Publications by Author: Brown%2C%20Ashley

Providing universal access to basic utilities is justified on human rights grounds and also because of the positive externalities involved. Adequate provision of water, sanitation and electricity contributes to the achievement of the other Millennium Development Goals (MDGs). Access to these services, however, is still unequal in the developing world. Services do not adequately reach the poor. This Poverty in Focus brings together a mix of policy issues and some country experiences.

Ashley C. Brown discusses the externalities involved in supplying basic infrastructure to those who can least afford it. He argues that, contrary to established views, cross-subsidy schemes actually benefit all users and not only the targeted population.

 

 

Brown, Ashley. Transmission Investment: Competitive Market Platform or Regulation Trojan Horse? Presentation to the HEPG 52nd Plenary Session. October, 2008. 16 pages.

The United States electric system has served the nation well with decades of reliable and universal electricity service. However, there is an increasing and broad recognition that significant amounts of investment in the transmission system will be needed in the near and long term if the system is to continue to provide the kind of electricity service that Americans desire and on which the nation’s economy depends.

Attracting new investment in transmission in recent years has become more complicated than in the past because of the nation’s transition from a traditional era of utility regulation to a new era of national policy supporting “open access” to transmission. While the wholesale electricity market has changed fundamentally, the framework for enabling and encouraging investment that will better enable the grid to serve growing competitive markets has not yet fully emerged. One area still largely unresolved is how the costs incurred in transmission expansion will be allocated among users. While it is clear that many traditional cost-allocation approaches are no longer appropriate, new principles governing the allocation of cost responsibility for new transmission investment have yet to be fully articulated and implemented. It is the articulation of principles for that cost allocation that is the subject of this paper.

This White Paper focuses on the principles for determining the benefits of new transmission investments, and for allocating the costs efficiently and equitably among those who benefit from the enhancement. While for the most part Federal regulators have been attempting in recent years to accommodate the differences of opinion on these topics by adopting transmission cost-allocation proposals resulting from settlement discussions or negotiated agreements among stakeholders in specific geographic areas, this approach suffers from the lack of common, predictable principles supporting transmission investment for the interconnected grid that serves broad regions of the nation. While the acceptance of different regional approaches is understandable from a pragmatic point of view because such settlement processes often allow issues to be resolved with less contentiousness, that approach is inadequate to the task of creating a sustainable and viable environment for continuing attraction of capital into transmission projects. Indeed, it is unlikely that the widely divergent methods proposed and accepted for allocating transmission costs can produce a body of policies that together both meet the legal standard of just and reasonable results and also prove to be the foundation for sustainable investment for the long term, particularly when these allocations interact across 2 regional boundaries. Finding a principled basis for cost allocation that relies on more than lowest common denominators would certainly provide a more appropriate and sustainable basis for public policy.

Brown, Ashley. Retail Procurement: Default Service vs. Monopoly Service Considerations. Presentation to the HEPG Forty-Eighth Plenary Session. October, 2007. 10 pages.

Brown, Ashley. Load Serving Entities and Hedging: Critical Regulatory Issues. 21 September 2006. Presentation, 7 pages.

Excerpt from the Introduction:

In January 2004, a World Bank (WB) mission, including both WB staffers and two outside consultants, visited Moscow to review the proposal of RAO-UES, , the stateowned electric utility, to restructure the Russian power sector in ways that would promote competition and render the sector more efficient. The objective of the WB mission was to produce two Policy Notes, one on market design, and the other on regulation. After extensive review of documents and meetings with a broad array of critical players in the market, as well as interaction with Russian counterparts, the Policy Notes were written in June 2004. Those papers, based on the submissions of the two outside consultants (Larry Ruff for market design and Ashley Brown for regulation), were distributed within the Russian power sector.

Brown, Ashley. Transparency and Good Decision-Making: Irreconcilable Differences or Happy Bedfellows? Presentation to the Harvard Electricity Policy Group. 3 March 2005. Presentation, 17 pages.

Brown, Ashley. Corporate Governance in Energy: Post-Enron. 8 May 2003. Presentation, 13 pages.

Excerpt from the Background section:

 

The Brazilian Power Sector, Latin America's largest, unique among energy suppliers to the world's leading economies, is almost completely dependent on one resource for its energy supply: water. Of its 65, 134 MW of installed generating capacity, in 1998 more than 90% was hydro. A substantial amount of that hydro capacity is located on only a few rivers. The sites for the generating facilities, by virtue of the nature of the resource, are generally far removed from major load centers, leaving the country highly dependent on long transmission lines to move electricity from the producer to the consumers. This dependence greatly complicated Brazil’s coordination and optimization in the use off its resources. Seasonal and regional differences in precipitation and water levels, coupled with the fact that most dams are multi-purpose facilities, providing irrigation and navigation as well as energy production, gave rise to a very sophisticated national model for coordination and dispatch. The model worked quite well in operating the generation and transmission sectors in a reasonably efficient manner.

Historically, the ownership of the power sector has changed from private to state and then back to private ownership. Indeed, the nationalization of the industry was only completed in the late 1970's, and even then it was not 100% nationalized. State ownership, however, did not necessarily mean ownership by the national government. Although the Brazilian Constitution vests responsibility for the electricity sector with the national government, in fact, much of the distribution sector was owned by state governments. In some states, including major ones such as Sao Paulo, Minas Gerais, Parana, Rio Grande do Sul, and Rio de Janeiro, the state government-owned utilities were at least partially vertically integrated. By the early to mid 1990’s when restructuring came on the agenda, the industry structure was clear. With the exceptions of nationally owned distribution companies in Rio de Janeiro, Espirito Santo, Brasilia and a few scattered, privately owned companies, the distribution companies were, as noted, owned by state governments. The part of the industry owned by the national government was generally housed under the umbrella of the government holding company, Eletrobras. These entities included four large generating and transmission companies: Chesf, FURNAS, Eletronorte, and Eletrosul (later Gerasul); the industry research arm, CEPEL; and the energy efficiency program, Procel. The huge Itaipu hydro plant was operated by an independent governmental authority, created pursuant to a treaty with Paraguay, with whom the facility is shared. The entire electric sector was, nominally, at least, subject to the “regulatory” authority of the National Department of Water and Energy (DNAEE). DNAEE’s staff was almost entirely composed of employees of regulated entities on loan to the regulator for stated periods of time, and was anything but independent. While it had a role in approving tariffs and was often consulted on industry related matters, it lacked an independent governing board, any independent and final authority of its own, and functioned generally as only a small piece of the overall bureaucratic structure of the industry. Overseeing DNAEE and responsible for policy within the sector was the Ministry of Mines and Energy.

Brown, Ashley. Confusing Means and Ends: Framework of Restructuring, Not Privatization, Matters Most. January 2002. Paper, 14 pages.

Brown, Ashley. RTO Governance. 3 April 2002. Presentation, 12 pages.