A presentation and discussion of LIRNEasia research from Sri Lanka, India, Bangladesh
I am frustrated by my dependence on electricity. It’s not that great to decide where one sits in an airport, not on the basis of the view but on the proximity to a plug point. We’ve been keeping an eye on developments on the power front for some time, and are happy that the momentum is finally picking up. “When wireless power is everywhere, battery life and charging rates will no longer be critical factors in mobile devices as our devices will always be charging,” Ms. Perry said.
The South Asian Forum for Infrastructure Regulation (SAFIR) is a 14-year old platform that brings the region’s regulators together to share experiences and build capacity. Today, LIRNEasia presented for the first time the findings from its research on how customer relationships can be improved in electricity and telecom sectors using the capabilities of mobile platforms. The presentation.
The past decade has seen unprecedented, rapid growth in electronic connectivity in the form of voice in the developing world. Access to the Internet and to more-than-voice services is quite uneven with those at the BOP being excluded from the benefits of the rich potential of applications and services associated with the Internet. The report is a part of LIRNEasia’s research into the exploration of how to bring about an increase the inclusivity of the currently marginalized BOP by providing more useful services and applications on mobile platforms. In terms of providing useful services, the research will focus on three sectors; telecom, electricity and government services. How can these services be more useful to particularly to the micro-entrepreneurs at the Bottom of the Pyramid?
Earlier this year, LIRNEasia provided formal inputs to the public hearing on the electricity tariffs held by the Public Utilities Commission of Sri Lanka (PUCSL). None of our recommendations were reflected in the outcome of that process, but we were happy to see subsequent actions by the PUCSL reflecting them. We were also pleased to see some of our ideas reflected in a speech by the Leader of the Opposition. The recent report indicating that the Ceylon Electricity Board has not only eliminated losses, but has shown profits appears to indicate that our predictions were right: d. The cost models that underlie the tariff proposal are based on assumptions of levels of use that may change because of the radical redesign of the tariff structure.
The headline suggests the focus is on the capture of regulatory agencies by retired IAS officers. But it is more, a wide-ranging discourse on problems of regulatory governance. It is a pity that the arguments are harmed by sloppy blame attribution: how can TRAI be blamed for spectrum auctions, when the article itself recognizes that is in the province of the Department of Telecommunications? So how do we reverse this capture of important decision-making bodies by the bureaucracy? In 2006, the Planning Commission published a report (Approach to Regulations: Issues and Options) with some suggestions.
While teaching a course on policy and regulation at a very nice, generator-equipped hotel in Taungoo, I was struck by how bad the Internet was and how unstable the electricity supply was. We are used to working closely with the office while on the road, but this proved too difficult in Taungoo and one of us had to advance the departure by one day to ensure projects did not get disrupted. The importance of electricity has been picked up by this analyst, as reported. The costs of Internet subscriptions are expected to decline gradually, particularly for equipment and administrative fees. Announcements that a high-speed Internet cable network is being built this year, and more hydropower dams over the next few years, will have excited the market, it said.
Earlier this year (April 2013) we pushed for Demand Side Management (DSM) in Sri Lanka to managing the burgeoning electricity demand in the country. Hence we were quite happy when the Public Utilities Commission of Sri Lankan (PUCSL) recently released draft regulations for the institutional framework conducting DSM activities in the electricity sector. Today, at a consultative workshop on the draft regulations, we recommended the following: Coordinate the market research design that each of the 5 distribution licensees have to conduct prior to initiating DSM activities. Make use of behavioral economics and Randomized Control Trials (RCTs) for high impact since it is the most effective way to understand consumer behavior and “nudge” them to more energy-efficient and energy-conserving behavior. The impact could be even higher if Sri Lanka were to quickly scale up the use of smart meters.
The survey was conducted among the low-income, urban micro-entrepreneurs (MEs) in three countries, Bangladesh, India and Sri Lanka. The study defined micro-entrepreneurs as those who employed less than ten hired workers, i.e 0-9. The hired workers are paid employees or full-time equivalent, excluding the owner. This is an adaptation of international definition followed by World Bank and European Commission1.
LIRNEasia is not known as an energy shop, but we’ve been getting into electricity issues gradually. In a week or so, LIRNEasia will be making a presentation to the Public Utility Commission of Sri Lanka on the best ways to introduce demand-side management. This NYT article shows how difficult deviating from the conventional path is and how much care has to be taken in effecting reforms in this critical area. German families are being hit by rapidly increasing electricity rates, to the point where growing numbers of them can no longer afford to pay the bill. Businesses are more and more worried that their energy costs will put them at a disadvantage to competitors in nations with lower energy costs, and some energy-intensive industries have begun to shun the country because they fear steeper costs ahead.
The Lankadeepa of 22 July 2013 carried report about the Leader of the Opposition arguing that electricity tariffs be adjusted to account for the larger contribution from low-cost hydroelectric generators to the overall supply mix of the Ceylon Electricity Board. This reflects a recommendation made by LIRNEasia in its submission made at the Public Hearing on the electricity tariff: The cost models that underlie the tariff proposal are based on assumptions of levels of use that may change because of the radical redesign of the tariff structure. If demand is lower than projected, especially at the peak, it is possible that the proposed tariff will yield excessive earnings. Therefore, the approved tariff should include provisions for monitoring revenue levels and for periodic adjustments and/or the return of excess earnings to consumers. These kinds of adjustment mechanisms are not difficult to embed within tariff decisions.
That is the title of a 2013 Utilities Policy article by Malcolm Abbott and Xiaoying Ma. I was quite intrigued because it addresses the central problem sought to be addressed by the Pacific ICT Regulatory Resource Center (PiRRC), that LIRNEasia has been assisting with over the past two years. As is unfortunately the case with too many peer-reviewed journal articles these days, there are few new findings/insights. But the quotes below pertain directly to the problem being tackled by the region’s regulators and the World Bank and the ADB (though there is no mention of the PiRRC, which has been in existence since 2011): A number of strategies have been made to ensure staffing and expertise levels. One approach is to employ specialist consultants outside of the country.
LIRNEasia works on infrastructure policy and regulation. It also has expertise in disaster risk reduction. That means that we have a natural interest in critical infrastructure issues. This is an area I had published in, even before LIRNEasia came into being. The subject was on assigning responsibility for risk reduction by regulators.
At LIRNEasia we study and teach about regulation. In March-April we spent some effort seeking to contribute to what we saw as an effort to remedy some long-standing political failures through transparent, consultative processes set in motion by Sri Lanka’s Public Utilities Commission of Sri Lanka (PUCSL). Our recommendations were not accepted, but we still hope the remedy will itself survive political failure. In the aftermath of the protests and the President’s overruling of the PUCSL, several observers have suggested that the PUCSL is a redundant entity that should be wound up. I agree that it failed in this instance and that it has done grievous harm to itself and to the essential process of moving toward cost-reflective tariffs.
Today, the Public Utilities Commission of Sri Lanka, held the oral-presentation component of the 2013 tariff hearing. In their effort to accommodate 70 or so persons/organizations among the 200+ that had made written submissions, they limited speaking time to 5-10 mts depending on how many issues had been covered and did not ask any questions of those making presentations. This was a pity, since the whole point of face-to-face interaction is interactivity. That said, I still found the exercise educative. For example, the spokesperson for one organization asked why the PUCSL had allowed a component of costs for ROE, return on equity.
EXECUTIVE SUMMARY The report broadly explores the customer relationship management (CRM) practices in the electricity distribution sector in Bangladesh. It identifies some of the existing challenges and how these can be improved with the use of ICTs and better service design. In a country where less than half the population has access to electricity through 13.5 million connections to the grid, the challenge facing the sector is two-fold. First, those that are privileged to be connected to the grid, need improved services.