Do Community Benefit Agreements Actually Work?

This week I spoke with Matilda Krieder, a researcher at the National Renewable Energy Laboratory, about a database she and her colleagues released this week showing how onshore and offshore wind developers use community benefit agreements – a form of compact aimed at improving local benefits from projects. We talked about whether communities really see the agreements as helpful or if there’s a better way.

The following is an abridged version of our conversation edited for clarity and space:

How much have you heard from people concerned that community benefit agreements are a form of financial influence or a false promise where they don’t receive real benefits?

I haven’t heard very much about the not-receiving end of things — and the reason I’ll say that is at least on the land-based wind side, an actual community benefit agreement is pretty uncommon. The vast majority of the time it’s just donations. And that, I think, is less likely to have the false promise thing because developers are handing over a one-time check, so there’s not really a perception that it won’t come to fruition.

So walk me through what your research shows with respect to how effective community benefit agreements are in assuaging local opposition to a project?

Unfortunately my research is not super helpful there. Because we didn’t look at failed projects, I don’t think I can say anything about whether [community benefit agreements] help or not.

But the existing literature that other people have done is not really positive on the connection between community benefits and improving community perception of projects, which is really interesting to me because I think people in the U.S. are really buying into it. Especially for offshore wind. So much pressure is being put on community benefits agreements as the thing that’ll change everything. And I support developers giving them, even if it doesn’t change anything, because it’s a net good. But I do wonder if developers or anybody setting regulations are reading what’s been studied. If so, I don’t know if they’d be putting all their eggs in this basket.

Okay then what if you walked me through the benefits you’ve found, at least in wind?

So it’s very different from offshore wind to land-based wind. In offshore wind, we’re seeing huge amounts of money, especially in the communities that host cable landings for the projects, because that’s the only point in offshore wind where the local government has any way to stop or change the way the project is developed. The cable landing is where you’re seeing $150 million [contributions]. And that hasn’t been happening long enough to measure the impacts of school funding or taxes over time.

The agreements that are more likely to be impactful are the ones that are more specific. I point to the Salem offshore wind terminal as a positive example because it’s such specific funding. You can tell they did the work to understand what the community’s priorities were and they directed funding to those areas.

In terms of land-based wind, it would be up to who you talk to. I’ve talked to county commissioners who’ve spoken really positively about the things that would be considered small potatoes. Not millions of dollars but directed funding in a specific way that met the community’s priorities and that changed people’s perception of the project. That’s a very small sample size, so you can’t identify a trend there, but I think it has potential.

I’m starting to view the donation side more positively than a lot of people too because a community benefit agreement most of the time is going to the local government, [and] a lot of people distrust their local government.

So instead, donations directly to services instead of county or local governments?

Yeah. That’s just a function of how in agreements, 95% of the funding goes to a local government. And people may not ever know what happens to it after that. It’s less visible.

What are you hearing from communities about community benefit agreements then?

I hear, how do we get one? The problem is, it’s still entirely in the developers’ hands so sometimes I feel a bit limited in the advice I can give to get one. It kind of comes down to what leverage you have with a developer.