Decisions made in the electricity sector have repercussions with fundamental impacts on the public and their interests. The decision to revise an electricity tariff affects the affordability of electricity supply; indeed, electricity reform-led tariff hikes have been greeted by popular uprisings. The decision to introduce efficiency standards for power plants can reduce air pollution in a surrounding community, and reduce the carbon emissions of an economy. The social, environmental and economic importance of the electricity sector is well recognized, and the stakes are high. Understanding how decisions are made in this sector is of critical importance as better decision- making processes can enable the making of better decisions. Closed political processes and politically powerful groups often give limited attention to sustainable development objectives and public interest in decision making, particularly during sector reform processes. In order for reform to be politically sustainable, the public must have confidence in its benefits, and this is best supported by transparency. Exclusive processes are prey to being subverted and used for narrow ends, whereas open processes provide checks on such abuses of power.
The Electricity Governance Initiative (EGI) Indicator Toolkit presents a framework to assess and promote good governance in the electricity sector. 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. In addition, the toolkit seeks to assess institutional capacity to adequately meet the requirements of good process.
The indicator toolkit comprises a set of qualitative research questions, whose answers generate indicators that assess decision-making processes in order to develop a metric to conceptualize good governance. Sound understanding of the decision chain and potential points for leverage and mutual benefit is critical for effective civil society engagement in the electricity sector. By approaching the social, environmental and economic challenges confronting the electricity sector through questions of governance, we can address these issues from the root of their causes.
The toolkit consists of a baseline survey of key attributes of the electricity sector, and 64 indicators assessing questions of good governance in the sector. Many of the indicators are applied to case study policies, regulatory processes, or sector projects. For each research question, indicator values of (i) Low (ii) Low-Medium (iii) Medium (iv)Medium-High or (v) High are possible. Each value is based on a documented explanation of the extent to which particular attributes of electricity governance have been met. The indicator design seeks to minimize the scope for arbitrary or inconsistent value judgments. At the same time, each indicator includes an analytical explanation for the value assigned, and teams are encouraged to use these explanations to capture any limitations of the elements of quality identified, and capture the political and socioeconomic dimensions of the issues addressed by the indicator.