People and Power : Electricity Sector Reforms and the Poor in Europe and Central Asia

, by Lampietti, Julian A.; Banerjee, Sudeshna Ghosh; Branczik, Amelia

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ISBN: 9780821366332 | 0821366335
Cover: Paperback
Copyright: 11/1/2006

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The Energy Sector Management Assistance Program (ESMAP) is a global technical assistance program that promotes the role of energy in poverty reduction and economic growth with redistribution. ESMAP undertakes analytical work and provides policy advice on sustainable energy development to governments and other institutions in developing countries and economies in transition. ESMAP was established in 1983 under the joint sponsorship of the World Bank and the United Nations Development Programme as a partnership in response to global energy crises. Since its creation, ESMAP has operated in some 100 countries through approximately 500 activities covering a broad range of energy issues. Book jacket.

Foreword

Acknowledgments

xix

Abbreviations

xxi

Preface: Why Look at the Household Effects of Reform?

xxiii

PART I Introduction and Methodology

(32)

Chapter 1 Power's Reforms—and the Problems

(14)

Europe and Central Asia's Challenges Were Unique

(2)

The Onset of Crisis

(1)

The Promise of Reform

(3)

The Problems of Reform

(2)

Rising Prices, Rising Opposition

(4)

Chapter 2 Using Poverty and Social Impact Analysis to Assess the Distributional Impact of Power Sector Reforms

(16)

Why These Studies?

(1)

Who Are the Stakeholders of Reform?

(1)

The Theoretical Basis

(3)

Welfare Indicators and How to Measure Them

(6)

Qualitative Analysis

(1)

Quantitative Analysis

(1)

Generating Better Data

(3)

Limitations of the Methodology

(1)

The Advantages of PSIAs for Designing Reform

(4)

PART 2 Case Studies

(110)

Chapter 3 Energy Reforms and Trends in Household Consumption

(10)

Patterns of Reform

(2)

Trends in Residential Electricity Consumption

(2)

Service Quality and Availability

(1)

Nonpayments

(1)

Other Energy Sources

(2)

Other Network Fuels: Gas and District Heating

(1)

Non-network Fuels

(1)

Changes in Consumption across Income Groups

(1)

Conclusion

(4)

Chapter 4 Raising Prices in Armenia—What Happens to the Poor?

(18)

Before the Price Hike

(2)

Residential Energy Consumption in Armenia

(5)

Uses of Energy

(1)

Energy Consumption and Expenditure

(1)

Improvements in Electricity Supply

(1)

How Households Cope with Increasing Collections

(1)

Use of Substitutes

(2)

Attitudes to Reform

(1)

Who Suffered Most: The Impact of Reform

(4)

Magnitude of the Tariff Increase

(1)

Overall Impact of the Price Increase

(1)

Effects on the Poor and Nonpoor

(1)

Effect on Bill Amounts and Payments

(1)

Arrears Levels for the Poor and Nonpoor

(1)

How Effective Was the Cash Transfer?

(1)

Targeting Effectiveness of the Cash Transfers

(1)

Effectiveness of Transfers in Softening the Impact

(1)

Conclusion

(5)

Chapter 5 Nonpayment and Power—Georgia

(26)

Deep Declines—Then High Expectations

(3)

Residential Energy Consumption in Georgia

(6)

Availability of Energy

(1)

Changes in Relative Energy Prices

(2)

Effect of Reform on Energy Consumption

(1)

Changing Household Energy Expenditures

(1)

Changes in Service Quality

(1)

Welfare Implications of Changes in Electricity Consumption

(1)

More Use of Gas

(1)

Impact of Increased Use of Traditional Fuels

(1)

How Was the Utility Able to Increase Revenues?

(4)

Prices

(1)

Subsidies

(1)

Service Quality

(1)

Remetering and Enforcement

(1)

Nonpayment: Affordability or Free-Riding?

(1)

How Effective Were the Mitigating Transfers?

(4)

Proposing a Better Mitigating Strategy

(2)

Conclusion

(8)

Chapter 6 Does Privatization Hurt the Poor of Moldova?

(20)

The Long Slide

(4)

Residential Energy Consumption in Moldova

(4)

Effect of Reform on Electricity Consumption

(1)

Effect of Reform on Service Quality

(1)

Differences between Urban and Rural Households

(1)

Did Reform Hurt the Poor?

(1)

A Difference between the Private and Public Utilities?

(3)

How Effective Was the Social Transfer System?

101

(2)

Proposing a Better Mitigating Strategy

103

(1)

Conclusion

104

(5)

Chapter 7 Timing and Sequencing of Raising Rates—Azerbaijan

109

(16)

Energy Rich, with Unrealized Power

109

(3)

Residential Energy Consumption

112

(2)

How Will Households Respond to Tariff Increases?

114

(5)

Effect of Reform on Consumption

114

(1)

Household Electricity Demand Model

115

(2)

How Much Households Need to Be Compensated

117

(1)

Differences between the Poor and Nonpoor

118

(1)

Availability of Substitutes

118

(1)

How to Mitigate the Impact of Tariff Increases

119

(2)

Increase Tariffs Gradually

119

(1)

Link Tariff Increases to Service Quality

119

(1)

Improve Efficiency of Energy Use

120

(1)

Improve Access to Clean Substitutes

120

(1)

Consider Lifeline Tariffs or Direct Transfers

120

(1)

Outside Baku

121

(1)

Conclusion

121

(4)

Chapter 8 Coping with the Cold: Heating Strategies for the Urban Poor

125

(18)

Inefficient District Heating Systems

126

(3)

Household Demand for Heat

129

(4)

Estimating the Demand for Heat

130

(1)

Household Heat Consumption

131

(1)

Household Heat Expenditure

132

(1)

Rethinking Heat Supply

133

(5)

The Cost of Full Service

134

(1)

The Cost of Reduced Service

135

(2)

Other Policies

137

(1)

Conclusion

138

(5)

PART 3 Lessons

143

(38)

Chapter 9 Implications for Operational Design

145

(20)

Simulating the Impact of Tariff Reforms

145

(3)

Softening the Blow: Direct Transfers and Lifeline Tariffs

148

(4)

Other Considerations

151

(1)

Other Pro-Poor Mitigating Measures

152

(4)

Explicitly Link Tariff Increases to Improvements in Service Quality

152

(1)

Raise Tariffs Slowly

153

(1)

Raise Collections First

153

(1)

Increase Access to Gas or Other Clean Substitutes

154

(1)

Make Metering a Priority

155

(1)

Investments in Efficiency

155

(1)

Financing Instruments

155

(1)

Mitigating the Environmental Effects of Reform

156

(9)

Environmental Benefits from Increased Energy Production Efficiency?

156

(1)

Environmental Costs from Fuel Substitution

157

(2)

Electricity Reform and Deforestation

159

(1)

How to Improve the Environmental Effects of Reform

160

(5)

Chapter 10 Conclusion: Designing Reforms to Produce Better Outcomes for the Poor

165

(16)

Tariff Reform: Where Do We Stand?

166

(1)

How Do Reforms Affect the Poor?

167

(2)

Residential Energy Consumption

167

(1)

Nonpayment: Affordability versus Free-Riding

167

(1)

Elasticity of Electricity Demand

167

(1)

Coping Mechanisms

168

(1)

Improvements in Service Quality

168

(1)

Designing Effective Mitigating Strategies

169

(1)

Direct Transfers or Tariff-Based Subsidies?

169

(1)

Improving the Efficiency of Energy Consumption

169

(1)

Raising Tariffs Gradually

170

(1)

Controlling Consumption

170

(1)

Designing and Implementing Successful Reform

170

(1)

Improving Cost Recovery

170

(1)

Outside Factors Affecting Reform

170

(1)

Designing Suitable Policies

171

(1)

Analyzing Reform: The Potential of PSIAs

171

(2)

Generating Better Data and Evidence

171

(1)

Involving Stakeholders

172

(1)

Building Capacity

172

(1)

Lessons for PSIAs

173

(1)

Necessary Steps

173

(1)

Adapt to Local Context

173

(1)

Allow Adequate Time and Resources

173

(1)

Reframe Controversial Issues

174

(1)

Involve a Broad Range of Stakeholders

174

(1)

Ex Post and Ex Ante Approaches

174

(1)

Alternatives to Privatization

174

(1)

Conclusion

175

Annexes

Annex 1 Overview of the Reform Process in Eight ECA Countries

181

(4)

Annex 2 Summary of Household Survey Data

185

(16)

Annex 3 Converting Energy Prices into Cost per Effective Btu

201

(2)

Annex 4 Combined Household Survey and Utility Data for Four Countries

203

(4)

Annex 5 Changes in Generation Mix in the Past Decade and Price and Income Elasticity of Demand Estimates

207

(4)

References

211

(10)

Index

221

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People and Power : Electricity Sector Reforms and the Poor in Europe and Central Asia

Summary

Table of Contents

Supplemental Materials