Taking a different view on merchant development.
The Nov. 15 issue of included an article entitled...
deregulation, rates and services presumably will be more market-driven. The need for extensive rate hearings could be eliminated. On the other hand, large public purchasers of power, such as city or county governments, may subject companies to extensive public processes in order to choose suppliers. Price may be the major determinant, but the reputation of the supplier also may be a factor.
Utilities now are embroiled in two areas of public controversy related to operation of existing facilities: (1) watershed management plans, and (2) the Environmental Protection Agency's Right to Know Act.
A number of utilities are developing watershed management plans as a tool for protecting water quality in reservoirs created by hydropower dams. Many utilities are recognizing the need to consult with the public on these plans, because they raise thorny environmental issues and could result in curtailment of existing land uses such as grazing or some forms of recreation.
Further, under new EPA rules, utilities now come under the provisions of the Right to Know Act and will be required to release far more information to the public about air emissions and the discharge of toxic or chemical materials. This requirement is likely to engender new controversies that will require working with communities.
Building Consensus: Never Out of Fashion
Based on this analysis, I predict several trends. First, as mentioned, public participation will continue to be needed in the deregulated environment; if anything, its strategic importance may be greater. But there will be a movement away from large public hearings toward more direct, consensus-seeking approaches to public participation.
Many of the requirements for formal public hearings will be reduced, although requirements for public hearings associated with environmental impact studies may continue. Hearings may have made sense in the regulatory setting, where the greatest concern is visibility and equality of treatment. But without those requirements, the utility's greatest concern will be solving problems in ways that are acceptable to local governments and immediate neighbors. Most people in the public participation field recommend interactive approaches like advisory groups, coffee klatches in neighbors' homes, workshops, open houses or door-to-door visitation.
The goal shifts from satisfying procedural requirements to getting the political consensus needed to proceed with the project. This shift necessitates a different kind of public participation, as shown in the table, "A New Approach to Public Outreach."
Finally, in coming years utilities will develop organization-wide public participation strategies and skills-building programs. Utility management will begin to see public participation as a management issue, not just a siting concern. When they do, they will find that they have lost much of the expertise they once had, and will need to train staff and hire new staff with the skills needed for effective public participation.
Although public participation initially will be seen as a necessary but unfortunate requirement of doing business in deregulated markets, management may soon find it to be an important competitive tool. As staff become more attuned to public expectations and needs, they will be better able to anticipate public concerns and develop products that address those needs.