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 which will be superseded to a great extent by the details of AB 1890.S. which sets in motion a process of electric utility deregulation beginning in 1998.html ERG Master’s Project Mark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

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

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

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

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

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

2002. industrial customers taking power at the transmission level eligible on January 1.supplies. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 18 Mydans. 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. 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.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. customer class-staged schedule for direct access implementation. 1996. ERG Master’s Project Mark Stout 12 . The Blue Book laid out an aggressive. Hoffman. 55. all commercial customers eligible January 1. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 1999. 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.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. In April of 1994. 6. all residential consumers eligible on January 1. and if successful. sending “a shockwave through the electric industry”. with large. and 3) rate changes to encourage efficiency and distribution of power.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. A more definitive policy statement was 16 17 Haddad.

1995. Blue Book. The first issue addressed open access to the transmission system 19 20 CPUC. which requires the CPUC to engage in a series of public hearings. “a vibrant market exists for energy efficiency services”. 1994. Blue Book. coupled with a lack of prior coordination with the state Legislature. such as “green pricing”.21 This stakeholder response. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. 1995. where customers voluntarily pay more to promote renewables. ERG Master’s Project Mark Stout 13 . evidentiary hearings. 1. numerous other states have also proposed electric utility deregulation. the CPUC proposed.20 Many stakeholders. Wagner. and documentation resulting in a report back to the Governor and Legislature by January 31. 1994.scheduled to be issued by the CPUC in August of 1994. which had been dubbed the MegaNOPR. where CPUC President Fessler and Commissioner Knight testified on their proposal.19 Since the release of the Blue Book proposal. 21 CPUC. For instance. were concerned about the content and timetable of this proposal. This process tempered the CPUC’s frenetic timetable. and asserted that. In their place. Status Report. pushing back their goal for a policy decision until September of 1995. including private and public-interest organizations.22 FERC MegaNOPR In March of 1995. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. FERC released a dual-issue Notice of Proposed Rulemaking. “alternative frameworks based on ‘let the market decide’”. 1994. This led to the passage of Assembly Concurrent Resolution 143.

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

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

EDF. but with increased funding levels to restore energy efficiency and R&D spending at pre-Blue Book levels. UCS. as a response to the MOU. 26 27 MOU Parties. should see short and long term rate reductions. Framework Parties. with utility shareholders accepting some of the burden for past. does not actually propose a specific electric utility industry structure. 1995. To enhance energy efficiency efforts. a coalition of public interest groups and renewable energy advocates. (PBR). but spells out a set of public interest concerns that should be addressed by any industry restructuring including mitigation of market power. The Framework calls for less than 100% stranded cost recovery. the Framework demands that each individual utility customer. and Towards Utility Rate Normalization (TURN) submitted a “Framework for Restructuring in the Public Interest” to the CPUC.27 Outraged that they had been left out of the MOU negotiating process. By combining this with effective Performance Based Ratemaking. As in the MOU. a non-bypassable systems benefits charge is proposed. and at the level of attention given to the MOU. small customer equity. uneconomic investments. including NRDC. including residential and small commercial consumers. The Framework. and continued progress for energy efficiency and renewable resources. continuation of low income programs. a new mechanism is to be developed. A minimum level of renewables is proposed for each IOU supply portfolio to return the states resource diversity to 1993 levels. Utilities Consumer Action Network. ERG Master’s Project Mark Stout 16 . in the spirit of the existing Electric Revenue Adjustment Mechanism (ERAM). The Framework calls for equitable opportunities for small consumer participation in any move to allow direct access.1995 levels. to decouple utility profits from sales volume. 1995.26 The CPUC held a full-panel hearing to focus on the details of the MOU in September of 1995.

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

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

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

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

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

That’s one reason why they want to cut their own deals. 24-25. 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.. There are some who are concerned about ELCON’s environmental ethics in pursuing electric utility restructuring. “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. John White. “In the past the commissions had found their main constituents to be residential customers.” to existing public interest programs. ELCON. Now they found 46 47 Davis. has no respect for the environment.” CLECA’s national counterpart is the Electricity Consumers Resource Council (ELCON). 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.”.”47 The Clean Air Act amendments of 1990 set a precedent for Federal legislation following California’s leadership on environmental programs. 1995. they will have to gulp and swallow elsewhere.” A consultant who shares White’s perception of ELCON notes that they want to push California to adopt a policy as. such as wind power. V. 192.. “At least you can talk to CLECA.viewpoint. “We do not advocate a slash and burn approach.. and they say they know renewables. “uncompromised as possible because they fear the California plan will become a model for the country. on the other hand. Asmus.”48 Davis describes the transition that has occurred in the influence of state PUCs. “Retail wheeling.. As Davis notes.. ERG Master’s Project Mark Stout 22 . are now competitive. “We just want to use competition to get the best price for power.. If there are provisions for renewables and conservation here.

84-108. 1994. 1993. “Discretionary Evolution. 50 Flavin and Lenssen.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. enabling increased competition. 1993. basing their arguments on welfare economics as applied to the changing electric utility landscape. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. greatly increasing opportunities for bulk power sales..intense pressure from large industrial customers. Gordon.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. 356-357. 195. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. Hoffman 55-62. ERG Master’s Project Mark Stout 23 .52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.. who in the past had enjoyed privileged status with cheap rates. 51 Stevenson. 52 Gilbert. but now had to pay higher rates. Davis. 150. 447-475.”.

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

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

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

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

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

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

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

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

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

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

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

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

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

1995 Decision. When combined with comments filed by that organization early in the restructuring process at the CPUC. 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. Figure 2 shows that all of the investor-owned utilities and independent producers.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. nearly half of the representatives say that their organization got most of what it wanted from the December Decision. a slightly smaller number of representatives report a mixed or unclear outcome. 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. this provides a baseline to determine if they got what they wanted. and the remaining minority claim that their organization got rather little.

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

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. 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. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . As Figures 5 indicates. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. either the CPUC December Decision or AB 1890.

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

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

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

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

• A staffer from Senator Byron Sher’s office also brought up the municipal utilities. yet were not in the hearing for one minute. These groups could not come to a resolution. The 10% rate reduction for small customers was final packaging to sell the bill for voters. they had full opportunity. and Why: • Low income organizations and the renewables community could have improved their performance.. and the renewables community was perceived as not being able to make a paradigm shift. according to this CPUC staffer.. . for their inability to articulate positions.. The rate reduction bonds may not yield net present value benefits. He also chided municipal utilities and some small consumer advocates for resisting the process and not fully participating. They did not want to participate. LADWP was trying to cause trouble with restructuring.The big mistake for these small consumer groups was letting Pete Wilson get elected and stack the PUC with right wing ideologues. . 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.. but just result in rate deferrals for 10 years.. could not address the problem of a competitive market and participation. This was very irresponsible. They waited until late in the process to get organized. but did not do hall walking to the extent of other groups.. The renewables players were probably asking for too much of the old world the PUC had engaged in.. The low income groups participated on paper through filed comments. but for different reasons.. In AB 1890. The low income groups may not have the staff resources to lobby effectively. • 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.. 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.CalPIRG and some other consumer advocacy groups criticized the process without participating.Officeholder Staff Comments on Who Got Rolled Over. The California Municipal Utilities Association folks lacked effectiveness also. 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 customers and the people who serve small customers.. Small consumer advocates faced an un-level playing field. such as CalPIRG and one of Ralph Nader’s organizations.unity. the residential ratepayers also had trouble. If they were there and could contribute. they were all against restructuring. This schism was a recipe for having the least influence. They needed to realize the process was happening. Groups that opposed the bill without participating also were ineffective. driven by an inability to compromise. and the much-maligned municipal utilities for an inability to articulate proposals. and they subsequently came around with an articulated position a day later.. This dissipated their effectiveness. As it was too esoteric a topic. It had too many purists that need to learn the art of compromise.. At first... 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. Finally. Peace was demanding in terms of defining your position. so there was not enough press coverage.. • A staffer from then-Senator Bill Leonard’s office pointed to public interest organizations for opposition despite non-participation. Also.. Large. due to the Governor and his CPUC appointees.. 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.. • A lack of unity in the clean power community. The environmental and consumer advocates did not have a clear idea of what they wanted. the playing field was tilted. Later on in the Committee. not after the fact. and pay attention to it then. It was very unhelpful to have put themselves in that position. the fact that the renewables and environmentalists were divided was damaging. When the train was leaving the station. which did not help. they did not know what seat they wanted to sit in. echoing Senator Peace’s staffer quoted above: Early on the munis were not able to define a single coherent position or proposal. ERG Master’s Project Mark Stout 45 . He threw the munis out. anyone could have influence.. caused them problems. powerful interests already had an advantage from the PUC Decision. Small consumer advocates and brokers did not participate in a timely manner. in this anonymous staff comment. There was not enough education or public involvement. To a lesser extent.

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

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

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

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

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

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

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

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

031.500 $263.608 $3.000 $634.153 $750 N/A $8.741 $21.000 $0 $70. (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 $59.163 $0 $25.079 $950 $14.149 $3.835 $1.157 $0 $188.000 N/A $0 $18.952 $1.308 $516.595 $0 $21.181 $0 $160.092 $3.630 $300 N/A $0 $5.079 $13.239 $0 N/A $0 $89.675 $384.964 $0 $40.125 $0 $4.752 $0 $51.758 $2.995 $596. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.S.470 $10.110 $34.675 $736.516.500 $533.180 $0 $209.000 $62.075 $4.203.000 $225.096 $971.102 $0 $73.818 $0 $65.479 $2.496 $8.819 $0 $323.370 $648 N/A $0 $208.000 $480.500 $1.419 $13.000 $1.981 $1.272 $0 $64.112 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.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 $562.405 $0 $722.588 $500 $32.745 $68.166 $5.559 $0 $246.416 $5.101 $495 $10.500 $190.500 $78.000 $681.592 $846 $0 ERG Master's Project Mark Stout 54 .374 $1.

401 $1.500 $0 $0 ERG Master's Project Mark Stout 55 .492 $0 $66.850 $1.083 $0 $20.723 $0 $38.319 $0 $10.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $526. (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.665 $0 $262.000 $37.145 $5. (gasoline refining and marketing) Tower Energy Group (oil.600 N/A $5.055 $0 $151.271 $0 $12.230.000 $0 $15.203 $0 $30.362.000 $383.596.947 $500 $281.203 $5.600 $32.000 $0 $6.326 $0 $100.519 $11.197 $500 N/A $2.400 $100 $79.250 $0 $30.701 $0 $5.495 $1.716 $39.000 $0 $171.495 $27. natural gas.551 $12. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.003.207 $5.000 $20.291 $3.938 $0 $118. 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 $4.081 $1.675 $0 $1.167 $500 $25.099 $12.000 $524.

450 $566.000 $209.626 $0 $8.882 $15.S. McQuat.717 $500 not applicable $0 $138.605 $250 N/A $1.460 $50.819 $921. 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.032 $0 $172. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 NA $500 $0 $2.331 $0 $97.147 $500 $739.250 N/A $100 N/A $2. 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. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.500 $29. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.571 $500 N/A $200 N/A $1.060 $6.750 $267.025. Dist.905 $30.782 $981.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.118 $0 $144.000 $85.179 $0 $3.200 $837. (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) $145.000 $50.748 $32. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 N/A $100 N/A $7.750 $1. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.100 $0 $500 N/A $100 $0 $500 N/A $2.590 $5.229 $100 N/A $1.017 $1.845 $452.195 $401. and Hamrin.750 $418.611 $1.543 $29.000 $35. producers.250 $148.600 $276.) 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.862 $21.000 $33.589 $26.240 $0 $178.281 $1.100 $144.454 $3.500 N/A $0 $211.400 $1.159 $3.500 N/A ERG Master's Project Mark Stout 56 .917 $300 $5.724 $500 not applicable $500 $57.286 $3.

995 N/A $100 N/A $0 $3.532 $4.181 $1.705 $19.950 $3.000 $65.138 $1.712 $100 N/A $200 $16.050 N/A $0 $214.960 $2.050 $949.384 $2.016 $1.622 $67. (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.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.900 $0 $21.500 $251.754 $4. 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. diesel) Unocal (CMA member) Victory Oil Co.000 $76.245 $335.000 $500 $456.000 $233.250 $34.500 $47.072 $918.521 $0 N/A $50 $87.137 $550 N/A $5.958 $2.407 $200 $61.780 ERG Master's Project Mark Stout 57 .925 $0 $44.573 $2.495 $22.000 $22.643 $1.521 $1.334 $498 $1.721 $748.689 $2.800 not tracked $3.636 $0 $103.417 $9.209.900 $1.347 $9. (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.885 $300 $207.177 $300 N/A $0 $29. natural gas.090 $749 $38.521 $14.761 $0 $73.750 $37.438 $500 N/A $0 $1. Texaco Tidelands Oil Tosco Corp.296 $800 $25.878 $12.500 $277.650 $3.750 $23.661.861 $1. (gasoline refining and marketing) Tower Energy Group (oil.989 N/A $9.478.511 $1.

438 $4.066 $500 $21.378 $100 $21.000 $700 $117.585 $33.448 $424.790 $100 $14.066 $500 N/A $250 N/A $22.462 $500 $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.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .000 $2.000 $15. of California.462 $208.250 $21. 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) $1.068 $14.

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

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

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

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AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. 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.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. 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 . CPUC vs.e.. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.

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

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

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

while holding on to what they really wanted. 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. the parent company of Southern California Gas Company83. E. 82 83 CPUC Renewables Working Group.”82 Enova Corporation has announced a merger with Pacific Enterprises. “People who influenced the outcome were present. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report.” Organizations had to be able to make decisions right on the spot to shape the outcome.15 million electric customers in San Diego and southern Orange Counties. 1996.7 million customers in San Diego County. a gas utility which serves a territory largely overlapping with Southern California Edison’s. “a subsidiary of Enova Corporation. is a California Investor Owned Utility Company founded in 1881. App.” according to Kathy. SDG&E provides service to 1. ERG Master’s Project Mark Stout 70 . It allows an organization to get buy-in from other parties in advance. 1996. Jack. SDG&E. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements.reasonableness check. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. and gas service to 0. Sirard. and willing to be straightforward on what they can give on.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In addition. The December Decision did a fairly good job in recognizing low income ERG Master’s Project Mark Stout 111 . The interview subject preferred to remain anonymous. We realized it was not realistic to resist retail competition as TURN had tried in telecommunications.Small Electricity Consumers Latino Issues Forum Latino Issues Forum. We also wanted to fund low-income weatherization programs at as high a level as possible. need-based level. Jane Kelly of UCS [see interview] recommended that I talk with someone at this organization. 1995 Decision? In an outline form. Overall. but as Dan Fessler was fond of saying. our goal was to protect as much of the old programs as possible. everything was included. 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. a non-profit organization advocating for Latino Californians. but it was realistic. “the devil is in the details”. and add needed education and protection programs in order to at least maintain the status quo for small consumers. 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. 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. such as non-english speaking customers. 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. In some ways this was not a very lofty goal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. Deregulation of the electricity industry threatened to tear this house of cards down. 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. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. As long as the Sierra Club and other groups were happy. was just beginning to be used as a policy option in several states. UCS has 100.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. E-3. The level of renewables support included in the BRPU served as a target for UCS. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. UCS was also opposed to 100% “stranded cost” recovery for utilities. Peace was the idea person. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency.John White were the front folks. As the deregulation process unfolded at the CPUC.000 sponsors nationwide. manifest in California as the Biennial Resource Plan Update (BRPU). Integrated Resource Planning (IRP). including 13. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. ERG Master’s Project Mark Stout 133 .000 in California”. Byron Sher was fine. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. Labor wanted to protect their employees. The ability to fund politicians helped. and look for ways to get around paying the CTC.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. Bill Leonard said that if you want to charge an exit fee. such as irrigation districts and economic development rates. you must play. it was all over. Political clout can be bought with lobbying and campaign contributions. He walked out at one point to force the munis to make up their mind. 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. The IOUs were clear that they wanted full recovery. There was a lot of play between SMUD and the large customers. 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. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. The IOUs got complete stranded cost recovery. However. ERG Master’s Project Mark Stout 155 . Once the Governor’s office was behind the MOU. causing chaos. while the large customers got the ability to go first on direct access. 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.

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

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

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

Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees . 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 .

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 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Natural Resources Defense Council . 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 #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 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 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 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 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 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .

000 $1. (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.000 $2.000 $495 $950 $696 $2.429 $498 $1.896 $3.800 $1.500 $22. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.191 $2.000 $3.000 $500 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $1.500 $1.000 $1.000 $4.495 $10.000 $7.000 $2.495 $1.495 $7.995 $300 $12. 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.995 $21.000 $3.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.

(CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.995 $0 $0 ERG Master’s Project Mark Stout 163 .495 $4.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.500 $47.995 $1.995 $2.750 $4.500 $1.000 $3.000 $10.995 $14.500 $800 $498 $200 $9. (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.000 $8.990 $1.017 $749 $750 $3.250 $2.460 $200 $500 $750 $2.511 $3.500 $1.500 $6.000 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $1.Table 2: Assemblymember Jim Brulte. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $1.

250 $500 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $2.000 $2. 4 ERG Master’s Project Mark Stout 164 . by the California Foundation on the Environment and the Economy. Mobil treated Brulte to a $60 event in 1996. Brulte was taken on a $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. as well as an event. Chevron treated Brulte to two meals. 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. Sweden.000 $750 $0 $0 103 Asmus.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. (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. Paling in comparison. totaling $101.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $3. 1996. and Privatization” visiting London.490 “Travel project to Europe on Electric Restructuring. CFEE is a “non-profit.500 $1. From 3/28/96 to 4/8/96.000 $3. Conservation. Not to be outdone. and Budapest.750 $2. Table 3: Senator Steve Peace.000 $1.000 $1.750 $750 $1.

000 $6.115 $18.450 $7.500 $16.000 $500 $2.600 $2.500 $3.000 $300 $1.050 $3.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.100 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $8.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $750 $500 $1.815 $750 $6.000 $1. (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.250 $1.250 $7.072 $2.000 $750 $750 $750 $1.000 $4.250 $2.Table 4: Senator Steve Peace.572 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.

taking Steve to 11 meals.450 166 ELECTRIC/GAS $6.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.100 $2. SDG&E had Peace out to six meals.900 . 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 $5.000 $5. 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 $1.000 Table 6: Senator Byron Sher. In 1996. Table 5: Senator Byron Sher. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. 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. Peace was treated to a $52 sports event by Mobil Oil. Southern California Edison was granted a high level of access. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. IEP made a gift of $241 for his speech at a conference. while Edison treated him to five meals and a sports event. In 1995.

Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.100 $500 $2. (biomass) Edson + Modisette (lobbyist for indep.000 $500 $500 $9.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 $1.482 $100 $1. $2. McQuat.000 $500 $1. Brotherhood of Electrical Workers (various $9. EVs) Hansen. (geothermal) Colmac Energy Inc.600 $13.000 locals) Southern California Pipe Trades United Assoc. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin.500 Int.882 $100 $1.000 $100 producers.

000 $1.000 $100 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 Large Energy Consumers $3.250 (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 $1.500 COMPANIES $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 $100 $100 $500 $1.000 (tire $1.000 $1.

(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.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .585 $100 $500 $2. of California.448 $14.Tosco Corp.000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $300 $300 $22.

Sher received no other gifts that year from energy utility stakeholders. totaling $758. and GE.000 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting. 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. Exxon.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Table 7: Senator Bill Leonard. totaling $2608. 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. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.500 $0 $0 ERG Master’s Project Mark Stout 170 .400 $750 $150 $1. In 1996.500 $300 $0 $0 $2.000 $1. Mobil.300 $500 $1. Sher holds over $100.

000 $2.000 $2.000 $500 $500 $4. 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.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $1. The Pacific Rim Conference of Seattle. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.080 $10.500 $150 $500 $3.500 $500 $1.650 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.730 $2.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster. WA paid $734 for Leonard to moderate a conference session on utility deregulation. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. SCE treated Leonard to dinner and lodging for Legislative Ski Day. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. for a paltry $20. While the Senator was there. Edison again ERG Master’s Project Mark Stout 171 . SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.650 $500 $1. extending his stay from 12/8/96 to 12/13/96. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $5.Table 8: Senator Bill Leonard. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.

had Senator Leonard out for Legislative Ski Day. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. paying $44 for two meals and lodging.000 $1. They also had Leonard out for two meals in Sacramento.250 $1.750 $1. for the modest tab of $56. ARCO treated Leonard to a $19 meal at a reception. 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.000 $1.600 $750 $750 $500 $1.000 $1.000 $750 $750 $650 $150 $500 $3. including lunch with Bob Foster.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .600 $1.

700 $500 $300 $550 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. and to 104 Asmus.500 $2.600 $500 $1.000 $3. Shanghai. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.Table 10: Assemblymember Mickey Conroy.700 $750 $450 $250 $250 $1.000 $500 $2. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. two meals for $44. 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.000 $500 $750 $250 $500 $2. 4 ERG Master’s Project Mark Stout 173 . 1996.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.050 $1.000 $2. PG&E treated him to a basketball game with $51 tickets. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.600 $3. and Inner Mongolia.000 $5. $7.

and Westinghouse Electrical. Kansas City Power & Light. Edison wined and dined the Assemblymember with four meals at $134.make sure Conroy kept a sweet spot in his heart for them. Pacificorp. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. Chevron took Conroy out for two business meals. In terms of investment. costing $99.000 in Orange & Rockland Utilities. with investments of greater than $10. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996.000 each in Edison. and $25 of cookies and candy. four rounds of “refreshments” for $30. SDG&E. General Electric. ERG Master’s Project Mark Stout 174 . and less than 10. After such a busy social calendar in 1995. $10 in candy.

000 $1.675 $2.175 $500 $1.750 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 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.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.250 $1.Table 11: Assemblymember Diane Martinez. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.250 $1.750 $2.750 $4.

000 $5.000 $500 $500 $500 $500 $500 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $4.500 $6.000 $500 $3.000 $500 $500 $5.750 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.250 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 . (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $1.500 $1.000 $1.500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $7.500 $1.Table 12: Assemblymember Diane Martinez.000 $1.500 $1.000 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. (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. Dist.000 $4.500 $500 $500 $1.

ERG Master’s Project Mark Stout 177 . 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.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $1.058 $500 $500 $1.000 $500 $500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.100 $100 $1.500 $1.Table 13: Assemblymember Steve Kuykendall.900 $3.208 $0 $0 $1. the Illinois Energy Association flew Martinez out for a $1.850 $1.600 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.467 trip to Northwestern University to discuss the deregulation of public utilities. natural gas.000 $8. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $2. natural gas. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.254 $200 $500 $4.350 $500 $1. ERG Master’s Project Mark Stout 178 .Table 14: Assemblymember Steve Kuykendall. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.000 $1. Kuykendall was taken on a $7.443 $6.374 $4.250 $100 $500 $35.000 $19. 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.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $500 $2. Conservation. From 3/28/96 to 4/8/96. However.000 $1.000 $1.490 “Travel project to Europe on Electric Restructuring.500 $0 $1. Sweden. and Budapest. and Privatization” visiting London. diesel) Unocal (CMA member) Victory Oil Co.374 $500 $2.500 $1. Kuykendall’s social calendar was destined to pick up in 1996.500 $1.

The Large Public Power Council. known as the Council of States Government .051 to fly the President out to New York City for a ConEdison Management Conference. regulators. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”.”105 The Consolidated Edison IOU spent $1. The California Mining Association took him out for an evening of recreation and dinner costing $89. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. According to investigative writer Peter Asmus. The Aspen Institute.by the California Foundation on the Environment and the Economy. in Aspen. an Edison lobbyist was added to the international travel party at the last minute. paid $1. for $610. A trade association. Chevron treated Kuykendall to two dinners for $131. and environmental groups to discuss the British experience with deregulation of electricity. by the California Foundation on the Environment and the Economy. SC to address their membership. and Paris.WEST. to meet with CEOs of the electricity industry. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. CO. Another non-profit organization. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). one of CFEE’s funders. a trade association for publicly owned utilities. government ministers. Brussels. spent $1402 to fly Fessler to Charleston. Edison. 4 ERG Master’s Project Mark Stout 179 . was very interested in California moving to the UK-style. Fessler was taken on a $7.167 junket visiting London. wholesale PoolCo model. 1996.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The California 105 Asmus.

the California Foundation on the Environment and the Economy took Fessler on an 11 day. Finally.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. for $61. for $467 airfare. DC. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. ZEV’s and Rethinking the Environment Conference. a libertarian think-tank.000 in Ohio Edison stock. spent $314 to bring him to speak at their Spring Conference. DC. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. Utah to speak at the “Utility Restructuring. the Center for Resource Management flew him to Midway. The Cato Institute. in Fort Collins. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. On the investment side. ERG Master’s Project Mark Stout 180 . The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. spent $249 to fly him to their annual meeting in Las Vegas. Synergics Resources Corporation had Fessler out to Princeton. EEI is a trade association representing investor owned utilities. had Fessler speak at their conference in Washington. a utility planning association. In April of 1995. NJ to speak at the 1994 DSM Implementation Conference. Shanghai. a utility association. The Western States Coordinating Council. Fessler holds over $10. CO. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. spending $291.802 junket to talk with Chinese central government and provincial leaders in Beijing. The Rocky Mountain Electrical League. and Inner Mongolia. spending $1006. PG&E had him out for two lunches. Finally. for $323. $7.

1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. ERG Master’s Project Mark Stout 181 . and Schlumberger oilfield services stock.000 in each of Montana Power Company and Exxon stock. spending $258.167 junket visiting London. PG&E had him out to three meals for $71. Unocal. to meet with CEOs of the electricity industry. 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. by the California Foundation on the Environment and the Economy. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. wholesale PoolCo model. and environmental groups to discuss the British experience with deregulation of electricity. Conlon was taken on a $7.000 in each of Central & Southwest Corp. one of CFEE’s funders. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. was very interested in California moving to the UK-style. Jr. government ministers. He left office on February 23.000 in each of Chevron. Edison. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. regulators. Brussels. He does own more than $10. He does own less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. utility and General Electric stock. and less than $10. 1995. In 1995. and Paris.

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