This article was originally published on Projects at Work by Rich Maltzman and Dave Shirley.
Project managers know the importance of stakeholder expectations and requirements. The Project Management Institute increased their emphasis by adding the 10th knowledge area to PMBOK®, Project Stakeholder Management. Here in my home state of Maine, as in other states, the governor (as a stakeholder) wields a lot of power. What interested me the most, however, was that the project in question, is a “project with green intent” or as we define it in our book, a project that is Green by Definition. Those projects have a product or outcome that is all about sustainability or the environment. Whether good or bad, at this time, the floating wind turbine project is on hold, because of a principle stakeholder, the governor.
According to one of our local newspapers, Statoil, a Norwegian energy company, has decided to pull out of a pilot offshore wind project using floating wind turbines. Rather than investing in Maine, its next project will probably be in Scotland, although the company is still interested in a US based operation, just not in Maine.
So how did stakeholder influence affect the overall project? This past January, Maine’s Public Utilities Commission granted initial approval for Statoil to moor 4 floating turbines off the coast of Maine. However, the governor was not happy about the proposal. In essence, Statoil’s proposal included a subsidy from Maine electric rate payers which totaled approximately $200 million over the next 20 years. That subsidy did not sit well with Governor LePage. He did not want Maine taxpayers to help pay for a private company’s venture into technology. Analyzing the risk, another important part of what we do as project managers, the governor decided that it was too one-sided. In effect, Statoil transfer a lot of the economic risk to the people of the State of Maine. It was an ideal situation for Statoil.
An alternative LePage proposed was to reopen the bidding process to include an effort by the University of Maine with their business partners. The proposal from UMaine would include a smaller subsidy and greater economic return to the State. That reopening of the bidding process was apparently enough for Statoil to withdraw their proposal and the funds that go with it. So, I’d like to think that part of the risk analysis for this project included a contingency in case Statoil pulled out of the project. That contingency includes the application by UMaine for federal monies to offset the cost of the proposed pilot.
Whether the project happens or not, or for that matter, whether this type of wind farm becomes a reality is still up in the air (excuse the pun). What I do know is that it makes a great case study for sustainable projects and projects in general. There are stakeholder expectations, risk assessment, make-buy decisions (should we go with a company that has done this thing before or should be take it on ourselves), and the 3-Ps, as well as all the other factors that need to be managed. But always remember the power of the stakeholder!