Recognizing that the condition of the recreation areas associated with its hydroelectric projects reflects on the company’s image, Portland General Electric took a proactive approach to managing these resources. By bringing responsibility for these areas in-house rather than hiring contractors and by asking visitors for suggestions for improvements, the utility enhanced recreational opportunities and fostered goodwill throughout the region.
By Deborah Schallert
Utilities operate parks and campgrounds because this is required as part of a Federal Energy Regulatory Commission (FERC) license for a hydroelectric project. But there is a direct link between providing high-quality parks and the business of making electricity. When properly operated and maintained, parks and campgrounds create value for the utility and its customers. Innovative management and customer focus can move parks from simple requirements of license compliance to an important component of the utility’s relationship with its customers and communities.
Over the past 12 years, Portland General Electric (PGE) has intentionally created value in its parks. This decision was not simply a choice of embracing its parks for the social good. It was a business decision and has paid off by solidifying the company’s reputation as a responsible provider of high-quality recreation experiences.
Assessing the success of recreational areas
To determine the success of parks related to hydroelectric projects, answer the following three questions:
– Are the parks in compliance with the relevant license terms? FERC looks to every licensee to balance the benefits of its projects to include consideration for safe public access and recreation opportunities. Leaving nothing to chance, new license terms are increasingly explicit in addressing recreation resources, and licensees must be vigilant to stay in compliance. Nonetheless, it is not that difficult to maintain compliance with the basic mandate of the Federal Power Act: public access to project lands and waters. The difficult part comes in providing true value, in integrating management of these parks with a broader company policy of providing valuable services to customers and communities.
– Do they provide value to the public, both visitors and the local communities? Ask yourself: Would customers be upset or relieved if your park disappeared overnight? One method to measure whether your parks provide value is through visitor surveys. PGE makes survey forms available in all parks, and park staff informally ask visitors for suggestions. Results from such surveys can make it apparent what is working or not in the eyes of your park customers, local communities, and other stakeholders.
– Do the parks provide value for the utility itself? This is often the hardest question to answer. Of course license compliance is critical to business success. And customer satisfaction is nice, but what difference does it really make to a company? It is true parks cost money and can put the utility at risk for liability issues. But the solution is not to just roll up the recreational vehicle (RV) pads and close the gates. There should be some measurable bottom line, in revenues and occupancy rates, for the difference well-managed parks make to a utility.
PGE’s ‘old’ approach to managing recreational areas
In the late 1950s and early 1960s, PGE built two major hydro projects. This wave of development increased the number of hydro projects within three hours of Portland that had large reservoirs and, consequently, extensively increased opportunities for public use. In addition, one of these projects inundated an existing state park, which PGE then had to replace. Suddenly, PGE found itself in the new business of constructing and operating parks, campgrounds, and day use areas.
PGE was proud of the parks it built as a result of this development. They were operated by company personnel and were featured prominently in company press releases. They even served as a showcase for exciting new technology, such as electric cook tops in outdoor group kitchens.
However, corporate cost cutting took hold in the late 1980s, and PGE devoted fewer resources to its parks. Maintenance was deferred, and few improvements were made. As a final step, PGE decided to contract operation and management of its parks to concessionaires. This move mirrored a trend among public park systems in the U.S. and Canada to consider contractors as a way to reduce staff and maintenance expenses. The theory was that the contractors would bear the financial and liability risks. The contractors were responsible for on-site daily maintenance and public contact. All PGE staff would do was provide major maintenance and periodically renew the contracts.
However, by the mid-1990s it became clear that using contractors in this way was not saving PGE money. Despite the tremendous amount of time PGE spent overseeing the contractors, there were many problems. Deferred maintenance issues, signage in disrepair, and contractors ill-prepared to represent the company to the public were taking a toll on PGE’s parks – and reputation. The contractors retained all park revenues, and there was literally no budget for park needs. Major maintenance was budgeted for and scheduled through the utility’s project operations crews, but this expense competed with all other core utility purposes for time and dollars.
“Yomes” installed at several of Portland General Electric’s campgrounds have proven a popular option with visitors. A yome is a soft-sided, yurt-like tent structure on its own platform. The yomes paid for themselves in only two years. Click here to enlarge image
PGE employees, especially project operations staff, talked about how good the parks used to look before being farmed out to contractors. The difficulty was that to retain contractors, PGE had entered into contracts that were almost impossible to terminate. Costs and risk rose as staff time to address issues related to the parks rose, and the company’s reputation was on the line. Despite the lack of company identification on most park signage, neither the public nor the media saw the parks as the contractors’ problems. They were PGE’s parks, next to PGE projects, on PGE lands.
Deciding to reexamine park operations
The catalyst for PGE to reexamine its parks operations came in the form of a series of expirations of FERC licenses that would take place from 2001 to 2006. The company was simply not prepared to deal successfully with the recreation and public access issues that would be raised during relicensing. The public’s expectations had changed significantly in the 50 years since PGE had last addressed these issues.
PGE knew it would have to take action to improve its park operations. The utility decided to bring responsibility for recreation back into the company by hiring a parks manager. Other steps included revamping the recreational message, attracting visitors, creating a safe environment, and managing costs.
Hiring a parks manager
PGE created an additional staff position for a parks operations manager. To help PGE improve its parks and still keep an eye on the pocketbook, the candidate for this position had to have good relationship-building and communication skills. The job did not involve sitting behind a desk. This employee would have to get out to the parks, determine what was going on, and periodically sleep in the parks on weekends and holidays.
Once on board, the new parks operations manager set about reclaiming responsibility for the parks from the contractors. As their operating contracts expired, contractors were replaced with seasonal staff who worked for PGE. Managing the parks more directly allowed PGE to deal with staffing problems, change fees and policies, solve customer service issues, quickly perform maintenance, and make infrastructure improvements. To assert company responsibility for its recreational offerings, PGE returned its name or logo to park signage, brochures, and staff name tags and shirts.
Revamping the recreational message
Projecting the right message for recreation areas is vital. Most of PGE’s parks are within a two-hour drive of the Portland metropolitan area, the state’s major population base. The company reframed its parks as being “in our backyard” and redesigned the company’s brochures and website accordingly.
The company also began promoting its efforts through fliers in company billings and news releases announcing season openings. PGE also looked for opportunities to host special events. For example, the company partnered with Portland City Parks and non-profit organizations to host day camps or accessible fishing days. To spur off-season visitation and provide more visibility to the company’s wildlife stewardship efforts, PGE created a winter eagle watch event at its 366.8-MW Pelton Round Butte Project. The popular event has been held every year since 1996. All these events were forums for PGE to present its messages: commitment to the environment, community partnership, and a founding company of Oregon.
Great-looking parks do not provide value without visitors, and the right visitor has a huge effect on the atmosphere of the park. To build revenue and value for both communities and the company, PGE had to bring people back to its parks.
One way PGE attracted visitors was to immediately begin modest investments in its parks, in advance of receiving the new FERC operating licenses. The urgency of upcoming relicensing discussions demanded the company demonstrate its commitment. Work included construction of a new accessible fishing platform at Promontory Park and a new wildlife viewing area at the Pelton Round Butte Project. Visitors noticed these investments, and word spread that PGE parks were looking better and better.
As its visitors of choice, the company targeted families. All improvements and promotional materials were focused on this target audience. To keep its parks affordable for all, PGE set fees at or slightly below market rates. The company also added new services designed to make it easier for people to try camping for the first time or to get back into camping. One example is the use of “yomes” in a few PGE campgrounds. Yomes are soft-sided, yurt-like tent structures, each on its own platform. Yomes are a great option for visitors who prefer a more enclosed camping experience, or who prefer not to invest in a tent or RV.
Creating a safe environment
Minimizing the physical risks associated with parks requires ongoing vigilance and infrastructure maintenance. This became easier as PGE regained control of routine park maintenance. Managing other risks – everything from petty theft to anti-social behavior to accusations of unfair treatment – is much harder. One way PGE initially chose to address security was to surround its campgrounds with fencing topped with coiled razor wire. Although this decision was well-intentioned, the impression was more disconcerting than reassuring.
PGE has since learned that razor wire is not nearly as effective as the presence of trained personnel in the park. Park staff should be trained and able to consistently provide respectful and fair treatment to all visitors.
To assist these personnel in keeping the parks safe, rules and procedures have been set that are clear, fair, enforceable – and enforced. Campground visitors should be able to get a good night’s sleep in your park.
The best staff can spot potential problems early, and usually defuse them. For those times when a visitor continues to make the wrong choices, PGE has its own security department that provides excellent and reliable backup for park staff. Because PGE’s parks are on its private lands, the company can evict visitors who choose not to comply with guidelines simply on the basis of trespass.
In addition, specific policies can be tailored to the facility and the issues of that location and clientele. For example, after polling customers for improvements, PGE chose to prohibit alcohol use or possession in one campground.
To staff its parks seasonally, the company actively recruits experienced, capable retired individuals. PGE’s parks are staffed by top-notch seasonal employees with years of experience in parks operations, customer care, and security.
To attract and retain these staff, PGE takes an unusual approach: A paycheck. Other park systems use retirees as hosts, but their responsibilities are usually limited, in exchange for a free campsite. The combination of a paycheck and a scenic location to spend the summer means many of the best hosts nationwide seek out PGE at recruiting forums. The company can be highly selective.
Where does the money come from to provide all this personal attention to the parks? One method PGE uses to manage expenses is paying attention to occupancy rates. Campground occupancy in Oregon is weather-related. Late spring or early fall rains can mean paying staff to attend to only a hardy few campers. With all the year-round camping options available in Oregon, PGE parks do not need to be open for longer than their niche demands. Late May through September is often sufficient.
Finally, PGE makes sure its new policies and services are worth the investment. For example, the utility knew it could charge a higher rental rate for a yome than for a normal campsite. The yomes paid for themselves in only two years, and customers love them. At the alcohol-free campground mentioned above, 2006 occupancy is above the rate two years ago, when the company made that decision.
Utilities understand the importance of keeping the lights on for customers and retaining their trust for reliable delivery of electricity. They also need to understand that well-managed parks are an important element of a company’s image and reputation.
The real test of success in park management is the return rate of visitors. About 80 percent of PGE’s campground visitors are return customers. It is much easier and less costly to retain a customer than attract new ones. Return customers stabilize operations and allow for reliable revenue projections.
PGE realized one important benefit to this renewed focus on parks during its relicensing negotiations. Investing in the parks and sponsoring events helped build trust with key stakeholders. These stakeholders can then prove to be valuable partners during relicensing negotiations. Because PGE was managing high-quality parks, the company brought credibility and strength to its relicensing negotiations. PGE had a good sense of when requests were merited or out-of-line and was able to offer alternate solutions, which saved the company mitigation dollars in the long run.
A prime example of this was when the USDA Forest Service (USFS) requested PGE make capital investments and fund all annual operations and maintenance costs for its campgrounds adjacent to PGE reservoirs. In light of those sites’ high occupancy rates, PGE calculated what it might cost to instead run those sites. The utility also discovered some of those campgrounds actually produce enough revenue to subsidize other USFS sites. Instead of resisting this request, PGE was able to return to the table and offer to operate the sites.
PGE will assume operation of several large USFS campgrounds within a few years. The utility will have more control of costs, be able to retain revenues to defray expenses, and be able to provide a consistent quality of service across all its project sites. There is no question this option also appealed to USFS during a time when regional staff reductions make it difficult to prioritize campground management. But it would not have been a viable solution unless USFS trusted PGE’s commitment to providing high-quality campgrounds.
Today, PGE parks are well-maintained and popular with families. The PGE name is visible throughout the parks. Park visitors continue to comment on how much PGE parks have improved in just over a decade. But best of all, these parks are a source of pride for PGE.
Ms. Schallert may be reached at Portland General Electric, 121 Southwest Salmon Street, 3WTC BRHL, Portland, OR 97204; (1) 503-464-7619; E-mail: [email protected]
Deb Schallert is project manager for all licensing issues related to Portland General Electric Company’s recreation, land use, aesthetic, and cultural resources.