Electric Power Projects

Deregulation of the electric industry has made public acceptance of power generation and transmission facilities even harder to win, as economic competition has transformed the old “compact” among consumers, utilities and state regulators. Until recently, this compact guaranteed an equitable balance between the risks of building new facilities – broadly defined as their perceived impact on the public’s quality of life – and the benefits of improving local service. But as more and more projects are tailored to meet the needs of distant customers, or to fulfill strategic business objectives in a deregulated marketplace, community opposition has inevitably begun to rise.

The implications of this trend for project developers are significant. Increasingly, the best generation site will often be the one that local “stakeholders” (e.g., grassroots groups, public officials and environmental organizations) agree to let them to build on, not necessarily the one that lies closest to existing gas and power lines. As good plant locations become harder to find, developers who anticipate and minimize “stakeholder risk” will hold a vital strategic advantage over their competitors. As a result, success in the emerging marketplace will often depend as much on earning community support for new facilities as it does on producing electricity at the right time or price.

It is widely recognized in the energy industry and at all levels of government that America’s electric power infrastructure is woefully inadequate to meet our present and future energy needs. At the same time, opposition to power lines is growing. New high-voltage transmission corridors proposed by the federal government in the Northeast are opposed by environmental and citizens’ groups, and public officials at the local and state levels are heeding the pressure from their constituents. Short-term, the prospects for new transmission projects are doubtful.

Read a recent Terra Group study titled "Electric Transmission and Carbon Reduction: A survey of State Regulators and Environmental Leaders."

In addition, energy needs in developing and developed countries around the world are increasing. Independent power producers are seeking opportunities in these developing markets, and are finding that, in most cases, public attitudes toward these projects are predictable – local residents want to be assured that the risks they perceive from a nearby facility will be balanced (or exceeded) by benefits. Techniques to address local stakeholder concerns, therefore, are based on the same principles that have been tested and proven in the U.S.

The Terra Group specializes in building public support for large capital projects by understanding who the stakeholders will be and by designing and implementing a siting campaign that minimizes or avoids community opposition. The key to this campaign lies anticipating such opposition and setting the terms of public debate about your project. This will require a thorough understanding of the operating environment and a willingness to engage extensively with project stakeholders.