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Mark Stout ERG Masters Project

Mark Stout ERG Masters Project

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Sections

  • Introduction
  • Objectives
  • Methodology
  • History of Electric Utility Industry Regulation
  • The Birth of State Public Utility Commissions
  • Federal Power Act of 1935
  • Public Utility Holding Company Act of 1935
  • Public Utility Regulatory Policies Act of 1978
  • Energy Policy Act of 1992
  • CPUC “Blue Book” Proposal
  • FERC MegaNOPR
  • CPUC May 1995 Draft Proposals and Stakeholder Responses
  • CPUC December 1995 Decision and California Assembly Bill 1890
  • Recent State and Federal Activity
  • Factors Behind the Drive for Deregulation
  • Large Consumer Pressure
  • Technology
  • Economic Rent
  • Academics & Ideologues
  • Existing Competitive Forces
  • Other Industries and Countries
  • Federal Regulatory Policy
  • State Regulatory Policy
  • Analysis
  • Selection of Stakeholder Groups
  • Overview of What the Stakeholders Wanted and What They Got
  • Stakeholder Interviews Cluster Analysis
  • Officeholder Staff Comments on Who Got What They Wanted and Why:
  • Synthesis of Stakeholder & Staff Comments on Who Prevailed, and Why:
  • Officeholder Staff Comments on Who Got Rolled Over, and Why:
  • Synthesis of Stakeholder & Staff Comments on Who Got Rolled, and Why:
  • Restructuring Stakeholder Campaign Contribution/Gift Analysis
  • Conclusion
  • Bibliography
  • Appendix A: Semi-Structured Interview Questions
  • Stakeholder Interviews
  • Officeholder Staff Interviews
  • Appendix B: Stakeholder Interviews
  • Investor-Owned Electric Utilities
  • Pacific Gas & Electric
  • San Diego Gas and Electric
  • Southern California Edison
  • Municipal Electric Utilities
  • California Municipal Utilities Association - Interview #1
  • California Municipal Utilities Association - Interview #2
  • Sacramento Municipal Utility District
  • Utility Labor Unions
  • Coalition of California Utility Employees - Interview #1
  • Coalition of California Utility Employees - Interview #2
  • Independent Producers
  • American Wind Energy Association
  • Independent Energy Producers
  • Large Electricity Consumers
  • Agricultural Energy Consumers Association
  • California Industrial Users
  • California Large Energy Consumers Association - Interview #1
  • California Large Energy Consumers Association - Interview #2
  • California Manufacturers Association
  • Small Electricity Consumers
  • Latino Issues Forum
  • The Utility Reform Network
  • Environmental Advocates
  • Environmental Defense Fund
  • Natural Resources Defense Council - Interview #1
  • Natural Resources Defense Council - Interview #2
  • Sierra Club/Center for Energy Efficiency and Renewable Technologies
  • Union of Concerned Scientists
  • State Institutions
  • California Energy Commission
  • University of California, California Institute for Energy Efficiency
  • Anonymous Stakeholder Comments
  • Anonymous Comments #1: Parties who could have improved their
  • Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D
  • Appendix C: Officeholder Staff Interviews
  • California Public Utilities Commission
  • Legislative Conference Committee, Office of Senator Steve Peace
  • Legislative Conference Committee, Office of Senator Byron Sher
  • Legislative Conference Committee, Office of Senator Bill Leonard
  • Anonymous Officeholder Staff Interview #1
  • Anonymous Officeholder Staff Interview #2
  • Appendix D: Cluster Analysis of Stakeholder Interview Data
  • Table 1: Assemblymember Jim Brulte, 1995 Campaign Contributions
  • Table 2: Assemblymember Jim Brulte, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte
  • Table 3: Senator Steve Peace, 1995 Campaign Contributions
  • Table 4: Senator Steve Peace, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Senator Steve Peace
  • Table 5: Senator Byron Sher, 1995 Campaign Contributions
  • Table 6: Senator Byron Sher, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Senator Byron Sher
  • Table 7: Senator Bill Leonard, 1995 Campaign Contributions
  • Table 8: Senator Bill Leonard, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Senator Bill Leonard
  • Table 9: Assemblymember Mickey Conroy, 1995 Campaign Contributions
  • Table 10: Assemblymember Mickey Conroy, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy
  • Table 11: Assemblymember Diane Martinez, 1995 Campaign Contributions
  • Table 12: Assemblymember Diane Martinez, 1996 Campaign Contributions
  • Table 13: Assemblymember Steve Kuykendall, 1995 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez
  • Table 14: Assemblymember Steve Kuykendall, 1996 Campaign Contributions
  • 1995/1996 Stakeholder Gift Information for Assemblymember Steve
  • 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler
  • 1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon
  • 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight, Jr
  • 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway
  • 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper
  • 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque

Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

“The Electric utility is changing. But unlike the evolution of species, conscious collective choice can influence the evolutionary drift of the industry.” Rodney E. Stevenson and David W. Penn (1995)

Table of Contents
INTRODUCTION................................................................................................................................................ 4 OBJECTIVES ...................................................................................................................................................... 5 METHODOLOGY .............................................................................................................................................. 5 HISTORY OF ELECTRIC UTILITY INDUSTRY REGULATION................................................................. 8 THE BIRTH OF STATE PUBLIC UTILITY COMMISSIONS................................................................................................ 8 FEDERAL POWER ACT OF 1935................................................................................................................................. 9 PUBLIC UTILITY HOLDING COMPANY ACT OF 1935................................................................................................... 9 PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 ............................................................................................ 10 ENERGY POLICY ACT OF 1992 ............................................................................................................................... 10 CPUC “BLUE BOOK” PROPOSAL............................................................................................................................ 12 FERC MEGANOPR .............................................................................................................................................. 13 CPUC MAY 1995 DRAFT PROPOSALS AND STAKEHOLDER RESPONSES .................................................................... 14 CPUC DECEMBER 1995 DECISION AND CALIFORNIA ASSEMBLY BILL 1890............................................................. 17 RECENT STATE AND FEDERAL ACTIVITY ................................................................................................................ 20 FACTORS BEHIND THE DRIVE FOR DEREGULATION........................................................................... 21 LARGE CONSUMER PRESSURE ................................................................................................................................ 21 TECHNOLOGY ....................................................................................................................................................... 23 ECONOMIC RENT ................................................................................................................................................... 23 ACADEMICS & IDEOLOGUES .................................................................................................................................. 23 EXISTING COMPETITIVE FORCES ............................................................................................................................ 24 OTHER INDUSTRIES AND COUNTRIES ...................................................................................................................... 24 FEDERAL REGULATORY POLICY ............................................................................................................................. 24 STATE REGULATORY POLICY ................................................................................................................................. 26 ANALYSIS ......................................................................................................................................................... 27 SELECTION OF STAKEHOLDER GROUPS ................................................................................................................... 29 OVERVIEW OF WHAT THE STAKEHOLDERS WANTED AND WHAT THEY GOT ............................................................. 29 STAKEHOLDER INTERVIEWS CLUSTER ANALYSIS .................................................................................................... 36 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 40 Officeholder Staff Comments on Who Got What They Wanted and Why:.......................................................... 41 Synthesis of Stakeholder & Staff Comments on Who Prevailed, and Why:........................................................ 43

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Officeholder Staff Comments on Who Got Rolled Over, and Why: ................................................................... 44 Synthesis of Stakeholder & Staff Comments on Who Got Rolled, and Why:...................................................... 46 RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS ........................................................... 52 CONCLUSION................................................................................................................................................... 60 BIBLIOGRAPHY .............................................................................................................................................. 61 APPENDIX A: SEMI-STRUCTURED INTERVIEW QUESTIONS............................................................... 66 STAKEHOLDER INTERVIEWS ................................................................................................................................... 66 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 66 APPENDIX B: STAKEHOLDER INTERVIEWS............................................................................................ 67 INVESTOR-OWNED ELECTRIC UTILITIES ................................................................................................................. 67 Pacific Gas & Electric..................................................................................................................................... 67 San Diego Gas and Electric ............................................................................................................................ 70 Southern California Edison ............................................................................................................................. 74 MUNICIPAL ELECTRIC UTILITIES ............................................................................................................................ 76 California Municipal Utilities Association - Interview #1 ................................................................................ 76 California Municipal Utilities Association - Interview #2 ................................................................................ 79 Sacramento Municipal Utility District ............................................................................................................. 80 UTILITY LABOR UNIONS ........................................................................................................................................ 85 Coalition of California Utility Employees - Interview #1 ................................................................................. 85 Coalition of California Utility Employees - Interview #2 ................................................................................. 86 INDEPENDENT PRODUCERS .................................................................................................................................... 88 American Wind Energy Association................................................................................................................. 88 Independent Energy Producers........................................................................................................................ 92 LARGE ELECTRICITY CONSUMERS .......................................................................................................................... 96 Agricultural Energy Consumers Association.................................................................................................... 96 California Industrial Users.............................................................................................................................. 98 California Large Energy Consumers Association - Interview #1 .................................................................... 102 California Large Energy Consumers Association - Interview #2 .................................................................... 104 California Manufacturers Association ........................................................................................................... 107 SMALL ELECTRICITY CONSUMERS........................................................................................................................ 111 Latino Issues Forum ...................................................................................................................................... 111 The Utility Reform Network ........................................................................................................................... 114 ENVIRONMENTAL ADVOCATES ............................................................................................................................ 119 Environmental Defense Fund ........................................................................................................................ 119 Natural Resources Defense Council - Interview #1 ........................................................................................ 122 Natural Resources Defense Council - Interview #2 ........................................................................................ 125 Sierra Club/Center for Energy Efficiency and Renewable Technologies ........................................................ 127 Union of Concerned Scientists....................................................................................................................... 133 STATE INSTITUTIONS ........................................................................................................................................... 137 California Energy Commission...................................................................................................................... 137 University of California, California Institute for Energy Efficiency ............................................................... 141 ANONYMOUS STAKEHOLDER COMMENTS ............................................................................................................. 144 Anonymous Comments #1: Parties who could have improved their performance ........................................... 144 Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D............................................... 144 APPENDIX C: OFFICEHOLDER STAFF INTERVIEWS ........................................................................... 146 California Public Utilities Commission ......................................................................................................... 146 Legislative Conference Committee, Office of Senator Steve Peace ................................................................ 148 Legislative Conference Committee, Office of Senator Byron Sher.................................................................. 152 Legislative Conference Committee, Office of Senator Bill Leonard ............................................................... 153

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Anonymous Officeholder Staff Interview #1 ................................................................................................... 155 Anonymous Officeholder Staff Interview #2 ................................................................................................... 156 APPENDIX D: CLUSTER ANALYSIS OF STAKEHOLDER INTERVIEW DATA................................... 159 APPENDIX E: RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS DETAIL............................................................................................................................................................ 162 Table 1: Assemblymember Jim Brulte, 1995 Campaign Contributions........................................................... 162 Table 2: Assemblymember Jim Brulte, 1996 Campaign Contributions........................................................... 163 1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte ..................................................... 164 Table 3: Senator Steve Peace, 1995 Campaign Contributions ....................................................................... 164 Table 4: Senator Steve Peace, 1996 Campaign Contributions ....................................................................... 165 1995/1996 Stakeholder Gift Information for Senator Steve Peace.................................................................. 166 Table 5: Senator Byron Sher, 1995 Campaign Contributions......................................................................... 166 Table 6: Senator Byron Sher, 1996 Campaign Contributions......................................................................... 166 1995/1996 Stakeholder Gift Information for Senator Byron Sher................................................................... 170 Table 7: Senator Bill Leonard, 1995 Campaign Contributions ...................................................................... 170 Table 8: Senator Bill Leonard, 1996 Campaign Contributions ...................................................................... 171 1995/1996 Stakeholder Gift Information for Senator Bill Leonard................................................................. 171 Table 9: Assemblymember Mickey Conroy, 1995 Campaign Contributions.................................................... 172 Table 10: Assemblymember Mickey Conroy, 1996 Campaign Contributions.................................................. 173 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy.............................................. 173 Table 11: Assemblymember Diane Martinez, 1995 Campaign Contributions ................................................. 175 Table 12: Assemblymember Diane Martinez, 1996 Campaign Contributions ................................................. 176 Table 13: Assemblymember Steve Kuykendall, 1995 Campaign Contributions............................................... 177 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez ............................................. 177 Table 14: Assemblymember Steve Kuykendall, 1996 Campaign Contributions............................................... 178 1995/1996 Stakeholder Gift Information for Assemblymember Steve Kuykendall........................................... 178 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler................................................ 179 1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon ................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight, Jr. ................................................ 181 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway .................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper .................................................... 181 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque ..................................................... 181

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and why. with varying success. 1995 Decision with the California legislative process resulting in AB 1890. 1994 4 WWW page: http://www. 1996 California Energy Commission. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).org/programs/Energy/green_power/a_better. a product with well documented environmental impacts including local air pollution. 1995 Electric Restructuring Decision. which sets in motion a process of electric utility deregulation beginning in 1998.Introduction On September 23. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. acid rain and climate change.html ERG Master’s Project Mark Stout 4 . The vision of electric utility deregulation legislated in AB 1890 is significantly different from that contained in the California Public Utility Commission’s (CPUC) December. This paper develops a comparison of which stakeholder groups got what they wanted. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. contrasting the results of CPUC process resulting in their December. which will be superseded to a great extent by the details of AB 1890. Various stakeholder groups. selling 250 billion kWh of electricity per year2. California electric utilities have a combined annual revenue of roughly $23 billion dollars1.4 Given the stakes involved with this industry.3 According to the Environmental Defense Fund. 1 2 CPUC RD&D Working Group. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. there will probably be significant winners and losers as a result of this legislation. 1996.S.edf. 1995 3 Flavin and Lenssen.

Objectives
• Evaluate which stakeholder groups got what they wanted: Each stakeholder group influencing the process pursued policy outcomes that they felt were in their self-interest. This paper determines which groups had their requests granted, and which had their requests ignored, looking at both the language of AB 1890, as well as the CPUC December, 1995 decision. Groups that fared better in one arena than the other are highlighted. Determine why or why not a stakeholder group was successful in getting what they wanted out of each policy process: In many cases, interest groups were able to influence outcomes in the legislative and/or CPUC forums through well reasoned comment filings, direct lobbying, campaign contributions, as well as other avenues. This paper explores what mechanisms the different interest groups used to influence these policy outcomes, contrasting differences in techniques applied between the Legislature and CPUC, focusing on whether each decision making body or individual had particular avenues that were most effective.

Methodology
In order to answer the questions of which stakeholder groups got what they wanted and why, I based my research on an analysis of three categories of data: 1) background utility regulation literature, 2) semi-structured interviews with stakeholders as well as CPUC and legislative staff, and 3) archival analysis of CPUC filings, legislative language and videos, and state officeholder filings. Rather than approaching the data with a hypothesis to verify, I compare and cluster the data to allow patterns to flow out that can then generate theories. I compare the CPUC and legislative policy processes, determining similarities and differences in how each party fared in each forum, as well as why each party fared as they did. This data-driven approach to the generation of theory is based on the work of Glaser and Strauss, who contrast the use of data to

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generate grounded theory with the use of data to verify logico-deductive theory.5 Below I describe the use of each of these data types. Background literature on electric utility regulation is used to provide a historical context for California’s electric utility deregulation, which is presented in the next two sections of this report, History of Electric Utility Industry Regulation and Factors Behind the Drive for Deregulation. Semi-structured interviews were conducted with 26 representatives of different stakeholder organizations. The semi-structured format allows flexibility in altering the flow of the interview, following up on interesting points as they arise. I selected an initial set of organizations to contact, trying to cover as wide a spectrum of stakeholder groups as possible, based on my experience representing a stakeholder organization on the issue of electric utility deregulation in the CPUC and legislative arenas. Most interviews were conducted in person, while several where over the phone. As I conducted interviews, subjects referred me to additional representatives to contact, both in their organizations as well as in others. An interview guide was used for

recording notes, which were typed up later. Questions were developed for the interview guide to determine for each organization what outcomes were sought, what outcomes were obtained in each of the policy decisions, and what methods and strategies were used to influence each policy decision. A list of questions for the semi-structured stakeholder interviews is included in

Appendix A. A full transcript of these interviews is included in Appendix B. These interview subjects are clustered into the following categories for analysis: investor-owned electric utilities, municipal electric utilities, utility labor unions, independent producers, large electricity consumers,

5

Glaser and Strauss, 1967, Glaser, 1978.

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small electricity consumers, environmental advocates, and state institutions. The organizations represented by each interview subject are listed, by category, in the Table of Contents for Appendix B. Semi-structured interviews were conducted with two staff of the CPUC and three staff of members of the legislative Conference Committee on Electric Industry Restructuring. An

interview guide was used, with questions developed to determine which stakeholder organizations were perceived by the staff as being most effective in influencing the respective policy outcome, and why; which stakeholder organizations were perceived as being able to set the terms of the debate, and why; as well as which stakeholder organizations were perceived as least effective in influencing that policy outcome, and why. A list of questions for the semi-structured officeholder staff interviews is included in Appendix A. A full transcript of these interviews is included in Appendix C. Finally, an archival analysis was performed on the CPUC formal filings, Fair Political Practices Commission records, Secretary of State Political Reform Division records, proposed and final legislative language, as well as legislative conference committee videos. The CPUC filings can be used to cross-check what each major interested party had originally requested from the process, tracking how that may change over time, as well as to determine policy outcomes from the CPUC. The California Fair Political Practices Commission archives an annual Statement of Economic Interest for each state office holder. The EIS forms for the CPUC Commissioners and Conference Committee members were examined to determine which organizations used trips, events, meals, and other gifts to gain access to decision makers. The California Secretary of State Political Reform Division keeps Officeholder, Candidate, and Controlled Committee Campaign Statements on file for each elected state officeholder and candidate. These Statements were ERG Master’s Project Mark Stout 7

most cities believed regulation was superfluous. 1997. and how much of it was getting incorporated into the final AB 1890 language. However. The Division’s March. they were not always viewed this way. Cities would grant multiple franchises to electricity companies. Competition could keep prices down.. due to decreasing marginal costs and the savings gained by avoiding redundant distribution networks. a historical look at Federal and state electric utility regulation is in order. The legislative Conference Committee videos were used to gain insights into the dynamics of this public hearing process. but many weak companies that were soon bought out by a strong one. The result was not healthy competition keeping down the consumer’s bill. and experience the witty banter between Senators Steve Peace and Bill Leonard. The Birth of State Public Utility Commissions Electric utilities have been considered natural monopolies over most of this century.. In the face of this trend local governments began to view 6 California Secretary of State.examined to track campaign contributions to the legislative Conference Committee members. cross-check interview impressions. ERG Master’s Project Mark Stout 8 . March. 1997 report on Lobbying Expenditures and the Top 100 Lobbying Firms6 also gives a big-picture view of overall lobbying expenditures by stakeholders. Proposed AB 1890 language was examined to get a flavor for who was making proposals. as Davis explains: “Prior to World War I. History of Electric Utility Industry Regulation Before examining which stakeholder groups were able to influence the California electric utility deregulation process. thus leading to a monopoly.

utilities as natural monopolies and hence inevitable. large nonutility companies such as electric equipment contractors. Based on the Interstate Commerce Clause. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). Beginning in 1907 with New York and Wisconsin. or were owned by. by 1922 47 states and the District of Columbia were regulating electric utilities. This being the case the best solution seemed to be regulation by public commission. this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers. a small number of holding companies owned most utilities in the United States. with at least 20% of electricity crossing state lines in 1935.” The early 1900s were marked by the rapid increase in electric utility regulation by state public utility commissions (PUCs) to address this natural monopoly character. ERG Master’s Project Mark Stout 9 . A number of these holding companies owned. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. 166-167. led to the passage of the Federal Power Act.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids.8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law. Hempling explains. State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation.” This legislation sought to avoid market abuses by limiting the size and 7 Davis.

11 Energy Policy Act of 1992 EPAct continued the Federal trend. 343. which is critical for wholesale competition. In capacity constrained systems. started by PURPA. PURPA was very significant in creating a market for non-traditional generators. 11 Pechman. this was the marginal cost associated with procuring new generation capacity. The Federal Energy Regulatory Commission (FERC). Hempling. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan. recent successor to the FPC. towards more competition in electricity generation.investment options of utilities so that each was confined in scope to an “integrated public-utility system. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. was charged with writing the rules required to implement this legislation. 166-167. ERG Master’s Project Mark Stout 10 . PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. It also opened the door for more widespread wholesale competition by requiring that regulated utilities purchase power from Independent Power Producers (IPPs) classified as Qualifying Facilities (QFs) at avoided cost. 10 Davis. 17. 16. It also created new 8 9 Pechman.

“Social Goals. This money-losing proposition is not significantly improved by any of the conservation cost recovery or incentive mechanisms now in use. 14 Cavanagh.13 and the transient nature of short term building owners and renters..and demand-side options systematically when seeking least-cost energy 12 13 Stevenson..” 356-357. “Energy Efficiency Solutions.” 521... 15 Cavanagh. 14 Also. ERG Master’s Project Mark Stout 11 . inadequate information available to customers. 356.. “Global Warming and Least-Cost. allowing larger generation plants to be exempt from traditional regulation. “1) implementing Integrated Resource Planning (IRP).. which compares supply. utilities make money in only one way--selling [units of energy]. Stevenson. They likewise lose money when the encourage customers to engage in conservation. Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions. “Discretionary Evolution.. One prominent utility regulator remarked on the situation that had developed in the 1980s: “In the current scheme of regulation.. regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold.” 407. Utilities lose money when customers engage in conservation.classes of IPPs including Exempt Wholesale Generators.”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider. These lead to what the National Association of Regulatory Commissioners calls the “payback gap”: substantially higher rate of return expectations for energy efficiency measures compared to supply-side investments.12 While encouraging wholesale competition. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options.”.

1996. 1999. Hoffman. with large. This utility restructuring involves the divestiture of utility electricity generation facilities into separate companies from the original utility which would still be responsible for transmission and perhaps distribution. all residential consumers eligible on January 1. all commercial customers eligible January 1. 2002.supplies. and 3) rate changes to encourage efficiency and distribution of power. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers. In April of 1994. The Blue Book laid out an aggressive. A more definitive policy statement was 16 17 Haddad. industrial customers taking power at the transmission level eligible on January 1. 55.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. 6. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 18 Mydans.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. sending “a shockwave through the electric industry”. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations. and if successful. ERG Master’s Project Mark Stout 12 .17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. customer class-staged schedule for direct access implementation. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”.

ERG Master’s Project Mark Stout 13 . which requires the CPUC to engage in a series of public hearings. 1994. Blue Book. Blue Book. and documentation resulting in a report back to the Governor and Legislature by January 31.20 Many stakeholders. 1995. “alternative frameworks based on ‘let the market decide’”.22 FERC MegaNOPR In March of 1995. 21 CPUC.21 This stakeholder response. where customers voluntarily pay more to promote renewables. numerous other states have also proposed electric utility deregulation. were concerned about the content and timetable of this proposal. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. 1994. FERC released a dual-issue Notice of Proposed Rulemaking. and asserted that. evidentiary hearings. This led to the passage of Assembly Concurrent Resolution 143.19 Since the release of the Blue Book proposal. coupled with a lack of prior coordination with the state Legislature. including private and public-interest organizations. such as “green pricing”. For instance.scheduled to be issued by the CPUC in August of 1994. “a vibrant market exists for energy efficiency services”. which had been dubbed the MegaNOPR. 1995. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. Wagner. pushing back their goal for a policy decision until September of 1995. the CPUC proposed. 1994. This process tempered the CPUC’s frenetic timetable. The first issue addressed open access to the transmission system 19 20 CPUC. In their place. Status Report.

1997. the California Commissioners released two draft proposals for pursuing rate deregulation in California. Retail contracts with a particular generator could be handled with separate “contracts for differences”. which is usually considered state jurisdiction. scheduled and dispatched by an independent system operator (ISO). is based on a common wholesale power pool.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. A common price for all electricity in the state would then be set by the market clearing price based on the bids. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. in May of 1995. All power purchases would be made through the pool. Generators are scheduled into the pool based on time-based bids submitted to the ISO. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition. The majority proposal known as PoolCo. 1995. meaning the utilities could not discriminate against other electricity suppliers.for wholesale transactions. Asmus and Smeloff. Status Report. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . favored by CPUC President Fessler and two other Commissioners.24 22 23 CPUC.

Commissioner Knight’s alternate proposal is based on direct access contracts between generators and customers. and Independent Energy Producers. who is responsible for maintaining transmission system reliability. or through the creation of optional pools which could manage bids in a manner similar to the PoolCo proposal. 1995. although generators would submit projections to an independent system operator (OPCO). and the actual generation scheduling and dispatch decisions would be made by a separate Independent System Operator based on transactions mediated by the PX as well as direct access contracts. In structure. California Manufacturers Association. No central entity would schedule power generation. Southern California Edison Company (one of three regulated. The MOU also proposed a nonbypassable charge to fund public policy programs. at the prompting of California Governor Pete Wilson. know as the “Memorandum of Understanding” (MOU). wholesale pool. as well as a central. Full stranded cost recovery is agreed to for Edison. Prices would be determined either through bilateral contracts between direct access customers and generators. it is a hybrid of the two proposals. Out of this surcharge. and low-income weatherization would be funded at 25 CPUC Direct Access Proposal ERG Master’s Project Mark Stout 15 . met to iron out differences between them and draft their own industry restructuring proposal. and R&D were not to exceed 3. California Large Energy Consumers Association. a group of seemingly influential special interests. as-needed basis.25 In response to the Commissioner proposals. the only IOU signing the MOU. including bilateral contracts for direct access customers. Bids for generation into the pool would be processed by a Power Exchange (PX).3% of total utility revenue requirements as of January 1. renewables. investor owned utilities in California). funding levels for energy efficiency. low-income ratepayer assistance would be funded at an uncapped.

the Framework demands that each individual utility customer. a new mechanism is to be developed. UCS. but with increased funding levels to restore energy efficiency and R&D spending at pre-Blue Book levels. a coalition of public interest groups and renewable energy advocates. EDF. By combining this with effective Performance Based Ratemaking. and continued progress for energy efficiency and renewable resources. The Framework calls for equitable opportunities for small consumer participation in any move to allow direct access. and at the level of attention given to the MOU. with utility shareholders accepting some of the burden for past. as a response to the MOU. To enhance energy efficiency efforts.1995 levels. A minimum level of renewables is proposed for each IOU supply portfolio to return the states resource diversity to 1993 levels.26 The CPUC held a full-panel hearing to focus on the details of the MOU in September of 1995. Framework Parties. including NRDC. including residential and small commercial consumers. The Framework calls for less than 100% stranded cost recovery. Utilities Consumer Action Network. As in the MOU. and Towards Utility Rate Normalization (TURN) submitted a “Framework for Restructuring in the Public Interest” to the CPUC. (PBR). small customer equity. 26 27 MOU Parties. 1995. does not actually propose a specific electric utility industry structure. continuation of low income programs. but spells out a set of public interest concerns that should be addressed by any industry restructuring including mitigation of market power. should see short and long term rate reductions. a non-bypassable systems benefits charge is proposed. to decouple utility profits from sales volume. in the spirit of the existing Electric Revenue Adjustment Mechanism (ERAM).27 Outraged that they had been left out of the MOU negotiating process. ERG Master’s Project Mark Stout 16 . uneconomic investments. The Framework. 1995.

For public purpose programs. ERG Master’s Project Mark Stout 17 . 1995. so that input can be made to the Legislature.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. 1995 which laid out a more defined vision of a deregulated ut ility environment. The December Decision mirrored the market structure defined in the MOU. A legislative conference 28 Framework Parties. and allow for uncapped low-income programs.expand renewables development above 1993 levels while commercializing new renewable energy technologies. through a Competitive Transition Charge (CTC). “be based on need”. bilateral. and an Independent System Operator centrally controlling California’s transmission system. The Decision called for 100% stranded cost recovery by IOUs over a five year period. while the state Legislature took up the issue of electric utility deregulation on their own terms. as well as a “minimum renewables purchase requirement”. 1996 levels. with several key implementation areas to be hammered out by stakeholder working groups. based on a wholesale Power Exchange. the Decision does not define any public program funding levels. the Decision proposed a nonbypassable “public goods charge” (PGC). The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. which should. requesting input from stakeholder working groups. Aside from funding levels for low-income rate discounts. with financial incentives tied to the level of divestiture. the CPUC released a policy decision on December 20. direct access contracts. PG&E (Pacific Gas and Electric) and SCE. nor a renewables purchase requirement level. coupled with an IOU rate cap at January 1.

omnibus legislation which preempts much of the PUC vision31.34 There is concern that 29 30 CPUC. arguing that it should not be used as a national model for protection of residential and small commercial consumer interests. Even given the large economic and environmental stakes. 1996 Roadmap CPUC press release. 1996 31 Rader. and especially residential and small commercial California ratepayers."33 However. TURN. Several public interest organizations served as advocates for small consumer and environmental protection. the final product of this bipartisan conference committee handily passed on the Senate and Assembly floors with minimal debate. 1996 32 Weisman. cutting deals with the stakeholders that would be required to “deliver the votes” within the committee. December. While the pace of the PUC process was tempered so that their final policy decision could better reflect stakeholder interests. but some have argued that the environmental organizations are not effectively representing the interests of their constituencies32. 1997. a prominent. has criticized AB 1890.committee on deregulation worked at breakneck speed. California Public Utilities Commission President Conlon praised members of the legislative conference committee: "It is through their tireless efforts that this legislation was crafted to provide balance of interests between utilities. 33 CPUC press release. compared to the reckless pace of the legislative wrangling. since it was perceived as a best effort compromise between the two main political parties. Pete Wilson signed AB 1890 on September 2330. As the PUC stakeholder working group process drew to an end. neither process involved substantial public education or participation. small consumer group. and confidential correspondence with stakeholder representative. 1995 Decision. 1996 34 TURN press release. other market participants. 1996 ERG Master’s Project Mark Stout 18 .

1996 37 Rader. 1996. which may lead to higher electricity rates for small consumers purchasing out of a centralized Power Exchange envisioned by both the CPUC Decision and AB 1890 . An argument can be made that the final legislation will result in lower funding for public purpose programs. endorsed in the CPUC Decision. 1995 Rader. indicate that electric utility shareholders faired better in the negotiations than small consumers 36. From some perspectives. said that the Legislature was going to. than would have occurred under the CPUC’s December 1995 vision. but due to the Decision’s lack of clarity about support levels. renewable energy concerns faired poorly in AB 1890. with uncertain funding allocations that may not be able to support the existing base of California renewable energy generators. 1996 38 Asmus. this is difficult to say. to ensure the maintenance and growth of this renewables base37. with a mix of shortcomings and unexpected benefits in the legislation. “roll over renewables” and “roll over enviros. Such an outcome was not unforseeable. along with a guaranteed 100% cost recovery for uneconomic utility assets. AB 1890’s questionable protection against utility market power. AB 1890 author Jim Brulte. as well as the loss of a strong policy mechanism.”38 Some public interest advocates would argue that moving ahead with the deregulation process. ERG Master’s Project Mark Stout 19 . in a speech before the California Manufacturers Association. Weeks before the passage of AB 1890.substantial market power exists among California electric utilities35. Large industrial customers are also likely to benefit disproportionately because of their ability to take advantage of contracts made directly with low cost electricity generators. is in the public interest since it moves California utilities away from the “paralysis and backsliding on our 35 36 Borenstein. including renewable energy and energy efficiency.

41 There are currently several electric utility restructuring bills in Congress. including residential and small commercial consumers.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. As Carter and Cavanagh have noted. “If the bill had failed. 1997 42 Weisman. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1997 41 Marshall. chair of the House Energy and Power Subcommittee. and 15% consumer-side incentives. 1996 CEC. It divides up this amount into four accounts that vary over four years of funding. would be eligible for direct access January 1. including a prominent one authored by Representative Dan Schaefer (R-CO).”39 Recent State and Federal Activity Since the signing of AB 1890 into law. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890.40 On May 6. 10% emerging technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 1997.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. The overall levels are: 45 % existing technologies. 30% new technologies. In March of 1997. 1998. 1997.

There is literally no profit in it for them. cement.45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition. the companies have no incentive to be efficient. and one of the largest gold mining firms in the world. a consultant representing CLECA explains their 43 44 Levison.”46 In California. and future expansion. Therefore. The state commissions typically calculate a company’s profits as a return on investment. Davis explains their reasoning: “the electric companies are inefficient.”.. Because the PUCs determine the rates. too conservative. if a company wants more revenue it must invest more capital.” Barbara Barkovich. services. Many forces have come together to create the push for electric utility deregulation in California. ERG Master’s Project Mark Stout 21 . “Restructuring Hearings on the Road” Levison. It has an incentive to build a new plant even if it is not really needed. “12 companies--most foreign-owned--that really soak up the juice. 1997. “DOE Restructuring Bill” 45 Stevenson. “Discretionary Evolution. 1997. these concerns are represented by the California Large Energy Consumers Association (CLECA). and overcapitalized due to state regulation.44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation.requirement".. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation.43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. 355. Retail wheeling sits at the top of the agenda of this coalition of steel.

on the other hand. Now they found 46 47 Davis. they will have to gulp and swallow elsewhere. The California Air Resources Board’s old tailpipe emissions standards for new cars and light-duty trucks sold in that state were adopted by Congress in 1990 as the standard to be met by all new vehicles.. “We just want to use competition to get the best price for power.. 24 companies that account of over 4% of the nation’s electricity use..” A consultant who shares White’s perception of ELCON notes that they want to push California to adopt a policy as. John White. “Retail wheeling. “We do not advocate a slash and burn approach. and they say they know renewables.”48 Davis describes the transition that has occurred in the influence of state PUCs.” CLECA’s national counterpart is the Electricity Consumers Resource Council (ELCON). Asmus.. 192. “At least you can talk to CLECA. ERG Master’s Project Mark Stout 22 . has no respect for the environment. such as wind power. That’s one reason why they want to cut their own deals. “uncompromised as possible because they fear the California plan will become a model for the country. V.. “In the past the commissions had found their main constituents to be residential customers.. are now competitive. “Balancing the demand for federal standards with the urgent need to reduce emissions in California was one of the primary challenges confronting Congress and the executive branch. If there are provisions for renewables and conservation here.”47 The Clean Air Act amendments of 1990 set a precedent for Federal legislation following California’s leadership on environmental programs. There are some who are concerned about ELCON’s environmental ethics in pursuing electric utility restructuring. As Davis notes. 24-25.viewpoint. ELCON. executive director of the Center for Energy Efficiency and Renewable Technologies remarks.”.” to existing public interest programs. 1995.

50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. 150. enabling increased competition.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.. Hoffman 55-62. 1993. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 51 Stevenson. Davis. who in the past had enjoyed privileged status with cheap rates. but now had to pay higher rates. Gordon. 195. greatly increasing opportunities for bulk power sales. ERG Master’s Project Mark Stout 23 .intense pressure from large industrial customers. 84-108.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 1994.”. “Discretionary Evolution. This reduction in scale has brought down the capital requirements of entering the electricity generation industry.. basing their arguments on welfare economics as applied to the changing electric utility landscape. 50 Flavin and Lenssen. 1993. 52 Gilbert. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 447-475. 356-357.

. Utilities compete for industrial customers who are relocating. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK.. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. such as natural gas for space heating. competition takes on several forms in this market. There is significant competition in the wholesale electric generation market. ERG Master’s Project Mark Stout 24 . over half of new U. Many electrical applications have substitutable fuels. Stevenson. non-utility providers. “Discretionary Evolution.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. “With this act. the camel of competition forced its nose under the monopoly tent.”..53 allowing a policy trend that emphasizes markets rather than social welfare.54 Since 1992. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway.”.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. as well as those on the border of service districts.S. 357. and it was only 53 54 Stevenson. 355-356. generating capacity has been supplied by alternative.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities.. 1994. 55 Flavin and Lenssen. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. “Discretionary Evolution.

creating new classes of larger non-utility generators. “Restructuring Goes on the Road” ERG Master’s Project Mark Stout 25 . 59 Levison. the ascension of Reagan administration advocates of competition amplified the effect of PURPA. Under Chairman Martha Hesse in the late 1980s. in order that they maintain control of the regulatory process at the state level. FERC vigorously supported competition for electricity. A recent announcement from Representative Schaefer’s office reads. 2000. by requiring that utilities provide non-discriminatory transmission access for wholesale transactions. 78.”59 As one environmental representative 56 57 POWER Working Group.a matter of time before it worked its way inside. including the Exempt Wholesale Generator. 195. Davis notes that it became used as a tool to inject competition into a regulated system. Federal legislation could force states into retail competition on a set timetable. and deleting portions of the Public Utility Holding Company act to facilitate establishment of EWG/IPPaffiliates by regulated utilities. The recent restructuring bills in Congress have given incentives to state governments to act. The resulting testimony convinced Schaefer that the current monopoly system is harming consumers. He has since introduced legislation (HR 655) that will give all consumers choice of their electric provider by December 15. Schaefer held nine legislative hearings and heard from dozens of witnesses on the issue of breaking up the electricity monopoly. 1997. 1. “Ironically.”58 The Energy Policy Act of 1992 built on this competitive momentum. the product of President Carter and the Democratic Congress. Cook. 58 Davis. a policy it had already implemented in its natural gas decisions. “During the 105th Congress.”57 The qualifying facility clause of PURPA was originally intended to encourage generation resource diversity.

ERG Master’s Project Mark Stout 26 . “the DOE bill does not mandate retail markets by any date certain. In 1994. Calls for bids have often been oversubscribed by a wide margin. an analyst with CPUC’s Division of Strategic Planning. Colorado. 355-356. “Discretionary Evolution. and Wisconsin.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. 1997. New York. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU)...”. Dassovich explained that they were frustrated with the “myriad of complex and controversial balancing accounts and rate adjustment mechanisms they had to contend with every 12 months” as part of the rate-making process. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process.63 This move towards greater reliance on the marketplace to make supply decisions is clearly in line with the free-market ideologies of the Republican Governor.. 60 61 Levison. “Retail wheeling. the same year that California’s Blue Book proposal was released. Commissioner Knight. 62 Asmus. “DOE Restructuring Bill” Stevenson. both appointees of Governor Pete Wilson.has noted.. Connecticut.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Michigan initiated a five year retail wheeling experiment involving two utilities. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail.”. 1995. Massachusetts. were the key retail wheeling champions within the CPUC. Maine. 24. according to Jeff Dassovich. though it urges states to consider retail competition.”62 a form of integrated resource planning know as the BRPU.

Many of the outcomes of the deregulation policy formulation were a result of negotiations between organizations representing different stakeholder groups. including authorizations for legislative and regulatory study committees as well as direct access for certain customers to alternative generators. “There was not enough education or public involvement. so there was not enough press coverage. There are limits to this approach. I decided it would be insightful to interview people who represented stakeholder organizations that were active in the process. it was clear that the general public was not very involved in the process.in a fit of political posturing. writes. in that not all interest groups who might be impacted by the process participated in the 63 64 CPUC Blue Book. ERG Master’s Project Mark Stout 27 . Based on my experience as a representative for an environmental organization. 1995. 1995. 32. nineteen state legislatures have reviewed bills in response to the potential for greater competition in the electric utility industry. Jesse J. letter to the editor.65 Analysis The California electric utility deregulation experience has often been described as a stakeholder-driven process. October 9. As it was too esoteric a topic. A15(Western). “Freeing Californians from the monopoly grip of the utilities and granting consumers direct access to competitive power suppliers will greatly benefit the state’s economy and enhance the quality of life in my state..”64 As of October. Wall Street Journal. As a staffperson for a prominent officeholder noted during our interview.” [see Anonymous Officeholder Staff Interview #1] Because of this stakeholder-representative orientation. as well as the staff of the officeholders they were trying to influence. as well as interviews for this analysis. Knight.

these interviews do not shed much light on the 65 66 Sikkema. be more effectively objectified. eloquently expressed by their participation. 1980. The officeholder staff were also able to add insight on who was able to set the terms of the debate (who decided which issues were excluded). and who prevails in decision-making. shaping. 3-32 ERG Master’s Project Mark Stout 28 . “who participates. on Lukes’ “second face” of power. Their values. As Goventa comments. “A may exercise power over B by getting him to do what he does not want to do.. As Polsby has written. 2. in a contradiction between the interests of those exercising power and the real interests of those they exclude. two-dimensional view of power accounts for the development of a “mobilization of bias” explaining how a political institution can systemicly be biased towards a particular outcome. even without observable actions or non-actions by that institutions agents. cannot. power may be analyzed by looking at. but he also exercises power by influencing. but only at a superficial level. most “radical” view of power. observable actions between participants. presumably people participate in those areas they care about the most.”66 By talking with active stakeholder representatives and officeholder staff. p. His onedimensional view of power is based around observable actions by stakeholders. Lukes has argued that there are three views or dimensions of power. he argues. 1974. Goventa. who gains and loses.” Lukes’ second.” In Lukes’ third. or determining his very wants. opening up the analysis to the second view of power. I primarily focused on Lukes’ first dimension of power.. Unfortunately. “by which power is exercised not just upon participants within the decision making process but also towards the exclusion of certain participants and issues altogether... it seems to me. Lukes.negotiations.

and the final AB 1890 language. ERG Master’s Project Mark Stout 29 . environmental advocates. I first review what the different stakeholder groups wanted and got in both policy outcomes. one important subcategory emerged because of its dominance: Oil and natural gas companies are often both large energy consumers. utility labor unions. large electricity consumers. Selection of Stakeholder Groups In selecting stakeholder groups to focus on. based on 26 stakeholder interviews [see Appendix B].. I tried to cover as wide a range of participants as possible. Status Report.67 As I extended my analysis with a summary of campaign contributions from stakeholders to the conference committee members. 1995 CPUC Decision. since such a broad analysis would be outside of the scope of this project. as well as considering those used in a status report from the CPUC to the Legislature. 67 68 CPUC. Status Report. independent producers. Overview of What the Stakeholders Wanted and What They Got Before analyzing who got what they wanted.. Status Report.exercise of power from Lukes’ most “radical” view. 69 CPUC. CPUC.68 I have broken oil and natural gas companies out as a separate category in the tabulations of campaign contributions.. municipal electric utilities. 1995. small electricity consumers. and a state institutions. talking with at least one prominent representative from a number of categories: investor-owned electric utilities. 1995. as well as independent producers. the December. I chose these categories based on personal experience representing a stakeholder organization in the process.... their comments on restructuring filed with the CPUC69. 1995.

Under legal mandates which we scrupulously respect the governance of these entities and their relation to their customers are committed to their duly constituted governing authorities. • December Decision outcome: The CPUC Decision did not address municipal utilities. except for on the subject of reciprocity for allowing direct access. While recovery period is limited to four years may limit their ability to achieve the full 100% cost recovery. Most resist retail competition.” The inclusion of direct access was not embraced by munis. and pursue 100% stranded cost recovery from ratepayers. including billions of dollars in rate settlements for PG&E’s Diablo Canyon and SCE’s SONGS nuclear plants. while ensuring their financial solvency. who are also their “shareholders”. Most resist retail competition and pursue the ability to recover 100% of stranded costs from ratepayers. • December Decision outcome: The IOUs did get the ability to recover 100% of stranded costs. where there was considerable support for staying clear of muni autonomy: “We have previously acknowledged that we do not have the authority to impose our vision on municipal or public power entities. A five year phase-in to direct access may have been a little too fast for Edison. • Municipal Utilities: The munis want to retain their autonomy in making their own policy decisions.• Investor Owned Utilities: The IOUs want to protect shareholders by maintaining their stock price and maximizing profits. • AB 1890 outcome: The legislation codified the utilities opportunity to recover 100% of stranded costs. which was the strongest proponent of starting with a wholesale-only PoolCo proposal. they are comforted by a negotiated settlement that was reached to avoid future litigation. ERG Master’s Project Mark Stout 30 .

They are strong proponents of maintaining system reliability as this requires adequate staffing. • AB 1890 outcome: The legislation allows for the collection of IOU employee severance and retraining costs in the CTC. AB 1890 also requires that IOU-divested generation plants come with two-year contracts for operation and maintenance by the existing staff.• AB 1890 outcome: The municipal utilities lost autonomy in making decisions about direct access as a tradeoff to ensure their ability to collect stranded costs. Appendix B] The inclusion of direct access was not embraced by munis. An unexpected positive outcome was the improved leverage munis gained over IOUs. since AB 1890 required the munis and IOUs to work together on joint filings to FERC for the Power Exchange and ISO. while going further to directly support the goals of system reliability through adequate inspection and maintenance. it does not focus on maintaining system reliability. • Utility Labor Unions: Unions would like to protect the income of their members while faced by a down-sizing industry. and pursue ratepayer support for worker severance payments and retraining. • December Decision outcome: Although the Decision does allow for the collection of IOU employee severance and retraining costs in the CTC. enhancing our stature at the federal level. ERG Master’s Project Mark Stout 31 .” [see interview. we can point to the legislation. “If the IOUs do not respect the munis. leading to an overlap of their interests with public interests. They resist retail competition. As the lobbyist for the Sacramento Municipal Utility District points out.

• Independent Producers: Independent generators want to protect the sanctity of their existing contracts. • December Decision outcome: The CPUC’s endorsement of the Renewables Portfolio Standard was applauded by existing renewable energy generators. • AB 1890 outcome: The legislation nearly mirrors the CPUC Decision in terms of impacts on independent producers. while having access to new customers made available to them. • Renewable Technology Independent Producers: As a subset of independent generators. They would like continued funding to reflect the public goods benefits offered by their technologies (such decreased air pollution). ensuring their continued financial well-being. the renewables industry would like to rebound from difficult financial times many of them are facing due to the sunset or failure of previous policy support mechanisms. • December Decision outcome: Although the CPUC supports the renegotiation (buyout) of Standard Offer contracts with qualifying facilities. it leaves these negotiations as voluntary. although a lack of specificity in the policy language with regard to percentage levels for the minimum renewables purchase requirement was a cause for concern. Independent producers gain access to new customers through the adoption of direct access. Most are proponents of direct access. protecting the sanctity of the QF contracts. while having access to new customers willing to pay more for “green” power. resulting in generally higher prices paid to generators. Direct access with community-based aggregation of load would help facilitate the development of bilateral “green” pricing contracts with residential customers. As with non-renewable ERG Master’s Project Mark Stout 32 . Short-run avoided cost (SRAC) payments to QFs are to be set to the market-clearing price in the Power Exchange.

with one that had known costs.25 years greatly increased large electricity consumers’ satisfaction with the deal. As in the December Decision. large customers won on the inclusion of direct access. • AB 1890 outcome: Again. allowing bilateral. direct access contracts. • Large Industrial & Agricultural Customers: The large consumers want the most efficient. making them the strongest proponents of direct access. They support granting the IOUs less than 100% stranded cost recovery. renewables funding through a systems benefits charge. but limiting the competitive transition charge (CTC) cost recovery to 4. As with non-renewable independent producers. competitive market possible to drive down rates. the RPS.independent producers. SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. and want a choice of their electricity supplier. • December Decision outcome: Large customers did get the market structure they desired. and AB 1890 does provide a significant amount of money to existing renewables developers to help mitigate any downsizing in the industry. IOUs still have the opportunity to collect 100% of their stranded costs. • AB 1890 outcome: Many renewables generators were disappointed with the replacement of a policy mechanism that had known outcomes. They lost out on rather generous terms for collection of stranded costs by the IOUs. Some argue that the level of funding is too low to maintain the current state renewables base and will end in 2002. resulting in an industry shakeout. However. SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. which could extend until 2005. this industries financial woes are not solely because of deregulation. ERG Master’s Project Mark Stout 33 .

as well as in their opposition to 100% stranded cost recovery by the IOUs. Low income consumer advocates want IOUs to continue their low income assistance programs (baseline rate. In principle.• Small Consumers: Small consumer advocates want any restructuring that occurs to have net benefits for even the least well off individual. small consumer and low income advocates lost in their opposition to a market structure allowing direct access. • AB 1890 outcome: As in the CPUC Decision. They resist retail competition. with no cap on low income rate assistance. Funding for low income programs was good. although more specific details were required. although the anti-slamming language in the bill may make this unworkable if it is not fixed in this session’s cleanup legislation. and support community aggregation for residential ratepayers to take advantage of bilateral contracts with low cost generators. low-income weatherization) on an as-needed basis. • December Decision outcome: Small consumer and low income advocates lost in their opposition to a market structure allowing direct access. Language on consumer education and protection did not go far enough in addressing the needs of a deregulated market. as well as in their opposition to 100% stranded cost recovery by the IOUs. Funding for low income programs was good. the consumer education and protection language was well received. with no cap on low income rate assistance. want an equitable user class phase-in schedule for direct access. Small consumers benefited from the inclusion of language on community aggregation to allow residential customers some benefits from direct access. ERG Master’s Project Mark Stout 34 . Small consumers benefited from the inclusion of language on community aggregation to allow residential customers some benefits from direct access. and have adequate customer education programs and protection from fraud put into place.

as well as in their opposition to the tying of stranded cost recovery to continued operation of nuclear plants. while others perceived it as continued charity for poorly-run businesses that had already received more than adequate support. They want the idea of leastcost planning through IRP to be protected. • AB 1890 outcome: Environmental advocates lost in their opposition to a market structure allowing direct access. The rift in the community that had developed regarding renewables policy was only torn wider by renewables funding ERG Master’s Project Mark Stout 35 . The application of a public goods charge to pay for energy efficiency and public interest RD&D was good in principle. Most groups resist retail competition and support continued funding for new renewables.• Environmental Organizations: Environmental organizations want the electric utility industry to evolve into a form which is environmentally and socially sustainable. Environmentalists would like to see an end to the backsliding that has occurred in utility energy efficiency and R&D budgets. These groups want to accelerate the removal of coal and nuclear plants from operation. and public interest RD&D. as well as in their opposition to the tying of stranded cost recovery to continued operation of nuclear plants. The inclusion of the Renewables Portfolio Standard was heralded as strong renewables policy by some environmentalists. Direct access threatens to undermine both IRP and sales volume/profit decoupling. Mechanisms that continue to decouple utility profits from volume sales are pursued because of the positive impact they have on demand side management efforts (DSM). although a lack of specific funding levels was troubling. There is a significant rift that has developed over whether existing renewables generators should continue to receive subsidies. • December Decision outcome: Environmental advocates lost in their opposition to a market structure allowing direct access. DSM.

The organizations represented by each interview is listed. and a state institutions. Stakeholder Interviews Cluster Analysis Given the large amount of interview data to absorb from 26 stakeholder interviews. each clustered category has a small number of organizations. Because of the subjective interpretations required to code qualitative interview responses. The raw coded data for this analysis is included in Appendix D. independent producers. combined with limited time and resources available. small electricity consumers. The application of a public goods charge with statutory spending level floors for energy efficiency. utility labor unions. but there is ongoing debate as to whether the adopted levels represented too much of a compromise with more powerful players.levels that may not support the existing base of generators while allowing some new development to be placed on line. municipal electric utilities. the following cluster analysis should only be used to point out rough trends. renewable energy. by category. Because of the time-intensive nature of this research. in the table of contents for Appendix B. public interest RD&D. environmental advocates. Appendix B has a full transcript of each interview. grouping the stakeholder interviews into categories allowed some overall patterns to emerge from this set of data. This clustering also allowed for a better correlation with a review of the officeholder staff comments. and low income programs was well received. I used my original categories for this cluster analysis: investorowned electric utilities. and the small number of organizations per category. ERG Master’s Project Mark Stout 36 . large electricity consumers.

nearly half of the representatives say that their organization got most of what it wanted from the December Decision. Figure 1: How much of what your organization wanted was in the CPUC December Decision? Rather Little Figure 2: How much of what your organization wanted was in the December Decision? STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES Most SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most Mixed/Unclear INDEPENDENT PRODUCERS UTILITY LABOR UNIONS The stakeholder representatives MUNICIPAL ELECTRIC UTILITIES were then asked how much of what their organization wanted was included in the CPUC December. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . as well as the majority of large electricity consumers. this provides a baseline to determine if they got what they wanted. 1995 Decision. Figure 2 shows that all of the investor-owned utilities and independent producers. and the remaining minority claim that their organization got rather little. When combined with comments filed by that organization early in the restructuring process at the CPUC. As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. a slightly smaller number of representatives report a mixed or unclear outcome.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding.

The small consumer and environmental organization representatives appear to have taken a step backwards in terms of getting what they wanted compared to the CPUC December Decision policy outcome. The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890. say that their organizations got most of what they wanted from AB 1890. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. and the remaining minority claim that their organization got rather little. As Figures 3 indicates.from the December Decision. as well as the majority of large electricity consumers. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. a similar number of representatives report a mixed or unclear outcome. ERG Master’s Project Mark Stout 38 . nearly half of the representatives say that their Rather Little Figure 3: How much of what your organization wanted was in AB 1890? organization got most of what it wanted from AB 1890.

As Figures 5 indicates.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. either the CPUC December Decision or AB 1890. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.

forward Decision. As excerpted from the PG&E stakeholder interview. and to begin to build theories for why. Natural Resources Defense Council #1. evolutionary the step INVESTOROWNED ELECTRIC UTILITIES 0 1 2 3 4 5 ENVIRONMENTAL ADVOCATES SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS CPUC December Decision AB 1890 No preference / Unclear INDEPENDENT PRODUCERS UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES from December Officeholder Staff Interviews Officeholder staff interviews are another data source that I now use to cross-check the previous cluster analysis on who did and did not get what they wanted out of the restructuring process. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E.[see American Wind Energy Association. and Union of Concerned Scientists interviews]. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. restructuring as envisioned in the CPUC Decision would have been less likely to take place in an orderly manner due to legal wrangling and ongoing filings at the CPUC. as well as three subjects ERG Master’s Project Mark Stout 40 .” Many of the other stakeholders consider AB 1890 an incremental.

... with no ex parte rules during the pure rule-making period before December 20. mostly focusing on market structure. was personally engaged. Lobbying access is only as good as a Commissioner’s willingness to meet. CLECA. particularly by negotiating a deal between them.. were the focus of this staffer from Senator Peace’s office. CMA.who were staff for members of the legislative Conference Committee during the 1996 legislative session. Coalitions were very important. they were able to then get retailers and agricultural groups on board. He alludes to the financial resources required to fly in these business circles. As a member of CMA’s energy group ($10 thousand membership fee).... Large businesses articulated the issues. who was also the President of CMA at one time. It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe. and Edison set the ERG Master’s Project Mark Stout 41 .” • Large industrial customers.... Stan Skinner. The level of influence on AB 1890 was a function of who was in the Conference Committee hearing room. A connection is made with obtaining the Governor’s buy-in. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. Officeholder Staff Comments on Who Got What They Wanted and Why: • This CPUC staffer points to IOUs and large customers as wielding the most influence in the CPUC process... resulting in the most influential stakeholders being granted the most access. resulting in a partial phase in of Direct Access. IOUs and large customers. PG&E’s President. networking with utilities. The MOU process was very important because fighting parties came to an agreement. This offered a substantial opportunity for access. who then initiated the “very important” MOU process. 1995.. WSPA made an effort to politically educate officeholders. Large customers were less influential. There was a lot of lobbying. The Memorandum of Understanding was a major event that brought together two worlds. The preferential access to Commissioners also stands out: IOUs were most influential. The allusion to lobbying (“politically educate”) is joined with a theme of officeholder resonance to a pro-business message (“good for California businesses”): CMA and CLECA jointly made utility restructuring the issue for business. CMA’s energy committee got parties together. The following are excerpts from the full interview transcripts in Appendix C.

through networking resources. Mark Timmerman [CMA]. The utilities established early on the full reimbursement for stranded costs. no one was happy. legal expertise. They were a guiding light.tone.. campaign contributions. according to this staffer from then-Senator Bill Leonard’s office. • A staffer from Senator Byron Sher’s office highlights the ideological CPUC appointments by Governor Pete Wilson as drivers for the process. and Bob Foster [Edison]. and staff time to network anytime. When the PUC December Decision came out. They also were able to offer a lot of help with technical drafting. This put everything on the table.. the IOUs are pointed out for their influence in shaping the agenda. but this time they are joined by clean power interests. Many stakeholder interviews also alluded to the fear that a lack of legislation would result in a worse fate defined by the CPUC: The PUC laid out the framework for restructuring in the Blue Book. says this anonymous staffer. a long-time defender of environmental interests. because of their financial resources can buy three things: lobbying of politicians. Once again. The momentum created by the Governor’s office initiating the MOU process is noted once again: ERG Master’s Project Mark Stout 42 . IOUs very quickly were able to get 100% stranded cost recovery firmed up. The Decision by the PUC was going to be implemented unless the Legislature was able to deliver a package. they had the manpower to make sure their positions were taken care of.. • The IOUs’ were able to get what they want. It would not have happened without DJ Smith [CLECA]. based on the free market-driven ideologues on the Commission. • The large customers and IOUs were able to get what they want again.. A lot of their lawyers did technical language work in coalition with the legislative counsel. encouraging other people to accept the process who otherwise would not have. Linking up with the Governor’s office was critical. This was the greatest expression of coalition building. as well as an acceleration of recovery. This had to be shaped by pressures on the Legislature. who were afforded protection by Senator Sher. Renewables and energy efficiency were also guaranteed protection. anywhere. and access to the Governor’s office: The IOUs were able to pull people together.

. The ability to fund politicians helped..... These influential players relied on a “fairness and competition” argument. they accounted for 2/3 of the people in the hearing room. who deal daily with issues of economic development. The IOUs got complete stranded cost recovery. Ann sat down and read from the draft during the conference committee. ERG Master’s Project Mark Stout 43 . it was all over.. Synthesis of Stakeholder & Staff Comments on Who Prevailed. Political clout can be bought with lobbying and campaign contributions. Between the large manufacturers and utilities. you can be part of the decision making process. and legal expertise: IOUs and large consumers got everything they wanted.. oftentimes because of superior staff and financial resources.. Once the Governor’s office was behind the MOU. But it was not the number of people in the room that mattered. If you had the resources to be there. as well as their ideological resonance with a conservative Governor’s office.. The Committee staff did not write the first draft of the bill. except that the labor unions which appear to fare well in the earlier analysis are not called out in any of the officeholder staff interviews. while the large customers got the ability to go first on direct access. IOUs and large customers are often cited as victors. He gives several reasons for their influence. but the resources that could be allocated. ability to marshal staff resources. This was the first time for the Members to be looking at actual language.. including connecting with a free-market Governor. Ann wrote it and brought it to the Committee for consideration. This supports the findings of the stakeholder cluster analysis. IOUs and large consumers. and look for ways to get around paying the CTC. in the coffee shops at three AM. This had validity for Committee Members. Senior Legal Counsel for Edison. A key witness before the Committee was Ann Cohn.. such as irrigation districts and economic development rates. • Another anonymous staffer focuses on the usual suspects.Large customers and the utilities both had the most money to spend. and Why: A familiar pattern emerges from these staff comments.. The Governor has the same goal: empower people for economic development.

. The low income groups may not have the staff resources to lobby effectively... small consumers are the recipients of a bogus rate-cut that they are self-financing: Low income advocacy groups did not make their issues big and high-profile like structural issues became.. • A staffer from Senator Byron Sher’s office also brought up the municipal utilities. The low income groups participated on paper through filed comments. The renewables players were probably asking for too much of the old world the PUC had engaged in. This was very irresponsible. The rate reduction bonds may not yield net present value benefits.CalPIRG and some other consumer advocacy groups criticized the process without participating. for their inability to articulate positions.The big mistake for these small consumer groups was letting Pete Wilson get elected and stack the PUC with right wing ideologues. • The clean power community’s inability to resolve differences between them has hampered their abilities according to a staffer from Senator Steve Peace’s office. but just result in rate deferrals for 10 years... could not address the problem of a competitive market and participation. and the renewables community was perceived as not being able to make a paradigm shift. He also chided municipal utilities and some small consumer advocates for resisting the process and not fully participating.. LADWP was trying to cause trouble with restructuring. The clean power community was cited again for a lack of ERG Master’s Project Mark Stout 44 . . but did not do hall walking to the extent of other groups. according to this CPUC staffer.. They waited until late in the process to get organized.. as rates were supposed to come down due to the QF cliffs anyway. they had full opportunity.. In AB 1890. The California Municipal Utilities Association folks lacked effectiveness also. yet were not in the hearing for one minute.. but for different reasons. .. He also touched on the un-level playing field created by a free-market ideologue Governor: The environmental and renewables communities made the Committee punt. and Why: • Low income organizations and the renewables community could have improved their performance. The 10% rate reduction for small customers was final packaging to sell the bill for voters.Officeholder Staff Comments on Who Got Rolled Over. They did not want to participate. These groups could not come to a resolution.

This schism was a recipe for having the least influence. the playing field was tilted. environmental and small consumer’s initial resistance to deregulation hindered their ability to articulate positions in the new environment: The renewables community fractured itself as far as coming together behind a proposal. It had too many purists that need to learn the art of compromise. such as CalPIRG and one of Ralph Nader’s organizations. they were all against restructuring. There was not enough education or public involvement. due to the Governor and his CPUC appointees.. If they were there and could contribute. so there was not enough press coverage. in this anonymous staff comment. The munis had a hard time articulating how to maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. Peace was demanding in terms of defining your position.. Finally. It was very unhelpful to have put themselves in that position. At first.unity. and pay attention to it then. driven by an inability to compromise. echoing Senator Peace’s staffer quoted above: Early on the munis were not able to define a single coherent position or proposal. • A lack of unity in the clean power community.. To a lesser extent... Small consumer advocates faced an un-level playing field. the residential ratepayers also had trouble. Small consumer advocates and brokers did not participate in a timely manner. small customers and the people who serve small customers. which did not help. Later on in the Committee. As it was too esoteric a topic. He threw the munis out. powerful interests already had an advantage from the PUC Decision. They needed to realize the process was happening. anyone could have influence. This dissipated their effectiveness.. they did not know what seat they wanted to sit in. Groups that opposed the bill without participating also were ineffective. and they subsequently came around with an articulated position a day later. and the much-maligned municipal utilities for an inability to articulate proposals. Large. caused them problems. the fact that the renewables and environmentalists were divided was damaging.... • A staffer from then-Senator Bill Leonard’s office pointed to public interest organizations for opposition despite non-participation. Also. ERG Master’s Project Mark Stout 45 . When the train was leaving the station.. The environmental and consumer advocates did not have a clear idea of what they wanted. not after the fact.

“insider” strategy: • A volunteer on the Sierra Club California Legislative Committee noted. This pattern of stakeholder groups is consistent with the results of the stakeholder cluster analysis. Some public interest (small consumer/environmentalist) advocates were not in the game at all. but were able to recover when pressured by Steve Peace. but depended on a consensus-based.Synthesis of Stakeholder & Staff Comments on Who Got Rolled. minimizing this group’s losses. leaving it up to the lobbyists and insiders to cut a deal. First.” ERG Master’s Project Mark Stout 46 . there was not enough time. “Some volunteer leaders wanted to be more vocal on stranded costs. The municipal utilities had trouble articulating proposed solutions to their concerns in the AB 1890 Conference Committee. in large part due to the free-market ideology of Governor Wilson’s office which has been passed down to the CPUC Commissioners over years of appointments. The American Wind Energy Association and Environmental Defense Fund interview transcripts provide ample evidence of a rift in the community. most of the environmental organizations did not expend much effort in using their grassroots activists to challenge the large customer groups and IOUs. along with small consumer advocates. and were relegated to complaining after the deal was done. Things were changing too fast. but we have learned ‘when elephants dance. We didn’t do grassroots letters. A careful examination of the interviews with stakeholder representatives for environmental organizations draws out two other factors that may have impaired these public interest groups. The clean power advocates. faced an un-level playing field all along... The clean power community (renewables industry and environmentalists) were held back by a lack of unity in the face of more monolithic stakeholders. mice stay away’. and Why: A pattern consisting of three stakeholder groups who may not have received what they wanted emerges from the staff interview data.

there was not enough activity.70 [also see numerous comments in interview transcripts] An American Wind Energy Association representative was disheartened that Cavanagh would not pull NRDC’s endorsement for AB 1890. we could have killed it. Critical stakeholders who could have derailed did not. NRDC had no media strategy. “Environmentalist Defends His Stance” ERG Master’s Project Mark Stout 47 . If environmental groups collectively walked.” • Ralph Cavanagh has served as a lightning rod for praise and criticism of the environmental community’s focus on an insider strategy. not turning it into a media tank battle. “NRDC did press work through editorial boards including the San Jose Mercury News. San Francisco Examiner. NRDC’s relationship with the IOUs was important. 1997. one on one. We were in constant contact. made no attempt to build clout. largely because no public interest group was willing to oppose the bill. It was strong going in and going out of the process. not grassroots activists: “It was a consensus-based process. AWEA endorsed the bill reported out of the conference committee.” • Cavanagh offers a different perspective on NRDC’s substantial media work. the San Francisco Chronicle.” Later in my interview with Ralph. but relied on their name instead. We were on separate tracks with industrial customers to ensure no cost shifting occurred.• A senior analyst for the Environmental Defense Fund comments on their participation in the CPUC process. it did become clear that NRDC’s strategy was based on coalitions of insiders. “wanted a win.” 70 Weisman. because he. “Past EDF’s filing comments. The environmental groups and consumer groups such as TURN worked well together. didn’t want to ruffle any strategies. In the end. and the Sacramento Bee focusing on public purpose programs.

71 An attorney with the small consumer advocacy group. “Latino Issues Forum did not actively participate. insider-coalition strategy. 1980.” Goventa has commented on the hazards of consensus-based processes for less powerful actors. the use of threats or rumors. which in a situation of apparent consensus may or may not have been the case. also questioned the validity of the “consensus” process during our interview.. Ralph Cavanagh carried our torch primarily. like an armadillo in the middle of the road.e.. IPPs. it could have been shaped or manipulated. etc. 19+29 ERG Master’s Project Mark Stout 48 . especially vulnerable to the manipulation of the power field around it. the powerful may be able to ensure that certain beliefs and actions emerge in one context while apparently contradictory grievances may be expressed in others. utilities.the consciousness of the relatively powerless. taking care of small consumers would have led to compromise. unions. AB 1890 was a deal cut in back rooms between powerful players. or other mechanisms of power. only a consistency that certain potentially key issues remain latent issues and that certain interests remain unrecognized--at certain times more than others. it is tough to stop the momentum. even as it emerges. The process may not have occurred.” One staff member at the CPUC gives some credit to NRDC’s insider strategy.” 71 Goventa. big customers.. they just loaded up the plate. Public purpose concerns become peripheral. such as public interest advocates confronting large corporate interests: . Through the invocation of myths or symbols. nobody gave anything up.• A representative from a Latino advocacy group comments on NRDC’s consensus-based. may be malleable. the ‘consensus’ could be maintained by power processes. The Utility Reform Network (TURN). “If you can get all of the big dogs to reach consensus. The “consensus process” was just everybody taking. ‘Real’ consensus implies a prior process of agreement or choice. From this perspective. “Ralph Cavanagh was influential in making sure that public purpose programs stayed on the plate. a consistently expressed consensus is not required for the maintenance of dominant interests. Critical consumer interests were not present. i..

The 3% [it was actually a cap of 3. “We reached a consensus on.1% of IOU revenues. RD&D..72 At this point late in the game. As a Sierra Club California legislative chair recounts on meetings between CMA... Industrial Users. TURN was one of several public interest organizations who opposed the change. a perusal of legislative language that was proposed during the long. the public interest groups did not have much leverage to oppose the dissolution of this consensus since they did not have an engaged constituency of activists to back them up. and energy efficiency. and the Sierra Club.3% of utility revenues. not simply subsidizing other consumers or increasing IOU shareholder profits 72 Confidential binder of proposed language and other stakeholder notes ERG Master’s Project Mark Stout 49 . hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. agricultural consumers. reduced funding to an average of 2.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding.. CLECA. During the Conference Committee hearings. funding for public purpose programs: low income. These got translated into dollars. EDF. less than two weeks before the Bill would be reported out of committee. renewables with an incremental cost estimate from the BRPU.” However. including IEP. The August 15 language from a coalition of powerful interests.

73 However. 1996 Conference Committee on Electric Restructuring AB 1890. This had 73 74 California Senate TV video of August 10. one Senator’s Chief of Staff revealed..for a static amount of renewables capacity.. There was no significant opposition to this point during the hearing. “Large businesses articulated the issues.. if they pursue antibusiness policies. receiving “symbolic rewards only”... the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. recession.” An anonymous staffer’s comment also resonated with this state imperative.influential players relied on a “fairness and competition” argument. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value. and unpopularity in the eyes of the public. falling tax revenues. . section 381. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff. States simply must provide the conditions that facilitate capitalist investment and economic growth. subdivision (e) 75 Dryzek. without making it at all clear if these voluntary contributions will actually decrease the amount the IOUs must contribute towards renewables support funding from their frozen revenues. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. As he explains.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. “. but outcomes will be systematically skewed against them.. She pointed out the public relations/marketing dilemma that would result if “green” customers found out they were having no real impact on increasing the use of renewable generation. They may be allowed to participate in the policymaking process. public interest organizations have been “co-opted or bought off cheaply”.. As noted earlier.74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. 1996 ERG Master’s Project Mark Stout 50 .. then they are punished by “capital strike”. To the extent that public policy remains under the sway of state imperatives.

Senator Peace’s response to this policy mechanism was along the lines of. But if there are no instrumental benefits. “quit beating a dead horse. “For those of you who have intra-familial differences. The democratic loss experienced by entry into the state can. We will 76 Dryzek. Dryzek also notes the impact that this “democratization as inclusion” has had on the ability of progressive organizations to function in a democratic. it will not inure to your benefit for those differences to still exist on Monday... 1996 meeting.76 Another factor that impaired the public interest groups was that Conference Committee Chair Steve Peace was able to coerce these groups into accepting compromises they would not have otherwise.. The Governor has the same goal: empower people for economic development. During my experience representing an environmental stakeholder organization in this process. 1996 ERG Master’s Project Mark Stout 51 . they may lose out altogether. bought at the expense of relatively unrestricted democratic interplay in the oppositional public sphere. and Senator Peace represents a district in the San Diego area. Inclusion in the life of the state is. “It was very clear that if everyone did not work together.”. the RPS is a “non-starter” because San Diego Gas and Electric (SDG&E) does not like it”.validity for Committee Members.. I read accounts of public hearings chaired by Peace. According to an NRDC analyst who was interviewed. the loss is harder to justify.” As Peace said himself during the Conference Committee’s August 10. Peace was threatening to handle renewable energy policy himself. then. under the threat of retribution. who deal daily with issues of economic development. where he bullied advocates for the Renewables Portfolio Standard. be justified by the instrumental benefits thereby achieved. bottom-up manner: the group may have to develop a more hierarchical internal structure in order to produce a stable leadership which government officials will recognize and deal with. and nobody would have been happy.

So for those of you who have been working on other issues I encourage you all to be helpful in that area if you can. The other thing is.” That same hearing session.77 Restructuring Stakeholder Campaign Contribution/Gift Analysis One way to track influence of elected officials is to look at the organizations paying for their campaign expenses and providing them with gifts such as meals and trips. and my rule is when we are forced to unilaterally resolve issues. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts. no attempt has been made at determining total annual contributions from all sources to each officeholder. Our largest problem area. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10. obviously there is going to be many political philosophies on that issue. even though there some parts they might hate. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division.start unilaterally resolving issues. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package. OK?.. The following campaign contribution summary tables were compiled from Officeholder. A full breakdown of contributions for each legislator is included in Appendix E. is clearly renewable folks. in order to move forward with a product. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . these tables cover the years 1995 and 1996 for the author of AB 1890. everybody should suffer except for us.. if there is something you can bring to the table. Where data is available.. in terms of complicated problem area. Candidate.. Jim Brulte (R-Ontario).

The California Energy Commission has compiled a useful. and Henry Duque. This web page78 was used as an additional check of which organizations have actively participated in influencing state energy legislation. but rather include a sampling of member company contributions. CMA.energy. Byron Sher (D-Palo Alto). yet dated (12/18/95).. and Steve Kuykendall (R-LA). Mickey Conroy (R-Orange).html ERG Master’s Project Mark Stout 53 . and Bill Leonard (R-Upland).Industry Restructuring. Governor Wilson’s five appointees are President Daniel Fessler.ca. Gift information is also compiled for the five Public Utility Commissioners presiding over the years 1994 and 1995 in Appendix E. Norm Shumway. 78 http://www. reference titled. Gregory Conlon. Only donations from organizations involved as primary stakeholders in California’s electric utility deregulation are included. The three Assemblypersons were Diane Martinez (D-Alhambra). Josiah Neeper. “California Lobbyists and Representatives in Energy-Related Legislation”. Jesse Knight Jr. or CIU member companies. The three Senators on the Committee were Steve Peace (D-El Cajon). These compilations do not provide comprehensive coverage for CLECA. Campaign contribution totals for organizations include donations by employees and volunteer leadership.gov/energy/cectext/lobbyist.

374 $1.166 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.595 $0 $21.157 $0 $188.000 $225.149 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.741 $21.496 $8.112 $3.181 $0 $160.096 $971.153 $750 N/A $8.819 $0 $323.675 $736.079 $13.000 $480.101 $495 $10.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 N/A $0 $18.592 $846 $0 ERG Master's Project Mark Stout 54 .180 $0 $209.000 $0 $70.758 $2.964 $0 $40.745 $68.000 $681.995 $596.559 $0 $246.370 $648 N/A $0 $208.031.419 $13.405 $0 $722.479 $2.000 $1.308 $516.110 $34.516.163 $0 $25.239 $0 N/A $0 $89.102 $0 $73.818 $0 $65.952 $1.630 $300 N/A $0 $5.500 $533.675 $384.500 $263.S.835 $1.203.500 $190.416 $5.608 $3.500 $1.000 $562.079 $950 $14.500 $78.000 $62.981 $1.092 $3.075 $4.000 $634.125 $0 $4.752 $0 $51. (geothermal) California Solar Energy Industry Association Enron Capital & Trade Resources Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Energy Corporation (windpower) Solar Turbines Incorporated LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Conference Committee Campaign Total California Contributions Lobbying Expenses $59.470 $10.588 $500 $32.272 $0 $64.

596.145 $5.081 $1.203 $0 $30.271 $0 $12. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.519 $11.055 $0 $151. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.000 $0 $171.000 $526.207 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .675 $0 $1.723 $0 $38.000 $383.600 N/A $5.362.000 $20.003.400 $100 $79. (gasoline refining and marketing) Tower Energy Group (oil.167 $500 $25. natural gas.665 $0 $262.000 $0 $6.495 $1.291 $3.401 $1.495 $27.319 $0 $10.716 $39.947 $500 $281.701 $0 $5.000 $524.326 $0 $100.230.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.099 $12.600 $32.551 $12.083 $0 $20.197 $500 N/A $2.203 $5.938 $0 $118.492 $0 $66.000 $37. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $0 $15.250 $0 $30.850 $1.

S.571 $500 N/A $200 N/A $1.032 $0 $172. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $35.600 $276.748 $32.240 $0 $178.750 $267.017 $1.400 $1.724 $500 not applicable $500 $57. Dist.543 $29.460 $50.100 $144.281 $1.200 $837.500 N/A $0 $211. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.147 $500 $739.905 $30.025. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.331 $0 $97.000 NA $500 $0 $2. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.454 $3.000 N/A $100 N/A $7.782 $981.000 $85.917 $300 $5.717 $500 not applicable $0 $138.819 $921.882 $15. McQuat.605 $250 N/A $1. and Hamrin.286 $3.750 $418.590 $5.626 $0 $8.500 $29. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.060 $6.589 $26.118 $0 $144.) Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District Turlock Irrigation District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.500 N/A ERG Master's Project Mark Stout 56 . Inc (consultants) Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Windpower Sithe Energies Co.195 $401.845 $452.000 $50.000 $209.159 $3.100 $0 $500 N/A $100 $0 $500 N/A $2.229 $100 N/A $1.250 $148. producers. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.862 $21.750 $1.450 $566.179 $0 $3.611 $1.250 N/A $100 N/A $2. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $33.

780 ERG Master's Project Mark Stout 57 . (gasoline refining and marketing) Tower Energy Group (oil.438 $500 N/A $0 $1.643 $1.925 $0 $44.000 $65.960 $2.181 $1.495 $22.500 $47.661.478.000 $76. Texaco Tidelands Oil Tosco Corp.689 $2.754 $4.750 $37. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.209.761 $0 $73.861 $1.521 $0 N/A $50 $87.521 $14.800 not tracked $3.137 $550 N/A $5.072 $918.958 $2.573 $2.250 $34.900 $0 $21.500 $251.334 $498 $1.532 $4. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.885 $300 $207.016 $1.000 $22.705 $19.245 $335.347 $9.384 $2.511 $1.090 $749 $38.900 $1.622 $67.050 N/A $0 $214. diesel) Unocal (CMA member) Victory Oil Co.050 $949. natural gas.407 $200 $61.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.750 $23.417 $9.989 N/A $9.712 $100 N/A $200 $16.636 $0 $103.650 $3.950 $3.000 $500 $456.995 N/A $100 N/A $0 $3.500 $277.878 $12.177 $300 N/A $0 $29.000 $233.721 $748.296 $800 $25. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.138 $1.521 $1.

462 $208.378 $100 $21.000 $2.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .448 $424.250 $21.066 $500 N/A $250 N/A $22. of California.000 $700 $117.462 $500 $14.000 $15.066 $500 $21.438 $4.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.585 $33.068 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.790 $100 $14.

Shanghai. were able to far outspend environmental organizations (who were usually spread thin over many issues). their “Travel project to Europe on Electric Restructuring. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. the lobbying summary tables above.”80 In April of 1995.As one would imagine. Brussels. paying up to $7. regulators. for $7. 4 ERG Master’s Project Mark Stout 59 . to meet with CEOs of the electricity industry. Conservation. One example of the type of access to officeholders that money can buy is the junkets run by the California Foundation on the Environment and the Economy. and Paris. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. and small consumer groups. According to investigative writer Peter Asmus.167 per guest. alternative energy producers. 1996. 1996. 4 Asmus. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and environmental groups to discuss the British experience with deregulation of electricity. government ministers.79 From 3/16/94 to 3/27/94. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London.800 each. From 3/28/96 to 4/8/96. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. and Inner Mongolia. including oil and natural gas companies. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. an Edison lobbyist was added to the international travel party at the last minute.

Conclusion This project synthesized data from several sources including semi-structured interviews with stakeholder representatives & officeholder staff. at the mere cost of $7. These clean power advocates. The clean power community (renewables industry and environmentalists) were held back by a lack of unity in the face of more monolithic stakeholders. in order to find out which stakeholder organizations got what they wanted from California’s electric utility deregulation policy formulation process. Sweden. stakeholder-driven processes. along with small ERG Master’s Project Mark Stout 60 . and why or why not different groups were successful. It is not so surprising that these “thousand pound gorillas” did well in the process. This analysis generates the hypothesis that these parties were most influential because of superior staff and financial resources. several patterns emerged regarding which groups got far from all of what they wanted. and academic literature. large industrial customers. Because these stakeholder groups support the capitalist state imperative of wealth “accumulation”. they are well suited for influencing inclusive. Rather than attempting to verify a pre-determined hypothesis. it appears the investor owned utilities. my analysis uses patterns in the data to create emerging theories. state government archives. such as the CPUC proceedings and legislative Conference Committee.490 per guest. Using the same officeholder staff interviews and stakeholder interview cluster analysis. as well as their ideological resonance with a conservative Governor’s office. Based on interviews with officeholder staff and a cluster analysis of stakeholder interviews. and labor unions were the most influential in the deregulation process.Assemblymember Steve Kuykendall to London. and Budapest.

consumer advocates, faced an un-level playing field all along, in large part due to the free-market ideology of Governor Wilson’s office which has been passed down to the CPUC Commissioners over years of appointments. These stakeholder organizations do not have the financial resources to support the level of policy staff, legal experts, and lobbyists that the larger commercial interests were able to bring to bear in order to gain and maintain access to decision-makers. Because they do not represent capitalist state imperatives, these alternative energy industry and public-interest organizations should not find inclusive, stake-holder driven processes such as California electric utility deregulation to be particularly fruitful for obtaining their objectives.

Bibliography
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CPUC vs. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 .Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.e. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.

and 2) coverage for utility stranded costs and obligations. PG&E had two main goals from the California deregulation process: 1) an orderly transition to a restructured generation environment. PG&E’s experience with the restructuring of the gas industry provided valuable insight that shaped this approach. For one.Appendix B: Stakeholder Interviews Investor-Owned Electric Utilities Pacific Gas & Electric Kathy Treleven is the Assistant to the Vice President for Policy Coordination & Regulation at PG&E. PG&E wants to avoid the stranding of deals that were made in an era of an intact regulatory compact. they want to be able to shape the outcome more effectively according to Kathy. eventually giving in to it while creating tensions with some parties. E-1. PG&E initially said no to gas deregulation.”81 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Kathy. “Pacific Gas & Electric is a California Investor Owned Utility Company. Now that PG&E has realized electric utility deregulation is inevitable. ERG Master’s Project Mark Stout 67 . Secondly. PG&E provides gas and electric service to more than 13 million people in northern and central California. PG&E does not want to have to automatically take the blame when reliability issues arise. 81 CPUC Renewables Working Group.

1995 Decision? PG&E got what it wanted on some of the more important issues in the CPUC’s Decision. Kathy indicated that the Decision included a plan for an orderly transition to a deregulated generation environment that PG&E desired. ERG Master’s Project Mark Stout 68 . Several areas of compromise for PG&E included irrigation district exemptions for collection of the Competition Transition Charge. the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. “Steve Peace forced everybody to confess what was important to them. but had to compromise a little more than in the CPUC decision. PG&E largely got what it wanted. AB 1890)? Why? Although the CPUC Decision was financially easier on PG&E. increasing the risk to full stranded cost recovery.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. restructuring as envisioned in the CPUC Decision would have been less likely to take place in an orderly manner due to legal wrangling and ongoing filings at the CPUC. what they perceive as significant funding for renewable energy support.. Is your organization more comfortable with one policy decision over the other (i. Also.” according to Kathy. compared to the four year collection period in AB 1890. and a shortened period for CTC collection. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? In the formulation of AB 1890. and own up to what they would let go. Kathy said that it was important for the Legislature to use a process which brought disparate parties together. CPUC vs.e.

She thought this was due to the nature of the regulatory process: workshops. in Kathy’s view. The most important strategy behind all of these tools was the use of a collaborative process to refine the organization’s thinking. “compromises that generated internal dissent. that sometimes leaked. “healthy internal debate. the negotiating team was given complete freedom to make policy. Kathy said that there was a. this flexibility combined with the pressures of negotiation sometimes resulted in. This more inclusive process is a. discussions in open forums. PG&E was able to maintain a consistent position on issues throughout the CPUC and Legislative process. The legislative process can be even messier. Although they checked back in with company officers.” outside of the organization. formal filings. which was required because of the Conference Committee environment created by Chair Peace. at finer levels of technical detail. For the formulation of the CPUC Decision. however. she indicated that there was an occasional rough edge. or over time? At a macro level. PG&E had a core set of negotiators for AB 1890. while the concept of a wholesale-only pool [President Fessler’s original PoolCo proposal] was to be resisted. More so than in the past. “way to advance goals with a ERG Master’s Project Mark Stout 69 . PG&E relied upon lobbying at the Commission. The collaboration that went into the MOU was an example of this approach. and responses to Commission requests for input. the Working Group process.” What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? To influence the CPUC Decision. However.Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. and outside conversations. According to Kathy. PG&E approached other parties to float proposal ideas by them. However. there was consensus within the organization on the basic decisions: direct access was to be supported.

1996. a gas utility which serves a territory largely overlapping with Southern California Edison’s. and willing to be straightforward on what they can give on. It allows an organization to get buy-in from other parties in advance. and gas service to 0. SDG&E.reasonableness check. ERG Master’s Project Mark Stout 70 . App. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report.15 million electric customers in San Diego and southern Orange Counties. Jack. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast.” according to Kathy. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. the parent company of Southern California Gas Company83. 1996. is a California Investor Owned Utility Company founded in 1881. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E.” Organizations had to be able to make decisions right on the spot to shape the outcome. Sirard. 82 83 CPUC Renewables Working Group. while holding on to what they really wanted.”82 Enova Corporation has announced a merger with Pacific Enterprises. “People who influenced the outcome were present.7 million customers in San Diego County. E. SDG&E provides service to 1. “a subsidiary of Enova Corporation.

[The CPUC’s proposal in the December Decision would have required roughly 10% of all retail sales to be backed up by tradable credits for renewables. SDG&E was a supporter of the PoolCo market structure along with Edison. Throughout the ‘70s. SDG&E wanted to become the lowest priced California IOU.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Our main goals were stranded assets recovery and the creation of a new marketplace where we could compete. and got it struck down. 84 CPUC Renewables Working Group. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. High priced renewables are OK if you are not moving to a competitive future. Also. We were very opposed to the BRPU. with the exception of the legislation’s mechanism for a rate reduction. AB 1890 mirrors the Decision in many ways. except for electricity purchases from Mexican geothermal generators. We were strongly opposed to the RPS. The lucky Arizona utilities went with coal. We went to FERC. everyone should pay.84] SDG&E does not have any renewables. we had the highest rates in the nation. When Tom Page came in as CEO in 1981. This would put us at a competitive disadvantage compared to PG&E and Edison. 1995 Decision? The PUC was on the right track. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. so we would have to buy energy or credits. it would be difficult to get 5% renewables. 1996. ERG Master’s Project Mark Stout 71 . they did not get there by investing in high cost renewables. if you are a broker. but are not viable with competition.

which has formed a joint venture with Pacific Enterprises. there would have been litigation or more legislation. the goals of an unregulated affiliate may be different than a utilities. Energy Pacific85]. CPUC vs. tried to talk with everybody as much as possible. The PUC had fallen into low esteem with the Legislature. If the Legislature had not done what it did to reconcile competing interests. We have one 85 Enova Corporation 1996 annual report. the process would have been smoother.e. and AB 1890 extended it.. Is your organization more comfortable with one policy decision over the other (i. or over time? In getting ready for competition. we have started a non-regulated business At times. SDG&E took part in a series of hearings. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. We tried to participate in the process. These differences were worked out internally with our affiliate. but we stepped all over each other internally. Whether this happens is up to SDG&E’s operation. Enova [Enova Energy. AB 1890)? Why? We supported the December Decision. The PUC was not the right forum for this. ERG Master’s Project Mark Stout 72 . the Commissioners have no authority over municipal utilities.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? AB 1890 provides a framework set to achieve our goals. Had there been more coordination between the PUC and the Legislature. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? In addition to the filing formal comments.

and need to hit the 1/1/98 deadline. SDG&E had eight people involved in the process. Have sold it that AB 1890 is not a model for the nation. Over time. but Byron Sher needed appeasement. Steve Peace would pick an issue. at which time they must get competitive. he created momentum with no recess. He was adamant against the RPS. Peace created a mood that we could get the package done. This was an exercise that none of us want to do soon. Peace would. The Republicans did not want any renewables funding. he would move on. all of the delegates have signed on. We are asking Congress to leave California alone.or two full time staff in San Francisco. because of the different characteristics of different states. The renewables community has a problem. in that their money goes away in 2002. supported by regulatory attorneys and experts brought in when needed. If it could not be resolved yet. try to resolve it. I will not be surprised if they push for new legislation in 2001. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We stuck to our two goals as the most important priorities. A delegation has taken AB 1890 to DC. because of the BRPU experience. The Conference Committee provided a forum for stakeholders to solve their problems in a collaborative approach. ERG Master’s Project Mark Stout 73 . nobody knew where it was going. Jim Brulte and Bill Leonard wanted to bail on them. Peace became an advocate for resource diversity. As AB 1890 started. If they did not solve them. with three officers who had good control over what we were doing. and nobody would like the outcome. We have a $1/4 billion to invest in the ISO.

all customers should at the same time. First. With the encouragement of the Governor’s office. and SCE investors as well as independent energy producers should have the opportunity for a return on investment. We could have been perceived as opposing direct access. Our three principles. large and small customers. The 109-year old investor owned utility serves more than 4. so we decided if this was going to come into play. not “the big guys eat first”. 000 square mile service territory has a population of more than 11 million. don’t rock the boat utility. with a phase-in to direct access. The regulatory compacts that we entered into need to be recognized.”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. “the nation’s second largest utility. and served as a basis for AB 1890. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and return on investment. we were positioned as an anti-restructuring.2 million customers in Central and Southern California. restructuring came to be viewed as inevitable. If any customers are to benefit. This is best implemented under a transition. 1995 Decision? Those three principles were significant components of the December Decision. equity. opportunity. we adopted a principled approach that recognized the interests of Edison.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE. and other energy service providers. a manifestation of these mutual interests. based on number of customers. The utility’s 50. be we did get a principled ERG Master’s Project Mark Stout 74 . I would not say we got everything we wanted. We also pursued the opportunity for a return on investment. creating a level playing field. let’s do this the right way. were equity. Over time.

All AB 1890 represents is an unfolding framework. it validated the direction taken by the December Decision. We could always ask what principle is driving a requested amendment. ERG Master’s Project Mark Stout 75 . in terms of headroom for shareholder returns. CPUC vs. AB 1890)? Why? We were satisfied with AB 1890. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Is your organization more comfortable with one policy decision over the other (i.e. E. and CTC exemptions.. or over time? Absolutely. We will not know how Edison faired until after the transition. we were very consistent.approach which recognizes the different parties interests. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? Edison worked to ensure that the Commissioners and Legislators understood that the interests being served by our proposals were more than just our own. This made for touchy meetings with the parties. This allowed us to be consistent. we do not know how it will turn out. it is best to adopt a principled approach. Since there are still issues for Edison around stranded cost recovery. Since regulatory changes are subject to regulatory whims. Generally. We made sure they knew 86 CPUC Renewables Working Group. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The same is true for this legislation. App. 1996. otherwise you may open up doors to places you do not want to go. putting language in the statute made it more likely to get a known outcome.

even now we have weekly meetings with corporate officers to discuss implementation. stranded costs are a bigger issue for municipal utilities than for the IOUs. with customers removing themselves from our distribution service. We also involved people at the highest levels. Edison strived to keep it simple. we have a small. Municipal Electric Utilities California Municipal Utilities Association . For both the Commission and Sacramento. San Francisco. working with broad-based coalitions. CMUA members had a debate at the beginning of 1996 as to whether to pursue our own legislation. for instance with the MOU partners. There were two areas of concern: physical bypass. excluding electric co-operatives. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In the political arena.Interview #1 Stuart Wilson is the Assistant Executive Director for CMUA. regulatory. not getting all they wanted. and DC offices also have weekly meetings to coordinate strategy. We put in legislation to prevent customers from avoiding CTC payment. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? This was a mix of internal and external politics. supported by policy. This is why we were so successful in helping resolve issues. a lobbying organization representing all but three of the municipal utilities in California. and legal expertise from the corporate offices. on-site staff. The Sacramento. and a Proposition 13 clause stating that local governments can not charge more than the cost of service for utility customers.that everybody was giving up something. which ERG Master’s Project Mark Stout 76 . On average.

We had to stay at the table in order to ensure that our concerns were addressed.. we will end up playing defense. [IOUs have made arguments about unfair competition from municipal utilities. we avoided “level playing field” language on tax exempt financing. 2000. public benefits programs. AB 1890 has good stranded cost recovery language which includes physical bypass. a quid pro quo for CTC protection. The direct access reciprocity requirements were expected. 3.. CMUA decided that if we do not take a more proactive approach. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? There was no time limit for municipal utility CTC recovery. 1995 Decision? CMUA had no clear objective at the CPUC. and an outline of flexible. We came up with a proposal to prepare for the December Decision. in order to get the legislative authority for CTC recovery. an argument which CMUA refutes.could be used to disallow CTC collection. This forced the munis to support full stranded cost recovery in the IOU CTC.87] CMUA also sought the option of long CTC recovery periods for its members.. 1995. App. The Legislature did not need to mandate this. Federal power. ERG Master’s Project Mark Stout 77 . What 87 CPUC. Also. Our proposal included voluntary participation in the PoolCo. other than not wanting deregulation to happen. AB 1890 also includes a requirement for our munis to begin direct access by January 1. referring to access to tax-exempt bonds and inexpensive. our customers would have insisted on direct access because of competitiveness concerns. We wanted to avoid mandates or language on an “un-level playing field”. Status Report on Restructuring. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. as well as a longer transition period for direct access.

This would not have passed the market power test at FERC. Municipal utility representatives attended working group meetings. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. We are not worse off from the legislation. short of wishing deregulation would all go away. giving munis leverage. AB 1890)? Why? The PUC did not do anything directly to munis in the December Decision. which would have caused transmission constraints. Is your organization more comfortable with one policy decision over the other (i. We did not have huge problems with their Decision. with allocation decisions retained by the local municipal utility leadership. except for its accelerating the transition period on IOUs. or over time? In general. the ISO would control transmission assets for only 2/3 of the system.was not anticipated was the requirement for munis to be part of the ISO.e. We had to agree with the IOUs on the FERC filing for the ISO. This was a compromise reached with Ralph Cavanagh.. ERG Master’s Project Mark Stout 78 . quickening their move to a competitive posture. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? CMUA filed formal comments. CPUC vs. We agreed to collection of public purpose program funds as a percentage of revenue at a level at least as high as the lowest IOU. The legislation also allowed the ISO to be an independent entity before the FERC filing. including our proposal. Without us. but we were forced to concede on the ISO issue. We also appeared at full panel hearings.

It was better to stay with it than not have any leverage. but did spend significant time with Committee members. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? “Blundering”. spending more time negotiating with other parties. CMUA went in very concerned about collecting stranded costs. Munis have overlap constituencies in ratepayers and citizen shareholders. we did not oppose the Decision. The only alternative was to walk away from the deal completely. Peace blew up when he realized he was dealing with an equation that would not balance. Because of this. We had sponsored legislation to assure no customers could avoid paying the CTC. CMUA filed comments.Interview #2 Jerry Jordan is the Executive Director of CMUA. Stuart Wilson [see previous interview] recommended that I speak with him also to gain additional insights. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? The PUC had no reason to listen to us as they do not regulate us.What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? The Conference Committee had a meeting in Anaheim to focus on muni issues. and their final Decision had the suggestion of both a wholesale pool and bilateral trades [direct access]. CMUA lobbied people. Edison made threats that AB 1890 would be just as prescriptive for munis as it was for IOUs. muni levels rising. but were perfectly willing to see no ERG Master’s Project Mark Stout 79 . forcing the legislation. IOU levels dropping. California Municipal Utilities Association . CMUA presented a slide graph showing rate forecasts. The pending rate decrease for IOUs provided a cushion for restructuring.

Stuart Wilson and me. beat up. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. but were concerned that legislation would handicap our ability to recover them. created in 1946. Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. 88 Asmus & Smeloff. 1997. 1993. in other words we wanted to be able to recover our stranded costs. CMUA did not have the army of people Edison did. and sent out to negotiate. We were called in by the Committee. We maintained flexibility. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. ERG Master’s Project Mark Stout 80 . volunteering to do public purpose programs in exchange for other concessions.legislation passed. and regulated by an elected district board which sets policy and rates for this electric utility. We never questioned that there would be stranded assets. CMUA had two lobbyists. see interviews]. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies.88 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We had one guiding principle: Preserve the autonomy of SMUD and other munis to determine their role in a restructured environment. We were prepared to oppose the bill if it did not include local control for municipal utilities. It was difficult to imagine how the Legislature would perceive a muni’s need. SMUD is a Publicly Owned Utility for the Sacramento region. Reinventing Electric Utilities.

SMUD is very committed to renewables. we have to resolve this by 2002. It created an environment of uncertainty. SMUD’s territory is a small island surrounded by PG&E. energy efficiency -. By constructing a brave new world for IOUs. There was also a concern that munis would be constrained to the same clock as the IOUs in terms of the duration of the CTC recovery period. that some other source should pay. SMUD responded. this made the question go away. In the June. This was the bottom line. The Legislature did not elevate this to a well-reasoned. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. it seemed obvious that these principles were a gimme. We are a consumer elected entity. ‘96 Rate Restructuring Settlement. if any. Assemblyman Steve Kuykendall was direct in his comments. Since our rates were 25% below PG&E’s. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained.Going into the process. this impacts munis. It is difficult to maintain public purpose programs if everyone else abandons them. This is a classic question of public versus private decision making. The munis are in a foreign land with the PUC. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . there was a questioning of what role. what equity or fairness issues were raised by them being in the marketplace. there was a question of whether we would get 100% stranded cost recovery.clean energy. should a public agency have in a restructured environment. Some would argue that the SMUD customer did not decide to open Rancho Seco. Even though municipal utilities have the authority to recover costs. he does not see a role for munis in a deregulated world. philosophical debate. it is planned that PG&E will drop their rates below SMUDs by 2002. SMUD will finish recovering our CTC by 2002. But in reality.

If the Legislature had respect for the municipal affairs doctrine. a cloud that we do not need. A lot of AB 1890 is not crisp. enhancing our stature at the federal level. It would have been difficult for the IOUs to keep up with us on these programs and bring down rates. If the IOUs do not respect the munis. because the repayment of current debt could be viewed as a CTC. ERG Master’s Project Mark Stout 82 . nobody saw the munis as co-equals to the IOUs. someone can accuse us of having rates too high.public purpose programs. not to say that we can’t operate as business as usual. This is a profound shift in how munis and IOUs relate to FERC. SMUD did get something more than we asked for also. we can point to the legislation. this gives us political standing. Going in. but it might be for others. this is not onerous or burdensome. AB 1890 also set time limits on the duration of CTC recovery. and conditions on CTC recovery. This is not a problem for SMUD. I do not know. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? It’s not like we were asking for a whole lot. If we do not go to direct access. For us. but got more than we asked for. We did not get everything we wanted. AB 1890 states that filings to FERC would be jointly between the municipal utilities and the IOUs. The state’s regulation of Investor Owned Utilities differs from a muni’s ability to decide how to serve. AB 1890 has language written that denies a muni’s ability to impose a CTC unless they allow direct access. it would not have put this in. This is arguably a meaningless statement. As I mentioned. This is an infringement on municipal autonomy. How this is playing out. But this language could burden us with litigation. but arguably gives standing to third parties to contest SMUD’s approach to restructuring.

Is your organization more comfortable with one policy decision over the other (i. it was used as a basis in the argument for 100% cost recovery by the IOUs.e. it would have been appropriate for the Legislature to allow some lower percentage. but residential customers will not leave their jobs.. AB 1890)? Why? We prefer AB 1890 because of the language which was added to our benefit: The joint filing with FERC. ERG Master’s Project Mark Stout 83 . Since munis could recover 100%. CPUC vs. while keeping residential rates high works just fine. principles for reciprocity on direct access. it codified that customers must sign up to a CTC.” I think we got used. I would find that the IPPs see this as a huge giveaway. saying “What is good for the goose is good for the gander. It works to SMUD’s advantage to keep their rates high. but would not want to change the outcome. or over time? I think so. It skews the time until true competition. The rate reduction bond is no skin off our nose either.The bill does a couple of profound things. This was no small feat for the IOUs. businesses will make location decisions based on electricity costs. As for 100% stranded cost recovery for the IOUs. The strategy of reducing rates to industrial customers. since it places a premium on their bill extending into the future. This could not have been done by the CPUC. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.

causing concern with other munis. SMUD is an independent special district that can not do that. there were three other people with direct contacts: SMUD’s General Manager. and those that are independent. We met with legislative staff and members.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We participated in workshops and in written testimony. There are also hybrids that fall in between such as ERG Master’s Project Mark Stout 84 . LADWP is a creature of LA. They were not camping out at the Capital. As a public agency. Munis can be divided into two groups: those that are creature of city governments. including through the CMUA. more at stake. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? SMUD did the lobbying and advocacy that public agencies are allowed to do. but do send attorneys to represent us. We also networked our position with other utilities. The IOUs have more resources to devote to this. The thing that sets people off is that LADWP transfers $100 million a year to their general fund from their utility revenues. If the city council needs this transfer to balance the budget. but came in for visiting with the staff and members two or three times each. so be it. we have to play things straight up. We do not have a lobbyist at the CPUC. Comments on municipal utilities and taxation: LADWP [Los Angeles Department of Water and Power. and Director of Public Affairs. which does not include campaign contributions. putting in 1/3 to 2/3 of my time. California’s largest municipal utility89] is a favorite whipping boy of some of the members from Southern California. In addition to myself. I was the point person in lining up meetings that several of us would attend. Assistant General Manager.

the city has imposed a duty on SMUD to collect this tax. with city council members as their board of directors. saying this would jeopardize the bill. There was a bill in the Assembly to immunize the IOUs against Prop 218. They would not take munis in. With deregulation. owner interests do not. as it was expected to pass. ERG Master’s Project Mark Stout 85 .. SMUD collects a utility tax for the city of Sacramento. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? The California unions decided early on that digging in our feet against deregulation was a bad strategy. Generators want to keep reliability on the edge. a coalition of labor unions whose members work at all of the electric utilities in California. driving up prices. Existing regulated rate systems have incentives for reliability through excess capacity. Highlights of Restructuring. like protecting the jobs of meter readers. The ultimate idea of our strategy is to protect jobs. The strategy then was to protect people. Utility Labor Unions Coalition of California Utility Employees . 89 CMUA. By passing a tax..Interview #1 David Marcus is a technical consultant to CUE. Propositions 64 and 218 create a cloud over a muni’s ability to collect taxes. which is a standalone district. not jobs. In a competitive system. you need to create a structure to ensure reliability. but this is a case when union interests and public interests coincide. no one is responsible for reliability. building inventory is stupid. In cases where fights would be inevitably lost. we decided to go for retraining.the Santa Clara Municipal Utility District. David was referred to me by Carl Blumstein as playing a central role in this labor coalition’s strategy [see interview with Carl].

The legislation also attempts to ensure the reliability of the system by building in responsibility for inspection and maintenance into the new regulatory structure. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We hoped to shape restructuring policy to minimize the adverse impacts on utility employees while still achieving the goals of the Commission: Lowering rates while protecting employees. transmission. a result where the only criteria was not cents/kWh.Interview #2 Marc Joseph is an attorney actively representing CUE through both the CPUC and legislative tracks. We initially focused on whether. Coalition of California Utility Employees . Marc was referred to me by David Marcus. and how the market should be shaped. We already had viable wholesale competition.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Getting CTC recovery for worker retraining and severance packages was a major victory. we shifted to focus on generation. and responsiveness to customer inquiries. Enron now agrees with us. As it became clear that this argument would be lost. Most customers want more than incremental savings. ERG Master’s Project Mark Stout 86 . and to what extent. but with a rational transition. a technical consultant to CUE [see preceding interview]. but criteria of reliability and quality of service. We pointed out that the only part of the industry subject to competition was the variable cost of energy. the existing unions get a contact for two years of plant operation. and distribution reliability. there are no savings to customers to be gained from retail competition. Also. We are willing to compete. when a utility plant is divested to a new company. increasing efficiencies without sacrificing reliability and service.

For example. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Most of what we sought.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and quantitative reliability measures were beginning in another rulemaking. Is your organization more comfortable with one policy decision over the other (i. The Decision fell considerably short of where it needed to be. we supported AB 1890. CPUC vs. with a 2 year continuation of the existing staff..e. ‘98 start date because of that. Some things were being addressed in other proceedings. But no standards were discussed for inspection and maintenance. and it did not provide for generation supply reliability. It recognizes the need for divested plants to be operated by capable people. AB 1890 also gives the ISO the responsibility to achieve Western Systems Coordinating Council (WSCC) standards for planning reserve criteria. or the value of a highly skilled. It calls for the adoption of standards for the inspection and maintenance of distribution and transmission. ERG Master’s Project Mark Stout 87 . The CPUC is required to ensure that generation reliability is maintained before plants leave their jurisdiction. AB 1890 provided for recovery of reasonable employee transition costs. distribution reliability was in a separate rulemaking. dedicated workforce. AB 1890)? Why? Yes. It attempted to address the means for employees to be provided with assistance to handle their transition. 1995 Decision? Not very much. The Decision also did not recognize the importance of maintaining local generation throughout California. and have committed to the January 1.

We participated fully in the public process at every opportunity. All comments we filed had yellow covers to stand out in stacks. including PG&E. AWEA. We have had no trouble with consistency.Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Independent Producers American Wind Energy Association Nancy Rader is the West Coast Representative for the American Wind Energy Association. This collaborative effort resulted in the June ‘96 PG&E rate restructuring settlement. ERG Master’s Project Mark Stout 88 . spending all of August working hard. and AB 2610 dealing with generation reliability. wind energy industry since 1974. that held together. but did some personal lobbying before the December Decision. We participated fully in the Committee hearings and drafting of language. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? CUE marched in the Steve Peace death march. CLECA. with three or four representatives in Sacramento much of the time. we sponsored two bills. CUE also took part in a coalition. “has represented all facets of the U. AB 3153 providing employee transition cost. CMA. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? CUE took part in the process with many written comments as well as in a full panel hearing. We did not do much. and the oil companies.S. that featured a rate freeze in exchange for a finite CTC collection period. that was one of the basis for AB 1890. Earlier in the summer. or over time? CUE has always spoken with one voice.

such as the Renewables Portfolio Standard. the MRPR was. 12 accessory parts manufacturers.AWEA’s 750 members. includes 7 turbine manufacturers. academicians and interested individuals. Nancy had developed the RPS concept for AWEA since being hired on. ERG Master’s Project Mark Stout 89 . “undermined by EDF [the Environmental Defense Fund] who actively sought to increase opposition to the policy in order to build support for their competing policy. the essential elements of the RPS were included in the MRPR so that AWEA could largely get what they wanted. Although she says the Decision language was vague. 22 consultants. which Nancy and I found to be clearly outside of the purview of the Working Group’s charter. She mentioned that another stumbling block for the 90 CPUC Renewables Working Group.”90 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Nancy says AWEA sought to attain a “strong renewable energy policy. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.” from the California electric utility deregulation process. efficient policy mechanism. 1995 Decision? Nancy was successful in getting the RPS embodied in the CPUC’s Decision as a minimum renewables purchase requirement (MRPR). 10 project developers/operators. with implementation details to be worked out through a CPUC stakeholder Renewables Working Group process. However.” EDF led a coalition with the only non-MRPR proposal in the CPUC Renewables Working Group. “corrects market failures and market barriers.” for supporting renewable electricity generation. including 155 members in California. The RPS. and is a long-term. E-1.

Nancy said that the allocation of Systems Benefits Charge money for renewables in AB 1890 was a temporary pile of dollars. arranged for personal meetings with CPUC President Fessler and the staff of Commissioners Knight and Conlon. The RPS. Nancy remembers that the meeting with President Fessler resulted in a “vague discussion”. in comparison. Nancy. is a long-term. AWEA’s position in the CPUC and Legislature has been consistent since October of 1994. and ERG Master’s Project Mark Stout 90 . and that consequently UCS’s support of the RPS was critical. “productive discussions”. when Nancy was hired to develop a strategy for how renewables policy would be structured in a competitive industry. comprised of detailed arguments. Nancy relied mainly on written testimony filed with the Commission. In comparison.RPS was a lack of support from the Sierra Club. along with Jane Kelly of UCS. they were not able to get any of what the organization originally wanted in the bill’s language. leading to no long term policy. or over time? According to Nancy. the meetings with Commissioner Knight’s staff were. whose outcome was dependent on allocation by a state agency. and that she was not certain of his support at the time. It amounted to nothing more than a deal. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Despite AWEA’s success in the CPUC Decision. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. market-driven policy. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? To achieve AWEA’s objectives at the CPUC.

Steve Peace.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. By melting down the proposed language. “trusted in the process.” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged.” The Committee Chairman. “incredible time crunch. There were major egos on the Conference Committee with pre-formed opinions.” What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. Peace threw all of the stakeholders out of the room and told them to come back in one hour with their deals already ERG Master’s Project Mark Stout 91 . resulting in very little control for AWEA. “Knight was sold on the RPS concept because he is a believer in markets. Nancy continued to describe the process: “Time was too short.” She was also invited to participate in a full panel hearing on public purpose programs. The new CPUC President Conlon tried to put the RPS back on the table for discussion. AWEA lobbyist Joe Caves was able to get John White’s customer rebate proposal pulled from the draft language. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. Nancy said she. In retrospect. with many issues being ironed out at once. and it worked. and people were not listening to arguments. AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome. Chairman Peace. At one point towards the end of the Conference Committee process. but Peace killed it again.Nancy feels that. Nancy remembers that the conference committee meetings were occurring in an. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. had killed the RPS before any discussion began.

California Manufacturers Association (CMA).” Nancy added that if TURN had not endorsed the report. IEP’s primary goals are to safeguard the interests of operating independent energy projects. didn’t want to ruffle any strategies. along with gutting energy efficiency funding. She was also disappointed that no discussion happened amongst legislators outside of the bipartisan conference committee. and Pacific Gas and Electric (PG&E). IEP was formed in 1982.”91 According to Jan. She was disheartened that Ralph would not pull NRDC’s endorsement. resulting in little debate on the Assembly or Senate floor. 1996. in order to come up with the $540 million allocated for renewables support over the four year transition period. she offered to walk away from the table and pull AWEA’s endorsement if Ralph Cavanagh of the Natural Resources Defense Council. Independent Energy Producers Jan Smutny-Jones is the Executive Director of IEP. would do the same. AWEA endorsed the bill reported out of the conference committee. This resulted in furious horse-trading between Southern California Edison (SCE). because he. but relied on their name instead. the key advocate for energy efficiency funding. When Nancy saw the public goods money being stripped away from energy efficiency. made no attempt to build clout. 91 CPUC Renewables Working Group. largely because no public interest group was willing to oppose the bill. as well as independent power marketers. and ensure that California remains a healthy market for the development in the independent energy industry. The utilities were able to obtain a three month extension on to recovery of the Competition Transition Charge. E. “California’s oldest and leading trade association representing the interests of developers and operators of independent energy facilities. ERG Master’s Project Mark Stout 92 . AWEA would have dropped their endorsement also. “wanted a win. NRDC had no media strategy.made. In the end. App.

In May. the CPUC Biennial Resource Plan Update. we influenced the Memorandum of Understanding that was released in August of 1995. Initially. and included a policy for maintaining resource diversity. the Governor’s office convened a meeting due to the hostilities between large customers and Edison at a time when Pete Wilson was trying to run a Presidential campaign. Over time. By allowing utilities an opportunity to recover 100% of their stranded costs. they had moved from using California’s Standard Offer process as a vehicle for the expansion of the independent power sector. ERG Master’s Project Mark Stout 93 . Ensuring the sanctity of existing contracts is our highest priority. The BRPU had resulted in 1300 MW of contracts before being struck down.] What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? It was clear that the way we were doing things was not working well. to spending millions of dollars developing California’s integrated resource planning process. IEP did well from restructuring. the MOU allowed the restructuring process to move forward. IEP also sought to maintain a policy for resource diversity in the mix of generation. independent producers were better off working with customers. [SCE succeeded in killing the BRPU at the Federal level in 1995. Direct access is a tool for future development. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. Over time. 1995 Decision? Overall. A large portion of the MOU is reflected in the December Decision.and represents a diverse group of gas and coal-fired cogeneration and renewable energy plants. 300 MW set aside for renewable generation. IEP was invited to the meetings. the Decision allowed for a direct access market developing. For IEP. but not allowed to talk.

The municipal utility issue also needed to be dealt with.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Much of the same applies to AB 1890. some members do not agree with this. or over time? Yes. a “settlement negotiation with a critical mass of interest groups”. For example.. Is your organization more comfortable with one policy decision over the other (i. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. AB 1890)? Why? IEP prefers AB 1890. Overall we did well in terms of direct access to customers. we had historically tried to take the high road on public policy issues. as well as support for resource diversity. The legislation also includes language on a method for calculating SRAC [short run avoided cost. It was necessary to provide an underpinning. on the issue of full stranded cost recovery. the amount paid to QFs such as many IEP members under PURPA law]. ERG Master’s Project Mark Stout 94 . We also made a myriad of filings. but do not want their contracts challenged by the IOUs or have the IOUs driven into bankruptcy. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? Our primary focus was through the MOU. There continues to be opportunities to take potshots over a lack of consistency. leading to an almost unanimous understanding of the need for legislation. Dan Fessler was a proponent of the PoolCo. which was not supported by IEP or customer groups who feared that we would wind up with a market structure which would cause unraveling.e. CPUC vs.

Tactically. 1995. there was too much fighting with the Sierra Club and EDF.What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? A lot built on the MOU. The cogeneration-CTC waivers in AB 1890 were for the companies that were stuck in the predicament of having begun construction of new generation. The renewables community was like a family with a rich uncle dying and no will. Developers will be much better off selling to people who want to buy renewable energy rather than forcing it down utilities throats. An issue that had not been dealt with well at the CPUC was renewables. The RPS lasted about seven minutes at the Legislature. The Renewables Portfolio Standard was put in at the last minute. there are the three or four merchant gas plants will be built in California in the next five years [see Edie Lau. anybody going to self-generation would have to pay the CTC. ERG Master’s Project Mark Stout 95 . and not enough talking with other market players. It did not have political legs within the Commission. General comments: In the December Decision. which would have happened without restructuring. Three fascinating things have occurred since the issuance of AB 1890. Strategically. using oblique language. who would still be required to pay the CTC or an exit fee. even if construction of their plant started before December 20. First. with the creation of an expanding core group of people who decided this was the right way to go. there is a move away from command and control. The $540 million surcharge for renewables was Plan B. but there will be an industry shakeout. which is how the RPS was perceived. CMA and CLECA offered to carry the CTC forward [three months] in order to include renewables funding in the public goods charge. I believe the vast majority of developers will survive the 11th year QF cliff.

This is based on input from growers. 1995 Decision? AECA got direct access with a slow phase-in. who have a choice in all of their other commodity inputs. sell. three have. This got traded away. Large Electricity Consumers Agricultural Energy Consumers Association Michael Boccadoro is the Executive Director of AECA. which has significant power to buy. Giving choices to folks will lower rates. independent power developer] bought Zond [wind turbine developer] speaks of significant market potential. a lobbing group representing all farm groups in California except for those represented by the Farm Bureau. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? AECA was a strong advocate for direct access.“Law generates push for gas-fired power plants”]. playing a significant role in planning and cost overruns. Agriculture had been fuel switching for a number of years. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. Finally. The IOUs were able to protect the whole concept of CTCs. While we recognized that contracts with QFs were forced. ERG Master’s Project Mark Stout 96 . and distribute electricity. non-bypassable meant something. Although more than 70 irrigation districts never have sought to utilize this power. but lost everything else. Then there is the announcement by SCE that they will be divesting 100% of their generation. Now others are precluded by the non-bypassability of the CTC which will not allow for competition. To the PUC. An irrigation district is a type of water district. We also desired that the IOUs share in some of the burden of their stranded costs. the nukes were not. the fact that Enron [large.

Agriculture got the overwhelming majority of the CTC exemptions. or over time? AECA recognized that in the legislative debate. as did almost everybody except for Edison. unlike at the PUC. although ideally there would be no limits. with a grassroots effort generating letters to and from the Legislature. vocal opponents to the PoolCo. We lobbied at the Governor’s office. We were able to carve out roughly three hundred megawatts of CTC exemptions for irrigation districts. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? AECA approached things differently than the other intervenors.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? AECA won on direct access.e. Is your organization more comfortable with one policy decision over the other (i. the CTC issue would not be resolved with less than 100% stranded cost recovery. Diesel and natural gas use was exempted. CPUC vs. so we left it alone.. Our ERG Master’s Project Mark Stout 97 . AB 1890)? Why? AECA preferred AB 1890. The CTC could have been challenged as an exit tax. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. We were leading. it can file for a rehearing. What kept the utilities at the table was that if a party disagrees with the PUC. but we did not get less than 100% CTC recovery. approach was very political. based on something in a Decision not supported by the record. We made direct testimony at the PUC. This can go to the state supreme court if it is not dealt with early enough.

but managed to get its language in thanks to Curt Pringle. We had an irrigation district bill which the utilities had previously killed. sending press releases to Wall Street analysts. A friendly analyst provided us with a fax list for Wall Street. We then made sure that anything negative about the utilities made it out to the analysts. Brand. It is amazing how much time the CEOs of IOUs spend on Wall Street. The political leverage of agricultural votes was critical. Seymour & Rowher is Counsel for CIU. we could have pulled a lot of agricultural votes on the floor otherwise. A couple of the Conference Committee members did not have a clue what was in the bill. but stayed out of the MOU. The irrigation district CTC exemptions was one of the last amendments added. We also had a strategy based on financial market leverage. which has evolved into an electricity-oriented group. traditionally most active with CPUC proceedings.What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? The legislative debate was different. ERG Master’s Project Mark Stout 98 . AECA participated with a customer coalition. This was too complex a bill for a split conference committee. IOUs care more than anything about their stock price. California Industrial Users Phil Stohr of Downey. Steve Peace kept saying it would go with a unanimous Committee vote or it was not going to go at all. an organization that was formed in the late 1970s to represent industrial natural gas and electricity users. We were one of the last groups hanging on the outside.

The overwhelming majority of our activity has been on traditional rate cases. with Direct Access pushed out on the horizon and tied to a range of contingencies. there was no forum in which to advocate for it. “Retail wheeling:. The draft Decisions [May. the development of an option that would permit industrial customers to look somewhere else than the UDC for electricity generation.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We sought retail wheeling. resulting in the PG&E rate restructuring settlement. 1995. this sent the Commissioners scurrying. representing 24 companies that consume over 4% of U. 1995 CPUC proposals] were a major disappointment because of the dominance of PoolCo. electricity92] mentioned retail wheeling to the CPUC. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.. Retail wheeling served as a muted backdrop. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The element at the core of AB 1890 came about as the result of informal negotiations between the December Decision and AB 1890. The December Decision had aspects which gave us pause.. the parties were involved in many conversations. In 1986 when ELCON [the Electricity Consumers Resource Council.S. Much of that related to the MOU. Between May of 1995 and the Decision. but in general was a step forward.” ERG Master’s Project Mark Stout 99 . The work between May and September was critical. This was not perceived as realistic before the Yellow Book. This was a new element which brought a new dimension: a rate freeze with a well- 92 Asmus. 1995 Decision? Quite a lot in terms of basic concepts.

AB 1890)? Why? The December Decision advanced the cause another step.e. Along with the rate freeze concept.defined period of time in which CTC obligations would be disposed of. This carried over directly to AB 1890. CPUC vs. Provisions of the MOU had a lot to do with the process moving to the Legislature. The provisions presenting a definite time period within which the CTC would have to be recovered were critical.. laying out requirements for the parties to get specific Legislation. for instance both included language regarding no cost shifting. this time frame foreshortened the transition to the new competitive market and meaningful customer choice. need to get into the specifics of the bill. Incorporation of the Commission’s policy and some additional elements into the Bill took California another big step down the road towards restructuring. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. In terms of process. CIU was not a signatory to the MOU. many parties felt legislation was necessary to assure a measure of permanence in the Commission’s policy Decision. To fully answer. Each brought a new dimension and set of sub-issues to be absorbed into our area of interest. But the basics of our position have remained unchanged throughout ERG Master’s Project Mark Stout 100 . There was a perception that Edison’s zeal reflected a concern that their hard-fought victory for 100% CTC recovery might be ephemeral. or over time? CIU had no problem speaking with one voice. There were a lot of areas of overlap between the December Decision and AB 1890. Is your organization more comfortable with one policy decision over the other (i. We have seen our position evolve at each major waystation. and that they needed a legislative backstop.

for instance on the rate restructuring settlement. as well as the caucusing and preparatory sessions amongst parties. We were there for the great bulk of the hearings. particularly in the collateral coalition meetings. The raw material of the initial bill came from coalition participants. some were at the request or demand of the Committee. it felt like “we’ve been here before”. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Our participation was largely a matter of being present and accounted for. The issuance of the Blue Book sent seismic waves through the community. and filed comments at every opportunity. Early on. We have also met with the Commissioners. Our members are business entities with a nationwide presence.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We were involved in all formal proceedings. Some of these meetings were spontaneous. but had no idea of the magnitude of tasks in the implementation phase over the last 18 months. able to draw on experts knowledgeable on energy policy and acquisition. due to the length of the policy phase proceedings. we had member company representatives participate in several full panel hearings. We have occasionally lobbied on more specific issues. and made our contribution. bringing member company representatives in from time to time to discuss broader agendas. CIU took part in most full panel hearings. At some points. It is important for the Commissioners to hear from the people actually running the businesses whose electricity needs have been our focus. We thought that we were busy during the policy phases of restructuring. This applies to the formal Committee. ERG Master’s Project Mark Stout 101 . Rather than have counsel speak. we commented on the Yellow Book. but our concerns at the time were still rate-case focused.

This time spent. and there was a perception of considerable influence emanating from the Governor’s office. however. In the course of this process. and have monitored the legislative process but have chosen to focus on the Commission. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? CLECA wanted lower rates in the long run. Some aspects of the Bill developed in off-line. such as in September of ‘95 at the SONGS hearings. cost-based rates.) California Large Energy Consumers Association . CLECA is an organization representing large. It is remarkable how much AB 1890 was a product of broad-based discussions. The Governor’s office was also party to several discussions. There will likely be follow-up at the Legislature principally with respect to SB 960 which dealt with PUC reform. (SB 960 was pulled together over several days following the AB 1890 deliberations. representing CLECA during the process leading up to the CPUC December Decision. This recent process marks the first time the Legislature has taken such a broad role interacting with the CPUC. industrial electricity customers. We were interested. We have made some legislative appearances. ERG Master’s Project Mark Stout 102 . direct visits with the members. aside from being painful. there has been a warming in the cordiality of the relationship between the Legislature and the Commission. CIU has never really included in its agenda a strong presence at the Legislature.Interview #1 Dianne Hawk was a Utility Regulatory Consultant for Barkovich and Yap.. President Conlon was there in the wee hours of the morning. Inc. has been very useful in the implementation phase.

We also wanted the separation of the ISO and PX. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? With regards to market structure. CLECA did not want a single market. They were based on a consistent thread of how to organize a market. but wanted multiple ways to purchase electricity. even over time. given the PoolCo structure in the May. 1995 Decision? The institutions in the Decision were designed with enough flexibility to give the opportunity for lower rates. but would trade off short term for long term gains. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. Prior to this proceeding. or over time? CLECA’s positions were consistent. The defining of industry structure for competition to drive prices down was important.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. I suggest you speak with Barbara Barkovich. 1995 CPUC majority proposal. ERG Master’s Project Mark Stout 103 . There was a lot of compromise. but we came closer. I am unsure of whether it will happen. nothing changed significantly from the CPUC Decision. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? In addition to filing formal comments. there was not as much coordination or compromise amongst stakeholders. We did not have the expectation that it would happen tomorrow. we met directly with Commissioners. On this question. The MOU set the tone for that. It used to be that the IOUs were driving everything.

There was some language about ERG Master’s Project Mark Stout 104 . It seemed premature before then. Our members are used to multiple suppliers for everything else. This was a big objective for the legislation. We had experienced with the regulatory proceedings in the past. extending them to include more of the AB 1890 process.California Large Energy Consumers Association . We did not want customers to pay any more than they had been. avoiding cost shifting. 1995 Decision? Competition was there. CLECA wanted to make sure unbundling and stranded cost recovery were done with no cost shifting. which is why the MOU happened. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? CLECA was one of the first parties to advocate retail wheeling. I spoke with Barbara to build on the base of insights into CLECA’s positions that Dianne Hawk provided. as early as our comments on the Yellow Book in the Fall of 1993. based on the concern that stranded cost recovery would be shifted onto industrial customers. Rates are very high in California. and we see competition as the only way to bring them down.. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.Interview #2 Barbara Barkovich is an Energy and Utility Regulatory Consultant with Barkovich and Yap. Inc. but no detail. it was very much influenced by the MOU. The May CPUC Proposal was lacking. representing CLECA throughout California’s electric utility restructuring process. they are seeking the same for electricity.

I am not sure how much residential customers wanted cost reductions paid for by bonds.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? More than in the December ‘95 Decision. not bail out developers that did not create a reserve with their subsidies. distribution. with a lower CTC payment. in general AB 1890 is a good bill. Many of the existing renewables companies have been managed poorly. A residual CTC is left over when the PX price. Our members will not experience the rate increase they would have if this went away. This was absolutely essential for the legislation. One things I was disappointed with was the rampant green/renewable payoff. We also kept interuptable rates in place for 5 years. We did pretty well. allowing for a 2001 date for the end of CTC recovery. Public purpose money should go to the next generation of technologies. just like more pigs at the trough. AB 1890 also includes comparable CTC treatment for direct access and non-direct access customers. The rate restructuring for Diablo Canyon was along the lines of the residual method for CTC setting. The legislation did a good job buying off people. It calculates CTC costs based on the residual method CLECA proposed. ERG Master’s Project Mark Stout 105 . based on paying for the CTC with the same rates large customers are paying now. and public purpose programs are subtracted from the frozen rate. The December Decision does not treat the CTC using the residual method. CLECA wanted to make sure small customers pay off their own bonds to finance the 10% rate reduction. transmission.

Is your organization more comfortable with one policy decision over the other (i.e., CPUC vs. AB 1890)? Why? AB 1890. Some things were not addressed in the December Decision. recovery went on too long, we wanted it time-limited, not stretching till 2005. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings, or over time? Yes, CLECA is a small and cohesive organization. We had to give up on 100% stranded cost recovery, resulting in more of an opportunity for utilities to recover than we would have liked. We were not prepared to agree to the levels of public purpose funding in AB 1890; we also did not want funding floors, we wanted caps. Till the end, we did not like renewables money going to existing plants. A major win was that fuel price increases would not get passed through. If this eats into the CTC headroom, that is the utility’s problem. This does not guarantee full stranded cost recovery by a long shot. A lot of formulation went into the rate restructuring settlement. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? Of course, CLECA filed formal comments. The most important thing we did was Also, CTC

negotiating the MOU. Even though the December Decision was not perfect, it was much better than the May, 1995 proposal as a result of the MOU. The May proposal was based on a PoolCo concept, with wholesale competition. This proposal was supported by Edison, SDG&E, and UCAN, but it angered the industrial customers. CMA hired Flanagan to talk to the Governor’s office and plan a campaign against Edison. Edison sent a letter to CMA’s board telling them that their members were, “off the reservation.” CMA fired a response back. Edison ran ads

supporting PoolCo, and CMA was about to retaliate, which Pete Wilson did not want when he ERG Master’s Project Mark Stout 106

was running for President. CLECA did not want the utilities to have full stranded cost recovery, but this was negotiated before I was even at the table. Edison was not even willing to talk without it. Another big issue was the SONGS [SCE’s San Onofre Nuclear Generating Station] settlement, extending recovery for this stranded asset. Important elements of the MOU were the proposed market structure and phase-in of direct access. The 1/1/98 date to begin was CLECA’s idea. It was critical that the Power Exchange, ISO, and direct access all start at the same date so that you do not end up with a PoolCo. We went to the Legislature and the PUC, including direct meetings with the Commissioners, in order to explain the MOU. Since this was a rulemaking, ex Parte rules were not in effect. We also met with non-MOU parties to see what it would take to get them on board, but they all wanted too much. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? An important step was negotiating a rate restructuring with PG&E, CMA, labor, oil, agriculture, and other groups. The legislative process had an awful lot of horse trading in a public, political environment. Steve Peace wanted it done in front of him. Many more parties were involved in this process.

California Manufacturers Association
Karen Lindh was CMA’s energy and environmental policy director through the CPUC and AB 1890 process, representing the organization in this area since 1976. CMA is an 800 member

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organization, representing mainstream California industries before the CPUC and Legislature.93 CMA has been involved in energy intervention since 1970, making arguments on cost of service rates and rate increases. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? CMA wanted to achieve utility rates in California for gas and electricity in order to compete with out of state industry. It became clear that customer choice was the only way to do this. Services that are natural monopolies should continue to be regulated on a cost of service basis, on a customer class basis. We desire a free market for everything else. In 1984, CMA was involved in a battle for the customer choice of gas, a ten year effort. We then turned to electricity to pursue the same goals. At the time the electricity restructuring process began, California electricity rates were 40-50% above the national average. Our members’ electricity usage is very different by industry, with electricity comprising a varying percentage of input costs. How much customers paid was also dependent on their load factor. For many members electricity is a primary cost. Coincidentally, the CPUC Division of Strategic Planning was thinking about

restructuring the electric utility industry, resulting in the Yellow Book. At the same time, CMA started a project for restructuring, and became involved in a series of workshops at the PUC. Our longer term goal is a reduction in costs. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20, 1995 Decision? CMA got direct access and non-discriminatory ISO access to the transmission grid. I would say 75%. There were some flaws in the Decision, but there was tremendous progress since

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Asmus, “Who are the De-Regulation Advocates: Profiles...”.

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the May draft. This was seen as a 100% improvement. The Decision had a lot of weakness on direct access phase-in. We were also concerned over the level of the CTC. CMA had worked out a methodology, but a lot of work was needed in the December Decision. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? AB 1890 added additional gains. The rate freeze put utilities at risk for recovering 100% of their stranded costs through the CTC. CMA did not want to pay any more for electricity than we were already paying. AB 1890 was an incremental improvement over the Decision. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings, or over time? Because of CMA’s long background dealing with energy issues, we had worked out many positions in advance. Along the way, some issues that were brought up had the potential for derailing the process. Some Eastern members thought they had been sold down the river by 100% stranded cost recovery, some thought it was politically possible to outmuscle the IOUs. We had to arrive at decisions cooperatively. Membership was voluntary, so people had to work with other members of the group. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? The primary thing was the MOU, which became the baseline for the December Decision. There were a series of meetings with the Governor. He did not want industries at a loggerhead, wanted us to go for a win-win solution. The Governor’s office sat in as a moderator on the negotiations, which went from May to August. SCE was the only utility involved; they did not want to give up their merchant plants and were opposed to direct access. The industrial

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including Lenny Goldberg from TURN. and were not able to articulate what they wanted. The market structure agreed on was a power exchange and a separate ISO that would ensure non-discriminatory access to the transmission grid. and come to the table with a solution. The IOUs suggested a revenue stream approach to CTC calculation. technical support was provided by Glen Shearon of Inland Paperboard. not just contracts for differences. ERG Master’s Project Mark Stout 110 . There was a problem if you did not know what you wanted. CMA filed formal comments. no attempt was made to jam something down someone’s throat. helping others to resolve their issues. and I was involved as an energy analyst. using a different formula. Each party got what was most important to it. Groups were influential by being at the table. Our chief representative was Mark Timmerman. and participated in two full panel hearings to explain the MOU to the Commissioners and the public. Inter-member briefing was also important. We worked by bringing PG&E into the process. The important thing was to make a positive contribution to the bill. with supra-economic assets netted out.customers wanted direct access. The customers agreed to 100% stranded cost recovery. Even in the legislation. as well as other customer groups. The municipal utilities represented by CMUA were too diverse. Steve Peace held marathon sessions. chief counsel at the PUC was Keith McCray. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? CMA was involved in every AB 1890 negotiation. The actual stranded costs are asset values that are no longer economic.

we strove to put as much consumer education and protection in place as possible to guard against the market abuses we are seeing in the deregulated telecommunications sector. The December Decision did a fairly good job in recognizing low income ERG Master’s Project Mark Stout 111 . We also wanted to fund low-income weatherization programs at as high a level as possible. We realized it was not realistic to resist retail competition as TURN had tried in telecommunications. We wanted to keep the CARE (California’s Alternative Rates for Energy) program funded at an uncapped. and add needed education and protection programs in order to at least maintain the status quo for small consumers. such as non-english speaking customers. Jane Kelly of UCS [see interview] recommended that I talk with someone at this organization. Overall. “the devil is in the details”. everything was included. 1995 Decision? In an outline form. The interview subject preferred to remain anonymous. In addition. In some ways this was not a very lofty goal. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. a non-profit organization advocating for Latino Californians. need-based level. our goal was to protect as much of the old programs as possible. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Latino Issues Forum wanted to try to maintain as many public programs for low income and vulnerable populations. I do not think small consumers will benefit from retail competition. but it was realistic.Small Electricity Consumers Latino Issues Forum Latino Issues Forum. but as Dan Fessler was fond of saying.

Ralph Cavanagh carried our torch primarily. At this stage perhaps it was not meant to.. It did not go nearly far enough in consumer protection and education. as the whole process has been sequential.and vulnerable population issues. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Not as much. It did have the benefit of good language on low income rates and energy efficiency programs. but did not go far in addressing them with specific solutions. CPUC vs. In terms of consumer education and protection. AB 1890)? Why? It is not entirely correct to contrast them. ERG Master’s Project Mark Stout 112 . or over time? Probably ad nauseum. since we had a mantra that we recited at every chance: Deregulation had to be equitable. Latino Issues Forum did not actively participate. The December Decision was a blueprint in recognizing these needs. AB 1890 was a deal cut in back rooms between powerful players. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Small consumers had to at least be unharmed if not better off. Is your organization more comfortable with one policy decision over the other (i. This needs to be cleaned up in this year’s legislation. Public purpose programs for low income consumers must be maintained. Significant consumer protection and education is needed to protect the abuses happening in telecommunications today such as slamming. AB 1890 did not go far enough.e.

We also participated with the Commissioners in community briefings to inform the public of upcoming changes. and testified whenever we had the opportunity. we interacted with the Legislature. had short hours.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We filed dozens of briefs in the last few years. which has partnership agreements with PG&E and Edison that they will represent some of Greenlining’s issues. We also wrote letter to Commissioners that have been influential. Some of this year’s cleanup legislation will exclude municipalities from the anti-slamming ERG Master’s Project Mark Stout 113 . Our letter to the Commissioners sparked modification and an investment of resources as part of the PUC’s internal restructuring plan. The utilities were hoping that they could administer CARE and low income weatherization. mono-lingual english only. but because of a lack of resources. It caused some embarrassment because of the total inadequacy. We also had small consumers mail in postcards to the Commissioners on rate issues. a possible profit source for them. only part time. and had no 800 numbers. We are also a member of the Greenlining Institute [a non-profit organization representing low-income communities of color]. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Latino Issues Forum depended on Ralph Cavanagh to articulate positions there. This Division was actually using AT&T language translation. have historically focused on the PUC. They were understaffed. At times. a very expensive service. After a meeting with the Consumer Services Division of the PUC. and spoke to the press on critical issues. This may come under attack in the future. we found out that the staffing for PUC complaints was utterly inadequate.

which could result in large customers leaving the system and smaller customers left holding the bag of higher cost resources. making the regulatory process impossible to track. California needs better regulation. This annual rate setting would be based on cost of service with an TURN was against the notion of retail wheeling opportunity for profit and a risk of loss. and not grant them 100% stranded cost recovery. there are different set of simultaneous proceedings. This would allow all customers to benefit. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? The Yellow Book laid out four options for the California electricity utility industry’s future direction. I am concerned about fly-by-night companies. The utilities argument for full recovery is based on the notion of a regulatory compact with a quid pro quo of cost recovery. a nonprofit organization advocating for residential and small commercial utility ratepayers. There is also a need to deal with the market power of utilities. With what we see as a failure of will by the regulator. getting rid of the multiple proceedings. TURN took a firm position calling for the PUC to start regulating the utilities. 100% stranded cost recovery for the IOUs does not make any sense because they already had a risk-adjusted rate of return. Although we need as many consumer protections as possible.language. many annual. proposed by the Yellow Book. Currently. TURN has called for a single annual rate-setting. and that small customers should not suffer. The Utility Reform Network Bob Finkelstein is a staff attorney specializing in electric utility issues for TURN. Our reaction to the Blue Book was that restructuring must provide competitive options for small customers. I think we can safely exclude municipalities. These risk-based cost of capital decisions got more explicit in the ‘90s and were very explicit by ‘93 and ‘94. But they can only point ERG Master’s Project Mark Stout 114 .

based on geographical region. and its inclusion of giveaways to large customer groups. Some commercial customers had wanted aggregation for different locations. We had advocated a community access model. but TURN did not like the allocation of CTC costs to different classes. it was clear that the Legislature would be moving forward. Regulated entities can achieve their own version of the truth by repetition. TURN was able to knock out an earlier Brulte bill. although by July. for aggregation of small customers to take advantage of direct access. We thought there would not be comprehensive legislation that year. everyone except for small consumers. 1995 Decision? There was good language on the non-bypassability of the CTC. it was OK for regulators to deny full recovery. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? We fought AB 1890 because of its putting in place items from the PUC’s December Decision that we hated. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. The Decision made a good commitment to maintaining public purpose programs. but did include language describing it. The PUC was vague on aggregation. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. ERG Master’s Project Mark Stout 115 . TURN applauded the focus. but the incentives were weak. It also included a recognition of the importance of market power. including low income. as opposed to the rate cap in the PUC December Decision. with incentives for divestiture of utility generation. in concert with oil companies. TURN also did not like it because we got a rate freeze.to Supreme Court decisions allowing a “reasonable chance of recovery”. Under these decisions they cite.

So we were stuck with a bill that we hated. we did not oppose or support AB 1890. we decided not to oppose.5 billion increase. It turns out that independent generation plants are run with much less staff. Peace’s residence had gotten slammed a couple times.. AB 1890)? Why? At the end of the process. there were some self-generation projects in the pipeline. but a narrow set of projects. We had the option of opposing it and jeopardizing the concessions in it. firmed up the nonbypassability of the CTC. a very. signed document with independent verification that a customer wants to be included in an aggregation. This raises a substantial barrier for municipalities to aggregate their residents’ loads. Some customers got away with no CTC. leading to a heated internal debate. On the good side. Edison gets coal cost increases. divested power plants must come with a contract for the original staff for the first two years. very bad bill. it limited CTC recovery to a shorter period of time. On the bad side. ERG Master’s Project Mark Stout 116 .e. so he was amenable to this. Also. CPUC vs. We had suggested that community access provide an out for people that did not want in. but had to be in the debate. PG&E gets a $0. In the end. requiring a written. TURN felt it had turned AB 1890. into a very bad bill. its anti-slamming [slamming is a practice of switching a customers utility provider without their consent] language is really anti-community access language. Since we felt that it was incrementally better than the December Decision. and offered a good commitment to low income programs. but Edison successfully created this barrier under the guise of anti-slamming language. Unions got a huge bone by having the cost of retraining and severance included in the CTC. Is your organization more comfortable with one policy decision over the other (i.

Edison and SDG&E asked for a wholesale pool with transition to direct access. Fessler’s PoolCo was what Edison wanted. Nobody gave enough reason for TURN to change its position.” The result is that the most favored groups. We did not do extensive lobbying due to a lack of resources. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? TURN made formal comments at most opportunities. In their first round comments to the Blue Book. 1995. but just have more refined positions. This led to the small customer groups scrambling to get things covered. people were getting handed new language instantaneously for discussion. he arranged ERG Master’s Project Mark Stout 117 . leading to an evolution of positions. When Wilson got wind of the CMA [California Manufacturers Association] fighting Edison. These positions were locked until May. the process was difficult to track. get attention. or over time? The terms of the debate changed. when the PUC proposals were released. Unfortunately. We also appeared at full panel hearings. trickling down to smaller customers. utilities and large industrials. large customers attacked the pool. while the utilities where up at the PUC everyday. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. The process of adding restructuring on top of our normal work is skewed to favor the utilities. The Commissioners were appointed with a viewpoint: “Do what’s right for business. everybody at TURN wishes we had opposed this bill kicking and screaming. We would still agree with our Yellow Book and Blue Book comments. with an Edison nuke settlement going on at the time. and you’ll do what’s right for California. PG&E requested direct access for large customers immediately.In hindsight.

TURN tried to marshal support with kindred groups UCAN [Utilities Consumers’ Action Network. with a troika of large customers. and IPPs [Independent Power Producers]. it was all over. like an armadillo in the middle of the road. taking care of small consumers would have led to compromise. What was eye opening about working with the Framework Parties [Framework for Restructuring in the Public Interest] was the divergent positions of the environmental groups. creating a huge advantage to have a fresh mind. There were waves of utility employees. Public purpose concerns become peripheral. The “consensus process” was just everybody taking. Lenny was in the Conference Committee every day. the whole thing would fall apart with parties leaving the table. another small consumer advocacy group] and Greenlining Institute/Latino Issues Forum [low income and minority community advocates]. If you can get all of the big dogs to reach consensus. Once Edison was on board for Direct Access. issue specific attorneys with support staff. utilities. supported by the appropriate staff. making it very easy for the Republican Commissioners to adopt. Hearings were going on till two or three AM. big customers. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? TURN hoped that if you knocked out enough of the gifts. ERG Master’s Project Mark Stout 118 . it is tough to stop the momentum. So much of the deal had been cut in advance by large powerful interests. unions. IPPs. they just loaded up the plate.for the meetings leading up to the MOU. TURN contracted with Lenny Goldberg. nobody gave everything up. I went up three or four times. Critical consumer interests were not present. utilities. Several times people did leave the negotiations.

ERG Master’s Project Mark Stout 119 . E-1.000 members nationwide. and punted on the details to the Legislature. 1995 Decision? Almost nothing. If focusing 94 CPUC Renewables Working Group.000 of whom live in California. and law to create innovative. EDF has participated in California energy policy issues since 1975. “There is no reason to proffer the benefits of competition first to only selected classes of customers. yes. and 4) incentives for uneconomic sales promotion minimized. [which] represents 300. Assuming these problems are resolved. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. more than 55.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. depending on interpretation. economically viable solutions to today’s environmental problems. 2) an Integrated Resource Planning process should exist for energy efficiency. if restructuring is implemented properly: 1) energy efficiency investments should continue. economics. It gave us nothing until the Legislature tells us otherwise. we are in favor of competition. “a leading non-profit organization. EDF supports the earliest possible implementation of direct access for all classes of customers. The Decision was vague. EDF links science.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. As stated in EDF’s first round comments on the Blue Book.

that would result in roughly 9% of the electricity sold coming from renewables. we wanted one billion. For renewable energy funding. The envisioned split for renewables was about $100 million per year. However. but the PUC has no environmental bones in it’s body.. 95 CPUC Status Report on Restructuring. There is a difference between what you ask for and what you expect. This was informally agreed to by the big boys.e. At best case with 25% of residential customers purchasing “green”.on a funding level. which dedicated about 3% of utility revenues to public purpose programs. Is your organization more comfortable with one policy decision over the other (i. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? About 70%. 2. Vol. we were tied to the language in AB 1123. AB 1890)? Why? If the PUC was God. The Legislature does have an environmental bone in its body. CPUC vs. ERG Master’s Project Mark Stout 120 . There is nothing else to point to for renewables policy. but left to the Legislature. and we got 1/2 billion. the PUC did not intend to choose a percentage requirement on the RPS.. Deregulation is not especially helping energy efficiency. it is a continuation of utility programs with different players.. Energy efficiency funding was lower than the historical peak. I am hopeful that buying “green” electricity would be similar to recycling. the Decision may have been better. which was never going to get past the industrial customers or utilities. but in the realm of what we would settle for.. the industrial customers thought that 1/2 billion was right. the Decision had the Renewable Portfolio Standard. By the time of December Decision.

there was not enough activity.Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. The outcome was a compromise that nobody liked much. The selection of the RPS in the Decision gave comfort to people who had a worse uphill climb. or over time? Yes. ERG Master’s Project Mark Stout 121 . and were sincere about it. Policy Report on AB 1890 Renewables Funding]. from the beginning. EDF stated that we were for competition. being difficult to influence the outcome. EDF did suggest draft language. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? Past EDF’s filing comments. Most direct contact was after the Decision. The process was like watching a movie. I am liking the CEC report [California Energy Commission. I took part in as many full panel hearings as I could get on to. CEERT is a diverse organization. I spoke several times with Jeff Dasovich in the Strategic Planning Division. This helped to keep a warm spot with free market ideologues. but time will tell on the legislative response. It was the threat of a gun that got AB 1890 done. I was concerned that fighting for all renewable funding go to new projects may have caused a backlash. I am surprised that AB 1890 came out as well as it did. making it difficult to get agreement. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? I left the point contact to John White [the Executive Director of the Center for Energy Efficiency and Renewable Technologies] and Ralph Cavanagh [NRDC’s Energy Program Director].

NRDC adapted with a new position. Sheryl argues that it did not make sense to jump to retail competition before wholesale.Natural Resources Defense Council . the lower the unit cost.”96 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Initially. 1995. low income customers. the rules had to be set so that there will be no diminishment in public purpose programs. 96 Natural Resources Defense Council. “For retail restructuring to occur. From their 25 year report. but supported the introduction of competition through wholesale restructuring. “NRDC has emerged as the national leader in fighting proposals to restructure the utility industry in environmentally destructive ways. Sheryl noted that for energy efficiency and renewables.” Specifically. “see how that works.Interview #1 Sheryl Carter is a Policy Analyst in the Energy Program at the Natural Resources Defense Council. NRDC opposed the move to retail restructuring. ERG Master’s Project Mark Stout 122 . renewables. where distribution utilities buy power in a competitive wholesale environment for resale to end-use customers in their territory.’ Such systems would be a strong disincentive to utility investment in efficiency and renewable resources--and would not deliver savings to residential customers. as Sheryl explains. NRDC is a nonprofit organization that has made a name for itself as a public interest environmental advocate in the courts and policy arenas.” As it became clear that opposition to retail restructuring was a losing battle. giving interested parties a chance to. RD&D. NRDC advocated for a non-bypassable charge to cover the costs of public purpose programs in such areas as energy efficiency. Advocates of ‘retail wheeling’ systems propose a return to the days when electricity service was run on the discredited principle of ‘the more you use. and universal access.

Funding levels were roughly the levels being spent by utilities when the bill was drafted. and not as high as merited. 1995 Decision? NRDC got most of it: a reaffirmation of the need to continue public programs funded through ratepayers. but had advocated that recovery not be linked to the continued operation of uneconomic plants. the included systems benefits charge was a re-affirmation of public purpose programs. It was not perfect. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. although the levels for public purpose programs were not what they seeked. and not everything they were pushing for. The December Decisions language on nuclear plant rate structuring did make this link. with systems benefits charge funding used for the development of emerging technologies. however. NRDC can live with AB 1890. NRDC had taken the position that the Renewables Portfolio Standard and a non-bypassable systems benefits charge can work together. For renewable energy. which was unclear in earlier proposals. although these were down from pre-Blue Book levels. They supported this legislation because it set a good precedent. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? NRDC got most of what it wanted in terms of policy mechanisms.a non-bypassable charge mitigates for a lack of integrated resource planning excluded by retail competition. ERG Master’s Project Mark Stout 123 . They did not take a position on the percentage level of stranded costs recovery by utilities.

Joint Response to Memorandum of Understanding”. with coalitions of varying members depending on the issue. The detailed language on renewables left much to be desired.Is your organization more comfortable with one policy decision over the other (i. and talking with staff. and herself have similar ideologies. Another tactic was a joint public outreach mailing with other environmental organizations including the Union of Concerned Scientists that resulted in letters and telegrams targeted at the Commissioners. NRDC also relied on formal comments. They tried to get a mixture of environmental. In a perfect world.e. In response to the MOU. It is not looking at what is best for the future of sustainability. low income. participation in full panel hearings. They decided to not oppose restructuring.. Sheryl noted that Peter Miller. AB 1890)? Why? AB 1890 expanded the rift in the renewables community. may have been better to specify goals for a renewables policy. NRDC entered into a public-interest coalition known as the Framework Parties to draft the “Joint Motion for Consideration of Framework for Restructuring in the Public Interest and for Further Public Process. or over time? Yes. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Ralph Cavanagh. but instead ensure that the rules were set up to achieve a good outcome. They also wanted to make sure the different proposed renewables policies not set up to be exclusive. ERG Master’s Project Mark Stout 124 . NRDC relied on consistent people and tried to be clear throughout. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? One key approach was talking with the Commissioners themselves. and consumer advocates in these coalition visits. CPUC vs.

During the debate. This got the municipal utilities signed onto the systems benefits charge. During the drafting of Byron Sher’s Assembly Bill 1123. Ralph Cavanagh was important in pulling parties together. Peace was threatening to handle renewable energy policy himself.Interview #2 Ralph Cavanagh is NRDC’s Energy Program Director. NRDC also talked one on one with legislators and aids. The total funding level for public purpose programs increased $600 million ERG Master’s Project Mark Stout 125 . When Steve Peace said no to the RPS. it created problems. they may lose out altogether. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? For energy efficiency funding. respectively]. Long meetings were held to make sure renewable energy funding was not left out. as well as testifying in legislative committee hearings. it became clear that he played a central role in organizing the public interest community during the California restructuring process and would have personal insights that should not be omitted.What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? The big thing was groundwork prior to the formulation of legislation. Natural Resources Defense Council . there would be no chance of consensus on a compromise. and nobody would have been happy. and increased Edison from $50 million to $90 million per year. It was very clear that if everyone did not work together. If the other parties had not understood NRDC’s position. energy efficiency funding levels dropped as soon as renewable energy was placed into the mix of public purpose programs. I selected him as a second interview subject for this organization because. AB 1890 locked in PG&E and SDG&E where they were [$106 million and $32 million per year. as I spoke with other stakeholders.

including a letter written in the Legislature by Byron Sher and Glen Moore after the Blue Book. San Francisco Examiner. we worked in three broad coalitions: the Framework Parties. funding levels laid out. the San Francisco Chronicle. There were other ways we put pressure on the Commission. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? In addition to the formal comments. There was not much one on one with Commissioners or their staff. Steve Peace ERG Master’s Project Mark Stout 126 . NRDC took part in two full panel hearings. Is your organization more comfortable with one policy decision over the other (i.per year over ‘96. CPUC vs.. Over time. and this would have been heading to zero if AB 1890 was not passed. Meetings between For instance. Sher was critical in supporting the environmental agenda. in a public forum. and the Sacramento Bee focusing on public purpose programs. and was unusual in that regard. AB 1890)? Why? AB 1890 had distinct improvements. NRDC did press work through editorial boards including the San Jose Mercury News. energy efficiency programs had The three critical Legislators were the Senators.e. More importantly. a broader coalition of 80 parties on market structure. and a utility/ESCO/public purpose coalition on energy efficiency focusing on using a non-bypassable systems benefit charge to sustain historic momentum. All public purpose funding levels were converted to floors instead of ceilings on spending. It was negotiated by six legislators with an audience of stakeholders. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? This process occurred over three weeks. stakeholders were important for ironing out details.

Campaign contributions were meaningless. to educate and enlist humanity to protect and restore the quality of the natural and human environments. Rich spoke as a representative of Sierra Clubs positions. 97 Sierra Magazine. NRDC’s relationship with the IOUs was important. “To explore. We were in constant contact. It was a consensus-based process. stating that although there were some divergences between the Sierra Club and CEERT positions. During our interview. enjoy. NRDC. ERG Master’s Project Mark Stout 127 . and protect the wild places of the earth. If environmental groups collectively walked.” CEERT’s members include EDF. one on one. “a non- profit public education organization dedicated to the sustained. not turning it into a media tank battle. the Sierra Club. these positions are substantially similar to those of CEERT. Critical stakeholders who could have derailed did not. page 4.became more supportive. The environmental groups and consumer groups such as TURN worked well together.”97 CEERT is. we could have killed it. May/June 1997. non-profit organization chartered. We were on separate tracks with industrial customers to ensure no cost shifting occurred. Sierra Club/Center for Energy Efficiency and Renewable Technologies Rich Ferguson is the Energy Chair of the Sierra Club California Legislative Committee and the Research Director of CEERT. The Sierra Club is a national. and UCS. to practice and promote the responsible use of the earth’s ecosystems and resources. It was strong going in and going out of the process. orderly development of energy conservation and clean power resources. as well as members of the energy efficiency and renewable energy industries.

consumer groups aired their pet peeve with environmental programs. The 3% of utility revenues for public purpose programs in the MOU came out of these discussions. but considered it a “think piece”. RD&D. and energy efficiency. About the time of the Blue Book. renewables with an incremental cost estimate from the BRPU. we wanted to restore investments at pre-Blue Book levels. We had built a commitment to renewables at the Legislature. Energy efficiency budgets had already been cut.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We did not pay much attention to the Yellow Book. the CPUC. and was built into AB 1123 [Byron Sher’s restructuring bill]. In a series of meetings. Industrial Users. I was concerned that this may become a backdoor way to beat up on environmental programs. Dan Kirshner [see Environmental Defense Fund Interview] and I started meeting with them. I was approached by CMA. When the Renewables Portfolio Standard was mentioned. and agricultural consumers to find out what the environmental community reaction to the restructuring proposal was. as long as environmental commitments were honored. There were several qualitative outcomes we sought. Our response was that economics was not the environmental issue. and CEC [California Energy Commission]. ERG Master’s Project Mark Stout 128 . there was opposition. California’s implementation of Integrated Resource Planning (IRP)]. averaging 1993 and 1994. These got translated into dollars. There is a lot of waste in some energy efficiency programs. CLECA. as well as funding for public purpose programs: low income. We reached a consensus on the need for independent administration of energy efficiency programs. with funding levels based on calculations from the BRPU [Biennial Resource Plan Update.

A deal was made with the consumer groups and IOUs: Take a wait and see approach on the duration of renewable and energy efficiency funding. while the latest CPUC Decision sunsets energy efficiency. People close to Sacramento knew the RPS did not have a chance. 1995 Decision? The Renewables Portfolio Standard (RPS) was included in the Decision as a renewables policy [the Sierra Club California Legislative Committee had voted to endorse AB 1202. so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. 98 Personal communication with Sierra Club Committee members. and we won’t need this regulation stuff”. ERG Master’s Project Mark Stout 129 . We did not want to have to pass new legislation. we didn’t want it or not want it. The customer groups had the same attitude.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. In the PUC Decision. It is a hard call from a policy standpoint: Sierra Club members would love the RPS. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Because of the lack of acceptance for the RPS. environmental programs are seen as transitional. I knew the consumer groups and power marketers hated it. but you have to be a political pragmatist. an earlier legislative vehicle for the RPS98]. see interview] thought she got and what she got from the Commission. creating a tension. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. I do not know why the PUC put it in the Decision. There always was a disconnect between what Nancy Rader [West Coast Representative for AWEA. Energy efficiency and RD&D funding does not sunset in AB 1890. “set up the market. the RPS Working Group is not reality. There was a concern that the RPS was seen as ratcheting up the compact of the BRPU [Biennial Resource Plan Update.

Peace had a hearing back then. how can you guarantee above market rates for the nukes. I wrote an article for the CEERT newsletter a few years back on how much money could be saved by shutting down Diablo Canyon and paying PG&E by giving them all of their money back.California’s implementation of integrated resource planning (IRP)] that everyone had agreed to. see interview] did much of the speaking for low income programs. When the MOU came out. President Fessler was livid. On public interest RD&D funding. one needs to reduce the rate of return on utility investments. The IOUs wanted only $10 million per year. The most outrageous part is special rates for the nukes. I and others agreed. and asked me where to get the money from. Fessler did not get the rate of return reduction he wanted. I said that if you want competition. Peace would send the hagglers off. AB 1890 delivered the $3 billion laid out in the December Decision. and we would go to IEP’s [Independent Energy Producers] office. but then unearthed it for AB 1890. The SF Bay Guardian [a long time opponent of PG&E] picked up this article. Peace poo-pooed the idea at the time. I said. The magnitude of the CTC collection is bothersome. but if CMA and CLECA go along. Ralph Cavanagh [NRDC Energy Program Director. the Sierra Club is not going to make much of a difference. On stranded costs. in case Plan A [the RPS] does not work out. you need to make sure you have Plan B. In AB 1890. When developing a strategy. and got angry because PG&E would get paid large sums. Low income advocates insisted their programs were outside of the 3% of revenue cap for other public purpose programs. the public interest community wanted a figure closer to the historical average [1994 California IOU ERG Master’s Project Mark Stout 130 . saying that if stranded cost recovery is to be guaranteed. CTC money is defined as a property right so that future attempts to repeal it can be secured against as a taking. “Do a revenue bond”.

There was an offer on the table for renewables that had been agreed to. John White [Sierra Club lobbyist and CEERT Executive Director] was on the fence because of a split in CEERT members. including RD&D for transmission and distribution. Ralph advocating for utility administration. Since the IOUs got some money for “reliability”. The value of the RECs should go to the contract holder. Renewables did well funding-wise in AB 1890. and the Sierra Club didn’t endorse. I would have wanted to see what was done with the RPS. CPUC vs. but the utilities 99 CPUC RD&D Working Group. On energy efficiency. there is the presumption that energy efficiency money would die in the CPUC Decision.. III-3. The Framework language [Framework for Restructuring in the Public Interest] said that they would consider an Independent Administrator. In the negotiations. Having QF developers getting them was a political miscalculation.5 million. This was a sore point that had to be finessed between players. The final stake through the heart was where the RECs [Renewable Energy Credits] where going. An argument ensued on how much of this figure would be under their control. The details were left out of AB 1890 on allocation of this money.e.]99. First. ERG Master’s Project Mark Stout 131 . fearing that if administration of this funding was confused. we don’t think AB 1890 is a good deal. I felt double-crossed. App. they agreed. AB 1890)? Why? Overall. while I preferred independent administration. Ralph Cavanagh and I agreed not to go to war on who would handle administration of funds. we would lose dollars.RD&D expenditures = $140 million. the DSM funding levels got dinged. which will be handled separately as regulated RD&D. In the end. Is your organization more comfortable with one policy decision over the other (i. we didn’t actually get pre-Blue Book levels. the legislation does a better job. arriving at an agreement of $62.

see interview] and ERG Master’s Project Mark Stout 132 . meetings going on morning. We got the Sierra Club level. Some volunteer leaders wanted to be more vocal on stranded costs. and schlepped it around internally. I wrote a paper with goals. If I had nothing new to say at a hearing.wanted less. cutting deals. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? In addition to filing formal comments. and the IOUs continued their CTC collection for three more months. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We didn’t do grassroots letters. CLECA and CMA build funding levels in. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. nobody wants to reopen it. there was not enough time. there is a white paper process. There was a huge number of meetings between parties. Jan Smutney-Jones [Independent Energy Producers Executive Director. The Sierra Club will be more successful if we focus on the environment. leaving it up to the lobbyists and insiders to cut a deal. The legislative process lets you get your oar in the water. and then making sure they did not get booted off the table. We had influence by having IEP. or over time? Yes. For developing Sierra Club policy. and night. we also had contact through meeting with President Fessler. Things were changing too fast. There were many discussions between parties. noon. but we have learned “when elephants dance. We attended the first restructuring weekend down in LA during the summer of ‘94. The legislators outside of the Conference Committee did not have a clue what was in the bill. mice stay away”. I would not chime in.

000 in California”. As the deregulation process unfolded at the CPUC.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. was just beginning to be used as a policy option in several states. UCS has 100. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. Byron Sher was fine. E-3. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. Integrated Resource Planning (IRP). manifest in California as the Biennial Resource Plan Update (BRPU). UCS’s initial position after the release of the CPUC Blue Book Proposal was that the deregulatory roadmap laid out in this proposal was too hasty. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. As long as the Sierra Club and other groups were happy. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. UCS was also opposed to 100% “stranded cost” recovery for utilities. ERG Master’s Project Mark Stout 133 . Deregulation of the electricity industry threatened to tear this house of cards down. The level of renewables support included in the BRPU served as a target for UCS.000 sponsors nationwide.John White were the front folks. Peace was the idea person. including 13.

with no support for commercialization over a longer duration. so UCS also supported low income program protection as defined by coalition partners.101 To Jane. “did not set public policy so much as doling out money in the transition period.. the legislation. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? UCS was not at all pleased with the poor support for renewable energy and energy efficiency codified in AB 1890. “Environmentalist Defends. Jane said the inclusion of the renewables purchase requirement was. 1995 Decision? UCS was pleased that the CPUC’s December Decision called for a minimum renewables purchase requirement. She also noted that no stakeholders seemed to resist the lack of a cap on surcharge collection for low income programs.bailout for poor investments in nuclear power generation. 101 Weisman. and Latino Issues Forum. working in progressive coalitions was important for UCS. and demonstration (RD&D) funding. Jane said that environmental organizations were. AB 1890 was not a victory” for environmental goals. “despite other interpretations. and no guaranteed market for renewable energy. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.. As for renewable energy. based on the Renewables Portfolio Standard devised by UCS’s coalition partner Nancy Rader of the American Wind Energy Association. The Greenlining Institute.” ERG Master’s Project Mark Stout 134 . “thrown a bone” with the moderate level of public-interest research. an allocation that was “responsible public policy”. Jane indicated that. “one of a few good pieces UCS was in a position to defend”.” She said the whole battle for continuing renewables support will need to be refought in a few years. development.

there was a real split in the public interest community as to whether retail wheeling was good or bad for social welfare. Jane said that her organization stood firmly behind the stance that the Renewables Portfolio Standard was the best policy for supporting renewables.e. CPUC vs. Some environmentalists think retail wheeling threatens environmental protection.” An alternative strategy that Jane considered would have been to oppose retail wheeling all the way along. while some see it as an opportunity for renewable energy generators to increase their markets. an organization representing small ratepayers. relying heavily on Nancy Rader of AWEA and their jointly commissioned lobbyist Joe Caves to represent this position in the heat of the 1996 summer Conference Committee meetings. a process that she said environmentalists do not usually fare well in. or over time? When asked about UCS’s ability to maintain a consistent position over the CPUC and legislative policy formulation process. “In the end. [Committee Chairman] Steve Peace was banging heads together.Is your organization more comfortable with one policy decision over the other (i. The small consumer advocate community also experienced this rift. and a huge decision was being made behind closed doors. didn’t have a unified.. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. clearly articulated position on the desirability of retail wheeling. AB 1890)? Why? Jane contrasted AB 1890 with the CPUC Decision. stating that the CPUC made a public policy decision for environmental protection. Jane noting that The Utility Reform Network. ERG Master’s Project Mark Stout 135 . the press had gone home. However. while AB 1890 simply doled out ratepayer dollars according to disparate levels of power that special interest groups could bring to the Legislature.

000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 . as well as meetings arranged jointly by Jane and AWEA’s Nancy Rader to lobby for the Renewables Portfolio Standard with then-current CPUC President Fessler. By helping to get Assembly Concurrent Resolution No. UCS took part in a mailing to 60. To compliment this public participation strategy. 143 adopted. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. resulting in over 2. as well as staff people for Commissioners Knight and Conlon. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. asking them to respond to the CPUC through a Western Union automated fax number.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? UCS used a dual approach outsider/insider strategy to influence policy formulation at the CPUC. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC.000 environmentalists in California. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position. as well as generating a large number of letters to the CPUC.

While Joe continued to lobby Senators. at the very least they could have stopped AB 1890 from passing unanimously. Thousands of UCS Northern California activists and supporters were informed about this opportunity to lobby legislators on renewable energy and energy efficiency issues in a coordinated way. which had passed the Assembly the previous year. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard. as included in Assembly Bill 1202. the legislative outcome would have been different. State Institutions California Energy Commission Eric Saltmarsh was serving as Staff Counsel in the CEC during the prior CPUC proceedings as well as the past Legislative session. Because of splintering and infighting within the public interest community. “progressive legislators did not have the usual suspects all opposing it”. UCS worked closely with AWEA at a June 1996 Senate Utility Committee hearing with both lobbyist Joe Caves and myself advocating for the Renewables Portfolio Standard and AB 1202. She went on to say that if the whole environmental community was working under a unified strategy. Jane believes that Clean Power Day was the one unifying experience for environmental and renewable energy organizations throughout an otherwise splintered legislative lobbying process. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 .California in April. a legislative education and lobbying event in early August. resulting in over two hundred letters to Sacramento. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. I worked for UCS coordinating our participation in Clean Power Day. gathering dozens of hand written letters from California residents to their state legislators. counting only those copied to UCS.

the completely distinct power exchange and ISO. including open transmission access. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Well before the December Decision. as has been put into place in foreign nations as well as US regional pools. The commission has been supportive of investments with payouts over time for energy efficiency and RD&D. and the unbundling of rates and services. but had trouble applying it to this situation. The wholesale pool is not really a buyer. and the ISO winds up making schedule changes for physical feasibility anyway. reciprocity for direct access. I can understand the concern for the concentration of power in one entity that drove this separation. We did not share the sentiments as to the structure of the December Decision. There is an added cost of having two mandatory entities.Board which has been created as a result of AB 1890. The CEC is a state agency that implements state energy policy and collects data on California energy usage and generation. except for voltage support to let transactions occur. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. ERG Master’s Project Mark Stout 138 . it is really just a clearinghouse. the Energy Commission had been supportive of core aspects of the proposed generation deregulation. We were more inclined to a unified structure. There is a need for much of the same information in both entities. customer direct access. 1995 Decision? The commission did not like the discrete power exchange and ISO.

In core concepts. but generalized. the Commission got the outcomes it wanted. or over time? Our positions were consistent. ERG Master’s Project Mark Stout 139 .e. While the Commissioners may not have endorsed a particular funding level. See interviews with Barbara Barkovich and Phil Stohr.. since this would require holding a meeting with 10 day meeting posting requirements. We only took generalized policy positions. [It flowed in large part from the June. AB 1890)? Why? AB 1890 happened in real time. The calculation of the CTC was not actually addressed in AB 1890. that there has not been an excessive amount of money spent in the past. all input was technical. There was no opportunity for the Energy Commission to make a policy statement. they were supportive of their being a real benefit to public purpose RD&D. Is your organization more comfortable with one policy decision over the other (i. In general terms there was substantial RD&D funding. A large percentage of AB 1890’s time was taken up on a few issues where the CEC had no positions. We had the luxury to legitimately decide on generalized principles.] The CEC did believe in the opportunity for reasonable cost recovery. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. while the decisions of government institutions generally do not happen that way in terms of scheduling. CPUC vs. The CEC was not in a position to come up with detailed solutions. 1996 PG&E Rate Restructuring Settlement.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The same concern with the separation of the power exchange and ISO applies in this case also.

including Assistant Chief Counsel John Chandley. our Public Affairs Director. A few people. transmission. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were technically relevant in the process. put in by the renewables community. The legislative language has multiple categories that should be included on the power exchange and ISO boards.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? The Energy Commission was a party in every comments filing. There was little. These board members will not certainly be disinterested. We also made testimony and participated in CPUC hearings as an examiner. They also killed the state agency renewable purchase requirement. They weighed in against the minimum renewables purchase requirement. For the ISO. This would have required state agencies to ERG Master’s Project Mark Stout 140 . some members perceived it as a tack-on. our Executive Director. and I. There was no advocacy at all. Edison and PG&E made arguments on takings [with regards to less than 100% stranded cost recovery] and coerced divestiture. if any other forum we took part in. The legislators were in a vacuum trying to figure out how the allocation of public program funding got made. a simple majority is to be unaffiliated with generation. The Governor’s office’s participation was punctuated. except for when I read into the record a statement for the Energy Commission Chair on the governance of the ISO and PX: they should have a significantly disinterested makeup in order to remove market power influence. were called up to testify on specific issues as an information source only. however. some of which would be “interested”. outside of a disinterested role in hearings and filings. or distribution companies.

a group at the University of California involved with energy efficiency research and development (R&D). phasing in over time. the Vice-Provost of the UC system. for instance by Jud King. it was vague. In this interview. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? The general policy of the University has been that public goods R&D is a good thing that should be preserved. After the passage of AB 1890. utility funding for CIEE had been cut off.5 million public purpose RD&D annual budget. 1995 Decision? We agreed with the stated principles of the Decision. contacts between the two commissions has been informal. California Institute for Energy Efficiency Carl Blumstein is the Associate Director of the California Institute for Energy Efficiency (CIEE). there were no dollar figures given for public interest RD&D. but is instead offering personal observations. he is not representing the position of the University. there was no attempt to amend it. from renewable generators. University of California. The CEC has a role allocating the lion’s share of the $62. Consequently. This R&D funding cut provided a concrete example of what was being lost in the move to deregulate the electric utility industry. AB 1890 passed unanimously on the floor.purchase a given percentage of their electricity. It could have gone further by laying out steps needed in legislation. In the process of recent years. Also. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. This has been affirmed in statements by University Provosts. One would need to augment budgets so the agencies were not hit. ERG Master’s Project Mark Stout 141 . We were fighting for restoration of this funding from October of ‘94 to December of ‘95.

the Legislature or PUC could modify. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We invited the Commissioners and public interest groups to briefings. Fessler attended one earlier. There is an agreement that the PUC could continue funding after 4 years. ‘95 decision. We have good people involved in research. compared to just 0. CPUC vs. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Neeper did after the December. briefings to the IOUs were a standard part of the communication.8 million per year. Whether or not the Legislature intended this was a point of contention.. Conlon attended a briefing a few years back.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. The funding for public interest RD&D will be reviewed after three years. we did not change our stance. AB 1890)? Why? I would see them as an appropriate sequence of decisions. but it was a reasonable outcome.e. Is your organization more comfortable with one policy decision over the other (i. In the February 14.7 per year to the utilities. Duque was very ERG Master’s Project Mark Stout 142 . not end this authority after four years. or over time? I think so. stating that their intent was that the PUC retain authority for energy efficiency funding. and this comes through in our briefings. most public interest RD&D money was allocated to the CEC: $61. ‘97 Decision on public purpose programs. Also. working well together. realizing the dollars available for public purpose programs were limited. Steve Peace and Byron Sher recently sent a letter to the PUC. More money could have been spent on public interest RD&D. very committed.

ERG Master’s Project Mark Stout 143 . The University has a counsel on the PUC service lists. We filed comments.interested in technology and became a CIEE board member. myself and another University employee were there off and on. We had a presence. and spoke at one public hearing. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. supplemented by several support staff. For the conference committee we had an attorney representing the University. but nobody dedicated to the PUC proceedings. allowing for inertia. but they permitted some very big cuts in R&D funding in late 1994. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. In practice. and their was a steady chatter amongst parties. about five people in the meileu. and commented publicly at the Conference Committee. The Governor can appoint one Commissioner a year. they have usually been good. who handle all University issues. but not an overwhelming one. They have been favorable in principle the whole way through. The office has two advocates. We had informal contacts with the CPUC staff. The University is represented by a legislative affairs office. Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D.

the renewables community cam back in. The IOUs wanted to use post-Blue Book. current levels for moving to a future restructured market.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. The renewables could have fared much better if they stuck together as a coalition. historic levels [combined SCE. and a representative told Peace that the group still had not come to an agreement on who would present the proposal that they still had not negotiated. University of California representatives and I advocated for higher. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. They probably thought that this funding level included regulated transmission and distribution RD&D. pre-Blue Book. After seven hours of negotiation. They proposed to me funding at current RD&D budget levels. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. but they allowed me to put in definitions derived from the CPUC RD&D Working Group Report on RD&D [which distinguished between public interest and regulated T&D RD&D] and other language. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . For example. The municipal utilities angered Peace so much that he asked.

5 million per year funding level for public interest RD&D.5 million in public interest RD&D. I believe that this was done by the IOUs. including the $62. All parties agreed that the earlier negotiated language. preserving $62. would be included back into the bill. I went before the Conference Committee during discussion and it was explained as an error in redrafting. ERG Master’s Project Mark Stout 145 . 102 Chart by Carl Blumstein based on 1995 CEC and PG&E data. all of the language that I had inserted earlier was removed.several nights later. at approximately 11:30 PM.

He later acted as a project manager of support teams analyzing the drafts of AB 1890. Large customers were less influential. ERG Master’s Project Mark Stout 146 . What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? There was a lot of lobbying. he is not representing the position of the Commission. Which stakeholder groups do you think were most effective in influencing the policy formulation process of the December 1995 Decision and what were they able to obtain from the process? IOUs were most influential. In this interview. but is instead offering personal observations.Appendix C: Officeholder Staff Interviews California Public Utilities Commission Tom Thompson was a project supervisor in the CPUC’s Commission Advisory and Compliance Division during the December 1995 Decision formulation process. resulting in the most influential stakeholders being granted the most access. except for a rate cap that was set high anyway. when ex parte rules are in effect. with no ex parte rules during the pure rule-making period before December 20. There was nothing for small customers. mostly focusing on market structure. Lobbying access is only as good as a Commissioner’s willingness to meet. personal meetings with the Commissioners. This offered a substantial opportunity for access. It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe. 1995. Senate Bill 1960 legislates that there must be a record of who was granted and who was denied ex parte communication. resulting in a partial phase in of Direct Access.

Since rates were poised to come down due to the 10-year QF cliffs [when qualifying facility contracts go from a high. with PG&E and SDG&E more willing to move forward on direct access and Edison resisting. As a result. The low income groups participated on paper through filed comments. preferring to punt them to Sacramento. a rate freeze created extra revenue for the CTC. as opposed to a revenue freeze. and why? The Memorandum of Understanding was a major event that brought together two worlds.Which stakeholder groups do you think were best able to set the terms of the debate. Ralph Cavanagh was influential in making sure that public purpose programs stayed on the plate. The Commissioners may not have been predisposed to dismantle low income programs. IOUs and large customers. even though the duration of the CTC recovery period got ERG Master’s Project Mark Stout 147 . It featured a phase-in of direct access. but did not do hall walking to the extent of other groups. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. Was it always clear what outcomes each stakeholder group wanted from the process? The independent power industry was split. and how could they have improved their approach? Low income advocacy groups did not make their issues big and high-profile like structural issues became. It is important to keep in mind the history of Edison and SDG&E being able to kill the Biennial Resource Plan Update (BRPU) at the FERC. General Comments on AB 1890 AB 1890 endorsed much of the December Decision. It included a rate freeze for the IOUs. The investor-owned utilities were split also. fixed price to much lower short run avoided cost]. The renewables players were probably asking for too much of the old world the PUC had engaged in. adding so much certainty to stranded cost recovery. while diverting some money to public purpose programs. with the rest of independent power producers looking to a new world of deregulation.

claiming that they are linked. Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? CMA. utilities were fine with the rate freeze. The rate reduction bonds may not yield net present value benefits. so that the [legislative] Members and Governor bought in that restructuring would be good for ERG Master’s Project Mark Stout 148 . CLECA. This reduces the risk of stranded cost recovery to the IOUs. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. Large businesses articulated the issues. The PX/ISO’s insertion into Federal jurisdiction was arrogant. The Office of Ratepayer Advocates’ [Tom’s current CPUC division] position is that there is no link between a rate reduction and these bonds. the PX/ISO Oversight Board is not important. The utilities are trying to get an untaxed ruling from the IRS on these bonds.shorter compared to the December Decision. CMA and CLECA jointly made utility restructuring the issue for business. As a sidenote. Office of Senator Steve Peace David Takashima is Senator Steve Peace’s Chief of Staff and a former Edison lobbyist. but just result in rate deferrals for 10 years. since the FERC will approve their structure. The utilities would fight this interpretation. as rates were supposed to come down due to the QF cliffs anyway. It is tough to sell delayed gratification. The level of influence on AB 1890 was a function of who was in the Conference Committee hearing room. the current criticism of QFs ignores the real competition that they founded. and WSPA [Western States Petroleum Association]. Legislative Conference Committee. The 10% rate reduction for small customers was final packaging to sell the bill for voters.

DJ Smith of CLECA and Mark Timmerman of CMA were able to organize people. The Legislature did not know whether to engage in this issue. There was a lot of legislation in process. The MOU process was very important because fighting parties came to an agreement. PG&E was the first to come along. agricultural consumers. No one would support the December Decision. The Legislature became the place to find a solution. WSPA made an effort to politically educate officeholders. eventually Edison made the decision. ERG Master’s Project Mark Stout 149 . CMA’s energy committee got parties together. Initially. causing chaos and uncertainty as to what would happen. and retailers were all opposed to each other. These parties hoped the Legislature would ratify the MOU as opposed to the PUC vision. The utilities. As a member of CMA’s energy group ($10 thousand membership fee). This made Edison and SDG&E very uneasy. All the parties went to the Governor’s office to criticize the PUC.California businesses. No one in the Legislature was taking a lead on the issue. PG&E’s President. Stan Skinner. PG&E tried to make a lot of accommodations to CMA. There was not much debate or serious discussion in the Assembly. all of it spot bills as opposed to comprehensive legislation. WSPA. George Dunn and Phil Romers from the Governor’s office encouraged the parties to sit down and talk. who was also the President of CMA at one time. The Governor’s office needed to figure out if the December Decision needed to stand. Activity at the PUC did not create the political momentum. most utilities opposed restructuring. was personally engaged. so it brought the situation to everyone’s attention. causing Edison to get very active. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Coalitions were very important. they were able to then get retailers and agricultural groups on board.

Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. The Conference Committee tried to put together legislation that made sense. Which stakeholder groups do you think were best able to set the terms of the debate. and why? CLECA. He had a conversation with Senator Lockyer to staff up the Conference Committee. It was unclear whether consensus among the Committee Members was going to happen. and Edison. having conversations with the Governor’s office.During the summer recess in July. Most parties felt that with the right bill. Mark Timmerman. The Committee engaged in months of hearings issue by issue. we have to get everyone to sign off on the bill. CLECA. The California Municipal Utilities Association folks lacked effectiveness also. and Edison set the tone. These groups could not come to a resolution. encouraging other people to accept the process who otherwise would not have. LADWP was trying to cause trouble with restructuring. DJ Smith [CLECA] and Bob Foster [Edison] wanted to make a case to ratify the MOU. decision makers at the table. and Bob Foster. Senator Peace was making a decision. CMA. you could get four votes. It would not have happened without DJ Smith. He wanted people who would get engaged. John Rozsa and I were brought on board. and how could they have improved their approach? The environmental and renewables communities made the Committee punt. They waited until late in the process to get organized. Senator Peace decided on a process with long discussions. They were a guiding light. could not address the problem of a competitive market and participation. They did not want to participate. getting everyone engaged for buy-in. Peace’s past experience with workman’s comp reform involved an extensive hearing process. Peace’s mind was made up. All of the munis were trying to figure out what to do in a restructured world that will not allow residential ERG Master’s Project Mark Stout 150 . but not all six. CMA.

the conference committee had to balance all interests: IOUs. Agricultural consumers wanted CTC exemptions on pumping. They feared the PUC would get jurisdiction over them. The oil companies had lost their CTC exemption at the PUC. irrigation districts. This was very irresponsible. The MOU signatories did not include PG&E. They were helpful and gave useful recommendations. They felt if they were willing to participate. CalPIRG and some other consumer advocacy groups criticized the process without participating. As for consumer groups. All of the parties went for an acceptable negotiated solution to avoid litigation or disputes at the PUC. Most parties did not want to go back to the PUC Decision.subsidies on the backs of industrials. they had full opportunity. IOUs wanted full stranded cost recovery. but no one knew what the end product would look like. yet were not in the hearing for one minute. they could get the unions. TURN and UCAN participated in every which way. Was it always clear what outcomes each stakeholder group wanted from the process? Stakeholders knew what they wanted. labor. If the Committee could do something for labor. Lenny Goldberg [TURN] was exceptional. or labor unions. The big mistake for these small consumer groups was letting Pete Wilson get elected and stack the PUC with right wing ideologues. A shorter CTC period was beneficial for utilities. On the other hand. It took a special relationship and trust between Senators Peace and Leonard to keep things together. oil companies. they were willing to do the Death March to find the Land of Oz. They did not know what they were willing to settle for. a longer period would discount them as marketable stocks. PG&E proposed a shorter CTC collection period to please Wall Street. they could compare AB 1890 with the December Decision. ERG Master’s Project Mark Stout 151 . They did not think this was going to happen. but knew if they did not resolve things at the Legislature this would happen.

getting a place at the table. and Bill Leonard were the masterminds. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 . What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? All employed lobbyists. Senators Byron Sher. but it mainly was a waste of money. and why? The PUC laid out the framework for restructuring in the Blue Book. Senator Peace established a process that was a model of openness. Which stakeholder groups do you think were best able to set the terms of the debate. There were also “grassroots” astroturf groups based on utility shareholders. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. Groups participated in coalition building. and accountants. based on the free market-driven ideologues on the Commission. Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? None were terribly effective. then your voice was heard. all of the outside lobbying did not matter. Some groups also used press conferences. establishing a level playing field. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. If your case fit into the unfolding structure. due to the egalitarian nature of the structure. lawyers. Steve Peace. The IOUs spent millions on astroturf such as “Shareholders for Equity”. One strategy was to get bills established early on in the session. A lot of PR and press consultants got rich from this.Legislative Conference Committee. The template was in large part formed by the CPUC’s December ‘95 Decision. Because of the genius of the legislators.

Large. Office of Senator Bill Leonard Delaney Hunter is a Legislative Aide for Republican Assemblyman Bill Leonard. powerful interests already had an advantage from the PUC Decision. the residential ratepayers also had trouble. He ended up doing quite well. the fact that the renewables and environmentalists were divided was damaging. ERG Master’s Project Mark Stout 153 . Since several interview subjects described Bill Leonard as a powerful. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. but the playing field was tilted. Lenny Goldberg from TURN was stellar. As a general matter. Renewables and energy efficiency were also guaranteed protection. considering the situation. He threw the munis out. Legislative Conference Committee. it is illuminating to get a perspective from one of his key staff who was quite active on the Committee. Peace was demanding in terms of defining your position. The Decision by the PUC was going to be implemented unless the Legislature was able to deliver a package. and they subsequently came around with an articulated position a day later. It was very unhelpful to have put themselves in that position. Leonard was a Senator on the Conference Committee during the summer of ‘96. To a lesser extent. large entities had unified positions.Legislature. and how could they have improved their approach? Early on the munis were not able to define a single coherent position or proposal. This schism was a recipe for having the least influence. fiscally conservative member of the Conference Committee. Later on in the Committee. as when he threw the munis out of the Committee for their inability to articulate what they wanted. Was it always clear what outcomes each stakeholder group wanted from the process? Peace forced clarity. The utilities established early on the full reimbursement for stranded costs.

He represented himself well in the hearings and actually helped to draft language that made it into the bill. The Committee Members took some things from the Decision. They needed to get their nukes off of the books. Groups that opposed the bill without participating also were ineffective. as well as an acceleration of recovery. A lot of their lawyers did technical language work in coalition with the legislative counsel. The full recovery of their stranded assets was very important to them. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Linking up with the Governor’s office was critical. They also were able to offer a lot of help with technical drafting. no one was happy. such as CalPIRG and one of Ralph Nader’s organizations. a small generation developer. they had the manpower to make sure their positions were taken care of. Wayne Rafesberger. and how could they have improved their approach? Power marketers such as Enron. could not go to a competitive market with a debt hindrance. Which stakeholder groups do you think were best able to set the terms of the debate. NEVs. and Working Assets were just not there when their issues came up.Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? The IOUs were able to pull people together. IOUs very quickly were able to get 100% stranded cost recovery firmed up. To contrast this. This was the greatest expression of coalition building. was a one-man machine. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. and why? When the PUC December Decision came out. If they were there and could contribute. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . This put everything on the table. anyone could have influence. otherwise blew it up.

Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. The ability to fund politicians helped. causing chaos. Bill Leonard said that if you want to charge an exit fee. Once the Governor’s office was behind the MOU. Bill Leonard did not historically support ratepayer funding for renewables. He walked out at one point to force the munis to make up their mind. it was all over. while the large customers got the ability to go first on direct access. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. Labor wanted to protect their employees. However.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Getting the help of the Governor’s office. and look for ways to get around paying the CTC. ERG Master’s Project Mark Stout 155 . The IOUs were clear that they wanted full recovery. Political clout can be bought with lobbying and campaign contributions. The IOUs got complete stranded cost recovery. There was a lot of play between SMUD and the large customers. such as irrigation districts and economic development rates. you must play. It looks most likely that it will be adopted.

This dissipated their effectiveness. they were all against restructuring. and why? Again. they did respond with thousands of cards and letters. Once something like AB 1890 is done. It had too many purists that need to learn the art of compromise. in the coffee shops at three AM. it is too late to change. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. which did not help. As customers learned more about what was going on. you can be part of the decision making process. Was it always clear what outcomes each stakeholder group wanted from the process? No. and how could they have improved their approach? The renewables community fractured itself as far as coming together behind a proposal. The environmental and consumer advocates did not have a clear idea of what they wanted. not after the fact. small customers and the people who serve small customers. influencing the CEC’s report to the Legislature. IOUs got 100% stranded cost recovery. they did not know what seat they wanted to sit in. ERG Master’s Project Mark Stout 156 . Also. There was not enough education or public involvement. so there was not enough press coverage. the large customers and utilities. When the train was leaving the station.Which stakeholder groups do you think were best able to set the terms of the debate. Anonymous Officeholder Staff Interview #2 Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? IOUs and large consumers got everything they wanted. At first. As it was too esoteric a topic. They needed to realize the process was happening. If you had the resources to be there. while large customers got to move forward with direct access. and pay attention to it then.

Which stakeholder groups do you think were best able to set the terms of the debate.What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? These influential players relied on a “fairness and competition” argument to Committee members: equity in access to the grid allowing competition to bring prices down. but the resources that could be allocated. TURN would say they want “X”. Often what groups indicated that they wanted was not what they actually wanted. Between the large manufacturers and utilities. and how could they have improved their approach? Power marketers and brokers were not as involved. This was the first time for the Members to be looking at actual language. Ann wrote it and brought it to the Committee for consideration. who deal daily with issues of economic development. they accounted for 2/3 of the people in the hearing room. The Governor has the same goal: empower people for economic development. For example. and why? The same stakeholder groups ran the discussions. However. Senior Legal Counsel for Edison. A key witness before the Committee was Ann Cohn. Was it always clear what outcomes each stakeholder group wanted from the process? No. The Committee staff did not write the first draft of the bill. and the conference committee comes back with a 10% rate reduction instead. So ERG Master’s Project Mark Stout 157 . Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. the ratepayer groups did not jump up and grab it. Ann sat down and read from the draft during the conference committee. Along the way the draft was changed of course. But it was not the number of people in the room that mattered. This had validity for Committee Members.

while the Members were trying to do the right thing. ERG Master’s Project Mark Stout 158 . it appeared as if they were not doing that at all.

Interview #1 Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.

How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .

Interview #1 Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.

000 $2.500 $1.000 $7.896 $3.000 $3.000 $500 $1.495 $1.995 $21.000 $2.000 $3.995 $300 $12.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.800 $1.495 $10.000 $4.429 $498 $1.000 $1.000 $495 $950 $696 $2.000 $3.495 $7.500 $22.000 $0 $0 ERG Master’s Project Mark Stout 162 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.191 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $1.

995 $2.Table 2: Assemblymember Jim Brulte.000 $2.000 $1.000 $8.000 $1.250 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.750 $4.000 $10.500 $800 $498 $200 $9.000 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $1.500 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.017 $749 $750 $3.995 $14.000 $2.511 $3.460 $200 $500 $750 $2.995 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $47.990 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .500 $1.495 $4.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Paling in comparison. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. and Budapest.490 “Travel project to Europe on Electric Restructuring. 1996.250 $500 $1. Conservation. Chevron treated Brulte to two meals.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Sweden. 4 ERG Master’s Project Mark Stout 164 . totaling $101. Mobil treated Brulte to a $60 event in 1996. by the California Foundation on the Environment and the Economy.500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $3. and Privatization” visiting London.750 $750 $1. as well as an event.000 $2.000 $3.000 $1.000 $1.000 $750 $0 $0 103 Asmus. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.750 $2. CFEE is a “non-profit.000 $1. Table 3: Senator Steve Peace. Not to be outdone. From 3/28/96 to 4/8/96. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. Brulte was taken on a $7.

072 $2.250 $7.050 $3.000 $6.115 $18.250 $750 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.572 $1.250 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.250 $2.000 $4.750 $0 $0 ERG Master’s Project Mark Stout 165 .500 $16. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $3.000 $1.000 $500 $2.Table 4: Senator Steve Peace. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $2.000 $750 $750 $750 $1.100 $2.000 $300 $1.500 $8.815 $750 $6.450 $7.

as well as chair of the Senate Energy and Utilities Committee. Table 5: Senator Byron Sher. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. SDG&E had Peace out to six meals. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. In 1996. while Edison treated him to five meals and a sports event. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.900 . In 1995. Peace was treated to a $52 sports event by Mobil Oil.000 Table 6: Senator Byron Sher. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Southern California Edison was granted a high level of access. taking Steve to 11 meals.100 $2.000 $5.450 166 ELECTRIC/GAS $6. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. IEP made a gift of $241 for his speech at a conference.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.

600 $13.882 $100 $1.000 $500 $1.000 $500 $500 $9. $2. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . EVs) Hansen.000 locals) Southern California Pipe Trades United Assoc.500 Int.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. and Hamrin. McQuat.000 $100 producers. (geothermal) Colmac Energy Inc. (biomass) Edson + Modisette (lobbyist for indep. Brotherhood of Electrical Workers (various $9.100 $500 $2.482 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.

500 COMPANIES $1.000 $1.000 (tire $1.000 Large Energy Consumers $3.000 $1.000 $100 $1.000 $100 $100 $500 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.

of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .Tosco Corp. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.448 $14. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $700 $4.000 $300 $300 $22.585 $100 $500 $2.

Exxon.300 $500 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.500 $0 $0 ERG Master’s Project Mark Stout 170 . Mobil. Sher holds over $100.400 $750 $150 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. Sher received no other gifts that year from energy utility stakeholders.000 $1. totaling $2608.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.000 in each of Amoco. Table 7: Senator Bill Leonard. totaling $758.500 $300 $0 $0 $2. In 1996. and GE. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. NARUC treated Sher to a two day trip to DC for another meeting.

(CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation.730 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. Edison again ERG Master’s Project Mark Stout 171 .) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.650 $500 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. saving up for a $77 dinner with head lobbyist Bob Foster.000 $5.500 $150 $500 $3.500 $500 $1. While the Senator was there.000 $500 $500 $4. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.080 $10.650 $2. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $2. The Pacific Rim Conference of Seattle. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. SCE treated Leonard to dinner and lodging for Legislative Ski Day. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. extending his stay from 12/8/96 to 12/13/96. for a paltry $20.000 $2.Table 8: Senator Bill Leonard.000 $1.000 $2.

PG&E took Leonard out to a Kings game.000 $1.250 $1.600 $1. ARCO treated Leonard to a $19 meal at a reception.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. for the modest tab of $56. They also had Leonard out for two meals in Sacramento. including lunch with Bob Foster. Table 9: Assemblymember Mickey Conroy.had Senator Leonard out for Legislative Ski Day. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $750 $750 $500 $1.000 $1.750 $1.000 $750 $750 $650 $150 $500 $3. paying $44 for two meals and lodging.

Table 10: Assemblymember Mickey Conroy.000 $2. $7. 1996.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $3. and Inner Mongolia.700 $750 $450 $250 $250 $1.000 $500 $2.500 $2.600 $500 $1. PG&E treated him to a basketball game with $51 tickets.600 $3. two meals for $44.000 $5.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. the California Foundation on the Environment and the Economy took Conroy on an 11 day.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. and to 104 Asmus.050 $1. Shanghai. 4 ERG Master’s Project Mark Stout 173 .700 $500 $300 $550 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $500 $750 $250 $500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. CFEE is a “non-profit. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

Edison wined and dined the Assemblymember with four meals at $134. Kansas City Power & Light. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. with investments of greater than $10.make sure Conroy kept a sweet spot in his heart for them.000 in Orange & Rockland Utilities. SDG&E.000 each in Edison. ERG Master’s Project Mark Stout 174 . the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. four rounds of “refreshments” for $30. $10 in candy. and $25 of cookies and candy. costing $99. and Westinghouse Electrical. In terms of investment. and less than 10. After such a busy social calendar in 1995. Pacificorp. Chevron took Conroy out for two business meals. General Electric.

750 $2.175 $500 $1.750 $4.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $1.000 $1.250 $1.675 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $2.Table 11: Assemblymember Diane Martinez.750 $1.

(CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $4. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.500 $500 $500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1.Table 12: Assemblymember Diane Martinez.500 $1.000 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.250 $1.500 $1.750 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $7.000 $5.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $500 $500 $5.500 $6.000 $0 $0 ERG Master’s Project Mark Stout 176 . Dist.500 $1.000 $500 $3.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $4.000 $1.000 $1.000 $500 $1.

) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. the Illinois Energy Association flew Martinez out for a $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.208 $0 $0 $1.500 $1.100 $100 $1.850 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.600 $1.000 $500 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.900 $3.Table 13: Assemblymember Steve Kuykendall. natural gas.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.058 $500 $500 $1. ERG Master’s Project Mark Stout 177 .000 $8.500 $1.

Table 14: Assemblymember Steve Kuykendall. ERG Master’s Project Mark Stout 178 . Kuykendall’s social calendar was destined to pick up in 1996.000 $1. and Privatization” visiting London. Sweden.350 $500 $1. and Budapest. Kuykendall was taken on a $7. natural gas. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.250 $100 $500 $35.000 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.500 $1.000 $2.374 $4.254 $200 $500 $4.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. diesel) Unocal (CMA member) Victory Oil Co. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Conservation.000 $19.500 $1. However.000 $1. From 3/28/96 to 4/8/96.500 $0 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.490 “Travel project to Europe on Electric Restructuring.443 $6.374 $500 $2.

According to investigative writer Peter Asmus. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. and Paris. regulators. The Large Public Power Council.by the California Foundation on the Environment and the Economy.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. Edison. to meet with CEOs of the electricity industry. a trade association for publicly owned utilities. CO. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. known as the Council of States Government . spent $1402 to fly Fessler to Charleston. The California 105 Asmus.051 to fly the President out to New York City for a ConEdison Management Conference. The Aspen Institute. Fessler was taken on a $7. SC to address their membership.167 junket visiting London.WEST. Brussels. Chevron treated Kuykendall to two dinners for $131. A trade association. 1996. Another non-profit organization. wholesale PoolCo model. one of CFEE’s funders. an Edison lobbyist was added to the international travel party at the last minute. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). was very interested in California moving to the UK-style. in Aspen. and environmental groups to discuss the British experience with deregulation of electricity. government ministers. The California Mining Association took him out for an evening of recreation and dinner costing $89. paid $1. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94.”105 The Consolidated Edison IOU spent $1. for $610. 4 ERG Master’s Project Mark Stout 179 . by the California Foundation on the Environment and the Economy.

Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. In April of 1995. the California Foundation on the Environment and the Economy took Fessler on an 11 day. Synergics Resources Corporation had Fessler out to Princeton. a utility planning association. Utah to speak at the “Utility Restructuring. in Fort Collins. The Cato Institute. for $323. for $467 airfare. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. a utility association. spent $314 to bring him to speak at their Spring Conference. Finally. The Rocky Mountain Electrical League. Shanghai. and Inner Mongolia. The Western States Coordinating Council. On the investment side. Fessler holds over $10. a libertarian think-tank. NJ to speak at the 1994 DSM Implementation Conference. ZEV’s and Rethinking the Environment Conference. CO. spending $291. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. EEI is a trade association representing investor owned utilities. PG&E had him out for two lunches.000 in Ohio Edison stock. DC. the Center for Resource Management flew him to Midway. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. ERG Master’s Project Mark Stout 180 . DC.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting.802 junket to talk with Chinese central government and provincial leaders in Beijing. $7. spent $249 to fly him to their annual meeting in Las Vegas. Finally. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. spending $1006. had Fessler speak at their conference in Washington. for $61.

The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. was very interested in California moving to the UK-style.000 in each of Central & Southwest Corp. by the California Foundation on the Environment and the Economy. and Paris. to meet with CEOs of the electricity industry. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and Schlumberger oilfield services stock. Conlon was taken on a $7. regulators. and less than $10. He does own less than $10.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. government ministers. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. ERG Master’s Project Mark Stout 181 . Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.167 junket visiting London.000 in each of Chevron. wholesale PoolCo model. Brussels. spending $258. Edison. 1995. In 1995. Jr.000 in each of Montana Power Company and Exxon stock. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. one of CFEE’s funders. He does own more than $10. Unocal. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. and environmental groups to discuss the British experience with deregulation of electricity. utility and General Electric stock. PG&E had him out to three meals for $71. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. He left office on February 23.

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