Contents -- Foreword -- Acknowledgments -- Abbreviations -- Preface: Why Look at the Household Effects of Reform? -- PART I Introduction and Methodology -- Chapter 1 Power's Reforms-and the Problems -- Europe and Central Asia's Challenges Were Unique -- The Onset of Crisis -- The Promise of Reform -- The Problems of Reform -- Rising Prices, Rising Opposition -- Chapter 2 Using Poverty and Social Impact Analysis to Assess the Distributional Impact of Power Sector Reforms -- Why These Studies? -- Who Are the Stakeholders of Reform? -- The Theoretical Basis -- Welfare Indicators and How to Measure Them -- Qualitative Analysis -- Quantitative Analysis -- Generating Better Data -- Limitations of the Methodology -- The Advantages of PSIAs for Designing Reform -- PART 2 Case Studies -- Chapter 3 Energy Reforms and Trends in Household Consumption -- Patterns of Reform -- Trends in Residential Electricity Consumption -- Service Quality and Availability -- Nonpayments -- Other Energy Sources -- Other Network Fuels: Gas and District Heating -- Non-network Fuels -- Changes in Consumption across Income Groups -- Conclusion -- Chapter 4 Raising Prices in Armenia-What Happens to the Poor? -- Before the Price Hike -- Residential Energy Consumption in Armenia -- Uses of Energy -- Energy Consumption and Expenditure -- Improvements in Electricity Supply -- How Households Cope with Increasing Collections -- Use of Substitutes -- Attitudes to Reform -- Who Suffered Most: The Impact of Reform -- Magnitude of the Tariff Increase -- Overall Impact of the Price Increase -- Effects on the Poor and Nonpoor -- Effect on Bill Amounts and Payments -- Arrears Levels for the Poor and Nonpoor -- How Effective Was the Cash Transfer? -- Targeting Effectiveness of the Cash Transfers -- Effectiveness of Transfers in Softening the Impact -- Conclusion.

Chapter 5 Nonpayment and Power -Georgia -- Deep Declines -Then High Expectations -- Residential Energy Consumption in Georgia -- Availability of Energy -- Changes in Relative Energy Prices -- Effect of Reform on Energy Consumption -- Changing Household Energy Expenditures -- Changes in Service Quality -- Welfare Implications of Changes in Electricity Consumption -- More Use of Gas -- Impact of Increased Use of Traditional Fuels -- How Was the Utility Able to Increase Revenues? -- Prices -- Subsidies -- Service Quality -- Remetering and Enforcement -- Nonpayment: Affordability or Free-Riding? -- How Effective Were the Mitigating Transfers? -- Proposing a Better Mitigating Strategy -- Conclusion -- Chapter 6 Does Privatization Hurt the Poor of Moldova? -- The Long Slide -- Residential Energy Consumption in Moldova -- Effect of Reform on Electricity Consumption -- Effect of Reform on Service Quality -- Differences between Urban and Rural Households -- Did Reform Hurt the Poor? -- A Difference between the Private and Public Utilities? -- How Effective Was the Social Transfer System? -- Proposing a Better Mitigating Strategy -- Conclusion -- Chapter 7 Timing and Sequencing of Raising Rates -Azerbaijan -- Energy Rich, with Unrealized Power -- Residential Energy Consumption -- How Will Households Respond to Tariff Increases? -- Effect of Reform on Consumption -- Household Electricity Demand Model -- How Much Households Need to Be Compensated -- Differences between the Poor and Nonpoor -- Availability of Substitutes -- How to Mitigate the Impact of Tariff Increases -- Increase Tariffs Gradually -- Link Tariff Increases to Service Quality -- Improve Efficiency of Energy Use -- Improve Access to Clean Substitutes -- Consider Lifeline Tariffs or Direct Transfers -- Outside Baku -- Conclusion.

Chapter 8 Coping with the Cold: Heating Strategies for the Urban Poor -- Inefficient District Heating Systems -- Household Demand for Heat -- Estimating the Demand for Heat -- Household Heat Consumption -- Household Heat Expenditure -- Rethinking Heat Supply -- The Cost of Full Service -- The Cost of Reduced Service -- Other Policies -- Conclusion -- PART 3 Lessons -- Chapter 9 Implications for Operational Design -- Simulating the Impact of Tariff Reforms -- Softening the Blow: Direct Transfers and Lifeline Tariffs -- Other Considerations -- Other Pro-Poor Mitigating Measures -- Explicitly Link Tariff Increases to Improvements in Service Quality -- Raise Tariffs Slowly -- Raise Collections First -- Increase Access to Gas or Other Clean Substitutes -- Make Metering a Priority -- Investments in Efficiency -- Financing Instruments -- Mitigating the Environmental Effects of Reform -- Environmental Benefits from Increased Energy Production Efficiency? -- Environmental Costs from Fuel Substitution -- Electricity Reform and Deforestation -- How to Improve the Environmental Effects of Reform -- Chapter 10 Conclusion: Designing Reforms to Produce Better Outcomes for the Poor -- Tariff Reform: Where Do We Stand? -- How Do Reforms Affect the Poor? -- Residential Energy Consumption -- Nonpayment: Affordability versus Free-Riding -- Elasticity of Electricity Demand -- Coping Mechanisms -- Improvements in Service Quality -- Designing Effective Mitigating Strategies -- Direct Transfers or Tariff-Based Subsidies? -- Improving the Efficiency of Energy Consumption -- Raising Tariffs Gradually -- Controlling Consumption -- Designing and Implementing Successful Reform -- Improving Cost Recovery -- Outside Factors Affecting Reform -- Designing Suitable Policies -- Analyzing Reform: The Potential of PSIAs -- Generating Better Data and Evidence -- Involving Stakeholders.

Building Capacity -- Lessons for PSIAs -- Necessary Steps -- Adapt to Local Context -- Allow Adequate Time and Resources -- Reframe Controversial Issues -- Involve a Broad Range of Stakeholders -- Ex Post and Ex Ante Approaches -- Alternatives to Privatization -- Conclusion -- Annexes -- Annex 1 Overview of the Reform Process in Eight ECA Countries -- Annex 2 Summary of Household Survey Data -- Annex 3 Converting Energy Prices into Cost per Effective Btu -- Annex 4 Combined Household Survey and Utility Data for Four Countries -- Annex 5 Changes in Generation Mix in the Past Decade and Price and Income Elasticity of Demand Estimates -- References -- Index -- Boxes -- 4.1 Data for the Analysis -Armenia -- 5.1 Data for the Analysis -Georgia -- 6.1 Data for the Analysis -Moldova -- 6.2 Nominative Targeted Compensation Categories -- 7.1 Data for the Analysis -Azerbaijan -- 8.1 Methodology and Data Sources -Heat Demand -- Tables -- 1.1 ECA's Generally Higher Incomes and Better Human Development Indicators -- 1.2 Access to Power Is Higher in ECA -- 1.3 Components of Energy Sector Reform as Promoted by the World Bank in 1998 -- 1.4 Reform Goals and Indicators in ECA: Improved Service Quality, Resource Efficiency, and Fiscal Balances -- 1.5 The Timing of Costs and Benefits Are Often Mismatched -- 2.1 Winners and Losers from Reform-A Typology of Consumers -- 3.1 Timeline of Reforms in the Electricity Sector in ECA -- 3.2 Urban Non-network Energy Use in ECA -- 4.1 Wood and Electricity Make Up the Bulk of Household Winter Energy Expenditures -- 4.2 The Burden Is Higher for the Poor -- 4.3 How Are Households Reducing Reliance on Energy? -- 4.4 Prices of LPG and Wood, December 1999 -- 4.5 Aggregate Impact of Electricity Tariff Change -- 5.1 Aggregate Impact of Reform on Collection Rates in Tbilisi -- 5.2 Electricity Subsidy Incidence by Quintile in Tbilisi.

5.3 Transfer Coverage in Tbilisi -- 5.4 State Budget Payments to the Energy Sector, 2001-03 -- 5.5 Simulation of Cost-Effectiveness of Different Transfers in Tbilisi -- 6.1 Share of Electricity Expenditures by the Poor and Nonpoor, 1999 and 2003 -- 6.2 Change in Electricity Consumption and Expenditures, by Location -- 6.3 Consumption, Payments, and Percentage of Income Spent on Electricity by Union Fenosa and NRED Customers, 2000-03 -- 6.4 Change in Electricity Consumption between 2000 and 2003, by Type of Provider and Location -- 6.5 Net Sales at State-Run Electric Utilities and Union Fenosa, 1999-2002 -- 6.6 Electricity Losses by Union Fenosa and the NREDs, 1999-2002 -- 6.7 Households Receiving Nominative Targeted Compensation for Electricity, by Income Quintile -- 7.1 Tariffs Are Lower and Consumption Is Higher in Azerbaijan -- 7.2 Differences between the Poor and Nonpoor in Baku Are Small, 2002 -- 7.3 Electricity Consumption and Service Quality Vary Widely by Location -- 7.4 Changes in Consumption under Different Elasticities in Baku -- 7.5 Rising Income Will Offset the Blow of Tariff Increases on Baku Households' Budget Shares -- 7.6 Household Consumption and Income Loss under Alternative Tariff Scenarios -- 7.7 Compensation for the Poor in Baku Should Be Higher -- 7.8 Households with Less Access to Substitutes Consume More Electricity -- 9.1 Percentage Point Change in Consumer Surplus Following Electricity Tariff Increase to Full Cost Recovery -- 9.2 Per Household Annual Cash Compensation to Offset Electricity Tariff Change for a Range of Demand Elasticities -- 9.3 Leakage and Coverage Are Highly Correlated, 2002 -- 9.4 Potential Maximum Loss of Life and Life Years from Indoor Air Pollution -- A1 Overview of the Reform Process in Eight ECA Countries -- A2.1 Power Sector Access, Payment, and Affordability for Urban Households in 2002.

A2.2 Power Sector Access, Payment, and Affordability for Rural Households in 2002.