Effective public participation: Some "whys" and "hows" for regulators

An IndEco article

By: Judy Simon

This paper addresses what effective public participation is, the benefits of effective public participation, and how we might achieve this goal. It also focuses on some of the experiences of the Ontario Energy Board (OEB) and the lessons we have learned.

What is effective public participation?

Defining what constitutes effective public participation is not an easy task. In the OEB’s report on demand-side management In May 199, the OEB decided to address integrated resource planning related to Ontario’s natural gas utilities based on a building block approach, examining DSM as a first step. The Board held an oral hearing on DSM, from December 1992 to January 1993, and issued its report, E.B.O. 169-III, containing guidelines on how the utilities were to proceed with DSM in July 1993., the Board said that in order for consultation to be effective, it must have three ingredients:
  • Involvement of appropriate parties
  • Meaningful input from them
  • Input at each of the major steps in the planning process.

However, consensus on issues by all parties is not necessary in order for consultation to be effective.

This definition raises a number of questions such as: “Who are the appropriate parties?,” “What is meaningful input?,” and “What are the major steps”? The OEB tried to answer these questions in the DSM report and in several subsequent Board repots and decisions which built on the earlier work. It is expected that this will be an ongoing exercise as we continue to learn form the various public consultation initiatives that we try.

How to implement effective public participation

Who are the appropriate parties?
OEB has answered this question as follows:
  • Parties should be consulted on matters of significance that affect them.
  • Consultation should be broad-based and include representation of diverse perspectives. For example, this would include residential, commercial, and industrial customers; special interest groups, such as environmental and aboriginal groups; and local and provincial government representatives.
  • Consultation should be balanced, manageable, and minimize unnecessary duplication.

What is meaningful input?
OEB has stated that meaningful input requires the following:
  • Consultation must take place before making irreversible decision regarding the matter being considered.
  • Stakeholders must be consulted to determine what issues they would like to determine what issues they would like to be consulted on and how they would like the consultation effort to be structured.
  • Participants must be advised on how their input was taken into account in the decision-making process and must be provided with the reasons for the decisions made.
  • The party doing the consulting must demonstrate an ability and willingness to incorporate participant input into the decisions made.

Participant funding
The OEB recognizes that participant funding is often necessary in order to have meaningful consultation efforts. The OEB has Cost Award Guidelines and we also have provided guidance on participant funding for nonhearing related consultation, which we have asked the natural gas utilities to undertake.

In 1989, Ontario’s Intervenor Funding Project Act was passed, providing the opportunity for eligible persons to receive up front financial support for their participation at OEB hearings paid for by the proponent of an application. These costs in advance were then deducted from any subsequent awards to avoid double recovery. With over seven years of experience with this Act, the OEB found that intervenor funding broadened the scope of evidence that the Board received, which was of assistance in the Board’s decision-making. Therefore, the OEB supported the continuation of intervenor funding.

The loss of the Intervenor Funding Project Act, which was allowed to sunset in March 1996, challenges all parties – the OEB, the utilities, and the intervenors – to devise creative ways of addressing the funding issue. For example a utility could volunteer to make an appropriate sum of money available for participant funding. Many more options are possible.

What are the major steps of the planning process?
The third question related to the issue of effective public participation is, “What are the major steps of the planning process that require consultation?” The answer to this question is that the major planning steps are those where key decisions regarding the outcome of the process are made; public participation must be an integral part of the planning process not something that is carried out in parallel.

To illustrate these points, I will discuss the steps in two different planning processes.

In the DSM planning process, the Board, in the DSM report, delineated the following planning steps:
  • Development of plan objectives.
  • Identification of potential DSM programs.
  • Selection of program screening criteria.
  • Screening and selection of candidate programs.
  • Selection of the preferred DSM portfolio.
  • Evaluation of portfolio implementation strategies.
  • Selection of the preferred DSM plan.
  • Regulatory review at the utility’s rates case.
  • Implementation, monitoring and evaluation of the plan.

The Board indicated in its DSM report that it expects the natural gas utilities to consult with appropriate parties in an effective manner at each of these major steps before irreversible decisions related to them are made. The specifics on how this consultation is to be carried out is left to the utilities to propose and justify.

For leave to construct applications for pipeline and related facilities, the Board describes the major planning steps in the latest version of its publication, Environmental Guidelines for the Location, Construction and Operation of Hydrocarbon Pipelines and Facilities in Ontario, 1995 (Environmental Guidelines).

The major planning steps include:
  • Delineation of the study area.
  • Development of the criteria for identifying alternative routes/sites.
  • Identification of the alternatives.
  • Assessment of the impacts and proposed mitigation measures.
  • Identification of the criteria for evaluating routes/sites.
  • Evaluation of the alternatives.

In the OEBs Guidelines, we recommend that the applicant should hold at least two consultation meetings to discuss these issues. The first should take place before the applicant chooses the preferred alternative route/site and the second should take place after the applicant chooses the preferred alternative and proposed impact management plan.

Overall, we advise that the number and frequency of meetings should reflect the environmental issues and concerns encountered on the project. After each meeting, the applicant should try to resolve outstanding issues by either individual or group meetings.

What are the benefits of effective public participation?

I will discuss briefly the benefits of effective public participation to the utility, the participant, and the regulator.

For the utility, the benefits are:
  • Better planning and decisions through a broader consideration of issues and alternatives.
  • Smoother negotiations with impacted parties.
  • A shorter, cheaper hearing process thorough the early resolution of issues to the extent possible and the focussing on unresolved issues at the hearing.
  • Greater overall credibility with stakeholders and the public.

For the participant, the benefits are:
  • Meaningful opportunities to influence decisions that affect them.
  • Greater understanding of the issues and alternatives.
  • More opportunities to resolve issues early and in a nonadversarial setting.
  • Greater trust for the utility and regulator.

For the regulator, the benefits are:
  • Increased agency effectiveness by being able to make more informed choices and decisions.
  • Greater fairness, openness, accountability, and integrity in its operations.
  • A more cost-effective and efficient regulatory process.
  • More community awareness and understanding of the regulator’s role.

Lessons learned by OEB

The OEB has experimented with several different kinds of public participation initiatives. We have tried a number of nonhearing initiatives on topics, such as a collaborative, a forum, and workshops. We have had policy hearings such as on DSM and direct purchase, and are now involved in a paper hearing on supply-side issues dealing with pipeline and related facility approvals.

Next, I will discuss three OEB examples of nonhearing initiatives and some of the lessons we learned. I will discuss the OEB workshop, on social and cumulative impact assessment, the OEB collaborative on externalities, and the OEB forum on diversification.

Workshop on Social and Cumulative Impact Assessment
As part of the Board’s consultation on the most recent updating of the Environmental Guidelines, the Board hosted a one-day workshop in May 1994 on social and cumulative impact assessment. Participation was limited to the three major natural gas utilities, Board members, and Board staff. The workshop was limited in this way because the results of our broader canvassing of views (e.g. to the gas utilities, environmental, industry and consumer groups, landowner groups and municipalities) on the draft guidelines revealed that only the utilities had significant concerns regarding the proposals for cumulative and social impact assessment contained in the draft document.

The workshop was a success. It gave the utilities an opportunity to explore and clarify their concerns in an open, informal manner and to devise methods to address them. It gave the Board an opportunity to sharpen its understanding of the views of the utilities and how to better accommodate them, while still achieving its overall goals for social and cumulative assessment. Because of the newness of what was being proposed, the process also helped to raise the comfort level for both the utilities and the Board on how to address these types of impact assessment.

Based on the discussion at the workshop, revisions to the social and cumulative impact sections of the guidelines were made and reviewed informally by workshop participants. The guidelines were finalized based on this input. Broader consultation was not necessary because the changes were consistent with the original principles of social and cumulative impact assessment contained in the initial draft.

What did the OEB learn?
What did the OEB learn from the experience with this type of workshop? We learned that this approach works well for identifying and resolving well-defined issues using a relatively small group. The format is useful for informal, but structured, group discussions on policy issues and worked well with approximately twenty participants. Having a facilitator chair the workshop allowed all participants to concentrate on the issues at had, ensured that the discussion ran smoothly, and that the agenda was followed. Preparatory work in advance of the workshop including advance handouts providing general background information on the topics helped to ensure that all participants were starting from a common point and helped to focus the discussion.

The Collaborative on Externalities
The Board asked the three major natural gas utilities in Ontario – Consumers Gas, Centra Gas, and Union Gas – to set up a “Collaborative” as one of the next steps in DSM planning, which arose out of the hearing on DSM. The mandate of the Collaborative had two key components:
  • To identify externality values that are used in other jurisdictions and to make recommendations, if possible, on what values to use in Ontario.
  • To assess methods for qualitative assessments of externalities and to make recommendations, if possible on acceptable approaches.

The Board asked the utilities to fund participants in line with the Board’s Cost Award Guidelines, to consider honoraria to compensate a participant for the value of the time of its employees and officers, and to use experts retained on behalf of the group, rather than underwriting the costs of the experts for individual participants.

There were twelve active members of the Collaborative including representatives from the utilities, consumer, environmental and industry groups and representatives from municipal and provincial governments. In addition, there were fourteen monitoring parties that were kept informed on the progress of the Collaborative and had the opportunity to provide comment on the draft report.

The Collaborative was a mixed success. The Collaborative captured a diverse range of interests and succeeded in dealing comprehensively with a broad range of externalities – greenhouse gases, other air pollutants, airborne toxic metals, radionuclides, land and water impacts, and socio-economic effects – and made recommendations on monetized externality values for greenhouse gases and other air pollutants.

However, the Collaborative did not canvass or develop qualitative approaches for assessing externalities, which was a significant part of its mandate. Also, the Collaborative took a long time to submit its report to the Board. The report was due in February 1994, but was submitted in September 1995, in part because an excessive amount of time was spent trying to resolve the participant funding issue.

What did the OEB learn?
What did the OEB learn from the experience with the Collaborative? I will answer this question from a personal perspective. First, I learned that the Board should provide more specific guidance on participant funding at the beginning when setting up a particular consultation effort to reduce the time and effort on this issue. Second, I learned that the Board has to be more diligent in ensuring that the consultation efforts that it sets up are running well.

When the Board was advised about the problems with funding and the lack of attention being paid to qualitative assessment, we responded some time later by writing a letter to the Collaborative. In the letter, the Board stressed the need for the Collaborative to properly address the qualitative assessment components of the terms of reference and, in addition to expressing its disappointment that so much time was being spent dealing with the funding issue, gave guidance on how to deal with it effectively.

While the letter contained strong direction, it occurred too late in the process. It is also unclear whether such a letter earlier on would have been sufficient to redirect the efforts of the Collaborate. More direct contact, such as through face-to-face meeting with the Collaborative, may have also been required in order to get a better understanding of the issues and how they should be addressed. We need to be more proactive to ensure that consultation proceeds in a timely and effective way.

Diversification Forum
In late December 1995, the Minister of Environment and Energy asked the OEB to obtain stakeholder input and advise her by April 30, 1996 regarding what the ratepayer impacts would be from the diversification of the natural gas utilities into other businesses, services and markets (e.g. water, electricity). In order to carry out the consultation and provide the advice requested by the Minister within the given time frame, the Board determined that a consultative process rather than a formal hearing was the most expeditious way to proceed.

At the end of December, the Board sent a letter to al parties to the utilities most recent rates cases outlining the Minister’s letter, a proposed list of issues, and a schedule for the submission of initial written comments. All written submissions were provided to all participants. The Board received on request from an intervenor for funding assistance in preparing its submission. The Board indicated that it would pay, out of its own budget, travel and out-of-pocket expenses.

On February 29, and March 1, 1996, the OEB held a two-day Diversification Forum to discuss the issues in more depth. Twelve stakeholder groups, the natural gas utilities, Staff of the Board and the two experts retained by the Board attended. The format of the public forum was an open and informal discussion of all the issues. A transcript of the discussions was made and distributed to all participants. The Board received final written submission by the end of March and distributed them to all participants. The Board’s Advisory Report to the Minister of Environment and Energy on Utility Diversification was released on May 15, 1996.

The Forum was a success. The event was well attended, diverse interest were represented, positions were clarified, and there was a good discussion of a wide range of policy issues.

What did the OEB learn?
What did the OEB learn from the experience with the Diversification Forum? Again, I will answer this question from a personal point of view. A forum is an effective way to canvass a broad range of views in a short period of time. I also learned that the range and depth of views expressed is ultimately limited by the time available.

Although it was successful in bringing out views, this approach is not the mot appropriate method for clearly establishing the facts, for doing an in-depth assessment of the technical issues, and for testing the pros and cons of the positions put forward. The hearing process is still the best process for achieving these objectives.

Achieving the benefits of public participation

From these three examples, there begins to emerge a model for how to achieve the benefits of public participation. The model had three components:
  • The purpose and objectives of the consultation should be made clear at the outset.
  • The type of consultation should match the purpose and objectives.
  • There should be ongoing monitoring and feedback, when appropriate, to ensure that the consultation is effective.

The OEB is testing a number of different types of approaches to consultation as we try to move along the learning curve in or understanding of which ones work best under what circumstances. As we try to develop our expertise, we recognize that experimentation is important and so is the willingness to take risks, to make mistakes, and to learn from them.

Future Initiatives

Our newest initiative is the newly created External Advisory Committee of stakeholders, which provides advice to the Chair of the OEB. The committee forum will provide the opportunity for a more frequent, meaningful dialogue in an informal setting among the people and organizations most affected by the Board’s regulatory activities. While the terms of reference are in a formative state, the External Advisory Committee will address important matters of concern to the energy community, as well as matters of administrative practice such as advise on rules of practice and procedure. Of course, the External Advisory Committee will not be examining policies that are expected to come before the Board in a hearing.

About the author

Judy Simon was Vice-President of IndEco from 1998 to 2011 and was a part-time board member of the Ontario Energy Board for about ten years. She published this paper in her capacity as a member of the Board.

Source document

Published in The National Regulatory Research Institute Quarterly Bulletin – Fall 1996, Vol. 17, No. 3, pp. 373-379. This paper was previously presented at the Tenth Annual CMPUT Regulatory Educational Conference, Niagara-on-the-Lake, Canada, April 30, 1996

Related information

For information about IndEco's work in public consultation, please contact Deborah Lightman.