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In a recent New York Times article, Bill Richardson, former U.S. Department of Energy Secretary and current New Mexico Governor, referred to the United States electric transmission system as a “third world” grid. While many might take issue with that assessment, there is little argument that investment in U.S. transmission infrastructure has not kept up with the need for this new infrastructure.

For a time following the rolling blackout in the northeastern United States in August 2003, the need to upgrade the transmission grid took center stage. Political momentum peaked in 2005 with the adoption of the Energy Policy Act of 2005 (EPACT), which gave the Federal Energy Regulatory Commission (FERC) new “backstop” powers to move certain interstate transmission projects forward where those projects were either rejected or delayed at the state level.

Yet fully five years after the August 2003 blackout and three years after EPACT, approvals for new transmission projects typically take years of effort. Realistically FERC's backstop authority will apply only in a limited number of projects and has yet to be fully tested. So utilities remained challenged to convince the public of the need for these projects. This article looks at some of the innovative ways utilities are approaching the public.

Public Opposition: It's More Than Just “NIMBY”

Getting public and regulatory approval for large projects that stretch for miles and impact large numbers of landowners is difficult and generally results in a public relations nightmare for utilities if not properly handled. As most siting managers or transmission planners will tell you, the lexicon of terms describing the public's reaction to new transmission projects goes beyond “NIMBY” to include “CAVE” (Citizens Against Virtually Everything), “BANANA” (Build Absolutely Nothing Anywhere Near Anyone), “LULU” (Locally Undesirable Land Use”), “NOPE” (Not On Planet Earth”), and “NIMEY” (Not In My Election Year). Even utilities that attempt to bring renewable resources to the market, such as San Diego Gas & Electric with its Sunrise Powerlink project, face tough opposition from increasingly sophisticated interest groups.

In the face of potential opposition, many utilities cling to the “slash and burn” method. These utilities figure that the best approach to public opposition is to meet it head on with a strong project need statement and a good team of lawyers.

In contrast, a growing list of companies, including American Transmission Corporation (ATC), Public Service Company of New Mexico (PNM), Progress Energy Florida (PEF), Central Vermont Public Service Corporation (CVPS) and Vermont Electric Power Company (VELCO), are pursuing a different approach. These companies are engaging the public well in advance of any regulatory filing. And while each has used a slightly different model, they have all achieved success both in terms of a more accepting regulatory environment as well as improved relationships with their respective constituents.

Proactive Community Involvement

STAR Group and UtiliPoint partner to work with utilities on proactively engaging the public on major utility investment programs such as transmission lines and power plants. STAR Group's Utility Search Conference^® process has proven to be one effective method for proactively engaging the public. The underpinning of this approach is a combination of several factors. Critical among these is a genuine commitment—at the highest levels within the utility—to engage and work with the utility's stakeholders on major infrastructure projects.

Significantly, engaging the public does not amount to ceding control over the project to the “unenlightened masses,” nor does the process require unanimity among participants. In the Utility Search Conference model, the process of engaging the public is one in which a tremendous amount of information is shared in both directions: from the utility to its stakeholders and from the stakeholders to the utility. For example, the utility often will provide information on the project need, the legal and regulatory constraints under which the utility is required to operate—including “reasonable cost” requirements that often make underground options either not feasible or not desirable for many—and the significant land use and other factors that the utility has already examined in connection with the project. Stakeholders give feedback on those things that the community values most highly as well as the participants' desire for reliable, affordable electric power. Stakeholders also give the utility crucial information about other land use plans, where poles can placed that are likely acceptable to the public, and provide feedback on transmission structure design options.

Rather than “selling” the public on the project, the process is designed to enable a rational exchange of information among key stakeholders. The utility has the opportunity to describe the problem(s) it is facing and its current set of possible solutions. The other stakeholders, in turn, are able to communicate their values and concerns in relation to the problem and the possible solutions being considered by the utility.

Among its many benefits, the process engenders trust and respect among all participants. Members of the public realize that the utility and its representatives are not some “evil force” that develops projects solely for its own ends, but rather as people who face significant challenges in building a system that can deliver safe, reliable energy. Utility representatives no longer view members of the public as “crazy” or irrational, but rather as individuals who care about their community and who are equally invested—with the utility—in maintaining or improving their quality of life. From this (often newfound) respect for one another, trust is built among the utility and its stakeholders. And where trust is built, tremendous opportunities arise for collaboration and positive outcomes.

Applying the Process

A structured approach for engaging the public has produced dramatic, positive results for utilities. In one case, PNM employed such a process following a previous, failed attempt to construct a transmission line near Santa Fe, New Mexico that cost the company over 12 years and $15 million. After using the Utility Search Conference method, PNM successfully sited a new transmission line for Santa Fe that received unanimous approval from each of the seven regulatory bodies that were required to approve it.

Of course, an extensive public involvement process is not always required and the Utility Search Conference method is not the only approach that has proven to be effective. Some projects lend themselves to more traditional forms of public outreach. In the end, the process used or the name given to the process is not what matters; what matters is that people who have a stake in their community's quality of life—however “quality of life” is defined within that community—are provided a genuine opportunity to become well-informed about and provide meaningful input regarding any major project that is likely to impact their community.

Utilities that recognize that their projects do affect a community's quality of life and that are willing to provide a credible method for reaching out and listening to their stakeholders regarding major infrastructure projects will:

• exercise a far higher degree of control over the process by which stakeholders are engaged and heard;
• avoid embarrassing 11th-hour surprises that could disrupt or kill a project;
• have much greater likelihood of receiving necessary regulatory approvals;
• significantly reduce the amount of time spent in costly litigation and other delays;
• improve the utility's good will in connection with the project; and
• improve the utility's credibility with stakeholders and regulators, making the utility's next project that much more feasible

Utilities that have embraced a well-structured and balanced approach to public involvement have found that members of the public can not only help enhance the overall quality of the project but also are willing to speak favorably on behalf of the utility during the regulatory approval process.

A well-conceived and properly executed stakeholder involvement process is a proven technique for building long-lasting relationships and should be considered for any utility project that is—or is perceived to be—likely to have a significant impact on the community.

Christopher G. Kenny is President of STAR Group, LLC (www.stargroupconsulting.com). Chris may be reached at ckenny@stargroupconsulting.com or at (505) 263-7067.