Economists sometimes get confused - especially when the real world doesn't fit into their neat boxes.
There was a time when utilities sat down with neighbors to listen to local concerns.
Let's bring it back . When was the last time your local utility held an open house to talk about its latest project, or how it might affect the community?
During the 1980s and early 1990s, many leading utilities learned to engage the public through open meetings whenever the siting of a new facility might prove controversial. Florida Power & Light used advisory groups to help select routes for transmission lines. Kansas City Power & Light conducted an open house on electric and magnetic fields (EMF) that drew more than 1,000 participants--with staff serving as baby-sitters while parents participated! Cincinnati Gas & Electric even sponsored a national conference on public participation.
Utility associations got into the act as well. Edison Electric Institute (EEI) sponsored a public participation guide. EEI, the American Public Power Association, and the National Rural Electric Cooperatives Association all scheduled training courses on public involvement. Public concerns about possible health effects associated with EMF led EPRI and the Tennessee Valley Public Power Association to offer training courses and guides on communicating with the public about those possible risks.
But sometime during the 1990s, public involvement disappeared. The utility industry became focused on issues related to deregulation. Many of the siting issues that drove them to work with the public were put on the back burner. Now utilities that once had extensive public participation programs have been out of that practice for five years. Many have "down-sized" and, in the process, lost staff with expertise in public participation.
But wasn't that at least one of the reasons for deregulation: to get away from all the bureaucracy that slows projects and raises costs? Some argue that in the new deregulated environment, utilities will not be able to use the open deliberative processes they used in the 1980s. They will need to move more quickly to compete with unregulated companies. And, they say, competition increases the need to keep business plans confidential.
I would argue that they're dead wrong. In fact, public interest in vitally every aspect of utility operations makes the need for public involvement more important than ever. Not only will we see utilities return to engaging the public in their plans, but we'll see them take a more direct, consensus-seeking approach. Utilities will forgo the town square meetings of yesterday in favor of working with local governments and immediate neighbors directly to solve problems.
NIMBY: Now More Than Ever
Pacific Gas & Electric hadn't done any public participation in several years when, with California's deregulation laws finally in place, it began siting new facilities once again. Two new substation projects immediately ran into problems. After meeting with major local controversy on one project, PG&E set up a neighborhood group to consult on site selection. For awhile, PG&E thought it had come up with a better solution, but it found it had just shifted the problem to a new neighborhood. Eventually, PG&E found a way other than building a substation to solve its problems.