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improving electricity governance

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How is the price of electricity set and what exactly are consumers paying for? Are today’s electricity tariffs too high or too low?

WRI's Electricity Governance Initiative program explains the details behind electric tariffs in a new working paper, 10 Questions to Ask about Electricity Tariffs, which offers a tool that stakeholders involved in tariff-setting processes can use to increase their knowledge and capacity in decision-making processes.

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A social entrepreneur invests the little working capital she has to bring solar electricity to a community that –like 1.2 billion people worldwide– lacks access to electricity. The community used to use dirty, expensive and choking kerosene for light to cook by and for children to learn by. The entrepreneur knows she can recoup her costs, because people are willing to pay for reliable, high-quality, clean energy – and it will be even less than what they used to pay for kerosene. Sounds like a good news story, right?

Three months later, the government utility extends the electrical grid to this same community, despite official plans showing it would take at least another four years. While this could be good news for the community, one unintended consequence is that this undermines the entrepreneur’s investment, wiping out their working capital, and deterring investors from supporting decentralized clean energy projects in other communities that lack access to electricity.

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When it comes to renewable energy, the Philippines is one of the world’s more ambitious countries. The country set out to triple its share of renewable energy by 2030 based on 2010 levels. The Philippines has one of Asia’s highest electricity rates, in part due to high costs of importing fossil fuels. Enhancing the country’s energy security and keeping power costs down have been the main drivers for setting renewable energy goals.

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Worldwide, one out of every five people lacks access to modern electricity. Affordability, quality of service, and social and environmental impacts pose great challenges in providing people with the power they need for lighting, cooking, and other activities. Good governance involving open and inclusive practices is essential to overcoming these pressing obstacles.

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This framework assesses the extent to which decision making processes in national electricity sectors are transparent, allow for public participation, remain accountable to the public interest and permit access to redress.

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Policymakers, regulators, citizens, and the international community are grappling with the challenges of providing access to reliable and affordable electricity, and addressing major environmental challenges.

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The Thai power sector has been dominated by three government-owned enterprises since 1970’s. The first is the Electricity Generating Authority of Thailand (EGAT), responsible for generation and transmission. The other two are Metropolitan Electricity Authority (MEA) and Provincial

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EGI focuses on public interests in policy and regulatory processes. We seek to create a new and constructive dialogue between civil society and sector officials where relations have often been strained.

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The Philippines assessment was completed by Green Independent Power Producers in partnership with the Action for Economic Reforms, and the Development Academy of the Philippines.

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The Indonesia assessment was completed by the Indonesian Institute for Energy Economics, in partnership with the Indonesian Centre for Environmental Law, Institut Bisnis dan Ekonomi Kerakyatan, Pelangi, Working Group on Power Sector Restructuring (WGPSR), and WWF Indonesia.

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This study was completed by the Center for Policy Research (New Delhi) Citizen Consumer and Civic Action Group (Chennai), The Center for Environmental Concerns (Hyderabad), and Praja (New Delhi).

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