• Regulators Are People Too: Approach them like that
  • April 15, 2010 | Author: Alan I. Robbins
  • Law Firm: Jennings, Strouss & Salmon, P.L.C. - Washington Office
  • Know your audience. That applies to your favorite regulatory agency, too. To know your audience, you need to try to understand what is driving them. What are their policy objectives? How do those policy objectives apply to your company or your particular regulatory proceeding? How can you make their jobs easier and enable them to declare success, while at the same time achieving an acceptable outcome for you? What are the specific roles, responsibilities and biases of the individuals you are dealing with?

    You undoubtedly address these and other similar questions when developing a new marketing plan, a new advertising campaign or new promotional materials. You should approach the promotion of your regulatory objectives in a similar manner.

    Know what you want, and why - Identify your objective clearly. Do so before you start or become involved in the regulatory process. Understand whether your primary interest is in a dollar outcome or instead in the setting of policy or precedent. If your interest is a matter of dollars, then you presumably have flexibility in how you achieve or package that result. But, if your objective is grounded in policy or principle, then you must decide the extent to which you need to remain true to that philosophy.

    Know how what you want fits or conflicts with known regulatory policy or regulatory objectives - Understand the mindset of your regulators. Their policies and policy objectives will color the glasses through which they examine your proposal. When possible, present your position as one that is consistent with their policies or that furthers their policy objectives. Even when what you want is at odds with their policy, it is often more effective to say "I really want to get on board with your policy, but I can't unless you change [X] because otherwise I will suffer this terrible consequence, which surely is not what your policy is intended to cause," than it is to say "I object to your policy because it's bad policy."

    Remember, even if you don't like their policy or it doesn't work for your company, the regulators likely helped formulate that policy. They therefore are not likely to think and will not admit that it is bad policy. Telling them that you think it is bad policy will only cause them to become defensive, not receptive. Just as would not tell parents that you think their child is ugly, but might ask if they ever considered having the child sport a different hair style, so too should you suggest some tweaking of policy rather directly deride the policy.

    Explaining pertinent differences between district energy and other regulated utilities to which the policy applies will likely provide you the springboard for this approach. Explain why you are different and why that means some change to the policy is necessary when applied to you. Most regulators recognize that one size does not always fit all, but sometimes you have to first make clear that not everyone is the same size.

    Establish and maintain credibility - Credibility is essential. Do not come into a regulatory proceeding ill-prepared. Know your objective, know your issues and know the basis for each. Know where your position is supported by existing practice or policy and where it departs from it. Be able to explain why. Be able to explain what the significance is to both you and to the public. Have a clear, understandable and not overly detailed explanation of your position, but also be ready to back it up with as much detail and support as is available.

    The regulators' job is to balance the interests of the regulated company and the interests of the consumers or the public at large. Help them do that. Address not only your needs and interests, but the consumers' and public's interests as well.

    Don't be afraid, but be respectful - Regardless of what you think of the individuals involved, approach them politely, respectfully and as professionals. Speaking pedantically, or otherwise causing them to take offense, will only cause them to become defensive and determined to not agree with your position. Your mission is to achieve your regulatory objective, not to give the individuals a personal reason to be belligerent towards you or your position.

    Conduct prefiling educational meetings - When possible, and assuming that the rules governing your particular regulatory agency allow, meet with them before your file your case. In most cases, the "ex parte" rules prohibit you from unilaterally discussing your case with decision-making individuals at the regulatory agency outside the presence of other parties. But such rules often do not apply until you have filed your case. Discussing a draft of your proposed application in advance of filing is often permitted. If so, such discussions not only afford you an opportunity to 'heads up' and educate the regulators, but also to get some initial feedback. Getting such feedback can be invaluable. It can prompt you to modify your filing before you make it, so that you fashion it a manner that is more likely to address the regulators' concerns.

    Garner customer support - The more widely supported your position, the easier it is for the regulators to approve it. Do what you reasonably can to obtain the support, or at least non-objection, from your customers. You will have to deal with your customers' views once you make your filing, so why not try to do so before you file, thereby smoothing out some of the bumps in the regulatory path that you are likely to confront later on?

    Always keep in mind that 'the regulators' are, like you, people with a job to do. Understand the job of the agency, and understand the jobs and the roles of the individuals with whom you are dealing. Most people appreciate being treated respectfully even if they disagree with your opinion or position. Be respectful by being prepared, professional and aware of their views and responsibilities.

    'From a Legal Perspective' is one of the newest column additions to District Energy magazine. It appears in each edition to address legal issues of current importance to the district energy industry. It is intended for educational purposes only and does not constitute legal advice. Robbins is a colleague of IDEA’s legal counsel Joel Greene.