To Turn Adversaries into Advocates, Begin with the End in Mind
- Jul 21, 2020 3:39 pm GMT
This image from the New York Times (left) is every energy company’s PR nightmare. But even with the heightened stakeholder activism and protest proclivities of our time, your energy project or program doesn’t have to get stalled by a buzz saw of public opposition.
How can energy companies avoid ugly public protests and knock-down public brawls with stakeholders? One way is to recall Stephen Covey’s admonition that highly effective people (and institutions) begin with the end in mind. By acting strategically, energy companies could expedite desired projects and avoid this type of public protest and, in the process turning adversaries into advocates.
Consider this truism: “An ounce of prevention is worth a pound of cure.” Did you ever hear that when you were growing up? Maybe you’re telling that to your children today? It was right then, and it is right now.
Turning Stakeholders into Advocates
In a recent virtual conference session on customer disrupters organized by the Western Energy Institute (WEI), I joined FortisBC’s Colin Norman (right) in speaking about the importance of proactive stakeholder engagement and customer advocacy.
Colin’s talk focused on how FortisBC’s natural gas utility was able to secure significant spending increases on demand-side management (DSM) — from $35 million in 2018 to being approved for over $66 million in 2019 and increasing to over $96 million in 2022 — in the fastest and friendliest regulatory process in decades.
Click here to access Colin’s presentation
FortisBC did that by turning traditionally skeptical or adversarial stakeholder groups into supportive, strategic allies. How? By seeking their input before FortisBC filed their DSM request, rather than meeting them on the courthouse steps after litigation had begun.
“Consultation works,” he said. “Try it!”
In his talk, Colin acknowledged that FortisBC had regulator/stakeholder trust issues. Their previous DSM plan resulted in over 600 information requests and took 14 months to implement.
But FortisBC was wondering if there was a better, faster, and less costly way to go. There was! During the summer and fall of 2017, it held over 110 consultations with customers, contractors, communities, indigenous peoples, vendors and interest groups in an effort to build a more effective gas DSM portfolio.
By seeking stakeholder input at the beginning of the process, and developing a plan in collaboration with those stakeholders, FortisBC was able to cut in half the time needed to secure regulatory approval, reduce by over 40% the number of information requests, and dramatically increase its DSM spend.
In approving the FortisBC gas DSM budget, the British Columbia’s regulatory panel “supported (FortisBC Energy Inc.’s) collaboration with other parties and commended (the company) for achieving the associated cost savings.” When, Colin asked rhetorically, was the last time a regulatory panel went out of its way to recognize a company it regulates?
By consulting with their stakeholders prior to filing their gas DSM portfolio, FortisBC learned that stakeholders placed a high value on the greenhouse gas savings of the DSM plan. That helped the energy company frame the benefits of the program around GHG savings and climate change mitigation.
Four Takeaways to Protect Your Project
Colin has four key takeaways from their gas DSM portfolio planning process:
1) Engage stakeholders early, listen to what they have to say and show them how you've implemented their feedback.
2) Listen to the Regulator and include them as an observer in the stakeholder consultation process.
3) Use an external facilitator for workshop sessions.
4) Pursue letters of support to aid the submission.
The issue of customer disruptors is particularly timely now, as energy developers have plans to begin construction on hundreds of billions of dollars of energy projects across North America over the next five years. These projects include nuclear power plants, oil & gas drilling projects, liquefied natural gas (LNG) export terminals, gas pipelines, electric transmission & distribution projects, wind farms, solar projects and more. Delays and litigation are a perennial threat that can be reduced by proactive stakeholder outreach.
Earlier this month, the owners of the $8-billion Atlantic Coast Pipeline project decided to abandon the project after investing billions of dollars over a six-year period and running into prolonged stakeholder opposition. One day after that announcement, two federal courts issued rulings against the Dakota Access Pipe Line and Keystone XL pipeline. Would increased stakeholder engagement have changed any of those decisions? Hard to say, but as they say about chicken soup, “It couldn’t hurt!”
Changing Hearts and Minds with Face-to-Face Outreach
There are a lot of ways to engage stakeholders; face-to-face (F2F) is one of many tactics available to energy companies. In my experience, F2F is an under-utilized tactic. We have blogged on F2F before, such as here and here and here. Are energy companies warming to the idea? I hope so.
In the current COVID-19 pandemic one needs to exercise caution in trying to schedule F2F meetings with stakeholders. However, at the WEI virtual conference session, I urged attendees to begin planning for a more robust F2F engagement of stakeholders. I shared brief case studies of four U.S. energy companies that built stakeholder advocacy through such outreach.
Encana, an oil & gas driller that was active in Colorado a few years ago, was able to defuse community opposition to drilling and secure a memorandum of understanding with the city of Erie to drill for oil & gas within its boundaries. Company officials relied on F2F outreach, specifically a door-to-door informational campaign and a series of open houses, to proactively persuade the persuadable.
- Fayetteville (NC) Public Works Commission years ago created a Community Advisory Group (CAG) of roughly 20 members that provided critical linkage between the community and the energy company. Originally envisioned as a standing focus group, the group’s mandate was expanded and it became a more robust advisory panel to the company’s leadership, weighing in on current issues, upcoming projects, upcoming Board decisions, and proposed communications. A spokesperson for the energy company said the CAG has led to better decision-making by the company’s leadership.
- Louisville Gas & Electric, and its sibling company Kentucky Utilities, has for over 20 years been mobilizing its retirees to act as the voice of advocacy for the energy companies within the community. Retirees, an often-overlooked stakeholder group, are especially credible to their neighbors because they speak “on a ‘guy next door’ level, without sounding corporate,” the group’s coordinator told me. “We are consciously using retirees to expand our reach into the community.” Click here to read my article on this program in the American Gas Association’s magazine.
- The Chattanooga Electric Power Board was able to successfully launch its broadband service because it had 500 employees and 400 retirees who served as the product’s adjunct sales force. Employees and retirees were asked to serve as “megaphones” and become the company’s feet on the street, the energy company’s general manager told me. He added that this adjunct sales force was 10 times more effective than issuing press releases on the new service. “It always comes down to people, complex technology notwithstanding,” he said.
The good news is that state regulators may allow your company to recover, and earn a return on, your outlays for F2F communications. Check with your regulatory affairs people!
Click here to access my presentation.
Now is NOT the time to launch a door-knock campaign during this COVID crisis, I told the WEI attendees. But now IS the time to build a F2F outreach capability plan that will, when it is safe again, become that powerful megaphone for your company’s activities and initiatives.
Lacking proactive cultivation of stakeholders, energy companies expose themselves to greater levels of customer opposition to proposed projects, higher costs, diminished employee commitment, greater uncertainties and delays in bringing projects online. If this is not the end you seek, now is the time to begin developing a F2F outreach capability.
All photo credits iStock/Getty unless otherwise indicated.
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