Worldwide, one out of every five people lacks access to modern electricity. Affordability, quality of service, and social and environmental impacts pose great challenges in providing people with the power they need for lighting, cooking, and other activities. Good governance involving open and inclusive practices is essential to overcoming these pressing obstacles.
This is part three of a four-part blog series, “Improving Electricity Governance,” which explores the key components involved in effective electricity governance. The series draws on the experiences of WRI’s Electricity Governance Initiative, documented in a new report, “Shining a Light on Electricity Governance.” Read more posts in this series.
Until recently, the Electricity Generating Authority of Thailand (EGAT) held a monopoly on Thailand’s power generation and transmission since the 1970s. While EGAT provided a relatively stable supply of electricity to consumers, it was unregulated, leading to inefficiencies in the sector, such as wrongly estimated fuel supply. Consumers experienced high prices, while new power projects moved forward with little public consultation, sparking social conflict and concerns over environmental impacts.
The situation worsened in 2003, when Prime Minister Thaksin Shinawatra set forth a plan to restructure Thailand’s electricity sector and privatize EGAT. Rather than improving Thailand’s electricity sector in the public interest, the plan for privatization was designed to increase capital for powerful stakeholders and upper management employees. It called to maintain EGAT’s unregulated monopoly in order to maximize profits, even at the expense of public needs and environmental vulnerabilities.
Thailand’s electricity sector seemed poised to worsen–until civil society groups stepped in.
An Electricity Governance Assessment for Thailand
During the time of the government’s privatization proposal, a group of WRI’s Electricity Governance Initiative (EGI) partners were carrying out an assessment of the country’s electricity sector. The assessment found that there was no official forum for public participation within the sector, nor was there an independent regulator to balance the interests of EGAT against public needs.
In 2004, thousands of EGAT union members as well as a coalition of civil society organizations (CSOs) protested the impending privatization plan. They voiced their objection to EGAT becoming a profit-driven monopoly and demanded that the electricity sector be made accountable to public needs. EGI partners submitted their findings to the Supreme Administrative Court, which held a hearing to address the impending plan. As a result of union members’ and civil society groups’ efforts, the privatization was postponed by the court. In 2005, the decision was overturned.
Establishing an Independent Regulator
Since then, EGI partners and other stakeholders helped draft a new law that establishes an independent regulatory commission to ensure accountability in Thailand’s electricity sector. The Energy Regulatory Commission has since helped create 13 Regional Consumer Committees in different parts of Thailand. Each committee represents energy consumers in a specific region of the country. They are expected to address energy complaints and petitions, suggest improvements in energy services, and advise energy consumers on consumer-protection issues.
The presence of the independent Energy Regulatory Commission of Thailand has worked to protect the public interest by ensuring fair prices and reliable service, promoting awareness and knowledge of the energy sector, providing impact assessments, supporting renewable energy, and securing fairness and transparency throughout the sector. In opening up the policy process and providing an independent forum for public participation, electricity sector decision-makers are now accountable to the varied expertise and interests of the public.
Improvements didn’t just stop with establishing an independent Regulatory Commission. EGI partner, Palang Thai, coordinated capacity-building workshops for the Regulatory Commissioners, connecting them to energy decision-makers in the United States. These visits led to the Thai Energy Regulatory Commission entering into a memorandum of understanding with the Washington State Regulatory Commission in order to share knowledge and experiences in regulatory decision-making. These kinds of peer-to-peer partnerships help spread best practices.
A Lesson in Electricity Governance
This example from Thailand highlights a lesson that applies to electricity sectors in countries and communities throughout the world: Bad decision-making processes lead to bad results. The actions that Thai civil society groups took to overturn EGAT privatization and set up an independent regulator provides a powerful example of why involving civil society in decision-making processes is a necessary step in improving decisions themselves.
LEARN MORE: For more information about how EGI helped improve transparency in the electricity sector, check out our outcomes report, Shining a Light on Electricity Governance.