The Burdens of Being Part of the Stakeholder

from Wikipedia, e-consultation.org

As marine renewables projects move forward in the United States, the stakeholder process for making decisions about siting is fast becoming an entrenched practice.  That’s not surprising, because here in the United States, in particular, we revere the stakeholder process as a tool for regulatory decision making.  And after all, what’s not to like?  At least on the surface, the stakeholder process is inclusive and democratic.  By working together, the theory goes, the parties build trust and arrive at decisions that are less vulnerable to court challenge.

But is the stakeholder process really all it’s cracked up to be?  I’m not sure.  For starters, the costs are enormous, and the burdens to small parties are imposing.  Consider the views expressed by a Iberdrola, a decent sized wind farm developer in a recent FERC proceeding on the issue of integrating renewables into the grid (as an aside, I’ve not posted on integration of marine hydrokinetics because the technologies are barely pre-commercial – but if you’re interested in the issues, the Oregon Wave Energy Trust recently completed a study on wave integration issues in Oregon).   As the New York Times Climate Blog reports, Iberdrola commented that the stakeholder meetings used by regional transmission groups to adopt practices for integrating wind are themselves discriminatory because smaller developers cannot afford to participate on a regular basis.  the Times notes that the Midwest Independent Transmission System Operator (MISO) held 600 stakeholder meetings in a year’s time, thus precluding participation by all but well funded utility staffers.

The stakeholder process for marine and hydrokinetic isn’t much better.  Though there are far fewer meetings, companies that can afford the process, as well as funded resource agency and NGO staff, are generally able to negotiate better deals more expeditiously than those who can’t afford the process.

More importantly, are the results of an extensive stakeholder process necessarily better?  I’m not so sure of that either.  Most parties believe that when they negotiate and file a settlement, that FERC will rubber stamp it, incorporate it into the terms of the license and enforce it.  That’s not necessarily the case.  FERC has very specific rules on the settlement process, and will decline to include measures that go beyond what is required by the public interest standards of the Federal Power Act.  As a result, parties who believed they were going to obtain a certain result because of expectations from the settlement process, may later learn that what they negotiated can’t be enforced.   These parties will feel cheated by the settlement process, thus breeding mis-trust rather than fostering it.

There’s a final problem with the stakeholder process.  As Philip Howard points out in this video, we can take the democratic process too far to the point where it erodes the authority of the regulatory agencies that Congress endowed with the power to make decisions in the public interest.

Naturally, I don’t think that we should eliminate the stakeholder process but rather, change it to make it work better for all involved.  First, the stakeholder process ought to take advantage of today’s low cost tech tools, and conduct a majority of meetings online and exchange documents and make information available through online portals.   Second,  the process should clearly delineate levels of interest or expertise.  If a pipeline or wind farm is going up on an individual’s property, they deserve a full level of input without question.  But for those whose interests are more remote, comments should be limited to discrete time frames in the proceeding.  More importantly, technical issues ought to be addressed by experts.  Stakeholders shouldn’t be coming up with lists of studies; that’s the job of developers and resources agencies, as informed by scientists or other experts.   Finally, what’s most significant is that agencies and developers need to keep the purpose of the proceeding in mind.  Development studies aren’t done for fun or interest – they are intended for the specific purpose of generating data to enable agencies to make decisions consistent with their statutory mandates.  Thus, the process needs to begin with the end:  identifying an agency’s objective and figuring out how to develop the information that the agency needs to meet its mandate.

Though the recent permitting of Cape Wind was gratifying, the offshore renewables industry in the United States can’t survive with costly, protracted permitting processes.   Of course, perhaps that’s the biggest problem of all — our focus on processes rather than solutions.