CONSUMER PARTICIPATION IN REGULATORY
REFORMS IN ELECTRICITY SECTOR: EXPERIENCE OF
CUTS INTERNATIONAL
UDAI S. MEHTA, CUTS INTERNATIONAL
Consumer Protection and Regulators
• Consumer protection is a primary mandate of all economic
regulators universally
• To fulfil this mandate, regulators must ensure effective consumer
participation in the regulatory process
• Depending on how effectively regulators fulfil their
mandate vis-à-vis consumers, the regulatory process
benefits from a higher degree of consumer involvement
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Ladder of consumer participation in
regulatory process
Three steps can be identified in consumer engagement
Information - Consultation – Partnership
•Information is the first step toward legitimate consumer involvement in the
regulatory process.
•At this step, emphasis is placed on one-way flows of communication (from
regulators to consumers) with no channel provided for feedback.
•Hence, when consumer participation is limited to information, consumers have
little opportunity to influence the outcome of the decision-making process
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Contd……
CONSULTATION
• Regulators rely on consultation with consumers as a source of
non-binding advice to inform the regulatory process
• Consultations can either be conducted on an ad hoc basis or
throughout the regulatory process
• In absence of formal mechanism, consultation may not be
sufficient to ensure effective consumer participation, as it offers
no assurance that consumer input will be taken into account in
the decision-making process
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Contd……
PARTNERSHIP
•“redistribution” of decision making power as consumers are
granted the right to negotiate with the regulator.
•Effective partnership with consumers hinges on the appointment
of consumer spokespersons representing the consumer
constituency
– Appointment of Consumer Advocates
– Including consumer representatives on the Board of the
regulatory institution
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CUTS Interventions in South Asia
• CUTS–FES (Friedrich-Ebert-Stiftung) Project on Involvement
of Consumers in Power Sector Reforms in Rajasthan, India
(2001 -2007)
• A Pilot Project on Capacity Building on Electricity Sector in
Bangladesh, Nepal and India (2008- 2010) (RESA Project)
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Initiative Objectives
Advocacy at
policy level
For enhancing the
consumer voice
Establishing a
network down
to grassroots
level
Creating an
effective
communication
system
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CUTS FES PROJECT
http://www.cuts-international.org/cart/CUTS-FES.htm
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Objectives
• Sensitise
service
providers,
regulators and the consumers
• Mobilise community participation
in the reform process
• Enhance capacities of CSOs and
consumers
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Strategy/Activities
•
•
•
•
Awareness and Capacity Building
Network Formation
Consumers’ feedback and information gathering
Raising policy issues at appropriate forums
– At national level
• Central government
• Other consumers’ organizations
– At the state level
• Rajasthan Electricity Regulatory Commission
• State Government
• Distribution Companies
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Outcomes
•
•
Institutional Spaces
– Provided under regulatory
framework
• Advisory Committee
• Grievance Redressal
Mechanism
– Created under the programme
• Chaupal baithaks (village meeting)
• Jan Sunwaiis (public meetings)
Network
– District level partners
– Vidyut Sudhar Samitis (electricity
reform councils)
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Regulatory Reforms in Electricity Sector in
South Asia
(RESA Project)
http://www.cuts-ccier.org/RESA/
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RESA Project
• Activities: Project launch meeting & training programme, consumer base
line survey, Reference group meetings, Territorial trainings, Grassroots
interface meetings, advocacy seminar (India, Bangladesh and Nepal)
• Project Outputs: Territorial base paper, Territorial training manual,
Vernacular handouts, E- newsletters, Poster, Policy briefs and Articles
• Highlights: GIM: 111 GIMs, Consumers reached - 5100 (Rajasthan & West
Bengal) and produced a video documentary – ‘Powered to Grow’
• Effective participation of consumers, people’s representative, media and
utility officials in project activities.
• RESA Initiative – ‘Bottom Up Approach’
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Project Model
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Impact & Outcome
RESA Project
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On Consumers
• Grassroots Interface Meetings (GIMs) were a phenomenal
success.
• GIMs (111) reached out and sensitised close to 5100
consumers across project territories
• Recorded & registered their problems, their needs and
challenges and subsequently came up with possible solutions.
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On Civil Society and Utility
Civil Society Organisations
•
•
•
•
Strong network of capacitated grassroots civil society organisations
Extended and strengthened the network from Local to Regional Level.
Created 80 grassroots trainers equipped to undertake advocacy on Electricity
Helped to initiate constructive dialogue on partnering consumer groups
towards better consumer services, transparency and awareness building
Utilities
• GIMs provided an effective platform for two-way communication between
the utilities and consumers----– helped authorities understand the ground realities and problems faced by
consumers
– helped consumers to understand various limitations/problems of the
utilities
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On Regulators, Policy Makers and Media
• Helped regulators, policymakers & decision makers get in touch
with grassroots realities & issues.
• Developed a network amongst policy community, regulators,
civil society representatives and media to tackle the challenges
jointly.
• Media involved in all key activities resulting in media enthusiasm
about power sector reforms and its importance.
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WAY FORWARD TO
STRENGTHEN CONSUMER
PARTICIPATION
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Milestones…..
Consumers of electricity should also have the option of choosing
their service providers from many
– Need to promote: Competition; Open access; Private investment in this
sector
Enhanced and Effective Consumer participation in Regulatory
processes
– Regular Capacity building and Awareness programmes of CSOs and
Consumers to be undertaken proactively by Electricity Regulatory
Commissions.
– ERCs to develop effective and innovative communication channels for
communication with Consumers and Community
– Improve on the existing formats of Public Consultations
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Milestones……
Extension of GRM upto Local Supply Offices to bring it within
reach of Grassroots Consumers
– Necessary to : Do away with corruption in the system by removing the .
scope for middlemen
– Can be achieved through: Change in policy and regulations; Improved and
transparent service delivery mechanisms at all levels of utilities.
Undertake more Research
Renewable Energy solutions; Improve Energy efficiency; Good Regulatory
Practices from across the world; How to improve service delivery mechanism and
How to harness Consumer power in improving the performance of this sector.
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Recognition of CUTS
The World Bank’s Water and Sanitation
Programme-South Asia [WSP-SA] identified and
documented the ‘CUTS-FES Model’ as one of the
Best Practice to bring consumer voice into power
sector reforms
http://www.cuts-international.org/cart/pdf/WSPFES_Case_Study.pdf
CUTS received the India Powers Award 2008 of the
Council of Power Utilities under social community
impact category for networking and outreach
activities towards empowerment of consumers
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USEFUL PUBLICATIONS
Consumer Empowerment in Electricity Reforms in South Asia
http://www.cutsccier.org/RESA/pdf/Consumer_Empowerment_in_Electricity_Reforms.pdf
Powered to Grow: Video Documentary
http://www.cuts-ccier.org/RESA/RESA_Documentary.htm
CUTS FES Report
http://www.cuts-international.org/cart/pdf/CUTS
FES_Report_on_Power_Sector_Reforms.pdf
Water and Sanitation Programme: World Bank Report
http://www.cuts-international.org/cart/pdf/WSP-FES_Case_Study.pdf
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Asante sana
usm@cuts.org
www.cuts-international.org; www.cuts-ccier.org
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