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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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which will be superseded to a great extent by the details of AB 1890.html ERG Master’s Project Mark Stout 4 . a product with well documented environmental impacts including local air pollution.3 According to the Environmental Defense Fund. Various stakeholder groups. selling 250 billion kWh of electricity per year2.edf.org/programs/Energy/green_power/a_better. and why. 1996 California Energy Commission. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes.S. This paper develops a comparison of which stakeholder groups got what they wanted. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. 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. 1995 3 Flavin and Lenssen. 1994 4 WWW page: http://www. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. 1995 Electric Restructuring Decision.Introduction On September 23. which sets in motion a process of electric utility deregulation beginning in 1998.4 Given the stakes involved with this industry. acid rain and climate change. with varying success. there will probably be significant winners and losers as a result of this legislation. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. 1995 Decision with the California legislative process resulting in AB 1890. 1 2 CPUC RD&D Working Group. contrasting the results of CPUC process resulting in their December. 1996. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).

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

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

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

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

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

with large. Hoffman. sending “a shockwave through the electric industry”. 55. A more definitive policy statement was 16 17 Haddad. 18 Mydans. all residential consumers eligible on January 1.18 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. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 1999.17 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. 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. ERG Master’s Project Mark Stout 12 . 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. all commercial customers eligible January 1. 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. In April of 1994. 2002. The Blue Book laid out an aggressive. 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. industrial customers taking power at the transmission level eligible on January 1.supplies. and if successful.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. and 3) rate changes to encourage efficiency and distribution of power. 1996.

19 Since the release of the Blue Book proposal. “a vibrant market exists for energy efficiency services”. 1995. The first issue addressed open access to the transmission system 19 20 CPUC. were concerned about the content and timetable of this proposal.20 Many stakeholders. which had been dubbed the MegaNOPR. 1994.21 This stakeholder response. In their place. where customers voluntarily pay more to promote renewables. 21 CPUC. This led to the passage of Assembly Concurrent Resolution 143. the CPUC proposed. Blue Book. For instance. pushing back their goal for a policy decision until September of 1995. “alternative frameworks based on ‘let the market decide’”. including private and public-interest organizations. 1.scheduled to be issued by the CPUC in August of 1994. FERC released a dual-issue Notice of Proposed Rulemaking. such as “green pricing”. 1994. 1995. numerous other states have also proposed electric utility deregulation. 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. Status Report. and asserted that. ERG Master’s Project Mark Stout 13 . and documentation resulting in a report back to the Governor and Legislature by January 31.22 FERC MegaNOPR In March of 1995. evidentiary hearings. 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. coupled with a lack of prior coordination with the state Legislature. Blue Book. where CPUC President Fessler and Commissioner Knight testified on their proposal. This process tempered the CPUC’s frenetic timetable. Wagner. which requires the CPUC to engage in a series of public hearings.

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

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

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

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

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

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

1997 42 Weisman.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. 30% new technologies.41 There are currently several electric utility restructuring bills in Congress. 1997 41 Marshall. 1996 CEC. and 15% consumer-side incentives. 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. chair of the House Energy and Power Subcommittee. 1997. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 10% emerging technologies. 1997.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . would be eligible for direct access January 1. including residential and small commercial consumers. It divides up this amount into four accounts that vary over four years of funding. The overall levels are: 45 % existing technologies. As Carter and Cavanagh have noted. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. In March of 1997.40 On May 6. including a prominent one authored by Representative Dan Schaefer (R-CO). “If the bill had failed. 1998.

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

.”.. “We do not advocate a slash and burn approach.”48 Davis describes the transition that has occurred in the influence of state PUCs. Asmus. ERG Master’s Project Mark Stout 22 .” CLECA’s national counterpart is the Electricity Consumers Resource Council (ELCON).” A consultant who shares White’s perception of ELCON notes that they want to push California to adopt a policy as. 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.viewpoint. 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. executive director of the Center for Energy Efficiency and Renewable Technologies remarks. 24 companies that account of over 4% of the nation’s electricity use. “uncompromised as possible because they fear the California plan will become a model for the country. There are some who are concerned about ELCON’s environmental ethics in pursuing electric utility restructuring. ELCON. That’s one reason why they want to cut their own deals.. are now competitive. “We just want to use competition to get the best price for power. V. “At least you can talk to CLECA. 1995. 24-25. on the other hand. 192.. they will have to gulp and swallow elsewhere. “In the past the commissions had found their main constituents to be residential customers. and they say they know renewables. Now they found 46 47 Davis.” to existing public interest programs. As Davis notes. “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. such as wind power. has no respect for the environment.. “Retail wheeling.. John White.

Gordon. greatly increasing opportunities for bulk power sales.”. 150. 52 Gilbert. who in the past had enjoyed privileged status with cheap rates. Davis. 1993. basing their arguments on welfare economics as applied to the changing electric utility landscape. Hoffman 55-62. enabling increased competition. 195. “Discretionary Evolution.. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 50 Flavin and Lenssen.. 447-475. 1993. ERG Master’s Project Mark Stout 23 . 84-108.intense pressure from large industrial customers. but now had to pay higher rates. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 356-357.50 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. 1994.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 51 Stevenson.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry.

over half of new U. 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. and it was only 53 54 Stevenson. 1994. such as natural gas for space heating.54 Since 1992..”. ERG Master’s Project Mark Stout 24 .S.. Many electrical applications have substitutable fuels. Stevenson. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power.. non-utility providers. 55 Flavin and Lenssen. competition takes on several forms in this market. “Discretionary Evolution. as well as those on the border of service districts. generating capacity has been supplied by alternative. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. “With this act.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology.53 allowing a policy trend that emphasizes markets rather than social welfare. Utilities compete for industrial customers who are relocating. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. the camel of competition forced its nose under the monopoly tent.. 355-356. 357.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities.”. There is significant competition in the wholesale electric generation market. “Discretionary Evolution.

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

61 California Public Utility Commissioners Jesse Knight and Norm Shumway. 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.”. 1995. “Discretionary Evolution. Maine. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. New York. and Wisconsin. Connecticut. Michigan initiated a five year retail wheeling experiment involving two utilities. an analyst with CPUC’s Division of Strategic Planning. Colorado.has noted.”62 a form of integrated resource planning know as the BRPU. 1997.63 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. In 1994. the same year that California’s Blue Book proposal was released.. were the key retail wheeling champions within the CPUC.. 62 Asmus. both appointees of Governor Pete Wilson. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). 355-356. “Retail wheeling. though it urges states to consider retail competition. Commissioner Knight. according to Jeff Dassovich. ERG Master’s Project Mark Stout 26 .. 60 61 Levison. 24. “the DOE bill does not mandate retail markets by any date certain. “DOE Restructuring Bill” Stevenson. Calls for bids have often been oversubscribed by a wide margin. Massachusetts.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.”.. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process.

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

eloquently expressed by their participation.” Lukes’ second.. Their values.. 2. His onedimensional view of power is based around observable actions by stakeholders. these interviews do not shed much light on the 65 66 Sikkema. “who participates. most “radical” view of power. power may be analyzed by looking at. 1980. who gains and loses. cannot. p. As Goventa comments. 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. it seems to me. Lukes has argued that there are three views or dimensions of power. but only at a superficial level.negotiations. presumably people participate in those areas they care about the most... 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). observable actions between participants. I primarily focused on Lukes’ first dimension of power.” In Lukes’ third. and who prevails in decision-making. Unfortunately. on Lukes’ “second face” of power. he argues. even without observable actions or non-actions by that institutions agents. As Polsby has written. 1974. or determining his very wants. shaping. “A may exercise power over B by getting him to do what he does not want to do. “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. Lukes. opening up the analysis to the second view of power. 3-32 ERG Master’s Project Mark Stout 28 . be more effectively objectified. Goventa. in a contradiction between the interests of those exercising power and the real interests of those they exclude.”66 By talking with active stakeholder representatives and officeholder staff. but he also exercises power by influencing.

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

” The inclusion of direct access was not embraced by munis. 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. while ensuring their financial solvency. 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.• Investor Owned Utilities: The IOUs want to protect shareholders by maintaining their stock price and maximizing profits. who are also their “shareholders”. • December Decision outcome: The IOUs did get the ability to recover 100% of stranded costs. • December Decision outcome: The CPUC Decision did not address municipal utilities. • Municipal Utilities: The munis want to retain their autonomy in making their own policy decisions. including billions of dollars in rate settlements for PG&E’s Diablo Canyon and SCE’s SONGS nuclear plants. Most resist retail competition. and pursue 100% stranded cost recovery from ratepayers. While recovery period is limited to four years may limit their ability to achieve the full 100% cost recovery. A five year phase-in to direct access may have been a little too fast for Edison. 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. Most resist retail competition and pursue the ability to recover 100% of stranded costs from ratepayers. ERG Master’s Project Mark Stout 30 . except for on the subject of reciprocity for allowing direct access. • AB 1890 outcome: The legislation codified the utilities opportunity to recover 100% of stranded costs.

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

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

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

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

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

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

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. nearly half of the representatives say that their organization got most of what it wanted from the December Decision. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. a slightly smaller number of representatives report a mixed or unclear outcome. Figure 2 shows that all of the investor-owned utilities and independent producers. this provides a baseline to determine if they got what they wanted. 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. as well as the majority of large electricity consumers. 1995 Decision.

ERG Master’s Project Mark Stout 38 . As Figures 3 indicates. 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. 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. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890.from the December Decision. as well as the majority of large electricity consumers. and the remaining minority claim that their organization got rather little. say that their organizations got most of what they wanted from AB 1890. a similar number of representatives report a mixed or unclear outcome. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives.

As Figures 5 indicates. 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. either the CPUC December Decision or AB 1890. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. 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.

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. 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 excerpted from the PG&E stakeholder interview.” Many of the other stakeholders consider AB 1890 an incremental.[see American Wind Energy Association. and Union of Concerned Scientists interviews]. forward Decision. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. and to begin to build theories for why. as well as three subjects ERG Master’s Project Mark Stout 40 . PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision.

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

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

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

but just result in rate deferrals for 10 years.Officeholder Staff Comments on Who Got Rolled Over. they had full opportunity. LADWP was trying to cause trouble with restructuring. and Why: • Low income organizations and the renewables community could have improved their performance. These groups could not come to a resolution. and the renewables community was perceived as not being able to make a paradigm shift. The 10% rate reduction for small customers was final packaging to sell the bill for voters. The renewables players were probably asking for too much of the old world the PUC had engaged in. could not address the problem of a competitive market and participation... He also chided municipal utilities and some small consumer advocates for resisting the process and not fully participating. They waited until late in the process to get organized..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... according to this CPUC staffer. In AB 1890. for their inability to articulate positions.. This was very irresponsible. but for different reasons. The low income groups participated on paper through filed comments. but did not do hall walking to the extent of other groups.. as rates were supposed to come down due to the QF cliffs anyway. The clean power community was cited again for a lack of ERG Master’s Project Mark Stout 44 . 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.. yet were not in the hearing for one minute.. .. The rate reduction bonds may not yield net present value benefits. • A staffer from Senator Byron Sher’s office also brought up the municipal utilities.. 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. The California Municipal Utilities Association folks lacked effectiveness also. They did not want to participate.. The low income groups may not have the staff resources to lobby effectively.CalPIRG and some other consumer advocacy groups criticized the process without participating.

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

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

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

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

. As a Sierra Club California legislative chair recounts on meetings between CMA.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... hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. RD&D.. agricultural consumers. 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 . “We reached a consensus on. renewables with an incremental cost estimate from the BRPU. EDF. and the Sierra Club. The August 15 language from a coalition of powerful interests. These got translated into dollars. During the Conference Committee hearings. less than two weeks before the Bill would be reported out of committee. CLECA. and energy efficiency. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. TURN was one of several public interest organizations who opposed the change. reduced funding to an average of 2. Industrial Users. including IEP.72 At this point late in the game. 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. 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. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.3% of utility revenues. The 3% [it was actually a cap of 3. funding for public purpose programs: low income. a perusal of legislative language that was proposed during the long.” However.1% of IOU revenues.

1996 ERG Master’s Project Mark Stout 50 . one Senator’s Chief of Staff revealed. then they are punished by “capital strike”. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. 1996 Conference Committee on Electric Restructuring AB 1890. This had 73 74 California Senate TV video of August 10. if they pursue antibusiness policies.. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. recession. but outcomes will be systematically skewed against them. As noted earlier. section 381. and unpopularity in the eyes of the public. They may be allowed to participate in the policymaking process. There was no significant opposition to this point during the hearing. 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. 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.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. As he explains. To the extent that public policy remains under the sway of state imperatives.73 However.for a static amount of renewables capacity. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value..” An anonymous staffer’s comment also resonated with this state imperative.influential players relied on a “fairness and competition” argument. receiving “symbolic rewards only”.. States simply must provide the conditions that facilitate capitalist investment and economic growth.. public interest organizations have been “co-opted or bought off cheaply”.. “Large businesses articulated the issues. . falling tax revenues. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff..74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. subdivision (e) 75 Dryzek... “.

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

Jim Brulte (R-Ontario).. in order to move forward with a product.. in terms of complicated problem area. if there is something you can bring to the table. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division. is clearly renewable folks. Our largest problem area. The other thing is. The following campaign contribution summary tables were compiled from Officeholder. 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. these tables cover the years 1995 and 1996 for the author of AB 1890. Where data is available. and my rule is when we are forced to unilaterally resolve issues. Candidate. 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. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . everybody should suffer except for us. obviously there is going to be many political philosophies on that issue. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package...” That same hearing session. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component.start unilaterally resolving issues. A full breakdown of contributions for each legislator is included in Appendix E. OK?. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10.77 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. even though there some parts they might hate.

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

500 $533.031.588 $500 $32.181 $0 $160.S.416 $5.000 $225.096 $971.079 $13.952 $1.163 $0 $25.125 $0 $4.745 $68. (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 $10.559 $0 $246.308 $516.675 $736.239 $0 N/A $0 $89.110 $34.000 $681.500 $1.592 $846 $0 ERG Master's Project Mark Stout 54 .595 $0 $21.075 $4.000 $634.149 $3.000 $1.995 $596.101 $495 $10. 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.675 $384.000 $562.203.180 $0 $209.819 $0 $323.630 $300 N/A $0 $5.500 $190.752 $0 $51.981 $1.741 $21.000 $480.370 $648 N/A $0 $208.500 $78. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.166 $5.374 $1.496 $8.112 $3.479 $2.516.000 $62.092 $3.500 $263.419 $13.157 $0 $188.079 $950 $14.758 $2.608 $3.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $0 $70.102 $0 $73.964 $0 $40.153 $750 N/A $8.835 $1.818 $0 $65.405 $0 $722.272 $0 $64.000 N/A $0 $18.

197 $500 N/A $2. (gasoline refining and marketing) Tower Energy Group (oil.675 $0 $1.519 $11.596.003.850 $1.000 $0 $6.000 $383.495 $27.000 $0 $15.000 $20.401 $1.938 $0 $118.665 $0 $262.500 $0 $0 ERG Master's Project Mark Stout 55 .495 $1.081 $1.600 N/A $5.400 $100 $79.000 $524.716 $39.271 $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.250 $0 $30. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.723 $0 $38.000 $37.145 $5.947 $500 $281.291 $3.083 $0 $20.000 $526.203 $5.055 $0 $151.701 $0 $5.167 $500 $25.230.326 $0 $100.000 $0 $171.099 $12.492 $0 $66.207 $5. natural gas.319 $0 $10.551 $12. 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 $4.203 $0 $30.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.362.600 $32.

(geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.S.017 $1.000 $85. 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.724 $500 not applicable $500 $57.543 $29.626 $0 $8.882 $15.) 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. and Hamrin.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.611 $1.000 $50.454 $3.750 $267. 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. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.500 N/A ERG Master's Project Mark Stout 56 .000 $33.281 $1.331 $0 $97.250 N/A $100 N/A $2. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.286 $3.000 N/A $100 N/A $7. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.250 $148. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.750 $418.748 $32.179 $0 $3.845 $452.229 $100 N/A $1.717 $500 not applicable $0 $138.060 $6.500 N/A $0 $211. Dist.500 $29.000 NA $500 $0 $2.240 $0 $178. (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) $145.118 $0 $144.195 $401.862 $21.000 $209. producers.605 $250 N/A $1.589 $26.159 $3.571 $500 N/A $200 N/A $1.100 $144.460 $50.032 $0 $172.819 $921.590 $5.600 $276.917 $300 $5.782 $981.400 $1.147 $500 $739.025.750 $1. McQuat.905 $30.200 $837. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.450 $566.000 $35.100 $0 $500 N/A $100 $0 $500 N/A $2.

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.958 $2.000 $65.521 $14.636 $0 $103.245 $335.900 $1.417 $9. diesel) Unocal (CMA member) Victory Oil Co.384 $2.500 $277.661.000 $76.650 $3.950 $3.000 $22.250 $34.511 $1.478.000 $500 $456. (gasoline refining and marketing) Tower Energy Group (oil.754 $4.622 $67.643 $1.495 $22.090 $749 $38.573 $2.438 $500 N/A $0 $1.750 $37.138 $1.960 $2.209.689 $2. natural gas. (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.800 not tracked $3.181 $1.016 $1.878 $12.500 $251.705 $19.780 ERG Master's Project Mark Stout 57 .532 $4.521 $0 N/A $50 $87.407 $200 $61.861 $1. (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.900 $0 $21.750 $23.296 $800 $25.137 $550 N/A $5. 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) $41.072 $918.721 $748.050 $949.050 N/A $0 $214.995 N/A $100 N/A $0 $3.885 $300 $207.347 $9.334 $498 $1.925 $0 $44.177 $300 N/A $0 $29.989 N/A $9.500 $47.712 $100 N/A $200 $16.521 $1.761 $0 $73. Texaco Tidelands Oil Tosco Corp.000 $233.

066 $500 $21.790 $100 $14.438 $4.068 $14.1996 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. of California.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .462 $500 $14.462 $208.448 $424.250 $21.000 $700 $117.585 $33.066 $500 N/A $250 N/A $22.000 $15.000 $2. 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.

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

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

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.

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. CPUC vs.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. 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. 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. 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 . 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.

For one. PG&E wants to avoid the stranding of deals that were made in an era of an intact regulatory compact. “Pacific Gas & Electric is a California Investor Owned Utility Company. PG&E provides gas and electric service to more than 13 million people in northern and central California.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. ERG Master’s Project Mark Stout 67 . E-1. 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.”81 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Kathy. Now that PG&E has realized electric utility deregulation is inevitable. PG&E initially said no to gas deregulation. 81 CPUC Renewables Working Group. they want to be able to shape the outcome more effectively according to Kathy. and 2) coverage for utility stranded costs and obligations. Secondly. eventually giving in to it while creating tensions with some parties. PG&E does not want to have to automatically take the blame when reliability issues arise.

1995 Decision? PG&E got what it wanted on some of the more important issues in the CPUC’s Decision. compared to the four year collection period in AB 1890. PG&E largely got what it wanted.. ERG Master’s Project Mark Stout 68 . and a shortened period for CTC collection. Kathy indicated that the Decision included a plan for an orderly transition to a deregulated generation environment that PG&E desired. 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.” according to Kathy. the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. Is your organization more comfortable with one policy decision over the other (i. CPUC vs. but had to compromise a little more than in the CPUC decision. Also. 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. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? In the formulation of AB 1890. what they perceive as significant funding for renewable energy support. Several areas of compromise for PG&E included irrigation district exemptions for collection of the Competition Transition Charge.e. 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. “Steve Peace forced everybody to confess what was important to them.

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

Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. Jack. and gas service to 0.7 million customers in San Diego County. It allows an organization to get buy-in from other parties in advance.”82 Enova Corporation has announced a merger with Pacific Enterprises. and willing to be straightforward on what they can give on. is a California Investor Owned Utility Company founded in 1881. “People who influenced the outcome were present. Sirard.” according to Kathy.reasonableness check. while holding on to what they really wanted. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. 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. 1996. “a subsidiary of Enova Corporation. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. a gas utility which serves a territory largely overlapping with Southern California Edison’s. SDG&E provides service to 1.” Organizations had to be able to make decisions right on the spot to shape the outcome. 1996. SDG&E. ERG Master’s Project Mark Stout 70 . E.15 million electric customers in San Diego and southern Orange Counties. App. 82 83 CPUC Renewables Working Group. the parent company of Southern California Gas Company83.

they did not get there by investing in high cost renewables. We were very opposed to the BRPU.84] SDG&E does not have any renewables. [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. but are not viable with competition. SDG&E wanted to become the lowest priced California IOU. 1996. everyone should pay. This would put us at a competitive disadvantage compared to PG&E and Edison. AB 1890 mirrors the Decision in many ways. 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 got it struck down. We were strongly opposed to the RPS. so we would have to buy energy or credits. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. The lucky Arizona utilities went with coal. 84 CPUC Renewables Working Group. SDG&E was a supporter of the PoolCo market structure along with Edison. Throughout the ‘70s. except for electricity purchases from Mexican geothermal generators. Also. ERG Master’s Project Mark Stout 71 . High priced renewables are OK if you are not moving to a competitive future.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. with the exception of the legislation’s mechanism for a rate reduction. it would be difficult to get 5% renewables. We went to FERC. we had the highest rates in the nation. When Tom Page came in as CEO in 1981. 1995 Decision? The PUC was on the right track. if you are a broker.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and distribution reliability. but with a rational transition. and responsiveness to customer inquiries. but criteria of reliability and quality of service. We already had viable wholesale competition. ERG Master’s Project Mark Stout 86 . We initially focused on whether. We pointed out that the only part of the industry subject to competition was the variable cost of energy. Coalition of California Utility Employees . a technical consultant to CUE [see preceding interview]. increasing efficiencies without sacrificing reliability and service. when a utility plant is divested to a new company. and to what extent. As it became clear that this argument would be lost. a result where the only criteria was not cents/kWh. Enron now agrees with us. We are willing to compete. transmission. Most customers want more than incremental savings. the existing unions get a contact for two years of plant operation. there are no savings to customers to be gained from retail competition. The legislation also attempts to ensure the reliability of the system by building in responsibility for inspection and maintenance into the new regulatory structure. Marc was referred to me by David Marcus. we shifted to focus on generation. Also.Interview #2 Marc Joseph is an attorney actively representing CUE through both the CPUC and legislative tracks.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. 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. and how the market should be shaped.

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

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

which Nancy and I found to be clearly outside of the purview of the Working Group’s charter. Although she says the Decision language was vague. the essential elements of the RPS were included in the MRPR so that AWEA could largely get what they wanted. Nancy had developed the RPS concept for AWEA since being hired on. “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. 10 project developers/operators.” for supporting renewable electricity generation. 12 accessory parts manufacturers. and is a long-term. However.”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. The RPS. “corrects market failures and market barriers. 22 consultants.” EDF led a coalition with the only non-MRPR proposal in the CPUC Renewables Working Group. E-1. She mentioned that another stumbling block for the 90 CPUC Renewables Working Group. includes 7 turbine manufacturers. efficient policy mechanism. 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 implementation details to be worked out through a CPUC stakeholder Renewables Working Group process. 1995 Decision? Nancy was successful in getting the RPS embodied in the CPUC’s Decision as a minimum renewables purchase requirement (MRPR). ERG Master’s Project Mark Stout 89 . including 155 members in California.” from the California electric utility deregulation process. the MRPR was. academicians and interested individuals.AWEA’s 750 members. such as the Renewables Portfolio Standard.

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

” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. “incredible time crunch.” 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. and it worked. Nancy continued to describe the process: “Time was too short. There were major egos on the Conference Committee with pre-formed opinions. Nancy remembers that the conference committee meetings were occurring in an.Nancy feels that.” She was also invited to participate in a full panel hearing on public purpose programs. “Knight was sold on the RPS concept because he is a believer in markets. AWEA lobbyist Joe Caves was able to get John White’s customer rebate proposal pulled from the draft 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. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. but Peace killed it again.” The Committee Chairman. Chairman Peace. At one point towards the end of the Conference Committee process. By melting down the proposed language. Nancy said she. had killed the RPS before any discussion began. 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. Steve Peace. In retrospect. with many issues being ironed out at once. The new CPUC President Conlon tried to put the RPS back on the table for discussion. AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome. and people were not listening to arguments.

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

we influenced the Memorandum of Understanding that was released in August of 1995. 300 MW set aside for renewable generation. they had moved from using California’s Standard Offer process as a vehicle for the expansion of the independent power sector. to spending millions of dollars developing California’s integrated resource planning process. IEP also sought to maintain a policy for resource diversity in the mix of generation. Initially. and included a policy for maintaining resource diversity. but not allowed to talk. Over time. Over time. the Decision allowed for a direct access market developing.and represents a diverse group of gas and coal-fired cogeneration and renewable energy plants. [SCE succeeded in killing the BRPU at the Federal level in 1995. The BRPU had resulted in 1300 MW of contracts before being struck down. ERG Master’s Project Mark Stout 93 . IEP did well from restructuring. A large portion of the MOU is reflected in the December Decision. 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. 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. Direct access is a tool for future development. IEP was invited to the meetings. Ensuring the sanctity of existing contracts is our highest priority. independent producers were better off working with customers. 1995 Decision? Overall.] 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. the MOU allowed the restructuring process to move forward. the CPUC Biennial Resource Plan Update. In May. For IEP. By allowing utilities an opportunity to recover 100% of their stranded costs.

It was necessary to provide an underpinning. AB 1890)? Why? IEP prefers AB 1890.. the amount paid to QFs such as many IEP members under PURPA law]. 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. 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. a “settlement negotiation with a critical mass of interest groups”. The municipal utility issue also needed to be dealt with. or over time? Yes. For example. as well as support for resource diversity. CPUC vs. we had historically tried to take the high road on public policy issues. The legislation also includes language on a method for calculating SRAC [short run avoided cost. on the issue of full stranded cost recovery.e. ERG Master’s Project Mark Stout 94 . but do not want their contracts challenged by the IOUs or have the IOUs driven into bankruptcy.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. We also made a myriad of filings. Dan Fessler was a proponent of the PoolCo. leading to an almost unanimous understanding of the need for legislation. There continues to be opportunities to take potshots over a lack of consistency. Overall we did well in terms of direct access to customers. which was not supported by IEP or customer groups who feared that we would wind up with a market structure which would cause unraveling.

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

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

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

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

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

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

Some of these meetings were spontaneous. Rather than have counsel speak. we had member company representatives participate in several full panel hearings. We have occasionally lobbied on more specific issues. it felt like “we’ve been here before”. as well as the caucusing and preparatory sessions amongst parties. The raw material of the initial bill came from coalition participants.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. particularly in the collateral coalition meetings. ERG Master’s Project Mark Stout 101 . This applies to the formal Committee. The issuance of the Blue Book sent seismic waves through the community. We were there for the great bulk of the hearings. some were at the request or demand of the Committee. 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. due to the length of the policy phase proceedings. but our concerns at the time were still rate-case focused. Early on. for instance on the rate restructuring settlement. Our members are business entities with a nationwide presence. able to draw on experts knowledgeable on energy policy and acquisition. we commented on the Yellow Book. 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. and made our contribution. CIU took part in most full panel hearings. but had no idea of the magnitude of tasks in the implementation phase over the last 18 months. We thought that we were busy during the policy phases of restructuring. and filed comments at every opportunity. We have also met with the Commissioners. bringing member company representatives in from time to time to discuss broader agendas.

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

On this question. 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. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. We also wanted the separation of the ISO and PX. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? With regards to market structure. The defining of industry structure for competition to drive prices down was important. nothing changed significantly from the CPUC Decision. It used to be that the IOUs were driving everything. I am unsure of whether it will happen. We did not have the expectation that it would happen tomorrow. but would trade off short term for long term gains. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. The MOU set the tone for that. 1995 CPUC majority proposal. but wanted multiple ways to purchase electricity. Prior to this proceeding. I suggest you speak with Barbara Barkovich. 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. but we came closer. There was a lot of compromise.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. CLECA did not want a single market. or over time? CLECA’s positions were consistent. They were based on a consistent thread of how to organize a market. we met directly with Commissioners. even over time. ERG Master’s Project Mark Stout 103 .

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

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

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

93

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

In some ways this was not a very lofty goal. but as Dan Fessler was fond of saying. Overall.Small Electricity Consumers Latino Issues Forum Latino Issues Forum. Jane Kelly of UCS [see interview] recommended that I talk with someone at this organization. The December Decision did a fairly good job in recognizing low income ERG Master’s Project Mark Stout 111 . our goal was to protect as much of the old programs as possible. and add needed education and protection programs in order to at least maintain the status quo for small consumers. a non-profit organization advocating for Latino Californians. need-based level. 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. 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? In an outline form. such as non-english speaking customers. “the devil is in the details”. We realized it was not realistic to resist retail competition as TURN had tried in telecommunications. In addition. but it was realistic. I do not think small consumers will benefit from retail competition. We wanted to keep the CARE (California’s Alternative Rates for Energy) program funded at an uncapped. everything was included. 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. The interview subject preferred to remain anonymous. We also wanted to fund low-income weatherization programs at as high a level as possible.

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

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

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

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

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

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

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

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

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

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

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

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

CPUC vs. and consumer advocates in these coalition visits. participation in full panel hearings. They also wanted to make sure the different proposed renewables policies not set up to be exclusive. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.e. 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. and herself have similar ideologies. They tried to get a mixture of environmental. They decided to not oppose restructuring. Joint Response to Memorandum of Understanding”.. ERG Master’s Project Mark Stout 124 . In a perfect world. NRDC relied on consistent people and tried to be clear throughout. Ralph Cavanagh. AB 1890)? Why? AB 1890 expanded the rift in the renewables community. with coalitions of varying members depending on the issue. It is not looking at what is best for the future of sustainability. and talking with staff. may have been better to specify goals for a renewables policy.Is your organization more comfortable with one policy decision over the other (i. 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. low income. The detailed language on renewables left much to be desired. or over time? Yes. In response to the MOU. Sheryl noted that Peter Miller. 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. but instead ensure that the rules were set up to achieve a good outcome.

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

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

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

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

environmental programs are seen as transitional. I knew the consumer groups and power marketers hated it. 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. The customer groups had the same attitude. 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. and we won’t need this regulation stuff”. 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. “set up the market. while the latest CPUC Decision sunsets energy efficiency. the RPS Working Group is not reality. but you have to be a political pragmatist. 98 Personal communication with Sierra Club Committee members. an earlier legislative vehicle for the RPS98]. 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. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. There was a concern that the RPS was seen as ratcheting up the compact of the BRPU [Biennial Resource Plan Update. creating a tension. so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. We did not want to have to pass new legislation. In the PUC Decision. Energy efficiency and RD&D funding does not sunset in AB 1890. we didn’t want it or not want it. ERG Master’s Project Mark Stout 129 .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. see interview] thought she got and what she got from the Commission. It is a hard call from a policy standpoint: Sierra Club members would love the RPS.

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

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

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

John White were the front folks. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. was just beginning to be used as a policy option in several states. Deregulation of the electricity industry threatened to tear this house of cards down. manifest in California as the Biennial Resource Plan Update (BRPU). ERG Master’s Project Mark Stout 133 . “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. including 13. UCS has 100. As the deregulation process unfolded at the CPUC. UCS was also opposed to 100% “stranded cost” recovery for utilities.000 in California”. 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.000 sponsors nationwide. Integrated Resource Planning (IRP). E-3.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. The level of renewables support included in the BRPU served as a target for UCS. Peace was the idea person. Byron Sher was fine. As long as the Sierra Club and other groups were happy.

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

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

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 Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome.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. To compliment this public participation strategy. By helping to get Assembly Concurrent Resolution No. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners.000 environmentalists in California. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. as well as generating a large number of letters to the CPUC. resulting in over 2. UCS took part in a mailing to 60. 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. 143 adopted. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 . 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 staff people for Commissioners Knight and Conlon. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS.

counting only those copied to UCS. 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. gathering dozens of hand written letters from California residents to their state legislators. “progressive legislators did not have the usual suspects all opposing it”. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . 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. Because of splintering and infighting within the public interest community. Jane believes that Clean Power Day was the one unifying experience for environmental and renewable energy organizations throughout an otherwise splintered legislative lobbying process. resulting in over two hundred letters to Sacramento. While Joe continued to lobby Senators. a legislative education and lobbying event in early August. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. at the very least they could have stopped AB 1890 from passing unanimously. as included in Assembly Bill 1202. She went on to say that if the whole environmental community was working under a unified strategy. 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.California in April. I worked for UCS coordinating our participation in Clean Power Day. 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.

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

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

The Governor’s office’s participation was punctuated. The legislators were in a vacuum trying to figure out how the allocation of public program funding got made. 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. including Assistant Chief Counsel John Chandley. a simple majority is to be unaffiliated with generation. There was no advocacy at all. however. These board members will not certainly be disinterested. They weighed in against the minimum renewables purchase requirement. A few people. We also made testimony and participated in CPUC hearings as an examiner. 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. some of which would be “interested”.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. were called up to testify on specific issues as an information source only. Edison and PG&E made arguments on takings [with regards to less than 100% stranded cost recovery] and coerced divestiture. There was little. our Public Affairs Director. This would have required state agencies to ERG Master’s Project Mark Stout 140 . our Executive Director. They also killed the state agency renewable purchase requirement. and I. put in by the renewables community. For the ISO. some members perceived it as a tack-on. outside of a disinterested role in hearings and filings. or distribution companies. if any other forum we took part in. The legislative language has multiple categories that should be included on the power exchange and ISO boards. transmission.

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

There is an agreement that the PUC could continue funding after 4 years. 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. Duque was very ERG Master’s Project Mark Stout 142 . Steve Peace and Byron Sher recently sent a letter to the PUC. we did not change our stance. the Legislature or PUC could modify. or over time? I think so. Conlon attended a briefing a few years back. More money could have been spent on public interest RD&D. and this comes through in our briefings. compared to just 0. most public interest RD&D money was allocated to the CEC: $61. Whether or not the Legislature intended this was a point of contention. Also. working well together. stating that their intent was that the PUC retain authority for energy efficiency funding.7 per year to the utilities.e. realizing the dollars available for public purpose programs were limited. The funding for public interest RD&D will be reviewed after three years. but it was a reasonable outcome. AB 1890)? Why? I would see them as an appropriate sequence of decisions. ‘97 Decision on public purpose programs.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. Neeper did after the December. ‘95 decision. CPUC vs. We have good people involved in research. briefings to the IOUs were a standard part of the communication. In the February 14. Fessler attended one earlier.. Is your organization more comfortable with one policy decision over the other (i. not end this authority after four years. very committed. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.8 million per year.

The University has a counsel on the PUC service lists. but they permitted some very big cuts in R&D funding in late 1994. We filed comments. they have usually been good. supplemented by several support staff. 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. and their was a steady chatter amongst parties. but not an overwhelming one. 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. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. but nobody dedicated to the PUC proceedings. They have been favorable in principle the whole way through. We had a presence. ERG Master’s Project Mark Stout 143 . and spoke at one public hearing. In practice. We had informal contacts with the CPUC staff. For the conference committee we had an attorney representing the University. allowing for inertia. The University is represented by a legislative affairs office. myself and another University employee were there off and on. The Governor can appoint one Commissioner a year. about five people in the meileu. The office has two advocates.interested in technology and became a CIEE board member. who handle all University issues. and commented publicly at the Conference Committee.

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. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. pre-Blue Book. The renewables could have fared much better if they stuck together as a coalition. The municipal utilities angered Peace so much that he asked. After seven hours of negotiation. The IOUs wanted to use post-Blue Book. They probably thought that this funding level included regulated transmission and distribution RD&D. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. historic levels [combined SCE. University of California representatives and I advocated for higher.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. 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. current levels for moving to a future restructured market. They proposed to me funding at current RD&D budget levels. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . “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. For example. the renewables community cam back in.

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

with no ex parte rules during the pure rule-making period before December 20. Large customers were less influential. but is instead offering personal observations. resulting in the most influential stakeholders being granted the most access. This offered a substantial opportunity for access. resulting in a partial phase in of Direct Access. There was nothing for small customers. 1995. In this interview. Lobbying access is only as good as a Commissioner’s willingness to meet. he is not representing the position of the Commission. ERG Master’s Project Mark Stout 146 . 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. mostly focusing on market structure. It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe.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. 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. personal meetings with the Commissioners. except for a rate cap that was set high anyway. He later acted as a project manager of support teams analyzing the drafts of AB 1890. Senate Bill 1960 legislates that there must be a record of who was granted and who was denied ex parte communication. when ex parte rules are in effect.

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

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

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

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

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

There were also “grassroots” astroturf groups based on utility shareholders. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 . If your case fit into the unfolding structure. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. Steve Peace. and accountants. Groups participated in coalition building. but it mainly was a waste of money. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. based on the free market-driven ideologues on the Commission. Because of the genius of the legislators. due to the egalitarian nature of the structure. getting a place at the table. and why? The PUC laid out the framework for restructuring in the Blue Book. The IOUs spent millions on astroturf such as “Shareholders for Equity”. 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. all of the outside lobbying did not matter. The template was in large part formed by the CPUC’s December ‘95 Decision. lawyers. and Bill Leonard were the masterminds. 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. establishing a level playing field. One strategy was to get bills established early on in the session.Legislative Conference Committee. A lot of PR and press consultants got rich from this. Senator Peace established a process that was a model of openness. Senators Byron Sher. then your voice was heard. Some groups also used press conferences. Which stakeholder groups do you think were best able to set the terms of the debate.

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

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

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

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

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

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

Interview #1 California Large Energy Consumers Association . 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 #1 Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .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 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 #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .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 .

0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Large Energy Consumers 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 . 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 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 .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 .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 .

California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 California Municipal Utilities Association .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.Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS 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 #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .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 #1 Coalition of California Utility Employees .

429 $498 $1.000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.495 $1.500 $22.000 $3.191 $2.495 $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $0 $0 ERG Master’s Project Mark Stout 162 .800 $1.000 $3.000 $4. 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 $495 $950 $696 $2.000 $7.000 $1.500 $1.495 $10.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $2.000 $1.995 $300 $12.896 $3.000 $3. (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.995 $21.000 $2.000 $500 $1.

500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co. (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.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.990 $1.995 $1.000 $1.995 $2.000 $2.511 $3.500 $47.250 $2.500 $1.995 $14.000 $2.017 $749 $750 $3.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $3.000 $10.500 $800 $498 $200 $9.000 $8.995 $0 $0 ERG Master’s Project Mark Stout 163 .750 $4.460 $200 $500 $750 $2.Table 2: Assemblymember Jim Brulte. 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.495 $4.500 $6.

490 “Travel project to Europe on Electric Restructuring.250 $500 $1. Paling in comparison. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $3. and Privatization” visiting London. 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 $1. Brulte was taken on a $7. totaling $101.750 $3. 1996. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.750 $750 $1. 4 ERG Master’s Project Mark Stout 164 .500 $1. Table 3: Senator Steve Peace. and Budapest.000 $1.750 $2. Chevron treated Brulte to two meals. From 3/28/96 to 4/8/96. Not to be outdone. Sweden. by the California Foundation on the Environment and the Economy. as well as an event. CFEE is a “non-profit. (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. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $2.000 $1. Mobil treated Brulte to a $60 event in 1996.000 $750 $0 $0 103 Asmus. Conservation.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.

500 $3.Table 4: Senator Steve Peace.115 $18.250 $1.050 $3.000 $4.072 $2.600 $2.000 $1.000 $300 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.815 $750 $6.500 $16.750 $0 $0 ERG Master’s Project Mark Stout 165 .572 $1.250 $2.000 $500 $2.000 $750 $750 $750 $1.500 $8. (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.000 $6.250 $7. 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.250 $750 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.450 $7.100 $2.

450 166 ELECTRIC/GAS $6. Peace was treated to a $52 sports event by Mobil Oil. Southern California Edison was granted a high level of access. taking Steve to 11 meals. SDG&E had Peace out to six meals.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.000 Table 6: Senator Byron Sher. IEP made a gift of $241 for his speech at a conference. In 1995. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. as well as chair of the Senate Energy and Utilities Committee. In 1996.100 $2. 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. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Table 5: Senator Byron Sher.900 . 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 pulled on Peace’s ear over a sports event and meal totaling $89.000 $5.

482 $100 $1. (biomass) Edson + Modisette (lobbyist for indep.600 $13.500 Int. and Hamrin. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. EVs) Hansen. McQuat.000 $500 $500 $9. $2.000 locals) Southern California Pipe Trades United Assoc. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. (geothermal) Colmac Energy Inc.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. Brotherhood of Electrical Workers (various $9.000 $500 $1.000 $100 producers.100 $500 $2.

250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .500 COMPANIES $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 $1.000 $100 $1.000 (tire $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $1.000 Large Energy Consumers $3.000 $100 $100 $500 $1.000 $1.

000 $700 $4.Tosco Corp.585 $100 $500 $2.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . (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. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.448 $14. of California.000 $300 $300 $22.

totaling $758.300 $500 $1. Sher holds over $100. Exxon. 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 $3.500 $300 $0 $0 $2. Sher received no other gifts that year from energy utility stakeholders. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.500 $0 $0 ERG Master’s Project Mark Stout 170 . 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. and GE. totaling $2608.000 in each of Amoco. Mobil.400 $750 $150 $1. NARUC treated Sher to a two day trip to DC for another meeting. Table 7: Senator Bill Leonard.000 $1.

(geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.650 $500 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. While the Senator was there. extending his stay from 12/8/96 to 12/13/96.730 $2. 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.080 $10.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $500 $500 $4. for a paltry $20.000 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2. Edison again ERG Master’s Project Mark Stout 171 . SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.500 $500 $1. saving up for a $77 dinner with head lobbyist Bob Foster. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $5.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.500 $150 $500 $3. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.Table 8: Senator Bill Leonard. The Pacific Rim Conference of Seattle.000 $1.650 $2.

000 $1.250 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.600 $1.000 $750 $750 $650 $150 $500 $3.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . including lunch with Bob Foster.000 $1. ARCO treated Leonard to a $19 meal at a reception.000 $1. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game. 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.750 $1.had Senator Leonard out for Legislative Ski Day. paying $44 for two meals and lodging. for the modest tab of $56.600 $750 $750 $500 $1. They also had Leonard out for two meals in Sacramento.

000 $2. PG&E treated him to a basketball game with $51 tickets. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.300 junket to talk with Chinese central government and provincial leaders in Beijing. Shanghai. CFEE is a “non-profit. $7.000 $500 $750 $250 $500 $2. 4 ERG Master’s Project Mark Stout 173 .050 $1.700 $500 $300 $550 $2. two meals for $44. 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.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. 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. 1996. and Inner Mongolia.700 $750 $450 $250 $250 $1. the California Foundation on the Environment and the Economy took Conroy on an 11 day.500 $2. and to 104 Asmus.000 $5.000 $3.000 $500 $2.Table 10: Assemblymember Mickey Conroy.600 $500 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.600 $3.

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. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. Chevron took Conroy out for two business meals. and $25 of cookies and candy. $10 in candy. In terms of investment. General Electric. After such a busy social calendar in 1995.make sure Conroy kept a sweet spot in his heart for them. SDG&E. ERG Master’s Project Mark Stout 174 .000 in Orange & Rockland Utilities. with investments of greater than $10.000 each in Edison. Pacificorp. four rounds of “refreshments” for $30. costing $99. and less than 10. and Westinghouse Electrical.

750 $1.750 $4.Table 11: Assemblymember Diane Martinez.750 $2.175 $500 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.675 $2.750 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . 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.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.000 $1.000 $1.250 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.

000 $500 $500 $500 $500 $500 $3.000 $5. 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. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.500 $500 $500 $1. (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.000 $4.000 $500 $500 $5.000 $500 $1.Table 12: Assemblymember Diane Martinez. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. Dist.000 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $1.750 $1.000 $500 $3.500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.000 $1.500 $1.500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $4.000 $7.000 $1.

Table 13: Assemblymember Steve Kuykendall. natural gas.100 $100 $1.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.208 $0 $0 $1.600 $1.900 $3. 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.500 $1.000 $500 $500 $1. ERG Master’s Project Mark Stout 177 . the Illinois Energy Association flew Martinez out for a $1.058 $500 $500 $1.000 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.850 $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 1996.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $8.

and Budapest.254 $200 $500 $4.490 “Travel project to Europe on Electric Restructuring.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. and Privatization” visiting London.500 $0 $1.250 $100 $500 $35. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $19.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.443 $6.500 $1. diesel) Unocal (CMA member) Victory Oil Co.000 $500 $2.000 $1. natural gas.000 $1. Kuykendall was taken on a $7. ERG Master’s Project Mark Stout 178 . 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. However.500 $1.374 $4.000 $2. Sweden.374 $500 $2.350 $500 $1.Table 14: Assemblymember Steve Kuykendall. Conservation. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Kuykendall’s social calendar was destined to pick up in 1996.000 $1. From 3/28/96 to 4/8/96.

Fessler was taken on a $7. and Paris. SC to address their membership.”105 The Consolidated Edison IOU spent $1. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. a trade association for publicly owned utilities. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. Chevron treated Kuykendall to two dinners for $131. paid $1.167 junket visiting London.WEST. an Edison lobbyist was added to the international travel party at the last minute. for $610. The California Mining Association took him out for an evening of recreation and dinner costing $89. According to investigative writer Peter Asmus. one of CFEE’s funders. “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.by the California Foundation on the Environment and the Economy. spent $1402 to fly Fessler to Charleston. known as the Council of States Government . a clean power auction the CPUC repeatedly postponed upon the urging of the utility. CO. The Aspen Institute. to meet with CEOs of the electricity industry. 4 ERG Master’s Project Mark Stout 179 . The California 105 Asmus. 1996.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation.051 to fly the President out to New York City for a ConEdison Management Conference. by the California Foundation on the Environment and the Economy. wholesale PoolCo model. in Aspen. regulators. government ministers. and environmental groups to discuss the British experience with deregulation of electricity. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. Brussels. Another non-profit organization. Edison. The Large Public Power Council. A trade association.

Shanghai. had Fessler speak at their conference in Washington. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. NJ to speak at the 1994 DSM Implementation Conference. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. the California Foundation on the Environment and the Economy took Fessler on an 11 day. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. a utility planning association. CO. Finally. The Cato Institute. for $467 airfare. In April of 1995. The Western States Coordinating Council. and Inner Mongolia. On the investment side. spent $314 to bring him to speak at their Spring Conference. Utah to speak at the “Utility Restructuring. spent $249 to fly him to their annual meeting in Las Vegas. spending $291. in Fort Collins. Finally. $7. ZEV’s and Rethinking the Environment Conference. DC. DC. The Rocky Mountain Electrical League. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton.000 in Ohio Edison stock. Synergics Resources Corporation had Fessler out to Princeton. spending $1006.802 junket to talk with Chinese central government and provincial leaders in Beijing. the Center for Resource Management flew him to Midway. a libertarian think-tank. for $61. PG&E had him out for two lunches. EEI is a trade association representing investor owned utilities. Fessler holds over $10. for $323. ERG Master’s Project Mark Stout 180 . a utility association.

and Schlumberger oilfield services stock. Edison. government ministers. and environmental groups to discuss the British experience with deregulation of electricity. Brussels. regulators. Conlon was taken on a $7. and Paris. ERG Master’s Project Mark Stout 181 .000 in each of Central & Southwest Corp. by the California Foundation on the Environment and the Economy.000 in each of Chevron. He does own more than $10. utility and General Electric stock. one of CFEE’s funders. Unocal. Jr. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. He does own less than $10.167 junket visiting London. to meet with CEOs of the electricity industry. spending $258. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. PG&E had him out to three meals for $71. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. wholesale PoolCo model.000 in each of Montana Power Company and Exxon stock. In 1995. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. 1995. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. He left office on February 23. and less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.

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