Conclusions from a US-Indian Regulatory Workshop on Public Good versus Private Profit

WASHINGTON, April 29 /PRNewswire/ -- IPPAI (Independent Power Producers Association of India) and FERC (Federal Energy Regulatory Commission) co-organized an Indo-US Regulatory dialogue titled 'Public Good Vs Private Profit' today at NE Washington DC. The workshop was organized to bring together regulators and policymakers from both sides of the globe on a common platform to exchange the best practises in regulating entities across various sectors. The event was expected to initiate debate and dialogue on challenges faced by regulators and the way forward in policymaking and regulation in both the countries. Some of the key issues that were examined during the day-long workshop included: US and Indian industry perspectives on regulating integrated utilities and challenges faced by public utility regulators in striking a balance between "public good and private profit."

In her opening remarks, Dr. Phyllis Yoshida, Deputy Assistant Secretary for International Energy Cooperation, U.S. Department of Energy announced that, "Next week, I will lead a delegation traveling to India for a US-India energy dialogue with the government officials in the Ministry of Power.  The visit intends to discuss the activity status and implementation status of the two MOUs already signed with the Indian Prime Minister earlier this year."  

The Regulators from both the countries opined that U.S. and India have a lot in common. Both India and U.S. have large democracies, both nations have embraced diversity, have been successful in establishing democracy and both the nations have embraced the public and private sectors. "Public Good and Private Profit should not be seen as opposing forces that need to be balanced," remarked Dr. Pramod Deo, Chairman, CERC. It is the duty of the Government to protect the poor and not that of the regulators. From the regulators' perspective there is always a conflict in balancing public good versus private profit. "Should the goal of a regulator be to provide lowest possible prices or continuity of supply that stimulate the private prices?" asked Mr. Lawrence Brenner, Maryland State Commissioner & former FERC Administrative law Judge. He further said that the prices may not always be the cheapest at a given point of time. There should be a balanced policy; however, there are always top-down and bottom-up compromises. Mr. S.L. Rao, Former Chairman, CERC pointed that India has tried to move command oriented scenarios to market oriented situations. CERC tried to grow Merchant power market, which was an ingenious solution as it enables private profit and public good. The gas market should also look at a similar solution. Mr. Scott Hempling, Exc. Director, National Regulatory Research Institute asserted that affordability of energy has nothing to do with Regulators that should be the concern of the Government. The Political branches should intervene and see how the prices can be brought down in the public good. There could be a market-based approach, wherein a capacity market should be created to encourage long term investments. It is important that there is always a need of independent regulatory body so that long term strategies could be evoked to harmonize the balance between public good and private profit. Mr. S L Rao, Former Chairman, CERC citing the example of price movement in Indian spot market questioned that when market and trading in India was opened for the first time, prices started moving up and down because the supply was less. In such a situation should the regulators intervene to bring down the prices of electricity?

Mr. Anil Razdan, Former Secretary, Ministry of Power, suggested that India should have a time-of-day tariff as this consumer gets an opportunity to judge its demand and would automatically opt for demand management.  

Concluding the session, Mr. John Shelk, President and CEO, Electric Power Supply Association, said that the Regulators should not make over-promises on price reduction as it is not always feasible to do so in different time frames.

SOURCE Independent Power Producers Association of India