that there is a vibrant civil society that will avail of opportunities to contribute to decision-making processes, use and act upon available information, and make use of available redress mechanisms. It is therefore important to include an assessment of the capacity of civil society organizations in your country to address environmental and social aspects of decision-making.

Values Select Explanation and Justification Not applicable / Not assessed

(0)

Civil society engagement in sector decision-making meets none of the elements of capacity

(i) Low

Civil society engagement with sector decision-making meets one or two elements of capacity

(iii) Medium

Civil society engagement with sector decision-making meets three or more elements of capacity

(v) High

Elements of Quality:

• Use of appeal mechanisms: At least one civil society organization has made use of appeal or redress mechanisms (filing challenges suits in court) to raise concerns about or demand attention to environmental and social problems.

• CSO analysis of environmental and social impacts: Existence of independent civil society assessment of environmental and/or social implications of sector level policy proposals, regulatory decisions or pending power sector legislation.

• Record of participation: There are official records of civil society organizations representing environmental and social concerns in the most recent public consultation process related to electricity sector regulation, policy or law (e.g., environmental advocacy groups, labor unions, women’s groups, rural cooperatives / consumers, advocates for poverty alleviation, etc.).

• CSO comments on EIAs: Evidence that more than two civil society organizations provided comments on most recent power sector EIA posted for public comment.

• Support for weaker groups: Evidence that civil society organizations, which specialize in energy issues or groups that provide pro bono legal representation, regularly facilitate or support the advocacy concerns of vulnerable populations, in particular populations without access to electricity, indigenous / aboriginal communities, women’s organizations, or populations in extreme poverty.

Guidance for assessment teams: The team should limit its assessment to the past five years. It is possible that applying this indicator may constitute a self-assessment of sorts for the team. In this case, the team will need to ensure the credibility of the score selected by relying solely on verifiable evidence, drawing on independent sources, and asking that this indicator receive careful review by the team’s advisory committee. Applying this indicator will require rigorously documented interviews with staff from the relevant forum / institution, as well as civil society organizations that might have made use of it. The team should collect records of meetings or participant lists. To corroborate with CSO participation in EIA processes, the team should interview the authority responsible for reviewing and posting EIAs, as well as a subset of NGOs that focus on power sector advocacy to collect information on the volume of civil society comments.

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Section C – Environmental and Social Aspects * PRIORITY INDICATOR * ESA 15 - Quality of the judicial or administrative forums that address environmental and social claims

Governance Principle: Accountability and Redress Mechanisms Relevance of the indicator: The quality of the judiciary systems that hear or are responsible for hearing and resolving claims related to environmental damages is a key factor in achieving positive environmental and social outcomes. In this case, the judicial courts that hear or have heard claims related to power sector infrastructure, or claims related to the denial of basic procedural rights of citizens in decision-making in the electricity sector.


(0)

The judicial or administrative forum exhibits none of the elements of quality for redress

(i) Low

The judicial or administrative forum exhibits one or two elements of quality for redress

(iii) Medium

The judicial or administrative forum exhibits three or more elements of quality for redress

(v) High

Elements of quality for redress: • The forum is capable of issuing binding decisions to redress environmental and social damages • The forum is independent and impartial • The forum has the capacity and training to influence the quality of decisions on environmental issues within the past five

years • Parties to a process are able to gain access to information and conduct fact-finding relevant to environmental and social

issues • Provisions of law define what can “trigger” a claim before the forum (basis for claims or kinds of damages the forum will

consider) • Applicable provisions of law define what parties have “standing” (who or what interests can bring a claim) before the forum

Guidance for assessment teams: This indicator should be applied to courts that adjudicate over claims related to the power sector. If there is no single forum responsible for redress of such damages, then the assessment team should apply the indicator to the forum that has most recently adjudicated or considered a claim for such damages. A decision is binding when the responding party is obliged to abide by decisions and the forum can apply a punitive or remedial measure to ensure that the decision is honored. Punitive measures include loss of job, fine, or even imprisonment, where a responding party does not adhere to the decision. Remedial measures include the ability of the forum to cause a third party to provide the requested relief. To assess the forum’s impartiality and independence, the assessment team should consider whether • forum members have tenure of appointment or some other assurance that their livelihood is not threatened by their decisions • rules or practices require limited relationships and/or contact with the parties to a proceeding, or require forum members to recuse

themselves from decisions where they might have a conflict of interest • forum members are drawn from a sector that has a clear stake in the outcome or are elected or appointed by a constituency that

has a stake in the outcome

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Section C – Environmental and Social Aspects ESA 16 - Accessibility of the judicial or administrative forums that address environmental and social claims

Governance Principle: Accountability and Redress Mechanisms Relevance of the indicator: The ability of ordinary citizens to gain access to and rely on the judicial system to hear legitimate claims is as important as the quality of the judicial system. If it is too costly to file claims, or the forum is so distant that it is too costly to travel there, or if claims take too long to be heard by the forum, this effectively means that there is no access to redress for those without significant resources.


(0)

The judicial or administrative forum exhibits none of the elements of quality for access to redress

(i) Low

The judicial or administrative forum exhibits one - two elements of quality for access to redress

(iii) Medium

The judicial or administrative forum exhibits more than two elements of quality for access to redress

(v) High

Elements of quality for access to redress: • A forum office is accessible within a day’s travel through public transportation (geographically accessible) • The forum decides cases in a timely manner (i.e., the average decision time is under two years) • The forum provides interpretation services so that it can hear the claims of people speaking local languages • The forum welcomes amicus briefs from non-parties to a dispute

Guidance for assessment teams: This indicator and ESA 15 should be applied to the same forum. Amicus briefs refer to legal and factual arguments made by a third person or organization that is not a party to the dispute (“amicus curiae,” or “friend of court” briefs). The willingness of the forum to consider such opinions or submissions is another indicator of its accessibility.

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Section C – Environmental and Social Aspects ESA 17 – Assessment of job losses linked to policy changes or sector reforms in the electricity sector

Governance Principle: Accountability and Redress Relevance of the indicator: In many developing countries, state-owned utilities are an important source of government employment. This employment has generally been stable, unionized, and offers better than average wages and benefits. In some cases, employment in state-owned utilities is also a form of political patronage. There are significant political and livelihood interests at stake when the electricity sector is “corporatized”, “un-bundled,” or segments are privatized. Therefore, it is important to analyze the potential job losses (or gains) and impact on wages and job security before reform laws are passed in order to decide how best to balance potential employment impacts with the need for improvements in efficiency and service quality within the electricity sector.


(0)

No documentary evidence that the legislative branch assessed the potential or actual employment impacts linked to major reforms in the electricity sector

(i) Low

Documentary evidence that legislative branch assessed the potential or actual employment impacts linked to major changes in reforms in the electricity sector, after they were adopted.

(ii) Low-Middle

Documentary evidence that the legislative branch assessed the potential or actual employment impacts linked to reforms in the electricity sector before their adoption. But the assessment includes no elements of quality for remedy.

(iii) Medium

Documentary evidence that legislative branch assessed the potential or actual employment impacts linked to major reforms in the electricity sector before their adoption. The assessment includes one element of quality for remedy.


Documentary evidence that legislative branch assessed the potential or actual employment impacts linked to reforms in the electricity sector before their adoption. The assessment includes two or more elements of quality for remedy.

(v) High

Elements of quality for remedy: • Assessment of Unemployment Impacts: Broad assessment of unemployment impacts, which includes examination of at least two

of the following: the magnitude of job losses, the effects on job security, impacts on wages and benefits, and significance to the macro economy.

• Mitigating Adverse Impacts: Explicit programs put in place to ease or reduce impact of job losses (re-training or education grants, compensation of affected labor force, etc).

• Redress: Creation of special redress mechanisms for workers (i.e., allowing them to raise claims regarding damages for pension benefits, adverse health impacts, failure to fulfill commitments for re-training, etc).

Guidance for assessment teams: The indicator seeks to assess if and when employment impact assessments were undertaken, and the quality of those assessments. The elements of quality for remedies focus on both scope (whether the assessment was carried out before or after a major electricity policy or reform package was adopted), and whether explicit remedies were devised to address job losses. This indicator should be applied

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as a case study indicator to a major reform process or other change with potential/actual employment impacts that has taken place within the last five years. The team should draw as much as possible from documentation gathered to evaluate policy-making and reform efforts in the Policy Indicators. Review official documents laying out the rationale, potential costs and benefits of the reform or policy change to find evidence of discussion of job loss or employment impacts. If the document studying employment impacts cannot be obtained, then the team should assume that it does not meet any of the elements of quality, unless it is possible to verify some of the elements via interviews or other documentation. Teams should consider informal interviews with staff of the executive or legislative branches involved in the reform or policy change, representatives of utility sector employees, utility contractors, and, if relevant, private companies that participate in the electricity sector. Such interviews will help verify which remedies -- if any-- were put in place.

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Section C – Environmental and Social Aspects ESA 18 – Participation in decision-making on access to electricity services

Governance Principle: Participation Relevance of the indicator: Access to electricity services varies greatly from country to country. In some developing regions and countries, a major percentage (from 30 to more than 80 percent) of the population does not have access to electricity and depends on traditional fuels. In such contexts, expanding access to electricity services is a major public benefit. Yet decisions in the electricity sector tend to be dominated by technocrats or to exclude constituencies with concerns about improving access to electricity services. This indicator seeks to assess the space made available and effort to incorporate non-technical viewpoints in setting access to electricity services; it applies to the executive branch responsible for electricity planning (or, in some countries, to an independent agency that has been tasked with electrification.)


(0)

No documentary evidence that decision-making on expanding access to electricity includes any of the elements of quality for participation in decision-making

(i) Low

Documentary evidence that decision-making on expanding access to electricity includes one or two elements of quality for participation in decision-making

(iii) Medium

Documentary evidence that decision-making on expanding access to electricity includes three or more elements of quality for participation in decision-making

(v) High

Elements of quality for participation in decision-making: • Evidence of more than one consultation with representatives of relevant socio-economic sectors on expanding or improving

access to electricity services. • Systematic efforts to consult more vulnerable socio-economic groups (such as indigenous peoples, women associations, low-

income groups, rural unions, informal industry associations). • More than two mechanisms of public participation to get public input into planning or programs related to improving access to

electricity services ((such as a public comment periods on draft policies/ plans/ programs; meetings with one or more interest groups; creation of a multi-stakeholder advisory committee).

• Consideration of public comments or inputs in supporting documents or other materials directly relevant to planning or policy processes related to access to electricity services, and a discussion of how these inputs were incorporated.

Guidance for assessment teams: The assessment team should first document the major pieces of policy or legislation related to or addressing access to electricity/electrification in some way. If at all possible, the team should seek to assess policies or decisions related to electrification that have taken place within the last five years. The elements of quality in this indicator focus on process, or the employment of particular mechanisms, and this will require interviews or written exchanges (via e-mail or letters) with relevant authorities and a sample of civil society organizations. Other sources of information include media or press reports or records of official meetings, if such records can be obtained by the assessment team. The team should note when there is a discrepancy between policy and practice (no requirements for consultation but evidence that it occurred, or, conversely, requirements for consultation but no evidence that it took place). If 95 - 100% of the population or geographic area of the country has access to electricity, the team may decide that this indicator is not applicable.

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ESA 19 – Scope for project- affected people to exercise their rights Governance Principle: Participation

Relevance of the indicator: The construction of infrastructure in the electricity sector can displace populations or produce significant changes to their livelihoods and quality of life. The most common electricity infrastructure that displaces or affects human populations includes hydro-electric dams, nuclear power plants, thermal power plants, port facilities or pipelines that deliver oil or gas to thermal power plants, high voltage transmission lines and, to a lesser degree, large transformer sub-stations.


(0)

No documentary evidence that the agency responsible for review and approval of development projects in the electricity sector practices any of the elements of quality for participatory decision-making when addressing project-affected people

(i) Low

Documentary evidence that the agency responsible for review and approval of development projects in the electricity sector practices one or two elements of quality for participatory decision-making when addressing project-affected people

(iii) Medium

Documentary evidence that the agency responsible for review and approval of development projects in the electricity sector practices three or more elements of quality for participatory decision-making when addressing project-affected people

(v) High

Elements of quality for participatory decision-making when addressing project-affected people: • Consultation Requirements: There are explicit requirements or procedures regarding consultation of project-affected people in the

review and approval procedures of projects. • Efforts to educate potentially project-affected people of their rights to consultation or compensation in project development

processes (Note: if more than 5 years have passed since such efforts were made then this element is not met) • More than one participation mechanism: The employment of more than two mechanisms for public participation to get input

from potentially affected people in project review, approval or licensing processes (e.g., formal public hearings, on-site meetings with representatives of project-affected peoples).

• Inclusion of the principle of free, prior and informed consent in the requirements and guidelines for consultation (i.e., affected population(s) are not only consulted but have also freely or willingly agreed to the proposed development activity or project. This element of quality is met only if consultation guidelines require or urge project proponents to work to obtain free, prior and informed consent from potentially affected people).

Although such infrastructure produces benefits for the larger public, significant costs or damages are sometimes borne by the populations in the immediate vicinity of such infrastructure. Fair treatment and compensation of such populations is necessary to ensure basic access to justice and protection of minority rights. Guidance for assessment teams: This case study indicator should be applied by the assessment team if large power infrastructure has been constructed in the last five years that has affected a large number of communities or vulnerable populations (indigenous people, rural communities, poor urban populations, etc.). The team should apply this indicator to one case study project. This case study should be representative of general practice in the power sector. The team should carefully document the basis on which this case study was selected, and set this case study in the context of general practice in the power sector. Although the treatment of project-affected people is relevant to infrastructure more generally, the assessment team should try to focus on specific requirements within the electricity sector.

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The assessment team should review the most current policies and procedures for power project licensing and approval to determine the degree to which they explicitly set out requirements for treatment or compensation of project-affected people. If these procedures are more than five years old, the assessment team should make note of their official date of adoption. The team should verify whether more than one public consultation was actually completed, using interviews or written exchanges (via e-mail or letters) with relevant authorities and with a sample of representatives from communities affected by these projects. Other sources of information include media or press reports or records of official meetings, if such records can be obtained by the assessment team.

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Section C – Environmental and Social Aspects ESA 20 – Participation in decision-making related to affordability of electricity prices

Governance Principle: Participation Relevance of the indicator: Electricity prices have important social impacts. They determine how much of a household’s income is spent on electricity, have ripple-effects throughout the economy that make productive activities more or less expensive, and also drive decisions to undertake or employ energy conservation measures. For these reasons, electricity tariffs must balance different objectives such as efficiency, cost recovery for utilities, sufficient returns to ensure maintenance and new investment in the electricity sector, and distributional impacts on small and large electricity consumers. Pricing tends to be dominated by concerns with cost recovery and fair returns. Relatively less attention is given to low-income constituencies, or to the impact on poverty. The degree to which regulators explicitly consider affordability and seek to understand the impact of tariff revisions by seeking the views or input of the consumers most likely to be affected by electricity price changes is an indicator of their attention to this key public interest concern.


(0)

No documentary evidence that the executive branch or regulatory body responsible for tariff setting or revisions practices any of the elements of quality for participatory decision-making when addressing affordability of electricity services

(i) Low

Documentary evidence that the executive branch or regulatory body responsible for tariff setting or revisions practices one or two elements of quality for participatory decision-making when addressing affordability of electricity services

(iii) Medium

Documentary evidence that the executive branch or regulatory body responsible for tariff setting or revisions practices three of the elements of quality for participatory decision-making when addressing affordability of electricity services

(v) High

Elements of quality for participatory decision-making when addressing affordability of electricity services: • Tariff Principles / Philosophy: Explicit attention to affordability of electricity services for low-income and rural consumers in

tariff-setting principles or terms of reference for assessment of proposed tariff changes. • Public participation in revisions: The use of more than two mechanisms of public participation to get input from low-income or

differentially impacted socio-economic groups in proposed tariff revisions, and an explanation of how their views were incorporated into the final tariff.

• Educating low-income groups: Systematic efforts to educate or communicate with low-income or differentially impacted socio-economic groups (such as rural households, informal businesses and small enterprises, low-income urban populations, retirees, etc.) regarding the impact of and justification for tariff changes Explanatory notes should record the form or methods employed to educate or raise awareness.

Guidance for assessment teams: This case study indicator should be applied if major changes in electricity prices have taken place nationally or among trend-setting provinces or states. This indicator is also relevant if electricity prices have been an issue of national debate and controversy. The assessment team should focus on the regulatory body, executive branch, or agency responsible for setting or revising electricity prices. In most countries, electricity pricing is considered a regulatory function, but not all countries have independent regulatory bodies. In some countries, electricity prices are revised periodically (e.g., every five years), or at the request of a utility or distribution company making the case that a revision is necessary. Review the most current policies and procedures for tariff revision, documents

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that lay out the principles to be followed in determining electricity tariffs, and, if possible, documents related to the most recent tariff revision or review. This will draw on research collected to apply the regulatory process indicators. The team will need to verify whether any formal requirements are in place for consultation with civil society or public interest groups, and if such a requirement specifies particular mechanisms or approaches. The team should then seek to interview relevant authorities and a sample of representatives from organizations that have a history of representing poverty concerns or consumer associations to asses whether these consultations actually took place. Other sources of information include media or press reports or records of official meetings, if such records can be obtained by the assessment team.

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ESA 21- Participation in development of policies to promote low environmental impact technologies and management

Governance Principle: Participation Relevance of the indicator: Technologies and management practices that have low impact on the environment contribute to energy security by diminishing reliance on fossil fuel imports and help to reduce air pollution and emission of greenhouse gases. Some countries have significant renewable energy sources that can compete with conventional power options, or scope for capturing significant savings from energy efficiency. Consideration of the appropriate contribution and potential mix of technologies and practices that have low impact on the environment often occurs as an afterthought in planning. However, failure to make a balanced assessment of renewable energy potential undermines efforts to support development that is environmentally, socially and economically sustainable. In this indicator, “decision-making” refers to decisions taken by the executive branch or agency responsible for planning or policy development.


(0)

No documentary evidence that decision-making has considered management and technology options that have low impact on the environment

(i) Low

Documentary evidence that decision-making has considered management and technology options that have low impact on the environment. These efforts meet no elements of quality for participation

(ii) Low-Middle

Documentary evidence that decision-making has considered management and technology options that have low impact on the environment. These efforts meet one element of quality for participation

(iii) Medium

Documentary evidence that decision-making has considered management and technology options that have low impact on the environment. These efforts meet two elements of quality for participation


Documentary evidence that decision-making has considered management and technology options that have low impact on the environment. These efforts meet three elements of quality for participation

(v) High

Elements of quality for participation: • Evidence of consultation with a range of stakeholders and interest groups on policies that support technologies or management

options that have a low impact on the environment. • Systematic efforts to consult communities affected by conventional projects such as thermal power plants or large dams for hydro-

electricity.

• More than one mechanism for public participation is employed to get public input into policy options for technologies or management practices that have a low impact on the environment (A list of technologies and approaches is included in the guidance notes below)..

Guidance for assessment teams:

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This indicator should be applied, if undeveloped renewable energy resources exist in the country, and/or offer potential to contribute to broader development goals such as poverty alleviation in rural areas, delivery of basic health and education services, and improvements in current account balances by reducing dependence on fossil fuel imports. The assessment team should first document broader electricity sector plans and policies as well as plans and policies that relate to energy efficiency, demand-side management, and/or renewable energy. If possible, seek to assess policies or decisions that have taken place within the last five years. The ministry or department responsible for planning or policy development in the electricity sector can be deemed to have considered management and technology options that have low impact on the environment if the documentation reviewed shows serious consideration of at least three of the following:

o o o o o o o o

Co-generation Demand-side management Creation of energy saving companies Grid-connected renewable energy technologies Distributed renewable energy technologies Improved thermal/fossil fuel generation technologies Improved pollution control technologies for thermal power plants Reduction in transmission and distribution losses

Note: these options do not need to be endorsed in order to have been considered The team should verify whether some form of consultation took place either in the absence of or in compliance with formal requirements for consultation or the employment of particular mechanisms. This will require interviews or written exchanges (via e-mail or letters) with relevant authorities and a sample of civil society organizations. Other sources of information include media or press reports or records of official meetings, if such records can be obtained. The team should note when there is a discrepancy between policy and practice (no requirements for consultation but evidence that it occurred, or, conversely, requirements for consultation but no evidence that it took place).

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ESA 22 – Reporting on environmental and social performance of the electricity sector Governance Principle: Access to Information and Transparency Relevance of the indicator: Much of the focus in decision-making is the ability to recover costs and to attract investment to the electricity sector, to improve service quality, and to reduce or eliminate fiscal imbalances and public sector debts. In this context, very important public benefits provided by the electricity sector often get little or no attention. Consequently, little or no information (quantitative or qualitative) is produced that can give either experts or non-experts a sense of how the electricity sector is performing in the environmental and social arenas. For this reason, explicit attention to and reporting on the status and condition of the environmental and social benefits is necessary to balance a focus on pure economic performance.


(0)

No documentary evidence that executive branch or agency responsible for reporting on the environmental and social performance of the electricity sector practices any of the elements of quality for transparent decision-making

(i) Low

Documentary evidence that executive branch or agency responsible for reporting on the environmental and social performance of the electricity sector practices one or two elements of quality for transparent decision-making

(iii) Medium

Documentary evidence that executive branch or agency responsible for reporting on the environmental and social performance of the electricity sector practices three or more elements of quality for transparent decision-making

(v) High

Elements of quality for transparent decision-making: • Annual reviews or reports on the electricity sector include attention to a broad set of environmental and social issues, including at

least three of the following issues: - access to electricity, - affordability of electricity services, - employment trends in the sector, - electricity theft / distribution losses, - energy security, - energy efficiency, - renewable energy, - air emissions or pollution from electricity generation, - and electricity sector contributions to greenhouse gas emissions.

• Quantitative Reports: Periodic but regular reporting and disclosure of quantitative information (statistics, trends, surveys) on the environmental and social performance of the electricity sector.

• Study Releases: Employment of a range of printed, electronic and on-line formats to disseminate or communicate findings or reviews of the environmental and social performance of the sector. Full reviews are posted on-line or the website indicates how they can be obtained.

• Public Information Across Audiences: Development of public information material for a non-technical audience that summarizes, visually represents or highlights power sector performance, including at least three environmental and social concerns listed under the first element listed here.

Guidance for assessment teams:

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This case study indicator should be applied if the economic, environmental or social performance of the sector has been the focus of significant public policy debate within the last five years. The assessment team should first gather any official documentation, preferably produced by the electricity ministry / department, related to the environmental and social performance of the sector. A desk review of these documents or reports should be sufficient to test the elements of quality for this indicator. Teams should verify whether one or more of the documents or reports gathered include quantitative information or statistics on the environmental and social performance of the electricity sector. This element of quality is only met if reporting is regular and the quantitative information is sufficiently reliable and comprehensive. Please make sure to explain the basis for this judgment in the indicator explanation. A disjunct may emerge between the rigor of environmental reporting and that of social performance reporting. If it is not possible to accurately capture this difference in the indicator values, then the assessment team should provide separate explanations for the environmental mandate and the social mandate.

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ESA 23 – Disclosure and oversight of electricity sector contributions to national greenhouse gas emissions Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Greenhouse gases from the electricity sector are responsible for approximately 38% of greenhouse gas emissions at the global level. The electricity sector’s contribution to greenhouse gases both nationally as well as globally is of public interest. Values Select Explanation and Justification Not applicable / Not assessed

(0)

No documentary evidence that executive branch, office or unit responsible for tracking and assessing greenhouse gas emissions from the electricity sector meets any of the elements of quality for accountable decision-making

(i) Low

Documentary evidence that the executive branch, office or unit responsible for tracking and assessing greenhouse gas emissions from the electricity sector meets one element of quality for accountable decision-making

(iii) Medium

Documentary evidence that the executive branch, office or unit responsible for tracking and assessing greenhouse gas emissions from the electricity sector meets two or three elements of quality for accountable decision-making

(v) High

Elements of quality for accountable decision-making: • Regular reporting by the ministry / department about the electricity sector’s contribution to annual and cumulative emissions of

green house gases at the national level. This element of quality is met if such information is routinely provided or contained in reports that are published on an annual, biennial or other regular basis; or if the power sector executive provides such information to another unit of government that regularly reports a baseline of national greenhouse gas emissions and includes estimates of the portion produced by the electricity sector.

• External Review: Data or baselines that quantify the electricity sector’s contributions to national greenhouse gas emissions have been reviewed by external (non-power sector ministry) experts.

• Reporting to the UNFCCC: Electricity sector contributions to national greenhouse gas baselines are included in national reports officially submitted to the United Nations Framework Convention on Climate Change (UNFCCC). If the government has neither ratified nor signed on to the UNFCCC, then by default, this element cannot be met.

Guidance for assessment teams: The team should review any annual reports on performance of the sector, or statistical or quantitative data generated by the power ministry or department. The team should also ascertain whether climate change and/or energy sector experts not involved directly in producing the estimates were invited to provide independent opinions on the soundness or quality of the estimates/data. If there is no indication of external review in the documentation of GHG emissions, then the assessment team should contact the office responsible for producing the data or reports to verify whether any form of review was carried out. If a claim is made that there was a peer review, then the assessment team should request the name of one or two of the peer reviewers and contact the individual/s to verify their role in the process. Assessment teams should also verify whether their government has ratified or is a signatory to the United Nations Framework Convention on Climate Change (UNFCCC). If so, the team should try to obtain the most recent national report that details progress in meeting national obligations to address climate change and determine whether the national baseline for greenhouse gas emissions separately reports emissions for the electricity sector, or if there is any discussion of the share of emissions from the electricity sector. If such disaggregated information is provided or discussion is contained in the report, the test for this element is fulfilled.

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Environmental and Social Aspects Analytical Questions

Many questions of governance require an element of judgment and are inevitably subjective. For this reason, we suggest that assessment teams document as carefully as possible the reasons for their assessments under each indicator. In addition, however, there are some important issues related to governance that are particularly challenging to capture through an indicator framework but that are too important to ignore. This section deals with such questions. We suggest assessment teams keep these questions in mind as they conduct interviews and scan through documents in order to write brief prose analysis (1 � 2 Pages) on the following issues.

How has decision-making on environmental and social issues in the electricity sector been influenced by the broader political context? The realities of politics in a country affect decision-making in the electricity sector. Please discuss the extent to which these larger political issues framing electricity sector decision-making have had an impact on environmental and social issues.

For example, if certain environmental or social issues are a particular priority or concern of a politically important constituency, they may receive increased attention or emphasis. Other issues you may wish to address include the extent to which corruption in the system is pervasive or to which the judiciary system has been found to be ineffective in preventing violations of environmental regulations in the electricity sector.

Based on your findings, how has the quality of decision-making on environmental and social problems affected environmental and social outcomes in the electricity sector? In applying indicators to assess the quality of decision-making processes affecting environmental and social decisions in the electricity sector, you have also gained insight into the quality of the outcomes of the decisions made. These outcomes are difficult to reflect in the indicators but critical to an overall assessment of the quality of governance in the electricity sector.

Discuss the interaction between how decisions are made and the outcomes of such decisions. For example, has the limited capacity of electricity sector officials to evaluate environmental and social problems led to the adoption of an electricity sector development plan that fails to incorporate alternative forms of energy generation? What aspects of decision-making did the environmental and social indicators fail to capture? To what degree is this because decision-making is dominated by informal processes?

Better decision-making processes in the electricity sector should enable better outcomes, but this may not always be the case: a gap between good processes and good outcomes may emerge, and must be accounted for.

Please discuss any such instances where, in spite of sound process (and a high score or value assigned to the ESA indicator), poor environmental and social outcomes have occurred. In explaining this disconnect, make particular note of the extent to which informal processes have influenced these outcomes. Also raise any particular decision-making processes related to environmental and social issues in your country that were (a) not covered or (b) inadequately covered by the ESA indicators, and discuss their importance.

Electricity Governance Toolkit Draft Indicatorspdf.wri.org/egi_toolkit_1-1.pdf · Case Study...

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