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THE ELECTRICITY GOVERNANCE TOOLKIT

Benchmarking Best Practice and Promoting Accountability in the Electricity Sector

Pilot Version – February 2005

Contacts: Smita Nakhooda Navroz K. Dubash Shantanu Dixit Coordinator Senior Fellow Member–Energy Group Institutions and Governance Governance and Public Policy Prayas- Pune Program National Institute of Public Amrita Clinic World Resources Institute Finance and Policy Athawale Corner 10 G Street NE (Suite 800) 18/2 Satsang Vihar Marg Deccan Gymkhana Washington, DC 20002 New Delhi 110 067 Pune 411-004 USA India India Tel: +1-202-729-7756 Tel: +91-11-2656-9303, Ext.142 Tel: +91(20) 25420720 [email protected] [email protected] [email protected]

World Resources Institute National Institute of Public Finance and Policy

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

Parenthood

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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; Preeti 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

Introductory Notes:

Principles of good governance 5 Approach to the framework and indicators 7 Applying the indicator framework

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Indicators

Indicator Framework Schematic

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Indicator Summary Tables o Section A – Policy-Making Process (PP) 14 o Section B – Regulatory Process (RP) 16 o Section C – Environmental and Social Aspects (ESA)

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Baseline Survey Indicators

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Policy Process (PP) Indicators

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Regulatory Process (RP) Indicators

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Environmental and Social (ESA) Indicators

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Appendix I: Conducting an Assessment

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Appendix II: Indicator Documentation Guidelines

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PRINCIPLES OF GOOD GOVERNANCE IN THE ELECTRICITY SECTOR Decisions made in the electricity sector impact the public interest in a fundamental way. The decision to revise an electricity tariff affects the affordability of electricity supply. Tariff increases as a result of reforms in the electricity sector have led to discontent and popular uprisings in some Asian countries. The decision to introduce efficiency standards for power plants can reduce air pollution in a surrounding community and reduce the carbon emissions of an economy. The social, environmental and economic importance of the electricity sector is well recognized, and the stakes are high. Understanding how decisions are made in this sector is of critical importance. Improving the decision-making processes can enable the making of better decisions.

The Public Interest and Decision-Making in the Electricity Sector The electricity sector has been fraught with controversy. Closed processes and politically powerful groups have limited attention to sustainable development objectives in decision making, particularly during sector reform processes. In order for reform to be politically sustainable, the public must have confidence in its benefits, and this is best supported by transparency. Exclusive processes can be subverted and used for narrow ends, whereas open processes provide checks against such abuse of power.

WRI’s research report Power Politics: Equity and Environment in Electricity Reform1 presented an overview of electricity sector reforms, based on experiences and case studies in six countries. The report concluded that a laissez-faire approach to market-led reform in the electricity sector was unlikely to serve the public interest. By focusing on economic considerations and financial health, policy processes may lock electricity sectors into environmentally unsustainable paths. Environmental and social considerations must be factored early into the decision-making processes themselves, so that they are adequately and appropriately addressed. In practice, however, governments with the support of donor agencies have usually designed reforms without adequate public input or consultation. Electricity sector policy has generally been designed and implemented by select groups of technocrats. Organizations of civil society, for their part, have been hampered by highly-restricted access to decision-making and the technical challenges of advocacy in the electricity sector.

“Good governance” – the process of decision-making itself and the processes by which decisions are implemented (or not implemented) – is necessary to ensure that the electricity sector and its operations serve the public interest. An open, transparent and participatory approach to policy and operations is more likely to serve the public interest, as it will provide political space for the articulation of a range of concerns.

Measuring Good Governance The electricity sector is technically complex. The overarching governance framework can be difficult to understand. The EGI builds on WRI’s earlier experience with The Access Initiative (TAI), a global coalition that promotes participatory and accountable governance as an essential component to achieving sustainable development. The analytical framework used in TAI is based on the pillars of the 1999 Aarhus Convention: access to information, access to participation, access to justice, and the capacity of governments to put the access principles into practice.2

The value of public participation in decision-making is increasingly well-recognized. Facilitating participation processes that grant greater decision-making power to organizations in civil society

1 For further information, see Navroz Dubash (Ed.), Power Politics: Equity and Environment in Electricity Reform, (Washington, DC: World Resources Insitute, 2002). Available Online: http://pubs.wri.org/pubs_description.cfm?PubID=3159 2 For more information see Elena Petkova et al., Closing the Gap: Information, Participation, and Justice in Decision –Making for the Environment (Washington DC: World Resources Institute, 2002) and http://accessinitiative.org .

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contributes to sustainable and equitable development.3 Access to information is crucial to inform and engage public constituents, so that their participation can be meaningful. Access to justice or redress mechanisms are necessary to hold governments as well as actors in the private and public sector accountable in a democratic society. This enables individuals and public interest groups to protect their rights to information and participation, and to challenge decisions that do not take their interests into account. Both governments and civil society must create and nurture capacity to provide, use, and widen such access.

TAI methodology was tested in nine countries (Chile, Hungary, India, Indonesia, Mexico, South Africa, Thailand, Uganda, and the USA) during 2002 and is currently being used to assess the quality of decision-making for the environment in over 20 countries worldwide. TAI experience demonstrates that it is possible to develop a common framework that is flexible enough to evaluate governance in very different national contexts. The conclusions of these initial pilot assessments have been positively received by governments across the world, and welcomed as a useful tool to identify accomplishments and gaps. The assessments point to the need to enhance the capacity of civil society and governments to implement their commitment to good governance. The assessments also suggest that public participation and access to information tends to be strongest in the “environmental” sectors, and weakest in related sectors. The electricity sector presents a logical starting point for a sector-specific toolkit to promote good governance.

The Electricity Governance Initiative (EGI) The EGI presents a framework to help civil society to promote good governance in the electricity sector. This framework assesses the extent to which decision-making processes in national electricity sectors are transparent, allow for public participation, are held accountable to the public interest, and allow access to redress. In addition, the EG toolkit seeks to assess the capacity of institutions and civil society to adequately meet the requirements of good process. It comprises a set of qualitative indicators addressing these questions of process in order to develop a common language and metric to understand good governance. Such a metric will enable organizations in civil society to engage in a constructive dialogue with sector officials and government representatives in order to improve overall governance and performance in the electricity sector.

The use of the EG toolkit is meant to complement ongoing work and advocacy strategies in civil society around electricity sector issues of public interest. These assessments do not serve as a substitute for advocacy around better outcomes and performance; they are instead designed to serve as a basis to inform such strategies. A sound understanding of the decision chain and potential points for leverage and mutual benefit is critical for effective engagement by civil society in the electricity sector. The ‘indicator’ based approach is also not intended as an alternative to analysis of governance processes from the political science or political economy perspective, but to complement such efforts. By approaching the social, environmental and economic challenges confronting the electricity sector through questions of governance and process, we can address these issues at their source, and take concrete steps towards advancing environmental, social as well as economic sustainability in the sector.

3 For more information see Crescencia Maurer et al., Aligning Commitments: Public Participation, International Decision-Making and the Environment (Washington, DC: World Resources Institute, 2003)

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APPROACH TO THE FRAMEWORK AND

ELECTRICITY GOVERNANCE INDICATORS

Four key principles of good governance are at the core of this framework: (i) transparency and access to information (ii) participation (iii) accountability and redress mechanisms (iv) capacity

As explained in the preceding section, we propose to adapt the well-established methodology of TAI. The TAI methodology is made up of research questions; once these questions are answered, they generate indicators of performance. (The term “indicator” is used as shorthand to refer to both the research questions and their answers.) Goals of the Electricity Governance Framework: • To develop a common language to facilitate communication among government, regulators, business

and civil society on good governance in the electricity sector • To provide an operational framework to measure progress and act as a mechanism for accountability • To serve as an advocacy tool that creates more formal processes for representation of the public

interest and to create space for better outcomes in the operation of the electricity sector • To establish benchmarks to measure the quality of decision-making processes in the electricity sector

over the long-term This toolkit is in its pilot testing phase. It will be revised in late 2005, based on lessons from pilot applications in Indonesia, India, Thailand and the Philippines. It is based on experience with: 1. The Access Initiative (TAI): A global initiative coordinated by WRI with partners worldwide to

assess the environmental governance (law and practices) across countries. This methodology was tested in nine countries (Chile, Hungary, India, Indonesia, Mexico, South Africa, Thailand, Uganda, and the United States) during 2001-02, has been refined in 2003, and is currently being used to evaluate environmental governance in over 23 countries worldwide. More information about TAI is available at http://www.accessinitiative.org

2. Power Politics – The result of a comparative study in six countries about the process and political

economy of power sector reforms in developing and transition economies. The study showed that many issues of public interest, such as access to electricity, equitable tariffs, and environmental outcomes, were absent while designing reforms. A key conclusion was that in the absence of more open and democratic reform processes, public concerns would be neglected. The study is available at http://www/wri.org/governance/powerpolitics.html

3. Prayas’s Assessment of Electricity Regulators in India: In 2002 Prayas, Pune undertook a detailed

assessment of 13 electricity regulatory commissions in India based on a rigorous survey and study of regulatory orders and reports. Prayas’s assessment evaluated the adequacy of transparency, resources and public participation in the Indian regulatory process. A panel of former senior government officials and central electricity regulators reviewed and advised this exercise. More information about Prayas’s work on public accountability in the electricity sector is available at http://prayaspune.org/energy/36_Prayas_ERC_Survey.pdf

4. Workshop on Electricity Governance (2003): WRI and the Thailand Environment Institute hosted a

workshop in Bangkok in December 2003 to discuss and map governance concerns and priorities in the electricity sector, particularly in the Asia region. NGOs and experts from Thailand, India, Indonesia and Philippines participated. Their observations and experiences helped in the development

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of this indicator framework. More information, including a summary report of the workshop, is available at http://governance.wri.org/pubs_description.cfm?PubID=3950

5. Workshop to Review the Electricity Governance Toolkit (2004):WRI and the National Institute for

Public Finance and Policy convened a two-day workshop in July 2004 to review the first draft of this EG toolkit. The purpose was to ensure that the toolkit is technically robust and responds to the priorities of civil society. This workshop convened electricity sector experts and civil society as well as sector decision-makers, including representatives of sector regulators, utilities, and private sector actors from India, Indonesia, Thailand and the Philippines to gather their feedback. In addition, a wider group of international civil society and electricity experts contributed written comments on the initial toolkit. The current draft of the toolkit is based on this extensive review process and is responsive to the concerns and priorities of these key stakeholders.

Principles of Governance

(i) Transparency and Access to Information supports meaningful decision-making. These indicators assess the extent to which information relevant to key decisions in the electricity sector is made available to the public.

Attributes of access to information include the comprehensiveness, timeliness, availability, comprehensibility of information as well as the extent to which efforts are made to make sure this information reaches affected and vulnerable groups, as appropriate.

(ii) Access to Participation can influence decision-making in many ways. Diverse and meaningful public input helps decision-makers to consider different issues, perspectives, and options when defining a problem; to gather new knowledge; to integrate public concerns into decision-making; and to manage social conflicts by bringing different stakeholders and special interest groups together at an early stage when change is still feasible.

Attributes of access to participation include formal space for participation in relevant forums; the use of appropriate or sufficient mechanisms to invite participation; the inclusiveness and openness of such processes; and the extent to which the gathered input is taken into account.

(iii) Accountability and Redress Mechanisms are necessary to hold governments as well as actors in the private and public sector accountable; to enable individuals and public interest groups to protect their rights to information and participation; and to challenge decisions that do not take their interests into account.

Attributes of accountability and redress include the extent to which there is clarity about the role of various institutions in sector decision-making; there is systematic monitoring of sector operations and processes; the basis for basic decisions is clear or justified; and legal systems uphold the public interest in the electricity sector.

(iv) Capacity: refers to both the government’s social, educational, technological, legal, and institutional ability to provide public access to decision-making as well as the ability of civil society to make use of such access.

Attributes include the capacity of government and official institutions to act autonomously and independently; the availability of resources (both human and financial) to provide access; as well as the capacity of civil society (particularly NGOs and the media) to analyse the issues and participate effectively.

Key Considerations

1. Applicability across countries: to achieve the goals mentioned above it should be possible to apply the indicator framework in different countries with very different electricity sectors. This implies that the indicators should be independent of the composition of the electricity sector in terms of ownership as

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well industry structure. However, the indicators also need to capture key components of the entire governance chain. Further, the indicator questions should be broad enough to allow for national variations and to capture the key national priorities of different countries.

2. Focus on ‘how’ rather than ‘what’: We have attempted to address the challenge of applicability across

countries by focusing on questions of ‘how’ decisions are made rather than ‘what’ decisions are made. For example the indicator assessing the processes of selecting members of the regulatory electricity commission focuses on whether the processes are ‘independent’ and ‘transparent’ rather than prescribing a preferred mechanism to make such selection processes ‘independent’ or ‘transparent’. This approach is intended to capture the different traditions and norms that guide such processes and other aspects of governance in different countries. ‘How’ decisions are made is very important to understand and ultimately to improve ’what’ decisions are made. Improving the process creates an opportunity to influence and improve outcomes.

3. Capturing the complete chain while keeping it as simple as possible: An assessment of governance

means a look at decisions and processes, which run across different institutions and stakeholders. One weak component in such a decision chain can undermine the integrity of the entire governance system in the electricity sector. Therefore, it is critical to assess the entire chain. But we have to balance the need for exhaustive detail and cross-country variation against the need to limit the number and scope of indicators to make implementation feasible. To this end, certain indicators – particularly those addressing “substantive issues” – may be optional and need not be applied, if these are not key national priorities.

4. Priority Indicators: We have pre-selected a group of 28 priority indicators that all teams must

apply. These indicators establish a minimum overview of sector processes and provide a good sample of overall performance. Priority indicators are clearly labelled in both the worksheets and summary tables. Assessment teams will select at least five (5) additional indicators under each component that address key priority issues in their countries.

5. The Framework is not designed or intended as a basis for ranking across countries: Such a

comparison would not be appropriate, given the vast differences in social and political traditions and norms across different countries. Our emphasis is instead on developing a framework that will be a toolkit to share best practices using a common language, and to enable the assessment of progress within individual countries over time.

6. Focus on the public perspective, not just the investor perspective: The governance debate in key

infrastructure sectors has tended to become dominated by the investor perspective, focusing on parameters such as returns to investors and on policies and laws that protect investors. Although private investment considerations are important, the purpose of the EGI is to look at governance issues from a broader public perspective. Therefore, it focuses on public interest issues such as the social and environmental impacts of the electricity sector, or on public participation in the regulatory process. Improvements in governance from the public perspective will necessarily contribute to the protection of investors by fostering decisions that are more credible, and by ensuring the legitimacy of governing bodies.

7. Limiting dependence on value judgments: To develop a common language and understanding on

governance, we must limit subjective value judgments in applying the indicators. We have sought to avoid arbitrary or inconsistent judgments through clear and careful design, and with explanatory notes that lay out unambiguous criteria for different scores.

8. Analytical Questions: Qualitative indicators focused on the process of governance may not always

include space to capture informal processes in decision-making in the electricity sector and/or actively link better process with actual outcomes in sector functioning and performance. The examination or scrutiny of process is only meaningful to the extent that it has impact on outcomes.

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Informal arrangements have a substantial impact on process. To capture these critical aspects of good governance, we have included two (2) short analytical questions. These questions, at the end of each of the three sections of the framework, are designed as relatively open-ended. Answering them in some depth will help the teams to write and compile their assessment reports.

HOW THE FRAM EWORK AND INDICATORS ARE ORGANIZED

The EGI is organized around three broad components, each representing one important aspect of the electricity governance chain: (i) Policy-Making Process (PP) (ii) Regulatory Process (RP) (iii) Environmental and Social Aspects (ESA) These qualitative indicators are framed by a baseline survey that captures key facts about the present condition of the national electricity sector. The baseline is intended to be a precursor to the governance assessment. It serves to map the national electricity sector and to set the context for these questions that examine process. This approach enables us to get a comprehensive picture of governance processes. We also address key substantive issues relevant to each of these components. Each of the three components of the framework covers: (i) structural considerations, relating to institutional, and legal structures and systems (ii) process considerations, relating to the process or practice of actual decision-making or regulation (iii) Key substantive issues, reflecting outcomes Indicator Design:

The indicator design is based on the TAI methodology (see sample indicator in Box 1 below). Indicators are generated by answering specific research questions. Each indicator addresses one narrow topic, allowing the researcher to go into depth and produce a detailed justification for the value assigned to that topic. Values describe different levels of performance in a particular indicator. Each indicator has three to five values. For each indicator, teams choose the value statement that most closely reflects the situation in your country.

Values are designated in ascending order of magnitude, with lower numerals (i, ii) representing weak performance and higher numerals (iv, and v) denoting strong performance. The highest score is always (v). In the explanatory notes, we explain the relevance of the indicator and basis for selecting a particular value.

Many indicators have an “elements of quality” approach: the indicator covers a range of desired elements, and a value is assigned based on how many of these elements are fulfilled in a particular scenario. This approach enables us to cover a range of specific details without making the framework overly complex. It also helps avoid ‘prioritization’ of certain aspects of a decision.

In some countries, reports being available “in local languages” may be critical, whereas in others, reports being “widely” available may be more important. Guidance notes for each indicator explain the basis for analysis and assessment for each “elements of quality”.

Due to the “elements of quality” approach, some indicators may actually assess more than one principle of governance. For simplicity, in such cases, we have noted the most prominent principle in the categorization of indicators. In applying the indicators, teams are encouraged to make a note of those

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indicators, which could stand to be re-categorized. Teams are also encouraged to note indicators that might be rendered more useful or meaningful by unbundling some of the issues addressed in the elements of quality. Such explicit scrutiny will enable revisions to the methodology, after pilot testing is completed.

Box 1 Values and Elements of Quality for Indicator PP 4 - Annual reports of the Electricity Ministry / Department (0) Not applicable / not assessed (i) The electricity department / ministry does not prepare an annual report or the reports do not satisfy even one element of good quality in reporting (ii) The electricity department / ministry prepared an annual report but it satisfies only one element of quality in reporting (iii) The electricity department / ministry prepared an annual report but it satisfies only two elements of quality in reporting (iv) The electricity department / ministry prepared an annual report but it satisfies three elements of quality in reporting (v) The electricity department / ministry prepared an annual report, which satisfies all the four elements of quality in reporting In this example,

• value (i) reflects the worst situation / practice, • value (iii) reflects intermediate performance, that could improve • value (v) represents the best practice.

Elements of Quality in reporting by the ministry / department include (no particular priority): • 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 or guarantees given to various groups / companies, etc.

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

• The report is available to the general public in a timely and easy manner, especially immediately after it is finalized, through a web-site and/or for public sale at nominal cost

• The report is available in local languages

Based on your research for this indicator, select the value that best reflects the situation in your country.

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APPLYING THE INDICATOR FRAM EWORK

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.

The previous note on the Approach to Indicator Framework Development explains this framework in further detail. WRI, NIPFP and PEG (as coordinators of the EGI) will work with you to conduct an in-depth training for your team on the application of the toolkit and help you to develop a strategy for conducting a national assessment. We will support teams to secure funds for the pilot applications of the toolkit.

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 EG 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. Please refer to the Appendix for details about research documentation and explanations.

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BASELINE INDICATORS:

MAPPING THE ELECTRICITY SECTOR

POLICY PROCESSES Institutional / Procedural

�Legislative Committee �Executive � Independence and Reporting of

Electricity Ministry / Department

�Reform and policy change processes

�Planning Agencies �Donor Agencies �Role of Consultants �Capacity of Civil Society �Availability of relevant

background Information �Quality of participation, debate,

and clarity of policy processes �Media coverage Key Substantive Issues �Asset Evaluation �Privatization �Subsidies � Independent Power Production �Extent of Competition

REGULATORY PROCESS Institutional / Procedural

�Authority and Autonomy �Selection and Removal �Financial + Human Resources �Function and Jurisdiction �Conflict of Interest �Transparency �Appeals �Training �Use of Consultants �Procedural clarity �Pro-activeness �Disclosure of and access to

documentation �Representation of weak

stakeholders �Space for public participation

and civil society capacity �Basis for orders and decisions �Dissemination of decisions Key Substantive Issues �Performance Reporting �Tariff Philosophy �Licensing �Consumer Service and Quality

of Supply

ENVIRONMENTAL AND SOCIAL ASPECTS Institutional / Procedural

�Clarity about Jurisdiction for environmental clearance

�Executive, regulatory and legislative mandates and capacity

�Setting minimum environmental standards

� Inclusion of environment in sector planning and reform

�Environmental Impact Assessment �Redress mechanisms �Regulatory responsiveness to social

or environmental claims �Engagement of service provider

with the public �Capacity of civil society to address

social and environmental aspects �Judicial or administrative forums Key Substantive Issues � Impact on Labour �Access to electricity �Affordability �Project-affected people �Low Environmental Impact

Technologies and Renewables �Reporting of Environmental and

Social Performance �Reporting on Greenhouse Gases

SCHEMATIC OF INDICATORS

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Electricity Governance: Draft Indicators 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 31

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

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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 35

PP 4 Annual reports of the Electricity Ministry / Department

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


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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

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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 41

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


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

• Information about policy positions • Availability of loan documents and

conditions

Transparency 45

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• 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 47

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

• Breadth • Ease • Timeliness

Transparency 49

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 51

PP 12 Independent review of recommendations by consultants

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


53

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 55

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

57

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 59

PP 16 Quality of media coverage about reform or policy decisions

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

Transparency 61

Key Substantive Issues

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

• Disclosure of methodology • Justification • Independent scrutiny


63

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 65

16

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

• Public process for allocation • Reporting on disbursement

Transparency 67

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


69

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

Transparency 71

PP 22 Competition Policy • Mechanisms for prevention of market power

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

Transparency 73

Analytical Questions 75

Section B – Regulatory Process


Principle Pg. No.


RP 1 Institutional structure for regulatory decisions

** PRIORITY INDICATOR **

• Regulatory decision through executive or independent commission

Capacity 77

RP 2 Authority of the regulatory body


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

Capacity 79

RP 3 Functions / jurisdiction of the regulatory body


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

to the regulatory body?

Capacity 81

RP 4 Selection of regulatory body members


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

Information 83

RP 5 Conflict of interests of regulatory body members

• Legal recognition of conflict issues • Preventive provisions


85

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

• Financial autonomy • Human resources

Capacity 87

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


89

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RP 8 Training of regulatory body members and staff

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

financial) • Diversity of perspectives

Capacity 91

RP 9 Information available to public regarding use of consultants

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

Information 93

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 95

RP 11 Pro-activeness of regulatory body


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

Capacity 97

RP 12 Disclosure of documents in possession of regulatory body


• Legal provisions • Operating procedures

Information 99

RP 13 Procedure for public access to regulatory body documents


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

Information 101

RP 14 Space for public participation in the regulatory process

• Open proceedings • Public right to participate

Participation 103

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 105

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

• Availability of financial and analytical resources

Capacity 107

RP 17 Interventions by civil society in the regulatory process


• Public interest cases and appeals • Active organizations

Participation 109

RP 18 Orders and decisions of the regulatory body


• Reasoned orders • Response to public comments


111

RP 19 Dissemination of regulatory body’s decisions

• Easy availability • Timely availability • Local language

Information 113


RP 20 Periodic performance reports by licensees / utilities

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

Information 115

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RP 21 Tariff philosophy


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

impacts • Simple language • Public participation


117

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

o Amendment / Revocation o Dispute resolution o Compliance / performance

monitoring


119

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

mechanism


121

Analytical Questions 123

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 125

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 127

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 129

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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 131

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



Capacity

133

ESA 6 Legislative Committee capacity to assess environmental and social issues




Capacity 135

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 137

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 139

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 141

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 143

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• 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 145

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?


147

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 149

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 151

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

153

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

• Geographic • Temporal • Linguistic • Economic

Accountability and Redress Mechanisms

155

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• 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


157

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 159

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 161

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 163

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 165

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 167

22

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 169

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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

Generation / Power Producers:

Distributors:

Utilities

Consumers

Transmission

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Note: Include timeframe of the formation of various institutions. 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: _______________________

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Government body overseeing rural electrification: _________________________ 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

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Regulatory Body for Appeals: Exists Name: ____________________ 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: ______%

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Distribution and transmission losses: ______%

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: _________________________________________________________________ VIII. PRIVATISATION:

Privatized When (Year):________ Under Consideration None

Transmission separate from Generation?

Distribution separate from Transmission?

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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: ____%

30

Section A – Policy Process (PP) Overview Policy processes establish the parameters for the function and performance of the electricity sector, and are the key to governance. Section A 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 the 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 the capacity of civil society to engage in the process of policy formulation. The quality of policy processes affects regulatory processes as well as the social and environmental aspects of performance in the electricity sector. Section A 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. Since the importance and relevance of these issues will differ from country to country, the indicators are designed to be responsive to national priorities. Guidance for Assessments Apply these indicators at the appropriate level for policy-making in the electricity sector: 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 address the executive process. Identify one legislative process and one executive process to which these indicators may be applied. Where the electricity sector is undergoing 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 something equivalent. 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 Governance 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, 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 committee 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 perform their role of setting and overseeing the direction of policy. Special efforts may 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 elements of capacity exist

(i) Lowest

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

(ii) Low-Middle

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

(iii) Medium

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

(iv) Medium – High

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

(v) Highest

Guidance for assessment teams: The four elements essential for enhancing the capacity of legislative members are:

• Trained staff and access to documentary resources to examine policy issues of relevance to the electricity sector • Periodic opportunities for knowledge enhancement (e.g. training courses, conferences etc.) for legislators and staff • Availability of financial resources to hire experts and undertake studies. These financial resources must be predictable and

under the control of the committee • Authority to call relevant elected representatives or appointed officials in order to seek information and answers, and exercise

of that authority in practice 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. Interview legislators and staff 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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Researcher Name and Organization:

Sources of Information:

Additional Information: Comments on this Indicator:

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Section A – Policy Process * PRIORITY INDICATOR *

PP 2 - Legislative (Electricity) Committee Governance Principle: Accountability and Redress Mechanism

Relevance of the indicator:

In addition to having capacity, a successful legislative committee should be independent and function actively in its policy-making and oversight role, while providing scope for public input and participation.

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) Lowest

There exists legislative committee overseeing electricity but it meets only one or two elements of effective process

(ii) Low-Middle

There exists legislative committee overseeing electricity but it meets only three or four elements of effective process

(iii) Medium

There exists legislative committee overseeing electricity but it meets five or six elements of effective process


There exists legislative committee overseeing electricity and it meets all seven elements of effective process

(v) Highest

Guidance for assessment teams: The seven key elements that make the legislative committee process effective: • Committee members are required to disclose their past links and commercial interests in the electricity sector industry before

joining the committee • The committee prepares reasoned reports and regular proceedings. Reasoned reports are those that explain the logic and thinking

behind the committee’s pronouncements • The committee is active; meets regularly; is proactive in considering issues relevant to electricity, and produces reports on a

timely basis. Examine the number of meetings held by the committee, the purposes of those meetings and assess whether significant issues and events in the electricity sector during a given period are proactively taken up

• Committee undertakes periodic public consultations (after issuing public notice) and its proceedings are open to the public • Documents brought before the committee are made public • Reports and recommendations of the committee are public documents • The executive branch (electricity department / ministry) is required to present an “action taken report” or similar response to the

committee’s recommendations in a timebound manner, and does so regularly Obtain detailed documentation pertaining to the functioning of the legislative committees. Key documents include records and proceedings of meetings, submissions to the committee and reports produced by the committee.

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35


PP 3 - Independence of Energy Department / Ministry from the Executive Governance Principle: Capacity Relevance of the Indicator:

The staff of an electricity ministry / department is charged with implementing the legislative decisions. They frequently have considerable latitude in interpreting legislative mandates, raising the risk that one or other stakeholder group may unduly influence the staff. To avoid this danger, it is important that staffing policies safeguard the independence of the executive. This indicator assesses four important attributes essential for independent decision-making.

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) Lowest

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 the four elements of quality

(v) Highest

Guidance for assessment teams: The four elements of quality in independent decision-making: • There are well laid-out, transparent (public) criteria for the appointment of key staff within the concerned energy department /

ministry • The tenure of the key staff is fixed / pre-determined. There is a well laid-out procedure (including criteria for removal) for the

removal of staff before their term expires • Appointees on key positions in the ministry / executive are required to disclose their past and current links with the electricity

sector, such as any shareholding in related companies or any employment or commercial / advisory relationship, etc. • There are clear rules for preventing conflicts of interest, such as a ban on key staff entering into a commercial relationship with

any electricity-related business for a few years after retirement from the department / ministry / executive Assessment teams will need to obtain procedural rules that guide the functioning of the relevant department / ministry. These rules will provide the basis for scoring in connection with the four elements of quality regarding the staffing policies for the electricity department / ministry

36



Additional Information:

37


PP 4 - Annual reports of the electricity department / ministry Governance Principle: Accountability and Redress Mechanism

Relevance of the Indicator:

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

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

(i) Lowest

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

(ii) Low-Middle

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

(iii) Medium

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


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

(v) Highest

Guidance for assessment teams: The four elements of quality in reporting by the ministry / department: • 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, etc.

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

• Availability of annual report to the general public in a timely and easy manner --immediately after it is finalized-- through a web-site and can be requested from at the ministry at a nominal cost and received within four weeks.

• The report is available in local languages Assessment teams should access the most recent available annual report through the department / ministry. If there are convincing reasons that the report for 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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39


PP 5 - Advisory Committees to the electricity department / ministry Governance Principle: Participation Relevance of the Indicator: An electricity department / ministry may appoint one or several advisory committees to assess particular matters of policy-making. When used well, such advisory committees may be useful vehicles to bring 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. Hence, 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 feature for effective functioning

(i) Lowest

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 all the six structural feature for effective functioning

(v) Highest

Guidance for assessment teams: The six structural features for effective functioning of advisory committees: • Clear role and a 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 taken.

• 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 capture, the committee should have representation from a broad group of stakeholders. Even though many issues are technical, committees should ideally include representation from technically minded public interest groups.

• 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 of the committee. Regular meetings are a signal that a committee is seriously deliberating an issue, and is not simply a rubber stamp.

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

• 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 about how the deliberations and findings of the advisory committee are being utilized.

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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Comments on this Indicator:

41


PP 6 - Distinct planning / policy agency Governance Principle: Capacity Relevance of the Indicator:

Whatever be the structure of the electricity sector, a distinct planning agency is useful. 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; 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)

Lowest 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 agency with clear consultation and executive response mechanisms exists, but the agency meets only one or two requirements of effective functioning


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

(v) Highest

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. 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 assess if the distinct agency meets the requirements of effective functioning: • 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.

• 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.

• Requirement to make public its analysis reports, studies and recommendations and exercise of this requirement in practice. Examine the operating rules of the agency.

• Requirement to consult stakeholders and other public interest groups 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; maybe this task is subsumed under a broader economic planning agency (be sure to specify which case applies). 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 of planning agency staff. Researcher Name and Organization:

Sources of Information: Additional Information: Comments on this Indicator:

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Section A – Policy Process ** PRIORITY INDICATOR **

PP 7 - Debate on reform / restructuring law or other key policy change law Governance 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 the law. 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 sanction (through means such as ordinance / presidential decree)

(i) Lowest

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 and the process meets all the four criteria for effective legislative process

(v) Highest

Guidance for assessment teams: The four criteria of effective legislative process: • Duration of time between tabling of legislation and passage of the law: This is crucial as 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. 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 one month and a maximum of one year should be considered reasonable, 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 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 present in practice.

• Duration of debate and composition of speakers is another important pointer to the importance attached by legislators to the electricity legislation. This could be considered satisfactory if serious debate took place at the time of enacting the law and if a reasonable number of opposition members had an opportunity to participate in the debate.

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

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Information necessary to assess this indicator will be available in legislative records. In addition, it will be helpful to interview key legislators of both ruling and opposition parties. Researcher Name and Organization:


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PP 8 - Role of donor agencies during policy reform Governance Principle: Access to Information and Transparency 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 conditionalities. Key documents in which these positions are articulated are Country Assistance Strategies (which are not binding on governments); policy loans (such 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) Lowest

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, but their involvement meets two conditions of transparent donor engagement

(iii) Medium

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


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

(v) Highest

Guidance for assessment teams:

The four conditions of transparent donor engagement include:

• Information about donor positions on policies in the electricity sector – such as that articulated in Country Assistance Strategies -- is publicly available

• Loan documents that include binding conditions on loan disbursements are publicly available during the period when the loan is active. (Disclosure post facto is inadequate. Only information available at the time of decision-making can support greater participation.)

• Information about financial disbursement relating to loan conditions – amount of disbursement, whether disbursement is withheld, and why – is publicly available

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

First identify the most active donor agencies – multilateral and bilateral – active in the electricity sector. “Publicly available” means that documents were available either through electronic sources or through personal requests to the relevant agency, by any member of the public. Once the relevant agencies are identified, conduct interviews with industry insiders, key stakeholders and donor agency staff to ascertain the key donor agency documents relevant to the electricity sector. These documents might include country assistance strategies, policy loan documents, investment loan documents, technical assistance documents and workshop reports. 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. 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

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interviews and donor agency staff interviews to make an independent assessment of the degree of transparency that existed at the time the strategy process / loan / workshop was underway. If there are significant differences across donor agencies regarding transparency, fill out the indicator based on the most influential donor agency, and report results for the others in additional notes. Researcher Name and Organization:



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

Relevance of the Indicator:

If a wide range of interests is to be represented in determining a policy change, it is important that a wide 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 process of public participation itself is covered in indicator PP14.

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) Lowest

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 five 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 the eight 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 the eight elements of a well defined process, and information on the process is well distributed (all the three elements of broad distribution)

(v) Highest

Guidance for assessment teams: Elements of a well-defined process of decision-making are:

• Clear understanding of who (which institutions / agencies) will make decisions • The time-frame for making decisions is laid out in advance, • The format for those decisions is clearly defined • The time-frame for public input is communicated and provides reasonable time for comment • Specification of how public input will be used • Anticipation of how and when will feedback be provided • Specification of a mechanism for recourse • Provision for system for documenting the process

The three elements of a process for which information is sufficiently broadly distributed are:

• Information must be circulated with reasonable lead time (specify) in advance of the initiation of the policy process • Information is available on the internet and through the use of more than one other communication tool • Demonstrated sysematic efforts are made to reach out to disadvantaged communities

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 websites. It may be helpful to access government web-masters to get details on web postings

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(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. Researcher Name and Organization:




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PP 10 - Scope of background / supporting information available to the public Governance Principle: Access to Information and Transparency 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 PP 11). Access to these documents is important for several reasons: an assessment of whether the decision was informed; whether the knowledge base was skewed toward one or other set of interests; and whether the decision was consistent with the knowledge base or ultimately dictated by interests over knowledge. 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) Lowest

Information available to the public fails to meet at least two criteria for transparent information sharing

(iii) Medium

Information available to the public meets all the three criteria for transparent information sharing

(v) Highest

Guidance for assessment teams: The three criteria for transparent information sharing:

� Breadth: it is important that transparent information should include both government documents and stakeholder views � Ease: Registries or records of policies, strategies, plans, programs, laws, or other necessary background documents are accessible

in more than one public location (please specify). 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: this information available to the public with reasonable lead time prior to the decision being taken? The public informed through web sites znd a least one more communication medium of the availability of the information?

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 the public, regarding use of consultants Governance Principle: Access to Information and Transparency

Relevance of the Indicator: Consultants often play a key role in any major policy change. While assessing reform and restructuring of the electricity sector, since most countries have historically operated with vertically-integrated and nationally-owned monopolies, most elements of the standard prescription for electricity sector reform are new. Consequently for reform design, governments often contract for help with consultants, who are often supported by donor agencies. Many key decisions about reform are made by consultants, or are made de facto through the terms of reference that guide consultants. Scrutinize the terms of reference to see if study of a range of alternative reform options, and their implications for financial, social, and environmental outcomes are included. Transparency in the choice of and working of these consultants is, therefore, crucial to transparency and representation of interests of stakeholders in the process as a whole.


(0)

No details of consultants (other than the name of the firm) involved in reform and restructuring are available as public information

(i) Lowest

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) Highest

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 web site, available in a library or reading room, and readily produced on demand from a ministry.

• Timeliness: was this information available to the public with reasonable lead time prior to the decision being taken, and was the public informed through web sites, and more than one other communication medium of the availability of the information;

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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Additional Information: Comments on this indicator:

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PP 12 - Independent review of consultants’ recommendations Governance Principle: Accountability and Redress Mechanisms

Relevance of the Indicator: Independent review is an 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.


(0)

There is no provision for independent review of consultant recommendations in the decision process

(i) Lowest

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) Highest

Guidance for assessment teams: To be useful, an independent review process should consider the following:

• 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 included 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 are incorporated as policy decisions.

• Outreach strategy: The consultant’s report should be adequately disseminated to stakeholders so that all stakeholders can 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 included in the final report.

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. The terms of reference for the consultant 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. Industry insiders and government staff, who commission consultant reports, and donors (who often pay for consultants) can provide additional information about the existence and extent of systematic review.

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PP 13 - Capacity of Civil Society Organizations Governance Principle: Capacity Relevance of the indicator: Civil society organizations (CSOs) can play a critical role in the governance of the electricity sector. Within the policy process, narrow financial and technical considerations are too often dominant. Civil society organizations will have to ensure that social and environmental concerns are not under-represented. Moreover, private 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 against the common 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 at least one capability

(i) Lowest

There are one to three CSOs active in electricity policy, but none of them demonstrates more than one capability

(ii) Low-Middle

There are one to three CSOs active in electricity policy, and at least one demonstrates three or more capabilities

(iii) Medium

There are four or more CSOs active in electricity policy, and at least one demonstrates four or more capabilities


There are four or more CSOs active in electricity policy, and at least three demonstrate four or more capabilities

(v) Highest

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 the agendas set by others. 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 grass-roots connections. Do the CSOs active in electricity policy have such links?

• Ongoing learning: Electricity is a dynamic sector. Do the CSOs 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 effective 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 from the “outside”, the broad credibility of a CSO 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.

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Begin by identifying active CSOs, including non-governmental organizations (NGOs), labor unions, professional bodies, academic institutions, and social movements. CSOs must be active in policy processes (as distinct from regulation only). Researcher Name and Organization:




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PP 14 - Quality of the public participation process during reform or policy decisions Governance Principle: Participation Relevance of the Indicator: A strong process for public participation is an essential element of good governance. Public participation allows for otherwise marginal voices to be heard and interests to be represented, provides an avenue for civil society input, and provides 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)

Lowest Adequately laid-out process of public participation, including one to three elements of quality

(ii) Low-Middle

Adequately laid-out process of public participation, including four to five elements of quality

(iii) Medium

Adequately laid-out process of public participation, including six to seven elements of quality


Well laid-out process of public participation, including all eight elements of quality

(v) Highest

Guidance for assessment teams: The eight elements of quality in a good process of public participation:

• Public notification of the process • Registries or records of policies, strategies, plans, programs, or laws are accessible in more than one public location (please

specify) • Communication of draft decision within one month • Wide use of several diverse communication tools (specify)to reach a broad range of stakeholders, which may include newsletters,

media, internet, public meetings, etc • Adequate /reasonable time for public consideration and preparation of positions • At least two or more opportunities for consultation and feedback • Clear communication on the results of public participation within three months of the decision • Systematic Outreach to affected and vulnerable communities

Conduct interviews with officials, and a broad range of stakeholders, and seek documentation of the public participation process.

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PP 15 - Quality of participation by stakeholders and government responsiveness Governance 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 participates actively and if decision-makers actually incorporate inputs into the final decision. In this sense, this indicator complements the earlier two: PP 13 on civil society capacity and PP 14 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) Lowest

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 both elements of quality and responsiveness met all three elements of quality

(v) Highest

Guidance for assessment teams: Two key elements in measuring the quality of participation:

• Quantity: 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 ten (10) submissions to be a minimum set of comments as indicative of reasonable participation.

• Breadth: comments and analysis are submitted by a broad range of stakeholder groups that not only include the power industry and industrial users but also public interest NGOs, labor, consumer groups, and other sectoral consumers such as farmers. As a rule of thumb, sufficient breadth is indicated if at least 20% of the comments or five strong comments are submitted from non-industrial groups. 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.

Three key elements in measuring responsiveness of policy-makers:

• 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 PP 14. 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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Comments on this indicator:

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PP 16 - Quality of media coverage about reform decisions Governance Principle: Access to Information and Transparency 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 may 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)

Lowest Media coverage meets one element of quality (ii)

Low-Middle

Media coverage meets two elements of quality (iii) Medium

Media coverage meets three elements of quality (iv) Medium – High

Media coverage meets all the four elements of quality (v) Highest

Guidance for assessment teams: The four elements to assess the quality of media coverage:

• Volume of coverage: If there was an average of four or more articles in the two largest circulation newspapers, this element of quality is met.

• Local language coverage: If there are four or more articles in the local language paper this element of quality is met. • Quality of coverage: Assess the quality of coverage in the various papers by looking for citations of specific documents, quotes by

opposing stakeholders / officials and independent analysis. Select at most ten detailed articles in order to make this assessment. Since this is necessarily a qualitative judgment, document the basis for your assessment in the notes.

• Balance of coverage: Assess the balance in the coverage by various papers. To assess balance, examine if articles give only one point of view, or more than one viewpoint. Select at most ten detailed articles in order to make this assessment. Document the basis for your judgment.

Pick a one-week span, covering a period of three days before and three days after the day of a significant decision (legislative or executive). Identify the two largest circulation newspapers and, in addition, identify one large circulation local language newspaper.

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

Relevance of the Indicator: Asset valuation of an existing utility is necessary, 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 asset valuation be subject to disclosure, be justified and be independently scrutinized.

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

Lowest The methodology is disclosed and justified but is not subject to independent professional scrutiny

(ii) Low-Middle

The methodology is disclosed and justified, but is not independently scrutinized

(iii) Medium

The methodology for asset valuation is disclosed, justified, and independently scrutinized


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

(v) Highest

Guidance for assessment teams: Typically, the department / ministry that governs the functioning of a utility (normally a power ministry or its 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: Asset valuation can be a complex business, involving complicated judgments on valuing assets. Consequently, it is important to have full disclosure to ensure that the judgments made are reasonable and pass scrutiny.

• Justification: Disclosure is more valuable if the judgments regarding asset valuation are justified to explain the assumptions behind and basis for disclosure.

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

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

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PP 18 - Process of privatization and bidding Governance Principle: Access to Information and Transparency Relevance of the Indicator: Transparency in the bidding process is an important tool to ensure that a fair value is paid for public assets, and to limit opportunities for corruption and graft. 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)

Lowest 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


Three key elements of the privatization process are publicly disclosed, and the successful bid is publicly justified on the basis of these elements

(v) Highest

Guidance for assessment teams: Three key elements of the privatization process: • Request for proposals • Information provided to the bidders • Decision criteria and the decision-making process Seek to obtain details about the privatization bidding process from the relevant administrator, normally the ministry concerned or the regulator. Ask for 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.

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

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


(0)

There are no public criteria and there is no public process for allocation of subsidies

(i) Lowest

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) Highest

Guidance for assessment teams: Select an important existing subsidy and assess it for the purpose of this indicator. To examine criteria and process, check both any existing law and implementing regulations. Reporting on subsidies should include, at minimum, whom the subsidy went to, the amount, and for what purpose.

Another area where subsidies are used is to provide financial support to utilities being privatized or loss-making public sector companies to meet their financial obligations during the transition period. If such subsidies exist, then this indicator could also be applied to the same.

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PP 20 - Accountability regarding subsidies Governance 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 design objectives.


(0)

No requirement to monitor effectiveness of subsidies in meeting stated goals

(i) Lowest

Requirement to monitor effectiveness of subsidies AND clear accountability for the monitoring role

(iii) Medium

Requirements to monitor effectiveness of the subsidy and responsibility for such monitoring, AND there is a clear stipulation of procedure for review of allocation of future subsidies and reallocation in case of non-compliance.

(v) Highest

Guidance for assessment teams: 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 monitoring. What measures do the program documents put in place for actions to be taken if monitoring reveals that program goals are not being met? Is there a procedure to review the subsidy, or to undertake re-targeting? In addition to reviewing documents, interview officials responsible for implementation and beneficiaries of the program, to understand how various provisions work in practice.

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PP 21 - Independent Power Producers Governance Principle: Access to Information and Transparency Relevance of the Indicator: The Independent Projects / Producers / Policy (IPP) have typically preceded any fundamental restructuring of the electricity sector. Many of these policies and projects are criticized on economic, social and environmental grounds. Due to large quantum of financial transactions associated with such projects, there have been several allegations about corruption and other bad practices in these projects. Hence, IPP process is an important indicator of the quality of governance.

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

Lowest 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 the six elements of quality (v) Highest

Guidance for assessment teams: The six key elements of quality, critical for ensuring a rational IPP policy:

• Legislative body was involved in the IPP policy development, either in the form of debate, new / amendments in the legislation or through the legislative committee process

• The IPP projects are awarded on the basis of competitive bidding • The ‘Need for new IPP project’ is established, based on transparent and detailed analysis about the demand-supply scenario.

Detailed analysis implies analysis of base load v/s 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.

• Before finalizing the project and before entering into the power purchase agreement a detailed analysis of the tariff impact of new IPPs is undertaken and the analysis is made public beforehand. Detailed analysis implies: consideration of aspects such as sensitivity to foreign exchange rate change; fuel cost variations; 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 are held during the IPP policy development. Adequate public consultations implies: making background documents available to the public; giving the public an opportunity to make comments / objections, and publication of executives / legislatives decisions on the public inputs.

• Similar public consultations are held – before approving any particular power purchase agreement with IPP.

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PP 22 - Design of competitive mechanisms Governance Principle: Access to Information and Transparency 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 directly by consumers in the form of higher rates, or indirectly through higher fiscal burdens, following state intervention to mitigate flawed competition (as happened in California, USA). For all these reasons, scrutiny of competitive processes is essential.

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

(i) Lowest

The design of competitive mechanisms meets only one element of quality

(ii) Low-Middle

The design of competitive mechanisms meets only two elements of quality

(iii) Medium

The design of competitive mechanisms meets three elements of quality


The design of competitive mechanisms meets all the four elements of quality

(v) Highest

Guidance for assessment teams: The four key elements of quality, critical for ensuring a rational competition policy are:

• Mechanisms for the prevention of abuse of market power are in place, wherever wholesale or retail markets exist. These mechanisms include: the investigation and mitigation of market power is explicitly assigned to an entity (regulator agency, anti-trust commission, or the like); explicit market share limitations are written into the law; or the law explicitly establishes 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)

• Conditions for existence of competition, such as market size, are explicitly considered during policy development • Adequate public consultations are held during the development of competition policy. Adequate public consultations implies:

making available background documents to the public, giving the public an opportunity to make comments / objections and publication of executive / legislative decisions on the public inputs.

• Competitive mechanisms are transparent where wholesale or retail markets exist: prices, quantities, and any other relevant information is available from reliable sources (e.g. the market operator or somebody without a financial stake on market transactions), on a timely basis (e.g. hourly), and at a reasonable cost (e.g. for a small fee charged to market participants, and free to all others)

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Section A - Policy Process Analytical Questions

Many questions of governance in the electricity sector require an element of judgment and are inevitably subjective. For this reason, we ask implementers to document as carefully as possible the reasons for their assessments under each indicator. In addition, there are 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 issues / 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 precedes 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, but also 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, and civil society organizations– develop their knowledge, opinions and, ultimately, their positions about the electricity sector? Electricity policy is a fast moving, hotly 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 threats to sensible policy-making. Incomplete and flawed knowledge is one danger. Another is that knowledge itself can be selectively used to promote certain interests over others.

For these reasons, capacity is an essential complement to transparency and participation in the sector. However, while indicators can measure number of workshops, and numbers of comments filed, it is much more difficult to understand how participants in the electricity sector 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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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 are intended to 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, labor 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 licences; 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. Apply these indicators at the appropriate RP level: federal or state. 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, their 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 if 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 consistency and accountability of decision-makers is to have a separate, dedicated body, (regulatory commission or board, etc.), which is 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 as a desirable structure to improve sector governance. Of course, just the existence of an independent commission is not sufficient and needs to 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’ and the RP indicators should be applied to any such body / institution. Assessments teams should clearly specify if the RP indicators are applied to a body / cell within ministry. Values Select Explanation and Justification Not applicable / Not assessed

(0)

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

(i) Lowest

Most regulatory decisions are made through normal executive decision-making 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) Highest

Guidance for assessment teams: The information about the existence of independent regulatory commissions would be easily 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 is operating 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 particular law or by 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 teeth in terms of legal authority. In the absence of sufficient legal authority the regulatory body will fail to get crucial information or the decisions / 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, 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) Lowest

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) Highest

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

• 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 can 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 provide details of the status of each element of authority in terms of reference to the specific provision or clear specification 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 should be clearly stated and the same should not be considered as 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: As explained in RP 2, 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, which scores high 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), 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 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) Lowest

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


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

(v) Highest

Guidance for assessment teams: This indicator assesses two aspects of ‘functions’ entrusted to the regulatory body. First, the indicator looks if the functions of the regulatory body are clearly defined. Here “clearly defined” means 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, which 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 the regulatory body can have, which functions are critical and which are not critical depends on the particular country scenario in terms of 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 power exchange, then the function of regulating power purchase is not critical but the function of designing / regulating 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 rather than tariff-setting, ensuring fair competition becomes critical functions.

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Before assigning a particular value to the above indicator, the assessment teams should adequately reflect on which are the critical functions and should clearly explain why the team assessed that a particular function is critical and also state the basis for selecting a particular value. Here the assessment teams should also list the critical functions, entrusted to the regulatory body. 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 be helpful to understand the two aspects being considered in this indicator, i.e. clarify about functions of the regulatory body and range of functions entrusted to the regulatory body. In cases where the legal instruments themselves entrust particular critical functions to the regulatory body but leave very little freedom for regulatory decision-making, this in effect 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. Researcher Name and Organization:




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RP 4 - Selection of regulatory body members

Governance Principle: Access to Information and Transparency Relevance of the Indicator: Decisions of the regulatory body are very crucial for the development of the electricity sector as well for consumers and non-consumers. Moreover, often the decisions of the regulatory body have very significant economic implications for the utilities and for democratic government. Also, as seen in the earlier indicators, for effective regulatory process it is desirable that the regulatory body has significant procedural authority and substantive functions. 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) Lowest

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) Highest

Guidance for assessment teams: This indicator focuses on five key elements that make the selection process effective, and the 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 of these elements 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 proper explanation for this assessment, and suggest a preferred composition.

• Well-defined –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.

• Transparent – The selection process should be transparent, at least to the extent of making public 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 from what background / 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: For the same reasons mentioned in notes to indicator on selection process (RP 4), 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, etc. In such a case it is more likely that the decisions of the regulatory body would favor the narrow interests of its members rather than the broader public interest. Also the possibility of such conflicting interests severely erodes the credibility of the independent regulatory body. 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) Lowest

The applicable law, rules or regulations do explicitly recognize issues of conflict of interests of regulatory body members, but the provisions to prevent such conflict of interests are inadequate

(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) Highest

Guidance for assessment teams: Typically to prevent such conflict of interests, the legal instruments of the selection process should specify that before appointing any candidate as a member of the regulatory body, he/she has to 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 conflict of interests are that a member:

• should not have any financial interests in any organization or utility related to / doing business in the electricity sector • cannot take any commercial employment with an electricity sector entity for a few years after retiring • cannot be re-appointed on the regulatory body • cannot represent the interests of any party before the regulatory body in future, etc.

The provisions to prevent conflict of interests should be considered inadequate, if the assessment teams have specific suggestions or alternative provisions, which they feel are essential to prevent conflict. Assessment teams should clearly justify the choice of a particular value.

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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, apart from adequate authority and substantive function, 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) Lowest

The regulatory structure has one or two elements of autonomy

(iii) Medium

The regulatory structure has all the three elements of autonomy

(v) Highest

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

• 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 provision 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 needs to 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 manpower should be available to the regulatory body, either permanent staff or consultants. The regulatory body should also have freedom to select its own staff and consultants. Adequacy of human resources could be judged on the basis of projected and 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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RP 7 - Appeal mechanism Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: From the governance standpoint, it is essential that regulatory decisions are appealable 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 assess if such an appeal is allowed under the statutes and, if so then, on what grounds. This indicator complements questions of overarching judicial systems 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) Lowest

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

(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 only on grounds of procedural violation


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 for procedural violation as well as on substantive grounds

(v) Highest

Guidance for assessment teams: This indicator assesses two important aspects of the appeal mechanism about decisions of the regulatory body. Firstly, the party who can appeal and secondly the grounds of appeal. In some cases, an appeal is allowable 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, at the most, the appellate body will direct the regulatory body to reconsider the decision but will not modify or change the decision of the regulatory body. In some cases, the statutes allow for appeal on substantive grounds also. This implies 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 capable enough to appreciate the complex techno-economic issues often involved. Allowing the courts to substitute their own judgment in place of the judgment 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 also

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(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 in the current scenario, 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. Researcher Name and Organization:



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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 is witnessing rapid changes in terms of market structure, industry structure and ownership. Coupled with changes in the financial sector; technology and inter-dependence across countries and different fuels, this means the regulatory body has to address very complex issues. Continuous capability building of members and staff of the regulatory body is crucial to ensure that it effectively addresses such complex issues. Also, to avoid the possibility of indoctrination to 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. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Regulatory body members and staff have no access to any of the specialized technical, legal, financial training courses

(i) Lowest

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 many of the 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 RB members and staff exist so as to routinely improve their capacity to understand and/or analyze technical, legal, financial issues


Adequate training facilities and institutions to train RB members and staff are offered and required so as to routinely improve their capacity to understand and/or analyze technical, legal, financial issues. AND systematic, pro-active efforts are made to expose RB members and staff to different viewpoints and perspectives through use of diverse faculty

(v) Highest

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

• 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 could be assessed based on information about training institutes and courses. The assessment teams may interview members and staff of the regulatory body to find out the three attributes of training opportunities they had in the recent past (last couple of years etc.) and how many found such training useful. The underlying rationale for this indicator is that regulatory body members and staff should have:

• access to regular, planned training opportunities • training, which is not restricted to only one specialized field but covers multiple fields: technical, financial, legal • training, which includes diverse perspectives on important issues such as market structure, competition, tariff philosophy,

subsidies, etc., though use of faculty with diverse backgrounds

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• It is not enough that such opportunities be offered, they must also be taken advantage of; therefore to meet the highest element of quality RB 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 RB 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. Researcher Name and Organization:


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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 / advice the regulatory body on many key issues, such as tariff revision or power purchase. Scrutinize the terms of reference to see whether a study of a range of options and their implications for financial, social, and environmental outcomes is included. Transparency in the choice and working 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 consultants (other than the name of the firm), involved in assisting the regulatory body, are public information

(i) Lowest

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) Highest

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: was this information available to the public with reasonable lead time prior to the decision being taken, and was the

public informed through web sites and at least one other communication medium of the availability of the information? To apply this indicator, seek information on consultant arrangements and reports from the regulatory body.

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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 bring in 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) Lowest

Proceedings before the regulatory body are either governed by well laid-out rules of procedure or 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) Highest

Guidance for assessment teams: This indicator considers two aspects of regulatory certainty. Firstly, procedural certainty. Secondly, 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 means 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. To apply this indicator, assessment teams will have to be conversant with various rules / regulations / guidelines / orders issued by the regulatory body in this regard. Important note: The indicator relating to the ‘functions’ of the regulatory body (RP 3) makes a reference to the important parameters of the substantive decision-making being defined by an agency apart from the regulatory body (which would score low in the indicator), whereas this indicator relates to such parameters being defined by the regulatory body itself and codified in the form of rules / regulations / guidelines, 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.

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RP 11 - Pro-activeness of the regulatory body

Governance Principle: Capacity Relevance of the indicator: Electricity is a complex, dynamic sector. For effective regulation, the regulatory body needs to work in a pro-active manner. A regulatory body, which only responds to cases / petitions filed before it, is more likely to be less effective than a regulatory process which is pro-active and takes initiatives to address the challenges and emerging issues before the sector. This indicator attempts to capture one dimension of such a pro-active 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) Lowest

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) Highest

Guidance for assessment teams: Pro-activeness and initiative of the regulatory body could be assessed based on certain types of events or decisions that the regulatory body takes. Some of these typical events / instances are described below. Assessment teams should evaluate how many such events / instances have taken place in the last three years. Assessment teams should describe each such event, which it considers as an instance of ‘pro-activeness’. If the regulatory body is in existence for duration less than three years then this indicator should not be applied, as in the initial period the regulatory body will be faced with the challenge of building institutions and it would be difficult for it to act pro-actively. Events / instances indicative of ‘pro-activeness’ of the regulatory body: • 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, 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 they 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) Lowest

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, and decisions regarding the same 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 procedure and rules to decide the ‘confidentiality’


There is a presumption that all documents / information in the possession of the RB 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) Highest

Guidance for assessment teams: Assessment teams should study applicable law, rules and regulations of the regulatory body to assess 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, which have significant impact on these issues, should also be considered.

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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 indicators focus on operational issues / practices regarding sharing of documents. 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) Lowest

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) Highest

Guidance for assessment teams: Four elements are crucial to remove operational hurdles and to encourage actual use of the right to information by various stakeholders. 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 lack of such procedure becomes a tool in the hands of 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 cost of photocopying documents or cost of administering the document disclosure system, etc.

• Wide dissemination of information about the above three elements – through measures such as advertisements, brochures, websites and newsgroups is essential to inform and encourage people to use such procedure. Otherwise, there is a danger that though there is a simple procedure very few people will take advantage of it, as they may not be aware of it.

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RP 14 - Space for public participation in the regulatory process

Governance Principle: Participation Relevance of the indicator: This indicator assesses another crucial component of the good governance process, i.e. openness of proceedings before the regulatory body and people’s right to participate in the proceedings. 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) Lowest

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 if 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 for the public, but the public has no right to participate in such proceedings


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

(v) Highest

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., not allowed to participate. “Allowed to participate in the proceedings” means the public has a right to make submissions and filings and these become part of the record of the proceedings before the regulatory body. Here ‘public’ means any interested or affected party.

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RP 15 - Institutional mechanism for representation of the interests of weaker sections / stakeholders Governance Principle: Participation Relevance of the indicator: ESA 14 assesses the right of the public to participate in the regulatory process. But experience indicates 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. Hence, it becomes essential to assess 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) Lowest

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 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) Highest

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 your country. To ensure that over a period of 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 earlier indicator (i.e. consumer representatives or regulatory body staff with specific mandate) and this 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 for capacity building of weaker sections or provide financial, technical and legal support

(i) Lowest

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

(v) Highest

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

• Firstly, whether the regulatory body or other agency government undertakes any activities such as training courses, preparation of information brochure and other literature, etc

• Secondly, 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 or may waive petition fees and charges or may provide financial support to undertake studies or representations, etc. While assessing this indicator, assessment teams should consider the normal / standard / routine practice of the relevant agency and the assessment should not be based on any one ad-hoc effort by the relevant agency.

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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) Lowest

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

(ii) Low-Middle

During the last two years, one to 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) Highest

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

• Number of cases filed – Only cases initiated by consumers or civil society organizations should be considered. i.e. if such groups have made submissions to the regulatory body in response to say a tariff increase petition filed by the utility, then the same should not be considered. If such groups have appealed against the order of the regulatory body, then the same should also be counted as separate case

• Nature of cases filed – Cases filed before the regulatory body could be of two types: (1) “Private interest” cases whose outcome would primarily benefit a particular consumer or set of consumers (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 relates to value 5, as more than two organizations filing cases before the regulatory body 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, i.e., say if this indicator has low values then to what extent this could be a result of possibly low values in earlier 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 what happens to their comments / objections, they will not have faith in the decisions of the regulatory body and may not be satisfied about the outcome. Also the requirement to provide reasons for decisions and to respond to public comments / objections is essential to make the regulatory body accountable. 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) Lowest

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

(iii) Medium

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

(v) Highest

Guidance for assessment teams: Analyze the legal provisions (laws, rules, regulations or decrees) about the requirement on 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 provided by the regulatory body in its orders. For this purpose, teams must select three to five representative orders / decisions of the regulatory body and evaluate whether these orders contain sufficient reasoning. Your opinion about the sufficiency / quality of reasoning must be clearly supported with examples of what teams consider as good or bad quality of reasoning. Care must be taken to ensure that the indicator assesses only the quality of reasoning and not the merit of the decision itself (i.e. if 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 lacks all three elements of quality

(i) Lowest

Dissemination process of the regulatory body’s orders / decisions lacks one or two elements of quality

(iii) Medium

Dissemination process of the regulatory body’s orders / decisions meets all the three elements of quality

(v) Highest

Guidance for assessment teams: Three elements of quality for effective dissemination process: • Easy availability – All orders / decisions of the regulatory body should be easily available to stakeholders through measures such

as making copies available for sale at the office of the regulatory body or in case of large geographical area at other locations also (public libraries etc.), putting them up on the website etc.

• Timely availability - All orders / decisions should be made available to stakeholders as soon as possible after finalization / communication to parties. 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, then 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 dissemination procedure for the same. 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) Lowest

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) Highest

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 (department of energy etc.). A binding requirement to file performance reports and clearly-defined consequences of not filing these reports are two primary indicators. A few additional aspects also need to be considered for making the reporting requirement effective. These five elements of quality for effective periodic reporting are: • Easy availability – Reports should be considered easily available if they are available to the stakeholders through measures such

as making copies available for sale at the office of the utility / regulatory body or in case of large geographical area at other locations also (public libraries etc.), posting on the website, etc

• Timely availability – Reports should be considered available in a timely manner if they are made available to stakeholders say within three - six months from the end of reporting period (if the reporting period is one year or more)

• Local language – In many countries, business / industry language is different from the common local language. If reports are available only in the business language, then the public cannot use the same effectively. Hence it is important to assess if reports are available in the local language

• Reliable – Reports should be considered reliable if there are not many cases of utilities changing the parameters / data presented in earlier report; the reports are prepared in a consistent manner for several years, and if various assumptions / basis of parameters are explained

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• Comprehensive – The report should be considered comprehensive if all basic information / data essential for assessing the performance of the utility are provided. For example, various cost components (manpower, 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, demand patterns etc. The nature of information expected in the report will depend on the market structure and regulatory approach. For example, in case of cost-plus regulation, much more details of expenditure by licensee would be required than in case 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 is an important requirement to enhance confidence of all stakeholders in the regulatory process. This also enables 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. These principles typically cover issues such as how to address cross-subsidy, incentive regulation or performance-based regulation, etc. Usually tariff philosophy is very broadly defined in the policy document or the rules / orders of the regulatory body. Existence of such overarching principles also makes the regulatory body more accountable. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Tariff determination is not based on or guided by pre-determined tariff philosophy / principles

(i) Lowest

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

(ii) Low-Middle

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

(iii) Medium

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


Tariff determination is guided by pre-determined tariff philosophy / principles and meets all the four elements of quality

(v) Highest

Guidance for assessment teams: Considering the significant impact tariff philosophy / principles has on all stakeholders, the following four elements are essential:

• Tariff philosophy is based on detailed analysis of cost drivers, projected efficiency gains, economic impact on different stakeholders such as utilities, governments and different consumer categories

• Tariff philosophy explicitly suggests / includes measures to mitigate adverse impacts, if any, on different stakeholders such as weaker sections and/or utilities

• Tariff philosophy is presented in simple language and is well defined (i.e. minimizes varied / conflicting interpretation) • Tariff philosophy / principles were adopted after a proper public participation process. A proper public participation process

implies sharing background analysis and drafts with 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 both would be complementary.

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RP 22 - Licensing Governance Principle: Accountability and Redress Mechanisms

Relevance of the indicator: Typically, issuing distribution or other types of licenses / concessions, or approving power purchase agreements is one of the major functions of the regulatory body. The regulatory body’s decision on these issues has major financial significance. The precise features of a good / desirable license or power purchase agreement substantially depends on country situation and hence is beyond the scope of this toolkit. But to develop a preliminary 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) Lowest

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 licence / 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 licence / 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. But the licence / contract meets all the three elements of good licence / contract

(v) Highest

Guidance for assessment teams: Review legal instruments (law, rules, regulations etc.) as well as some 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 for ‘elements of quality’ review actual cases (i.e. license, PPA). The three elements of quality relate to the existence of clear provisions in the license / agreement:

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

Desirable provisions for these three aspects will significantly depend on specific country context, so assessments teams should provide a detailed explanation 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; procedure and time for increase in load, etc. 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) Lowest

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 elements of effective implementation


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

(v) Highest

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: • Existence of systematic mechanism for monitoring actual performance in terms of consumer service and quality of supply • Periodic reviews are undertaken for evaluating the electricity company’s compliance with the standards of performance. During

these reviews the 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

• 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.

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Section C – Environmental and Social Aspects (ESA) Overview Environmental and social considerations tend to be neglected in policy development of the electricity sector, 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 have suggested that social concerns carry far more political weight in the electricity sector than do local or international environmental agendas and it would be strategic to try and link these two priorities of public benefit. It is critical that Environmental and Social Aspects (ESA) should be taken into account early in the decision and policy making process so that they are adequately and appropriately addressed. These ESA indicators, therefore, seek to assess the ways in which the governance structure of your country’s electricity sector accounts for its environmental and social impact. Guidance for Assessments These 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 access to redress on social and environmental grounds on sector issues, in the context of laws and practice or application of these laws. These indicators also allow you to ask questions of the process about 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 your responses accordingly. Each indicator includes extensive guidance notes on the pertinence of the indicator, and how to go about collecting information to research it.

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Section C – Environmental and Social Aspects 35,25,7< ,1',&$725

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, for granting approvals or exercising authority over environmental issues. There is a lack of transparency about where authority lies and when it is exercised. There are few formal checks and balances between these institutions. The question of accountability for environmental clearances and approvals is very important to the public interest, because their decisions determine whether and what environmental conditions are imposed on electricity projects. Values Select Explanation and Justification Not applicable / Not assessed

(0)

There are no provisions contained in law, implementing regulations or executive policy establishing what public sector entities have authority to grant / issue environmental approvals for major power sector projects

(i) Lowest

Provisions are contained in law, implementing regulations or executive policy establishing what public sector entities have authority to grant / issue environmental approvals for major power sector projects. But they do not define if and how such authority is to be shared across jurisdictions

(ii) Low-Middle

Provisions are contained in law, implementing regulations or executive policy, establishing what public sector entities have authority to grant / issue environmental approvals for major power sector projects. They define if and how such authority is to be shared across jurisdictions and include at least one element of quality for transparency

(iii) Medium

Provisions are contained in law, implementing regulations or executive policy establishing what public sector entities have authority to grant / issue environmental approvals for major power sector projects. They define if and how such authority is to be shared across jurisdictions and include at least two or three elements of quality for transparency


Provisions are contained in law, implementing regulations or executive policy establishing what public sector entities have authority to grant / issue environmental approvals for major power sector projects. They define if and how such authority is to be shared across jurisdictions and include at least four elements of quality for transparency

(v) Highest

Guidance for assessment teams: “Shared Jurisdiction” refers to shared authority between line ministries or central versus local governments. Elements of quality for transparency: • Provisions published in the official government journal / gazette • 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 • 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.) • Provisions may be obtained in a government public information office or public library

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• Public sector agency with principal authority discloses projects granted approvals in a timely fashion (within 30 days of approval) • Principal authority discloses all projects requesting / pending approval 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. Researcher Name and Organization:



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Section C – Environmental and Social Aspects * PRIORITY INDICATOR *

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 have mainstreamed social and environmental issues. The extent to which electricity sector policy-makers communicate these environmental responsibilities serves as an additional measure of their commitment to addressing public interest concerns related to the environmental quality of the sector. 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)

Documents that describe the executive agency’s roles and responsibilities do not define or make reference to the environmental and social performance of the electricity sector

(i) Lowest

Documents that describe the executive agency’s roles and responsibilities include mention of the environment and social issues. BUT they refer only to the role of other agencies in assuring the environmental or social performance of the electricity sector

(ii) Low-Middle

Documents that describe the executive agency’s roles and responsibilities define specific environmental and social responsibilities of the executive, AND include guidance on when and how the executive will cooperate with regulators or other authorities

(iii) Medium

Documents that describe the executive agency’s roles and responsibilities define specific responsibilities of the executive, AND include guidance on when and how they should cooperate with regulators or other authorities, AND contain commitments to at least one of the elements of quality for information disclosure


Documents that describe the executive agency’s roles and responsibilities define specific responsibilities of the executive, AND include guidance on when and how they should cooperate with other regulators or authorities, AND contain commitments to more than two elements of quality for information disclosure

(v) Highest

Guidance for assessment teams: Elements of quality for information disclosure:

• Reporting on the environmental and social aspects of performance of the electricity sector • Documents related to the executive’s environmental and social responsibilities are available at cost or free to the public • Documents related to the executive’s environmental and social responsibilities are provided in a range of forms / formats

printed and electronic formats • Effort to disseminate using various media / outlets (public offices / libraries, internet, radio, newspaper) • Planned efforts were made to target documents, audio-visual materials, or meetings at marginalized socioeconomic or

cultural groups

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Assessment teams should review reform legislation as well as major policy and planning documents. The degree of clarity of the executive’s role versus that of the electricity regulator or the environmental regulator or authorities 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 • 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

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, but assess only the degree to which these responsibilities are clearly laid out and 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. Researcher Name and Organization:


Additional Information: Comments on the Indicator:

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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 prices for electricity; approving licenses for power plants; setting performance standards for service quality) have considerable environmental and social impacts. However, the responsibilities of most environmental regulators are limited to assuring or certifying that individual electricity sector projects have addressed the issue of how the direct environmental impacts of that discrete project will be mitigated. The general tendency to narrowly define the regulator’s environmental responsibilities and the limited availability of information regarding the nature of those responsibilities limits the efforts to hold the regulatory body accountable for the environmental and social aspects of its decision-making, and also limits the regulator’s ability to balance public interest concerns with those of other stakeholders. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Documents that describe the roles and responsibilities of the regulatory body do not make reference to environment or social responsibilities

(i) Lowest

Documents that describe the roles and responsibilities of the regulatory body do make reference to environment or social responsibilities. BUT these are limited to certifying or assuring the mitigation of impacts for project licenses or concessions

(ii) Low-Middle

Documents that describe the roles and responsibilities of the regulatory body make reference to environmental or social responsibilities. AND these encompass certifying or assuring mitigation of impacts AS WELL AS consideration of social and environmental aspects of regulatory decisions that set broader performance requirements. 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 environmental or social responsibilities. AND these encompass certifying or assuring mitigation of impacts AS WELL AS consideration of social and environmental aspects of regulatory decisions that set broader performance requirements. AND 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 environmental or social responsibilities. AND these encompass certifying or assuring mitigation of impacts AS WELL AS consideration of social and environmental aspects of regulatory decisions that set broader performance requirements, AND the regulator meets three or more of the elements of quality for transparency

(v) Highest

Guidance for assessment teams: Elements of quality for transparency:

• Description of regulator’s environmental and social responsibilities is published in the official government journal • Documents related to the regulator’s environmental and social responsibilities are posted on the regulator’s website • Documents related to the regulator’s environmental and social responsibilities are available at low cost or free to the public

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• 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.)

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

• 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.).

Assessment teams should review the basic foundational documents that lay out 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). As in the previous indicator, the assessment team should evaluate the degree of clarity with regard to the regulator’s roles and responsibilities. Important environmental and social responsibilities that might be set out in such documents include:

• review of environmental and social performance standards for power plants • mandate and criteria to assess the environmental and social effects of electricity prices and tariff structures or principles • adjudication of environmental and social disputes or claims

These are illustrative examples and will vary from country to country. Assessment teams are expected to judge both the scope (narrow versus broad) of the regulator’s environmental and social responsibilities, 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. Researcher Name and Organization:


Additional Information: Comments on this Indicator

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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 within the executive to adequately address social and environmental issues is a measure of the institutional commitment and capacity to address the social and environmental dimensions of decision-making in the electricity sector. 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) Lowest

The executive exhibits at least one element of capacity to assess the 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) Highest

Guidance for assessment teams: Elements of capacity to be assessed:

• Specific budgetary resources are explicitly earmarked or directed to support research or investigation into environmental and social issues or problems

• At least one staff person with explicit responsibility to address the environmental and social aspects of policies and performance in the electricity sector

• Evidence of staff training on environmental and social issues / problems in the past two years • Staff expertise, including specialized higher education and past experience with environmental and social issues / problems

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 focus of the documentation should be to verify staff expertise and training, staff responsibilities, and budgetary 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 the environmental and social dimensions of decision-making. 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) Lowest

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) Highest

Guidance for assessment teams: Elements of capacity to be assessed:

• Specific budgetary resources explicitly earmarked or directed to support research or investigation of environmental and social issues or problems

• At least one staff person with explicit responsibility for addressing the environmental and social aspects of electricity sector policies and performance

• Evidence of staff training on environmental and social issues/problems in the past two years • Staff expertise, including specialized higher education and past experience with environmental and social issues / problems

Assessment teams will need to rely on a diverse set of information sources, including staff directories or lists, interviews with former or current regulatory staff, and to the extent possible, legislative, planning or other documents that detail budgetary expenditures and staff resources. The focus of the documentation should be to verify staff expertise and training, staff responsibilities, and budgetary resources. The aim should be 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 6 - Legislative committees’ capacity to assess environmental and social issues Governance Principle: Capacity Relevance of the indicator: Legislative or parliamentary committees, responsible for drafting and/or passage of 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 policy frameworks created through legislative processes set the overarching priorities. In addition, legislative bodies balance or ensure oversight by executive decision-making. 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 resources at its disposal 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) Lowest

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) Highest

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). Elements of capacity to assess environmental and social issues:

• Specific budgetary resources are explicitly earmarked or directed to support research or investigation of environmental and social issues or problems

• There are committee members or legislative staff with explicit responsibility for addressing the environmental and social aspects of electricity sector policies and performance

• Evidence of training on environmental and social issues/problems in the past two years • Committee members or their staff have relevant expertise, including specialized higher education and past experience/work

on both environmental and social issues / problems. Assessment teams will need to draw on a diverse set of information sources, including staff directories or lists, interviews with former and current legislative or parliamentary members or their staff, and to the extent possible, legislative, or other documents that detail budgetary expenditures and staff resources. The focus of the documentation should be to verify staff expertise and training, staff responsibilities, and budgetary resources. The aim should be 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 distribution losses; and efficiency requirements for appliances. These standards are often technically complex, yet they are also very significant to local environmental quality, human health, and economic efficiency. The executive’s ability to explain the relevance and importance of such standards to a non-technical audience, and to such an audience in the process of establishing these standards reflect the government’s larger (institutional or structural) commitment to public access and public participation. Values Select Explanation and Justification Not applicable / Not assessed

(0)

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

(i) Lowest

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

(ii) Low-Middle

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

(iii) Medium

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


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

(v) Highest

Guidance for assessment teams: Elements of quality for participation:

• Documentary or other evidence that either the legislative or executive branch consulted the public during the process that determined the environmental performance standards

• Documentary evidence that executive or legislative communicated / explained the substance of public inputs • Documentation exists that explains the basis for existing performance standards • Regular reporting or disclosure (annual, semi-annual, every two years, every five years) on utility / industry compliance with

performance standards Assessment teams should clarify whether existing performance standards were established, updated or modified during the last five-year period. If not, the team should document the dates and time period when these standards were defined / established or last underwent significant review. The team should then identify the public sector authority with primary responsibility for the development of these performance standards. Was it the environmental ministry / department, the power sector ministry / department, the health ministry / department or a joint or inter-ministerial body? As a first step, the assessment team should evaluate official documentation explaining existing environmental performance standards. As a second step, the assessment team should evaluate, to the extent possible, the process used to define or establish the standards. Interviews with current or former staff primarily responsible for defining the performance standards, civil society groups that followed

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the process, or media/press accounts may be necessary. If the definition of the standards goes back more than five years, then the assessment team should make note of the degree to which the indicator score reflects the quality of the process versus the state of access to information. Researcher Name and Organization:



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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 sets out the macro objectives, the sector is to achieve and the development objectives the government seeks to achieve through investment in and development of power sector services and infrastructure. Thus, such master plans or sector-level strategies are indicative of the degree to which environmental and social benefits have been addressed or mainstreamed into overall sector operations. Given the benefit of such plans for the public, it is significant whether opportunities exist for public participation and the extent to which those representing concerns about equity and environment impacts take advantage of these opportunities. Values Select Explanation and Justification Not applicable / Not assessed

(0)

Environmental considerations are not explicitly addressed or analyzed in the most recent electricity sector development plan

(i) Lowest

Environmental considerations are explicitly addressed or analyzed in the most recent electricity sector development plan. BUT these are framed narrowly around the mitigation of direct environmental impacts. 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 these are framed narrowly around the mitigation of direct environmental impacts. Public access to these documents meets one or two elements of quality

(iii) Medium

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

(v) Highest

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. 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

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The assessment team should only apply this indicator if a sector-level equivalent of a strategic or master plan exists, that has been developed during the last five years. Combine documentary review with interviews in order to re-construct the public participation process, because the elements of quality focus on the consultation and public participation process employed. The team should begin by carefully reading the most recent sector-level plan and follow with a search for supporting documents, that indicate what form of consultation or engagement with the public (if any) took place. Such supporting documents might include press releases, workshop agendas and participant lists, or records of public hearings. This should then 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). Researcher Name and Organization:


Additional Information: Comments on this Indicator

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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, limit destruction of natural habitats, etc. 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. The indicator is closely related to PP 14 and 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) Lowest

Environmental considerations are addressed in official documents, that post-date passage of reform legislation, and are framed narrowly around the mitigation of direct environmental impacts. 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, and framed narrowly around the mitigation of direct environmental impacts. 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, but framed broadly to include both direct impacts as well as indirect economic and global impacts. 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 to include both direct impacts as well as indirect economic and global impacts. Public access to these documents meets more than one element of quality

(v) Highest

Guidance for assessment teams: 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 This indicator should be applied only if 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

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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 first document or identify the main executive agency/ies leading the reform process, and where relevant the legislative or parliamentary committees responsible for passage of relevant legislation. If donor agencies either 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. This research should not become overly burdensome, if the assessment team is applying indicators assessing reform under the policy-making section of the toolkit. Researcher Name and Organization:




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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) Lowest

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) Highest

Guidance for assessment teams: Elements of quality to be assessed:

• Public participation is mandated at the scoping or draft stage of the EIA process • The use of more than one public participation mechanism (hearings, stakeholder / community meetings, on-line commentary,

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

final EIAs • Full and summary reports of the EIA are released to the public before a decision to approve a development activity / project • Guidelines are in place establishing what constitutes adequate public consultation in an EIA process • Summary or full public comments received on EIAs are routinely disclosed • Final IA report discusses how public comments or input informed the findings / recommendations • Principle of Free Prior Informed Consent is incorporated into EIA guidelines for consultation

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

∗ 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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regulations or guidelines for specific sectors (e.g., mining, forestry, transportation) or project types (chemical plants, power plants, ports, etc). If no such national or sectoral EIA policies or procedures are in place, then the assessment team should not apply the indicator (assign value 0). Documentation that relates both to the broad requirements for EIAs as well as the detailed guidelines for electricity sector infrastructure are necessary. The most important documents are the official laws, policies and guidelines that establish EIA procedures, which should be the basis of the score given for this indicator. It is important to document the dates of official adoption or application of these laws and policies. In some countries, the assessment may be based on laws and policies that are more than a decade old. In such cases, teams should try to verify (via interviews with officials that review electricity sector EIAs, or a sampling of recent EIAs) whether the practice of EIA processes and reports simply meet minimum requirements established by law for public consultation and disclosure, or whether they go beyond these in practice. 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. Researcher Name and Organization:

Sources of Information: Additional Information:


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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 integrate environmental and social aspects. 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) Lowest

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 or more elements of comprehensiveness

(v) Highest

Guidance for assessment teams: Elements of comprehensiveness to be assessed:

• Electricity sector policies, regulations or guidelines exist that detail requirements for project-level EIA • Electricity sector policies, regulations or guidelines exist that detail requirements for project-level social impact assessment • Strategic assessment(s) have been carried out for the electricity sector in the last five years that evaluate environmental or

social objectives at a sector or landscape scale • Strategic assessment(s) have been carried out for the electricity sector in the last five years that evaluate both environmental

and social objectives at the sector or landscape scale • Strategic assessment guidelines or requirements are in place for electricity sector programs, plans, and policies

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 petitions or complaints 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 decision-makers do not generally recognize social or environmental issues as areas of relevance to the operations of the electricity sector. The electricity sector can have potentially far reaching effects (both positive and negative) on the environment and on human welfare. It is important that public agencies overseeing the electricity sector recognize these claims as relevant to sector performance. For example, the setting of electricity prices can have different effects on consumers, and may make household electricity services unaffordable for low income consumers. Claims regarding the impacts of electricity prices, and the need to balance these impacts with the utility’s need for cost recovery or profit should be considered by the regulatory body. 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) Lowest

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 environmental or social complaints

(iii) Medium

More than one formal case or evidence of an environmental or social complaint or petition within the last five years that was accepted for review by regulatory body (or relevant executive branch office/unit)

(v) Highest

Guidance for assessment teams: If the regulatory body operates at the provincial or state level, then the indicator should be applied to regulatory bodies in states which have had the most investment and development in their electricity sector over the last five years. 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 assessment team should not apply the indicator (assign value zero). 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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Section C – Environmental and Social Aspects * PRIORITY INDICATOR * 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 well versed with the issues of the sector and adamant about the public interest in decisions made, they are increasingly well-placed to take their demands directly to service providers and exert influence. This indicator seeks to address the degree to which service providers allow formal space for this engagement to be constructive. 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) Lowest

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) Highest

Guidance for assessment teams: Elements of quality to be assessed:

• Existence of department or assignment of at least one specific staff person with responsibility for engaging and consulting the public (distinct and separate from a public relations 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)

• 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

• Service provider communicates or supplies information on how customers or populations potentially affected by its actions / development activities can file complaints

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. Guidance on interpreting the elements of quality follows: Department Staff: Verify the existence of a dedicated department or staff person(s) through an interview directly with the utility / provider, and a review of publicly available documents that describe its departments or staffing. This department would engage the community’s civil society organizations and respond to information requests, complaints, facilitate consultations, or negotiate with potentially affected communities. These functions are separate from public or media relations, and marketing.

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Corporate Policy: The key is to determine whether the company has defined explicitly its own strategy on what issues, under what circumstances, and for what purpose it engages the public, and whether it disseminates this strategy to the public in some way.

Resources to Vulnerable Social Groups: Has the service provider supported (financially or otherwise) effective community and civil society participation in direct engagements? For example, it may cover travel and lodging costs associated with a consultation, cover costs of translation / interpretation, or provide documents free of charge, etc.

Information about Filing Complaints: To test this element of quality 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 as important as the extent to which 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) Lowest

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) Highest

Guidance for assessment teams: Elements of Quality to be assessed:

• At least one civil society organization has made use of appeal or redress mechanisms (i.e., filing challenges suits in court, petitions before the regulator, use of utility’s complaint mechanisms) to raise concerns about or demand attention to environmental and social problems

• 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 by civil society organizations representing environmental and social concerns in 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.)

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

• 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 interpretation of the elements of quality:

• Civil society use of redress mechanisms: Identify the most important appeal mechanism(s) available to environmental and advocacy organizations (regulator, ministry administrative procedures, etc), and collect documentation regarding efforts by civil society to make use of these mechanisms. This will require interviews with staff from the relevant forum / institution, as well as civil society organizations that might have made use of it

• Existence of independent civil society assessments of policy proposals: Carry out a documentary search, and verify that the report’s contents related to the pending or new regulatory policy or laws.

• Record of participation: This may be difficult to document, but the team should collect records of meetings or participant lists. Support this documentation by interviewing relevant groups that participate in such consultation processes or meetings.

• Evidence of civil society comments on a recent power sector EIA: The assessment team should select a very recent power sector project that required an EIA, and which included an opportunity to comment on the draft or final EIA. 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

• Civil society support to vulnerable groups: This element attempts to measure the existence of NGO efforts or networks to support participation by more vulnerable socio-economic groups. There will probably be a need to contact / interview both the NGOs that potentially support (legal aid clinics or public interest lawyers) such groups, as well as legitimate

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representatives of one or two of the identified vulnerable groups (such as the leaders of indigenous people’s organizations) 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. Researcher Name and Organization:



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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 relevant legal or judicial forums are those that hear or have heard claims related to claims suffered from the power sector infrastructure, or claims related to the denial of basic procedural rights of citizens in decision-making in the electricity sector. Values Select Explanation and Justification Not applicable / Not assessed

(0)

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

(i) Lowest

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) Highest

Guidance for assessment teams: 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 the decision • Parties to a process are able to gain access to information and conduct fact-finding relevant to ES issues • Applicable 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

Assessment teams will need to identify the primary administrative or judicial forum where parties that have suffered environmental or social damages from companies or utilities operating must seek or have sought redress, and apply the elements of quality. If there is no single forum responsible for redress of such damages, then the assessment team will need to apply the indicator to the forum that has most recently adjudicated or considered a claim for such damages. Instructions on how to interpret the six elements of quality follow: Binding decisions: 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 assure 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 Independence and impartiality: 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

rescue 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 3. Capacity and training: The assessment team should verify whether any of the judges or personnel responsible for resolving or addressing claims before the forum regularly refresh or receive professional training. The assessment team should particularly try to verify the areas of training received, and whether training is given on the substance of the country’s environmental laws and regulations. If training that focuses on the environment and natural resources has taken place within the last five years, then the forum meets the element of quality.

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Access to information and fact-finding: Factors to consider include whether parties had access to all relevant information (including documents, interviews, witness statements, tape recordings, etc.) that were relevant to the proceeding or that could have led to the discovery of relevant information. Some questions that inform the value include the ability of parties to:

• question witnesses or other persons with information relevant to the proceedings • obtain documents or evidence in the custody of other parties • access files and records of the forum, including all of the files of the previous processes (under supervision) • obtain documents or evidence submitted by any other parties

Trigger: The assessment team should examine both laws as well as judicial decisions for articulation of what conditions or kinds of grievances can be legitimately heard by the forum. Verify that such triggers are clearly articulated in law, or have subsequently been defined in the context of particular cases. Standing: The assessment team should examine both laws as well as judicial decisions to verify whether there is clear definition of what parties the forum will consider to have legitimate claims, and thus have “standing” to have their claim considered by the forum. Is such standing only granted to parties that suffer direct losses or damages to their property or person? Are other parties that prove a legitimate interest but have not suffered direct harm to property or person conditions granted standing? Seek clarity on such issues. Researcher Name and Organization:



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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. Values Select Explanation and Justification Not applicable / Not assessed

(0)

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

(i) Lowest

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

(iii) Medium

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

(v) Highest

Elements of quality for access to redress:

• Geographic access • Temporal access • Linguistic access • Economic access • The forum welcomes amicus briefs from non-parties to a dispute

Guidance for assessment teams: As in ESA 15, the assessment teams will need to identify the primary administrative or judicial forum where parties that have suffered environmental or social damages from companies or utilities must seek or have sought redress. Ideally, this indicator should be applied to the same forum to which ESA 15 was applied. The elements of quality can be applied to either an administrative or a judicial forum. If there is no single forum responsible for redress, then the assessment team should apply the indicator to the forum that has most recently adjudicated or considered a claim for such damages. Instructions on how to interpret the five elements of quality follow: Geographic access: Does the forum operate near potentially affected communities or outside the national capital (e.g., major regional centers or provincial capitals)? How long is a journey that relies on public transportation from the most distant district or municipal center within its jurisdiction? Does this journey take more than one day and is formal public transportation available to make that journey? Temporal access: Does the forum adjudicate or decide cases in a timely manner? For example, does it take more than one year for a claim accepted by the forum to receive its first hearing? What is the average time for the forum to decide the claims before it? Is this more than two years? If so, then the court is not temporally accessible. Linguistic access: Does the forum have interpreters on staff or on contract for the country’s major dialects or local languages? Are interpretation services provided free of charge or at cost by the forum, or must the plaintiff/defendant bring their own interpreter?

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Economic access: Are the costs imposed by the forum to file claims affordable to middle and low-income communities (compare cost of a day of interpretation services to the average regional/national monthly or weekly wage)? Are there pro bono legal services available (either formally by the judicial system or informally by private or civil society organizations) for economically disadvantaged populations? Amicus briefs: This element refers to the forum’s ability and willingness to consider 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. Researcher Name and Organization:



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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; is for the most part 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”. Analysis is necessary before reform policy decisions are made, of the potential job losses (or gains), impact on wages, and job security, in order to decide how to balance potential employment impacts with the need for improvements in efficiency and service quality within the electricity sector. Values Select Explanation and Justification Not applicable / Not assessed

(0)

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

(i) Lowest

Documentary evidence that executive or legislative branch assessed the potential or actual employment impacts linked to major changes in policies / reforms in the electricity sector, after their passage or adoption

(ii) Low-Middle

Documentary evidence that executive or legislative branch assessed the potential or actual employment impacts linked to major changes in policies / reforms in the electricity sector, BUT the assessment includes no elements of quality for remedies

(iii) Medium

Documentary evidence that executive or legislative branch assessed the potential or actual employment impacts linked to major changes in policies / reforms in the electricity sector, AND the assessment includes one or two elements of quality for remedies


Documentary evidence that executive or legislative branch assessed the potential or actual employment impacts linked to major changes in policies / reforms in the electricity sector, AND the assessment includes three or more elements of quality for remedies

(v) Highest

Elements of quality for remedies: • Broad assessment of unemployment impacts, which includes examination of at least two of the following issues:

o magnitude of job losses o effect on job security o impact on wages and benefits o significance to the macro economy

• Assessment undertaken before major policy changes or reforms legislation was passed. • Explicit programs put in place to ease or reduce impact of job losses (re-training or education grants, compensation of affected

labor force, etc). • Creation of special redress mechanisms for workers (i.e., allowing them to raise claims regarding damages for say pension

benefits, adverse health impacts, failure to fulfill commitments for re-training, etc). Guidance for assessment teams:

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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 as a case study indicator, if a major reform process or other change with potential/actual employment impacts has taken place within the last five years. If there have been multiple policies or reform efforts, the team will need to select one change for assessment. 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 team determines that an assessment or study of employment impacts was completed, it should seek to obtain the document or report. Assuming the document(s) can be obtained, the team will need to review the assessment to find evidence of whether it meets some of the elements of quality for remedies listed above. If the document 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. Finally, assessment 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 to verify what (if any) remedies were put in place. Researcher Name and Organization:



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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 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. Values Select Explanation and Justification Not applicable / Not assessed

(0)

No documentary evidence that decision-making by executive branch responsible for electricity planning or by independent agency responsible for electrification includes any of the elements of quality for participation in decision-making

(i) Lowest

Documentary evidence that decision-making by executive branch responsible for electricity planning or by independent agency responsible for electrification includes one or two elements of quality for participation in decision-making

(iii) Medium

Documentary evidence that decision-making by executive branch responsible for electricity planning or by independent agency responsible for electrification includes three or more elements of quality for participation in decision-making

(v) Highest

Guidance for assessment teams: 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 reach more vulnerable socio-economic groups in consultation processes • More than two mechanisms of public participation to get public input into planning or programs related to improving access to

electricity services • Discussion of the nature of public comments or inputs in supporting documents or other materials directly relevant to planning or

policy processes related to access to electricity services The assessment team should first document the major pieces of policy or legislation related to or that address 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. Guidance notes follow for each element. Evidence of consultation: This element assesses whether, during the process of developing electrification policies, plans and programs, the public authorities consulted outside stakeholders. As a first step, the assessment team should seek to verify whether the agency responsible for developing and implementing rural electrification plans and programs has any formal requirements in place for consultation. Verify whether some form of consultation took place either in the absence of or in compliance with formal requirements for consultation. More than one consultation is necessary to meet this element of quality. Systematic Efforts to reach vulnerable socio-economic groups: This element is closely linked to the one above. Once the team has verified whether consultation is required and that there have been instances of consultation, verify whether the stakeholders consulted included “weaker” or “vulnerable” social groups. These include: indigenous or aboriginal communities, women’s associations, low-income groups, rural unions, associations of micro- or small and medium enterprises, informal industry associations, etc. More than one mechanism for public participation: This element assesses whether the public authorities responsible for electrification policies and programs employ or have employed a diversity of mechanisms for public participation or consultation. Verify whether

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existing consultation requirements (identified under the previous element) specify particular mechanisms or approaches to public consultation. Examples of such mechanisms include:

• formal public hearings • public comment periods on draft policies plans or programs • meetings with one or more interest groups or their representatives • creation of a consultative council or advisory committees, which include representation from a spectrum of stakeholders

The team should attempt to verify whether these mechanisms are actually employed or used in any regular fashion. Note: these elements 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 not evidence it took place). These elements are fulfilled if and when the assessment team deems sufficient evidence exists that consultation occurred in practice and that more than one public mechanism was employed. Consideration of Public Input: The assessment team should review supporting documents or analyses that supported the current policies and plans for access to electricity / electrification, and determine whether there is any discussion both of the nature and character of public input or feedback on the proposed plans or programs, as well as how that input is incorporated or addressed by the access to electricity programs, plans or policies. Verifying whether such a discussion is contained in supporting analyses and policy documents is largely a document gathering and research task. Researcher Name and Organization:



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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 which 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. 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. Values Select Explanation and Justification Not applicable / Not assessed

(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) Lowest

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) Highest

Elements of quality for participatory decision-making, when addressing project affected people: • 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 • The employment of more than two mechanism for public participation to get input of potentially affected people in project

review, approval or licensing processes • Inclusion of the principle of free, prior and informed consent in the requirements and guidelines for consultation 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 and has affected a large number of communities or vulnerable populations (indigenous people, rural communities, poor urban populations, etc). 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. The most important policies and procedures to examine are those related to licensing or approval of power sector projects and infrastructure. If these procedures are more than five years old, the assessment team should make note of their official date of adoption. Explicit consultation requirements with project-affected people: 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. A statement that fair treatment and compensation of such populations is important or relevant only meets the test for this element of quality, if it makes additional reference to specific requirements for adequate treatment or compensation.

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Efforts to educate potentially affected people of their rights: Another aspect of access to information is whether populations that have been affected or are likely to be affected by power infrastructure are aware of their rights to fair treatment and compensation. Verify whether the executive branch or regulatory body has undertaken any effort within the last five years to raise awareness or to educate such populations of their rights or efforts to reach vulnerable populations in areas slated for or that have been the site of major power infrastructure. If such an effort was taken more than five years ago, then this should be noted. If there is no evidence of such an effort, then this element of quality is not met. In the explanatory notes, assessment teams should list the forms and methods (if any) employed to raise awareness. Use of more than two mechanisms for public participation: This element assesses whether authorities responsible for approving licenses for large power infrastructure employed a diversity of mechanisms for public participation or consultation. First, verify whether the licensing authority has any formal requirements for consultation with project-affected people, and whether those requirements specify mechanisms or approaches. Examples of such mechanisms include: formal public hearings, on-site meetings with representatives of project-affected peoples, creation of a consultative council or advisory committee to address treatment and compensation, etc. Then verify whether a diversity of mechanisms were employed, by evaluating two large power infrastructure projects developed within the last five years. This will require 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. This element is fulfilled when the assessment team deems sufficient evidence exists that consultation occurred in practice and that more than one public mechanism was employed. Inclusion of the principle of Free, Prior And Informed Consent.: The team should determine whether there is any explicit discussion of or commitment to the principle of “free, prior and informed consent”, which means that affected population(s) have not only been 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 affected people. Researcher Name and Organization:



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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, and have ripple-effects through 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 tariff must balance different objectives such as efficiency, cost recovery for utilities, sufficient returns to ensure maintenance and new investment in the electricity sector, 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 solicit the views or input of the consumers most likely to be impacted by electricity price changes is therefore a good indicator of the electricity sector’s attention to this key public interest concern. Values Select Explanation and Justification Not applicable / Not assessed

(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) Lowest

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) Highest

Elements of quality for participatory decision-making, when addressing affordability of electricity services:

• 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

• Systematic efforts to educate or communicate with low income or differentially impacted socio-economic groups regarding the impact of and justification for tariff changes

• The use of more than one mechanism of public participation to get input of low-income or differentially impacted socio-economic groups in proposed tariff revisions

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 or 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 (every five years), or at the request of a utility or distribution company, when it can make the case that a revision is necessary. Review the most current policies and procedures for tariff revision, documents 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 should draw on research collected to apply the regulation indicators. Guidance notes for each element of quality for participatory decision-making, when addressing affordability of electricity services: 1. Attention to Affordability: The team should evaluate the degree to which either existing tariff principles or procedures, that set out a process for revising tariffs explicitly, require attention to affordability of electricity prices by low-income consumers. A statement that

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affordability is an important or relevant issue, only meets this element of quality if it makes additional reference to specific requirements to address these issues or evidence of assessments that address distributional impacts. 2. Communication with affected groups: This element assesses the degree to which the tariff setting or regulatory body undertook efforts to communicate the proposed changes in electricity prices and their potential impacts to segments of the population most likely to be affected. Verify whether the executive branch or regulatory body has undertaken any efforts within the last five years to raise awareness or educate these populations, including rural households, informal businesses and small enterprises, low-income urban populations, retirees, etc. If such an effort has been undertaken, but it was more than five years ago, then this should be noted. If there is no evidence of such an educational or awareness campaign then the agency responsible for tariff revision does not meet the test for this element of quality. Explanatory notes should record the form or methods employed to educate or raise awareness of potentially affected populations. 3. Use of more than one mechanism for public participation: This element assesses whether the regulatory body or authority responsible for revising and approving electricity tariff employed diverse mechanisms for public participation or consultation with segments of the population likely to be materially affected by a rise in tariffs. First, 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. Then verify whether a diversity of mechanisms was actually employed, and if any were targeted affected populations, through interviews or written exchanges (via email or letters) with relevant authorities, and a sample of representatives from organizations that have a history of representing poverty concerns or consumer associations. Other sources of information include media or press reports or records of official meetings, if such records can be obtained by the assessment team. Researcher Name and Organization:



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Section C – Environmental and Social Aspects 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. 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. Values Select Explanation and Justification Not applicable / Not assessed

(0)

No documentary evidence that decision-making has considered management and technology options that have low impact on the environment

(i) Lowest

Documentary evidence that decision-making has considered management and technology options that have low impact on the environment. BUT these efforts do not meet any of the 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. AND 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. AND 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. AND these efforts meet three elements of quality for participation

(v) Highest

Elements of quality for participation: • Evidence that the ministry /department responsible for planning or policy development in the electricity sector assessed the

existing national potential as well as the costs and benefits of a broad range of options, including at least three of the following: o Co-generation o Demand-side management o Creation of energy savings companies o Grid-connected renewable energy technologies o Distributed renewable energy technologies o Improved thermal/fossil fuel generation technologies o Improved pollution control technologies for thermal power plants o Reduction in transmission and distribution losses

• Evidence of consultation with a range of stakeholders and interest groups on policies that support technologies or management

options that have low impact on the environment.

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• The employment of more than one mechanism for public participation to get public input into policy options for technologies or management practices that have low impact on the environment.

Guidance for assessment teams: This case study indicator should be applied, if significant but undeveloped renewable energy resources exist in the country, or offer potential to contribute to broader development goals such as poverty alleviation in rural areas, delivery of basic health and education services, or 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. Guidance notes for each element of quality: Evidence of comprehensive analysis of options: Review the most current policies and plans for the electricity sector, to determine the degree to which these draw from or are supported by assessments or analytical documents that explore the policy options for promoting technologies or management practices that have low impact on the environment. If they do not exist or cannot be obtained, then by default this element of quality cannot be considered. If such an assessment can be obtained, teams should verify how many of the options specified are addressed in the assessment. The assessment should give serious consideration to at least three of these technology and management options – it need not endorse these options to meet this element of quality. If a donor institution or private party has produced the assessment, then the team should seek to assess whether the public sector used this assessment to explore policy options. Evidence of consultation with a range of stakeholders: This element assesses whether the planning or policy unit consulted with external stakeholders and public interest organizations, and whether these stakeholders represented a diversity of interests, including populations (or their representatives) that might gain from renewable energy resources, utility industries, representatives of rural enterprises, renewable energy companies, consumer associations, etc. Evidence of consultation with at least three or more such stakeholders is required to meet this element of quality. Use of more than one mechanism for public participation: Verify whether the agency responsible for addressing renewable energy development within the electricity sector has any formal requirements for consultation, and whether those requirements specify particular mechanisms or approaches. Examples include: formal public hearings, public comment periods on draft policies plans or programs, meetings with one or more interest groups or their representatives, creation of a consultative council, etc. This element of quality is met if two or more consultations have been conducted. NOTE: The last two elements focus on process. 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 email or letters) with relevant authorities, and with 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 not evidence it took place). Researcher Name and Organization:



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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 economic performance only. Values Select Explanation and Justification Not applicable / Not assessed

(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) Lowest

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) Highest

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: o access to electricity, o affordability of electricity services, o employment trends in the sector, o electricity theft / distribution losses, o energy security, o energy efficiency, o renewable energy, o air emissions or pollution from electricity generation, and o electricity sector contributions to greenhouse gas emissions.

• Periodic but regular reporting and disclosure of quantitative information (statistics, trends, surveys) on the environmental and social performance of the electricity sector.

• 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.

• 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 element #1.

Guidance for assessment teams: 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, that relates 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.

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Guidance notes follow for each element: Annual reviews or reports: determine whether any public sector reports include reporting on environmental and social issues. Focus on public sector evaluations or reports. If these do not exist or public agencies rely on privately-produced reports then evaluate these reports. List the reports, assessments or evaluations gathered. Public sector reports should be reviewed collectively, to see if any of them cover at least three of the listed topics. This element is only fulfilled if at least one report covers three of the listed topics. If three or more of these topics are covered in separate reports, this element is not met, because such dispersal requires the public to piece together information on environmental and social performance. Periodic reporting: 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 the team considers reporting is sufficiently regular and the quantitative information is sufficiently reliable and comprehensive. Please make sure to explain the basis for this judgment in the indicator explanation. Use of a range of formats: This element seeks to assess whether a range of printed, electronic and on-line formats are employed to communicate findings or reviews of the environmental and social performance of the sector. Verify whether any of the following conditions are met. If any of the conditions are met, then this element is fulfilled:

• the findings are available in various formats (summaries, electronic and printed reports, statistics, etc) • both technical and more popularly accessible reports are available explaining the sector’s performance • Findings are posted on-line or the website indicates how they can be obtained.

Visual representation in non-technical form: Verify whether any of the reports released to the public are targeted or designed to reach a non-technical or general audience. Furthermore, these non-technical materials should relate to at least three of the issues listed in the first element of quality (Annual reviews or reports). 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. Researcher Name and Organization:



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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% (Dubash, 2002) 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) Lowest

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) Highest

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

• Data or baselines that quantify the electricity sector’s contributions to national greenhouse gas emissions have been peer reviewed by external (non-power sector ministry) experts

• 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)

• The courts have upheld the public right to information on green house gas emissions by the electricity sector Guidance for assessment teams: Regular reporting: This element evaluates whether the electricity ministry or department routinely reports on the sector’s contributions to annual and cumulative greenhouse gas emissions. Review any annual reports on performance of the sector, or statistical or quantitative data generated by the power ministry or department. The test for 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. The test for this element can also be met if the power sector provides such information to another unit of government (a special unit with responsibility for climate change), which in turn regularly reports a baseline of national greenhouse gas emissions that includes estimates of the portion produced by the electricity sector. Data quantifying power sector green house gas emissions are peer-reviewed: This element should evaluate whether in the last five years there has been any independent peer review of greenhouse gas data or baselines produced by the electricity ministry or department. In other words, were climate change and/or energy sector experts, not involved directly in producing the estimates, invited to provide independent opinions on the soundness or quality of the estimates/data? First review the reports or documents that contain the estimates of greenhouse gases or greenhouse gas inventories, to see if they indicate whether the data or report itself underwent peer review. If there is a discussion of a peer review process, or a list of peer reviewers, then the test for this element is met. If there is no indication of peer review, then the assessment team should contact the office responsible for producing the data or reports to verify whether any form of peer 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 as reviewer/s.

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Green house gas emissions by electricity sector included in UNFCCC reports: Assessment teams should first 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. The assessment team should review this report, 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. If the government has neither ratified nor is a signatory to the UNFCCC, then by default the test for this element cannot be met. Courts have overturned executive branch refusals to provide the public with information on greenhouse gas emissions: This element focuses on case law or judicial decisions with regard to claims that access to information related to international climate change commitments have been denied, or that the electricity sector has failed to fulfill its obligations to provide such information. The first task of the assessment team is to determine whether the electricity ministry or department has denied requests for information related to climate change or greenhouse gas emissions. If such requests have been denied, the second step is to determine whether the courts have been asked to overturn this decision. If the matter has gone before the court, then the team should try to determine how the administrative or judicial forum decided the matter. If the court over-turned the electricity ministry’s denial of information, then the test has been met for this element. If no information has been denied, or no petition filed before a judicial or administrative forum to appeal the decision, then this element cannot be assessed. Researcher Name and Organization:



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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) of the following issues.

1. 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, that frame 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 the judiciary system has been found to be ineffective in preventing violations of environmental regulations in the electricity sector.

2. 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.

In answering this question, please 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?

3. 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?

This question complements the preceding question on how process affects outcome. Better decision-making processes in the electricity sector should enable better outcomes, but this may not always be the case: a disconnect between good process 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 taken place. In explaining this disconnect, make particular note of the extent to which informal processes have influenced these outcomes.

Please 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 explain their importance.

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APPENDIX: CONDUCTING AN ASSESSMENT

Building a coalition

The key to a successful assessment is a diverse team of researchers – a coalition.

What is a coalition and why do I need one?

A coalition is a team of several organizations and individuals coming together to perform the research and analysis tasks of an assessment. It is very important that all members of a coalition have knowledge and understanding of the electricity sector. A coalition can include:

• Non-governmental organization (NGO) representatives • Lawyers • Academics • University students • Journalists • Other experts and consultants as needed

Working in a coalition lets you divide up work, draw on multiple viewpoints, and reach broad audiences.

How is a coalition structured?

The size and structure of your coalition will vary depending on the needs and resources of your country.

In general, coalitions include:

• Several non-governmental organizations (NGOs) that can cover different aspects and substantive issues in the toolkit

• A lead organization that coordinates efforts and keeps the coalition on track • A research team consisting of members from different organizations to conduct

data collection and analysis • An advisory group - a panel of experts that oversees the research and lends

credibility to the effort

How many organizations and researchers are in a typical coalition?

Coalitions usually include two to four non-governmental organizations (NGOs), a team of three to five main researchers from those organizations, and additional researchers as needed.

Below are examples of different types of coalitions from countries that completed pilot assessments using the Access Initiative Methodology to Assess Environmental Governance in 2001:

• Hungary: 5 researchers from 3 NGOs • Indonesia: 12 researchers from 4 NGOs • Uganda: 4 researchers from 2 NGOs, 1 independent journalist • India: 6 researchers from 1 NGO

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Who leads the coalition?

One NGO will serve as a lead organization, coordinating coalition efforts and helping the assessment run smoothly.

The lead organization:

• Convenes meetings of the coalition • Devises a plan for the assessment and divides up tasks • Ensures that the assessment is consistent and credible • Helps coalition members coordinate their work and communicate with each other • Sets deadlines and guides the review process • Serves as a primary point of contact for the project

What is the role of the advisory group?

An advisory group is a panel of experts from the government, national power utilities, the national regulatory agency, public interest bodies, and other individuals with substantial academic or technical expertise in the electricity sector. This group does not conduct the assessment, but it provides guidance and oversight. Having advisors who are well-known and respected can bring credibility to and attract publicity for your assessment.

The role of the advisory group is to:

• Provide advice on selecting case studies • Monitor work and provide input • Review results and correct errors • Engage audiences beyond the coalition • Help with strategy and action plans

Planning Your Assessment

Before you start your assessment, make sure you know the answers to the following questions:

• What are the goals and audiences for my assessment? • How long does an assessment take? • How much does it cost to conduct an assessment?

What are the goals and audiences for my assessment?

The ultimate goal of conducting research is to present findings to the public, the government, or civil society, and to encourage improvements in access. Having this in mind will focus your research and influence your outreach strategy. One of your first steps should be to consider:

• Target audiences for the results of your research (government, mass media, etc.) • Strategies for outreach (workshops, press conferences, etc.) • Products that could emerge from your research (materials such as research reports, press releases,

pamphlets for the public, etc.)

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How long does an assessment take?

Conducting an assessment will likely take several months. The exact amount of time you will need will depend on how many researchers you have, how efficiently they work, and what kind of outreach you plan. To manage staff time, the lead organization should set deadlines for:

• Completion of research • Completion of internal review by the research team • Completion of external review by the advisory group • Preparation and release of a research report • Preparation and release of other products

We will work with you to develop a timeline for the completion of an assessment report.

How much does it cost to conduct an assessment?

The cost of an assessment will vary from country to country. Since it is impossible for us to provide specific cost information, we have instead included a list of activities that will need to be completed for the assessment and its related outreach. You will need to budget for:

• Staff time for reviewing the methodology and conducting the research • Meetings with other coalition members and with the advisory group • Reproduction and mailing of letters, questionnaires, information requests, etc. • Telephone calls, faxes, and (optional) Internet access for research • Travel to research sites such as libraries in another city, government ministry headquarters, sites

of emergencies or land concessions chosen as case studies, or universities • Consultants, interns, and/or university students to serve as additional researchers, if needed • Production and distribution of your research report

In addition we will support coalitions to secure funds for these pilot applications of the toolkit.

Preparing for and Conducting Research

How should the workload be divided?

Research, planning, and outreach tasks will need to be matched with the skills of particular organizations or individuals. The lead organization can be responsible for assigning tasks and planning.

Activities and Tasks

Planning tasks include:

• Determining target audiences and appropriate outreach products • Securing funding and managing the budget • Setting deadlines for completion of research • Organizing meetings to launch the assessment and share findings • Distributing the software and coordinating data entry

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Research tasks include:

• Reviewing the methodology, deciding which parts of it to use • Selecting indicators to be applied in addition to the priority indicators • Determining how research tasks (such as interviews, site visits, and information

requests) can be coordinated • Conducting legal research on legislation, provisions, and court decisions • Researching access to information and making requests for environmental

information • Researching provisions for public participation • Researching policy and practice regarding support for NGOs and environmental

education • Preparing the final research results, scoring, and research report

Outreach tasks include:

• Writing and releasing the research report • Preparing other outreach products (such CD-ROMs, pamphlets, press releases,

draft legislation, workshop agendas, curricula for environmental education) • Presenting your findings, conclusions and recommendations to a broader audience,

through press conferences, interviews with the mass media, and other activities

How do team members conduct their research?

The electricity governance framework comprises 28 priority indicators framed by a baseline survey. In addition to these priority indicators, coalitions must select at least 5 indicators to apply in each of the three framework sections from over 40 additional indicators in the toolkit. Coalitions are encouraged to apply as many of the toolkit indicators as they are able, and select their indicators according to their own public interest priorities. At the launch workshops, WRI, NIPFP and Prayas will work with implementation coalitions to develop an assessment strategy and select relevant indicators.

Once the team members are prepared, they will collect information and answer over 42 research questions to generate qualitative indicators of performance. Refer to the preceding section on the Electricity Governance Framework to get started.

In addition, you will answer two short analytical questions at the end of each section. These analytical questions are open-ended and designed to capture key facets of sector governance that could not be adequately expressed in the indicator justification sections. Qualitative indicators focused on process do not always include space to capture informal processes in decision-making in the electricity sector and or actively link better process with actual outcomes in sector functioning and performance. In answering these questions in some depth, you will facilitate the writing and compilation of your assessment reports.

How should results be prepared for review?

Team members chosen to analyze data should complete the final analysis and write an overall summary of the results to be distributed to all coalition members. We strongly recommend that only two or three people analyze the results, so that the analysis can be completed quickly and efficiently.

How should the internal review be conducted?

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Before the assessment results are submitted to the advisory panel, your entire research team should review the findings internally to ensure consistency and credibility. Questions or concerns can be addressed at this point by the responsible researcher. If necessary, you can consult original case studies and sources. Discuss the values selected for each indicator and agree on preliminary findings. The objective of the internal review is to make sure that:

• You have provided references and citations for all research sources • You have justified all of your value selections (that is, your scores) • You have filled in all case selection forms and indicator worksheets completely • You and your team agree on the analysis and conclusions

Since these are pilot applications of the electricity governance toolkit of indicators, WRI and our partners will work with you to collate all the information from the indicators, and develop conclusions from your assessments, including an overall score for national performance with regards to governance in the electricity sector.

How should the external review be conducted?

When your analysis has been completed, reviewed internally, and the results aggregated into composite score reports, then the assessments should be submitted to your advisory group for external review. For an effective external review, make sure to:

• Provide the advisory group with all indicator scores and a summary of findings • Provide the completed forms and worksheets from this guide • Include conclusions and recommendations for comment • Agree on a deadline and format for feedback from the panel • Respond to all questions and concerns from the advisory panel and gather its advice on outreach

strategies • Make both the comments from the reviewers and your responses to them available to the public.

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INDICATOR DOCUMENTATION GUIDELINES

It is very important that our research for completing the indicators and assigning a value be well documented. Thorough documentation of the indicators and their justifications will corroborate our research, and will also limit the perception that our indicator values are too subjective or based purely on personal bias or opinion. In fact, corroboration through interviews and literature reviews backed up by comprehensive referencing and documentation is particularly critical in the case of indicators that call upon assessment teams to exercise value judgments such as “reasonable lead time”, “independence”, “responsive”, “clear”, etc. and in particular “meets x. elements of quality”.

Further, in the “explanation / justification” for indicators that feature an “elements of quality approach”, it is crucial that you note which elements of quality have been met, and which elements are lacking and account for weaknesses in that aspect of the governance change. Without this explanation, the indicator worksheet will not present an adequate diagnosis of the situation.

WRI standards for complete notes and bibliographic listings

The purpose of these entries is to provide readers with the information they need to find your references. Complete source information includes the following:

Book:

� Name of author(s) or editor(s) � Year of publication � Full title, including subtitle (if any), in

italics � Volume number (if any) � Series title, if book is part of a series,

not in italics � Editor(s) � City of publication � Publisher’s name

Article in a periodical:

� Name(s) of author(s) � Year of publication � Full title of the article, including subtitle (if any) in "quotes" � Full title of the periodical, in italics � Volume number followed by issue number/month/season in

parentheses � Inclusive page numbers

Example Note (Print and PDF) Bibliography (Web site)

Personal communication

1. Daniel Martin, private communication, June 4, 1998. Note: If possible, please specify the type of communication (e.g. email, letter, interview, etc).

(Do not use personal communications in bibliographies.)

Confidential Interview Interview with World Bank Staff, March 14, 2002.

(Do not use personal communications in bibliographies.)

Book 1. S.J. Carlquist, Island Biology (New York: Columbia University Press, 1974), p. xx.

Carlquist, S.J. 1974. Island Biology. New York: Columbia University Press.

Book with editor instead of author

1. I. Serageldin and J. Martin-Brown, eds. Ethics and Values: A Global Perspective: Proceedings of an Associated Event of the Fifth Annual World Bank Conference on Environmentally and Socially Sustainable Development (Washington, DC: The World Bank, 1998).

Serageldin, I., and J. Martin-Brown, eds. 1998. Ethics and Values: A Global Perspective: Proceedings of an Associated Event of the Fifth Annual World Bank Conference on Environmentally and Socially Sustainable Development. Washington, DC: The World Bank.

Books with more than 1 J M Antle J N Lekakis and GP Zanias Antle J M J N Lekakis and G P Zanias

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one editor or author Agriculture, Trade, and the Environment: The Impact of Liberalization on Sustainable Development (Cheltenham, UK: Edward Elgar, 1998), pp. xx—xx.

1998. Agriculture, Trade, and the Environment: The Impact of Liberalization on Sustainable Development. Cheltenham, UK: Edward Elgar.

Books with more than three editors or authors

1. Charlotte Marcus et al., Investigations into the Phenomenon of Limited-Field Criticism (Boston: Broadview Press, 1990), pp. 3 - 5

Marcus, Charlotte et al. 1990. Investigations into the Phenomenon of Limited-Field Criticism. Boston: Broadview Press.

Article in a book-length collection

1. John Wry, "Pleistocene Days," in Old Ages. F.B. Morgan, ed. (Boston: Merlin Press, 1994): 23.

Wry, John. 1994. "Pleistocene Days," in Old Ages. F.B. Morgan, ed. Boston: Merlin Press.

Popular magazine or signed newspaper article

1. John McInerney, "What Man Hath Wrought," New Republic (March 18, 1976): 16.

McInerney, John. 1976. "What Man Hath Wrought." New Republic. Vol. 28 (March 18): 12--20.

Journal article 1. E.B. Barbier, J.C. Burgess, and A. Markandya. 1991. "The Economics of Tropical Deforestation." Ambio 20(2): 55--58.

Barbier, E.B., J.C. Burgess, and A. Markandya. 1991. "The Economics of Tropical Deforestation." Ambio 20(2): 55--58.

The publisher of a report is sometimes the only author cited. In such cases, the publisher’s name should appear at the beginning of the citation rather than after the title of the report, and it need not be repeated.

Report

1. United Nations Population Division, Long-Range World Population Projections: Two Centuries of Population Growth 1950—2150 (New York: United Nations, 1991), pp. 150--155.

United Nations Population Division. 1991. Long-Range World Population Projections: Two Centuries of Population Growth 1950—2150. New York: United Nations.

Conference proceedings

1. K.G. Boto, "Mangroves and Secondary Productivity." Paper presented at the National Mangrove Workshop, Australian Institute of Marine Sciences, Sydney, Australia, April 15--17, 1979.

Boto, K.G. 1979. "Mangroves and Secondary Productivity." Paper presented at the National Mangrove Workshop, Australian Institute of Marine Sciences, Sydney, Australia, April 15--17.

For online sources, include as much information as possible. Also include the date you accessed the site and the URL. If a source exists as both a published document and an online reference, give the published citation before the web site citation.

1. CNN Interactive. 1999. "Ecological misfortunes could bring economic blessings." Online at: http://cnn.com/ US9901/16/calamity/index.html (January 16).

CNN Interactive. 1999. "Ecological misfortunes could bring economic blessings." Online at: http://cnn.com/ US9901/16/calamity/index.html (January 16).

For sources on diskette or CD-ROM, include data as for books and periodicals and the electronic form of the source.

Electronic sources

1. United Nations Population Division, World Urbanization Prospects, 1950--2025 (1992 revision on diskette) (New York: United Nations, 1993).

United Nations Population Division. 1993. World Urbanization Prospects, 1950--2025 (1992 revision on diskette). New York: United Nations.

Subsequent references

Use a complete reference for each endnote. Do not use ibid. and op. cit. As soon as text is modified in any way (text edition, deletions, or moving of text), these can lose all meaning. Do not ever use ibid. and op. cit. online.