USEAUSAID Energy Partnership Program Partnering the world of

USEA/USAID Energy Partnership Program Partnering the world of energy management Gordon Weynand, Energy Team Leader, USAID Barry Worthington, Executive Director, USEA James Connelly, Commissioner, MDTE CSD-14 Partnerships Fair – May 2006

Gordon Weynand Energy Team Leader, United States Agency for International Development Bureau for Economic Growth, Agriculture and Trade CSD-14 Partnerships Fair – May 2006

Sustaining Economic Growth □ There is a need for energy prices to encourage reliable economic growth and job creation □ Expensive, unreliable electricity cripples economies and restrict job opportunities CSD-14 Partnerships Fair – May 2006

Lack of Commercial Electricity □ Hospitals cannot refrigerate vaccines □ Schools cannot provide adequate lighting □ Farmers cannot use pumps to irrigate their fields □ Clean water systems cannot function CSD-14 Partnerships Fair – May 2006

Energy & Security □ Adequate energy infrastructure is critical for combating unemployment, illiteracy, the spread of infectious disease, environmental degradation, and the cycle of poverty in developing countries □ Poverty and instability pose an increasingly significant geopolitical risk to countries around the world CSD-14 Partnerships Fair – May 2006

USAID’S ROLE IN ENERGY □ Access to affordable, reliable, clean, and efficient energy services is essential to breaking the cycle of poverty and achieving sustainable development □ Public/Private Partnerships □ Technical Assistance □ Training CSD-14 Partnerships Fair – May 2006

Barry Worthington Executive Director, United States Energy Association CSD-14 Partnerships Fair – May 2006

About the Energy Partnership Program □ Practioner-to-practioner partnerships □ Transferring commercially viable, market-oriented approaches to overseas electric and gas utilities, as well as energy regulators □ Result in a two-way exchange of “best practices” between the US and overseas partners CSD-14 Partnerships Fair – May 2006

Quantity of Partnerships (since conception in 1990) □ 81 partnerships in 30 developing countries □ Over 12, 000 executives have participated pro bono □ $ 58 million in donated time and expertise CSD-14 Partnerships Fair – May 2006

EPP Key Issue Areas: □ Efficiency Gains in Electricity Transmission □ Improving grid codes □ Improving system maintenance □ Operating regional transmission networks □ Energy Regulation □ Improving public hearings process □ Improving license procedures □ Improving staff management CSD-14 Partnerships Fair – May 2006

EPP Key Issue Areas (continued): □ Best Practices in Electricity Distribution □ Billing and metering □ Tariff collection □ Management of technical losses and theft □ Accurate and Informed Energy Reporting by the Media □ Key energy issues □ Journalism standards CSD-14 Partnerships Fair – May 2006

EPP Key Issue Areas (continued): □ Energy Markets □ Rules of participation in regional market □ Financing independent market operator □ Regional regulation □ Power Generation □ Financing new generation □ Improving maintenance of power plants □ Optimizing contracts with Independent Power Producers CSD-14 Partnerships Fair – May 2006

Partnership Outcomes Results impact reliability, affordability, economic viability, and social & environmental sustainability – improving the reliability and access of commercial electric delivery Examples include: □ Rules and financial contributions of membership in the West Africa Power Pool are based on the Southwest Power Pool in Little Rock, Arkansas □ BENEFIT: Allows self-financing and improved reliability in region CSD-14 Partnerships Fair – May 2006

Partnership Outcomes (continued) □ Dhaka Electric Supply Company in Bangladesh (DESCO) established a handbook of maintenance practices based on the Sacramento Municipal Utility District and Clark Public Utilities of Washington State □ BENEFIT: Saving money on maintenance to apply towards improved service □ The Office of Utility Regulation in Jamaica improved its power reporting requirements based on the Missouri and Rhode Island regulatory commissions □ BENEFIT: Now able to inform customers of power outages and expected restoration CSD-14 Partnerships Fair – May 2006

Partnership Outcomes (continued) □ In Angola, the national distribution company is developing a slum electrification program with the assistance of a utility in Salvador, Brazil □ BENEFIT: Replication of a successful international program to help reach an underserved population □ The Armenian Regulatory Commission developed a tariff methodology for natural gas with the help of the Kentucky Public Service Commission □ BENEFIT: Sustainable gas service to ensure supply to consumers CSD-14 Partnerships Fair – May 2006

Partnership Outcomes (continued) □ In Mongolia, the regulatory commission has adopted a life-line tariff due to exposure of similar tariffs in the program □ BENEFIT: Society’s poorest consumers have access to affordable electricity □ The Bhutan Power Corporation adopted a performance based incentive system after seeing it in Southern Africa □ BENEFIT: Improves performance for customers CSD-14 Partnerships Fair – May 2006

Unexpected Outcomes □ Positive Surprise □ Existing practices confirmed by comparing against standards of US partners □ Growth of interest from potential international partners □ Negative surprise (obstacle) □ Information is not readily shared between participants and field staff who are not chosen for exchange activities CSD-14 Partnerships Fair – May 2006

Future Challenges/ Next Steps □ Funding and incorporating the many countries who wish to participate into the program □ Insuring that overseas partners utilize the information received by U. S. companies CSD-14 Partnerships Fair – May 2006

James Connelly Commissioner, Massachusetts Department of Telecommunications and Energy CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ How the partnership operated □ In MA, staff were matched with counterparts who oversee Benchmarks and Performance Measurement, Customer Service & Dispute Resolution, and Performance Based & Cost of Service Regulation CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ Lessons learned from Massachusetts: □ Administrative Law – importance and application □ Due Process Hearings – Transparency and balance of interests □ Appellate Procedures – How cases are considered by a regulatory commission CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ The Central Energy Regulatory Commission of India developed a two-part, performance-based tariff based on MDTE’s tariff structure □ MDTE provided the National Electrification Administration and Energy Regulatory Board of the Philippines with its experience in utility restructuring □ MDTE provided the Romanian regulatory agency with tariffs and operational rules when it was first developing its own tariffs CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ MDTE gave the Egyptian commission software valued at over $100, 000 to track customer calls and data to develop a call center □ MDTE met with the Pakistani regulators and provided them with information to set sustainable, market-based tariffs CSD-14 Partnerships Fair – May 2006

CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ MDTE gave the Egyptian regulators the following documents to help in developing Egypt’s rules and operations: □ copies of MA laws, rules and regulations used to ensure independent decision making □ Copies of MA license applications and rules of licenses □ Sample transcript of a MA license hearing CSD-14 Partnerships Fair – May 2006

Example from Partner (Massachusetts Commission) □ Partnership was also beneficial for MDTE □ Developed staff presentation skills □ Exposure to international regulatory practices and how they compare with the NE region of the United States CSD-14 Partnerships Fair – May 2006

Questions? □ CSD-14 Partnerships Fair – May 2006