The study is motivated by the question "what is the optimal tariff design?" While we do not offer an answer to this question, we use the different designs in four select countries to illuminate the issues involved in designing electricity network tariffs. Electricity networks are a resource shared by all network users. A tariff design that is clear to network users and well understood by them can help them make efficient decisions. A design that sets up conflicting or perverse incentives results in economic distortions. We find that there are a variety of choices and trade-offs while designing the electricity network tariffs for any electricity system. The tariff design must not only be influenced by the technical and economic characteristics of the system, but also the secondary policy objectives that policy makers wish to achieve, while allowing network companies to recover the costs of building and maintaining the network. A design that sets up conflicting or perverse incentives results in economic distortions. * Corresponding author, MIT Technology and Policy Program and the MIT Center for Energy andA main constraint on the tariff design is the overall budget constraint: the total of all charges to all users must be sufficient to cover the costs of the network and afford the network company an adequate return on its capital. On the other hand, the total of all charges should be kept reasonable, in the sense that the network company is not extracting monopoly profits.Transmission networks are different from distribution networks in terms of their technical requirements and usage patterns. Tariffs may therefore be designed differently for the two types of networks to provide specific incentives to the respective users. We discuss tariff designs for both types of networks.To set the stage for the description of alternative tariff designs, it is beneficial to revisit the issues arising out of the economic characteristics of electricity networks and the consequent regulatory provisions.Page 5 of 108 NETWORK CHARACTERISTICS Natural MonopoliesElectricity networks -both transmission and distribution -are treated as natural monopolies because of the existence of economies of scale and scope in the delivery of electricity. Economies of scale exist when a firm's average cost of production declines as output increases. Economies of scope exist when it is cheaper to produce combinations of different products within a single multi-product firm, than to have specialty firms produce the different products (Panzar and Willig 1981).Electricity networks achieve economies of scale when their capacity is sized to meet the demand for all network users within their network territory. For a given network capacity, the average cost of production decreases as the capacity utilization increases, and is lowest when utilization is maximized. The average cost of production is lowest if the network company sells to the entire market, that is, when it meets the total demand. Competition in electricity networks for a particular se...

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Satellite imagery is a form of big data that can be harnessed for many social good applications, especially those focusing on rural areas. In this article, we describe the common problem of selecting sites for and planning rural development activities as informed by remote sensing and satellite image analysis. Effective planning in poor rural areas benefits from information that is not available and is difficult to obtain at any appreciable scale by any means other than algorithms for estimation and inference from remotely sensed images. We discuss two cases in depth: the targeting of unconditional cash transfers to extremely poor villages in sub-Saharan Africa and the siting and planning of solar-powered microgrids in remote villages in India. From these cases, we draw out some common lessons broadly applicable to informed rural development.