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 which will be superseded to a great extent by the details of AB 1890.Introduction On September 23. 1995 3 Flavin and Lenssen.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

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

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

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

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

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

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.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 6. 1999. 55. and if successful.supplies. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. The Blue Book laid out an aggressive. A more definitive policy statement was 16 17 Haddad. 1996.18 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. ERG Master’s Project Mark Stout 12 . all residential consumers eligible on January 1. and 3) rate changes to encourage efficiency and distribution of power. customer class-staged schedule for direct access implementation. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. sending “a shockwave through the electric industry”. 2002. Hoffman. In April of 1994. 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. industrial customers taking power at the transmission level eligible on January 1. 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. 18 Mydans. all commercial customers eligible January 1.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. with large.

This process tempered the CPUC’s frenetic timetable. 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. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. pushing back their goal for a policy decision until September of 1995. including private and public-interest organizations. the CPUC proposed. were concerned about the content and timetable of this proposal. “alternative frameworks based on ‘let the market decide’”. evidentiary hearings. 1994. The first issue addressed open access to the transmission system 19 20 CPUC. This led to the passage of Assembly Concurrent Resolution 143. Blue Book. which had been dubbed the MegaNOPR. where customers voluntarily pay more to promote renewables. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1.19 Since the release of the Blue Book proposal. 21 CPUC. FERC released a dual-issue Notice of Proposed Rulemaking. 1995. such as “green pricing”. “a vibrant market exists for energy efficiency services”. For instance. and asserted that. 1994. which requires the CPUC to engage in a series of public hearings. 1994. Wagner.20 Many stakeholders. numerous other states have also proposed electric utility deregulation. Blue Book.22 FERC MegaNOPR In March of 1995. 1995. and documentation resulting in a report back to the Governor and Legislature by January 31. coupled with a lack of prior coordination with the state Legislature.21 This stakeholder response.scheduled to be issued by the CPUC in August of 1994. ERG Master’s Project Mark Stout 13 . Status Report. In their place.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. • Large Industrial & Agricultural Customers: The large consumers want the most efficient. with one that had known costs. the RPS. They lost out on rather generous terms for collection of stranded costs by the IOUs. allowing bilateral. IOUs still have the opportunity to collect 100% of their stranded costs. As in the December Decision. direct access contracts. and want a choice of their electricity supplier. which could extend until 2005.25 years greatly increased large electricity consumers’ satisfaction with the deal. As with non-renewable independent producers. SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. renewables funding through a systems benefits charge. resulting in an industry shakeout. • AB 1890 outcome: Again.independent producers. competitive market possible to drive down rates. • December Decision outcome: Large customers did get the market structure they desired. and AB 1890 does provide a significant amount of money to existing renewables developers to help mitigate any downsizing in the industry. making them the strongest proponents of direct access. However. large customers won on the inclusion of direct access. They support granting the IOUs less than 100% stranded cost recovery. ERG Master’s Project Mark Stout 33 . but limiting the competitive transition charge (CTC) cost recovery to 4. this industries financial woes are not solely because of deregulation. • AB 1890 outcome: Many renewables generators were disappointed with the replacement of a policy mechanism that had known outcomes. Some argue that the level of funding is too low to maintain the current state renewables base and will end in 2002.

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

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

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

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

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

As Figures 5 indicates. 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. either the CPUC December Decision or 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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .

PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. As excerpted from the PG&E stakeholder interview.[see American Wind Energy Association. 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. Natural Resources Defense Council #1. 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. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. as well as three subjects ERG Master’s Project Mark Stout 40 . and to begin to build theories for why. and Union of Concerned Scientists interviews]. forward Decision.” Many of the other stakeholders consider AB 1890 an incremental.

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

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

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

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.. The renewables players were probably asking for too much of the old world the PUC had engaged in. . He also touched on the un-level playing field created by a free-market ideologue Governor: The environmental and renewables communities made the Committee punt. and the renewables community was perceived as not being able to make a paradigm shift..Officeholder Staff Comments on Who Got Rolled Over. • 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... They did not want to participate.. The 10% rate reduction for small customers was final packaging to sell the bill for voters. but just result in rate deferrals for 10 years.. but did not do hall walking to the extent of other groups.. . as rates were supposed to come down due to the QF cliffs anyway. • A staffer from Senator Byron Sher’s office also brought up the municipal utilities. This was very irresponsible. for their inability to articulate positions. These groups could not come to a resolution. 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.. The clean power community was cited again for a lack of ERG Master’s Project Mark Stout 44 . could not address the problem of a competitive market and participation... The low income groups may not have the staff resources to lobby effectively. They waited until late in the process to get organized. The California Municipal Utilities Association folks lacked effectiveness also..The big mistake for these small consumer groups was letting Pete Wilson get elected and stack the PUC with right wing ideologues. and Why: • Low income organizations and the renewables community could have improved their performance. according to this CPUC staffer. but for different reasons. they had full opportunity. The low income groups participated on paper through filed comments. LADWP was trying to cause trouble with restructuring. In AB 1890. yet were not in the hearing for one minute..

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

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

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

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

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

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

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

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

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

000 $62.592 $846 $0 ERG Master's Project Mark Stout 54 .079 $950 $14.500 $1.180 $0 $209. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.479 $2.125 $0 $4.102 $0 $73.096 $971.405 $0 $722. (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 $59.745 $68.163 $0 $25.000 $0 $70.308 $516.149 $3.818 $0 $65.000 $634.166 $5.470 $10.500 $78.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.496 $8.995 $596.000 N/A $0 $18.741 $21.374 $1.835 $1.092 $3.819 $0 $323.157 $0 $188.500 $263.031.203.079 $13.110 $34.239 $0 N/A $0 $89.608 $3.000 $681.559 $0 $246.419 $13.000 $1.112 $3.752 $0 $51.416 $5.101 $495 $10.675 $736. 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.981 $1.272 $0 $64.952 $1.588 $500 $32.516.500 $190.595 $0 $21.075 $4.181 $0 $160.500 $533.000 $480.758 $2.370 $648 N/A $0 $208.153 $750 N/A $8.630 $300 N/A $0 $5.000 $562.964 $0 $40.000 $225.S.675 $384.

000 $383.197 $500 N/A $2.000 $0 $171.362.938 $0 $118.207 $5.319 $0 $10.675 $0 $1.716 $39.000 $526.519 $11.723 $0 $38.083 $0 $20. 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 $4.500 $0 $0 ERG Master's Project Mark Stout 55 .203 $5.000 $20.203 $0 $30.291 $3.000 $37. (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. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.271 $0 $12.099 $12.000 $0 $15.167 $500 $25.492 $0 $66. (gasoline refining and marketing) Tower Energy Group (oil.596.250 $0 $30.401 $1.003.495 $1.947 $500 $281.665 $0 $262.000 $0 $6.600 $32.850 $1.600 N/A $5.055 $0 $151.551 $12.326 $0 $100. natural gas.000 $524.081 $1.145 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.400 $100 $79.495 $27.701 $0 $5.230.

118 $0 $144.500 $29. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $35.626 $0 $8.000 $50. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. (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) $145.229 $100 N/A $1.147 $500 $739. 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.905 $30.000 NA $500 $0 $2.S.100 $144.611 $1.281 $1.286 $3.000 $209.400 $1.032 $0 $172. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. and Hamrin.100 $0 $500 N/A $100 $0 $500 N/A $2.450 $566. Dist.500 N/A $0 $211.845 $452.750 $267.750 $418.) 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. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.195 $401.600 $276.159 $3.862 $21.543 $29. 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. McQuat.000 N/A $100 N/A $7.460 $50.819 $921. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.331 $0 $97.060 $6.882 $15.000 $33.000 $85.240 $0 $178.200 $837.782 $981.589 $26.590 $5.025.500 N/A ERG Master's Project Mark Stout 56 .750 $1.571 $500 N/A $200 N/A $1.454 $3.605 $250 N/A $1.017 $1.724 $500 not applicable $500 $57. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.917 $300 $5.748 $32. producers.179 $0 $3.717 $500 not applicable $0 $138.250 $148.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.250 N/A $100 N/A $2.

347 $9.650 $3.573 $2.900 $1.750 $23.885 $300 $207. Texaco Tidelands Oil Tosco Corp.950 $3.000 $233. (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.296 $800 $25.689 $2.780 ERG Master's Project Mark Stout 57 .721 $748.712 $100 N/A $200 $16.861 $1.750 $37.050 N/A $0 $214. natural gas.209.000 $76.800 not tracked $3.407 $200 $61.000 $500 $456.177 $300 N/A $0 $29.900 $0 $21.417 $9.138 $1.521 $14.661.995 N/A $100 N/A $0 $3.050 $949.521 $0 N/A $50 $87.384 $2.622 $67.1996 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. (gasoline refining and marketing) Tower Energy Group (oil.245 $335.511 $1.500 $277.478.925 $0 $44. diesel) Unocal (CMA member) Victory Oil Co.878 $12.989 N/A $9.636 $0 $103.960 $2.000 $22.643 $1.072 $918.090 $749 $38.532 $4.438 $500 N/A $0 $1.761 $0 $73.705 $19. 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) $41.495 $22. (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.500 $47.250 $34.016 $1.500 $251.137 $550 N/A $5.754 $4.181 $1.958 $2.521 $1.000 $65.334 $498 $1.

462 $208.585 $33. 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) $1.000 $15.066 $500 $21.1996 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.068 $14.448 $424.250 $21.000 $700 $117.000 $2.790 $100 $14.462 $500 $14.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .378 $100 $21. of California.066 $500 N/A $250 N/A $22.438 $4.

and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus.”80 In April of 1995. 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. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). 4 Asmus. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing.As one would imagine. and Inner Mongolia. an Edison lobbyist was added to the international travel party at the last minute. CFEE is a “non-profit. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. Shanghai. for $7. and Paris. and environmental groups to discuss the British experience with deregulation of electricity. Conservation. to meet with CEOs of the electricity industry. government ministers. were able to far outspend environmental organizations (who were usually spread thin over many issues). CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. the lobbying summary tables above. According to investigative writer Peter Asmus. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers.79 From 3/16/94 to 3/27/94.167 per guest. including oil and natural gas companies. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. 4 ERG Master’s Project Mark Stout 59 . 1996. regulators. alternative energy producers. From 3/28/96 to 4/8/96. Brussels. paying up to $7. their “Travel project to Europe on Electric Restructuring. 1996. and small consumer groups.800 each.

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

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

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

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

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

” Organizations had to be able to make decisions right on the spot to shape the outcome. ERG Master’s Project Mark Stout 70 . It allows an organization to get buy-in from other parties in advance.” according to Kathy. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report.reasonableness check. Jack. while holding on to what they really wanted. E. “People who influenced the outcome were present.15 million electric customers in San Diego and southern Orange Counties. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E.7 million customers in San Diego County. App. 82 83 CPUC Renewables Working Group. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. 1996. “a subsidiary of Enova Corporation. and gas service to 0. Sirard. 1996. SDG&E provides service to 1. the parent company of Southern California Gas Company83. is a California Investor Owned Utility Company founded in 1881. a gas utility which serves a territory largely overlapping with Southern California Edison’s.”82 Enova Corporation has announced a merger with Pacific Enterprises. and willing to be straightforward on what they can give on. SDG&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. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. Also. When Tom Page came in as CEO in 1981. This would put us at a competitive disadvantage compared to PG&E and Edison. they did not get there by investing in high cost renewables. We went to FERC. everyone should pay. [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. and got it struck down. with the exception of the legislation’s mechanism for a rate reduction. except for electricity purchases from Mexican geothermal generators. ERG Master’s Project Mark Stout 71 .84] SDG&E does not have any renewables. if you are a broker. it would be difficult to get 5% renewables. so we would have to buy energy or credits. The lucky Arizona utilities went with coal.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. we had the highest rates in the nation. 1996. AB 1890 mirrors the Decision in many ways. 84 CPUC Renewables Working Group. We were very opposed to the BRPU. but are not viable with competition. SDG&E wanted to become the lowest priced California IOU. High priced renewables are OK if you are not moving to a competitive future. Throughout the ‘70s. We were strongly opposed to the RPS. 1995 Decision? The PUC was on the right track. SDG&E was a supporter of the PoolCo market structure along with Edison.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I spoke with Barbara to build on the base of insights into CLECA’s positions that Dianne Hawk provided. There was some language about ERG Master’s Project Mark Stout 104 . it was very much influenced by the MOU. Rates are very high in California. We had experienced with the regulatory proceedings in the past. The May CPUC Proposal was lacking. avoiding cost shifting. 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. based on the concern that stranded cost recovery would be shifted onto industrial customers. CLECA wanted to make sure unbundling and stranded cost recovery were done with no cost shifting. extending them to include more of the AB 1890 process. as early as our comments on the Yellow Book in the Fall of 1993. 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 detail. representing CLECA throughout California’s electric utility restructuring process.. 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. Our members are used to multiple suppliers for everything else. they are seeking the same for electricity.California Large Energy Consumers Association . which is why the MOU happened. 1995 Decision? Competition was there. This was a big objective for the legislation. It seemed premature before then. and we see competition as the only way to bring them down. Inc.

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

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

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

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

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

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

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

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

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

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

2) an Integrated Resource Planning process should exist for energy efficiency. It gave us nothing until the Legislature tells us otherwise. and 4) incentives for uneconomic sales promotion minimized.000 members nationwide.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. economically viable solutions to today’s environmental problems. yes. depending on interpretation. [which] represents 300. if restructuring is implemented properly: 1) energy efficiency investments should continue.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. ERG Master’s Project Mark Stout 119 . and punted on the details to the Legislature. we are in favor of competition. The Decision was vague.”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. “a leading non-profit organization. economics. EDF has participated in California energy policy issues since 1975.000 of whom live in California. E-1. 1995 Decision? Almost nothing. more than 55. Assuming these problems are resolved. EDF links science. If focusing 94 CPUC Renewables Working Group. As stated in EDF’s first round comments on the Blue Book. and law to create innovative. EDF supports the earliest possible implementation of direct access for all classes of customers. “There is no reason to proffer the benefits of competition first to only selected classes of customers. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

preserving $62. including the $62.5 million in public interest RD&D. at approximately 11:30 PM. I believe that this was done by the IOUs. 102 Chart by Carl Blumstein based on 1995 CEC and PG&E data. ERG Master’s Project Mark Stout 145 .several nights later. all of the language that I had inserted earlier was removed. All parties agreed that the earlier negotiated language. I went before the Conference Committee during discussion and it was explained as an error in redrafting.5 million per year funding level for public interest RD&D. would be included back into the bill.

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

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

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

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

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

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

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

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

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

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

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

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

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

Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS 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 .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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.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 Municipal Utilities Association .

How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 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 .Interview #1 California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Natural Resources Defense Council .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.

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 . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.

000 $1.000 $1.000 $2.995 $300 $12.495 $7.000 $7.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $3.000 $495 $950 $696 $2.000 $500 $1.191 $2. 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.495 $10.000 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $4. (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.429 $498 $1.000 $3.800 $1.000 $1.995 $21.500 $1.500 $22.000 $2.495 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.896 $3.

511 $3.995 $2.000 $3.500 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co. 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.990 $1.Table 2: Assemblymember Jim Brulte.000 $10.500 $47.500 $800 $498 $200 $9.495 $4.017 $749 $750 $3.995 $1.500 $1.000 $2.250 $2.460 $200 $500 $750 $2.000 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $8.995 $0 $0 ERG Master’s Project Mark Stout 163 .750 $4.000 $1.000 $1.995 $14. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.

750 $2. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $2.000 $1.000 $2.500 $1.000 $3.750 $750 $1. Table 3: Senator Steve Peace. (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.250 $500 $1.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Conservation. by the California Foundation on the Environment and the Economy. CFEE is a “non-profit. 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.750 $3. 1996. Chevron treated Brulte to two meals. From 3/28/96 to 4/8/96. as well as an event.490 “Travel project to Europe on Electric Restructuring.000 $1. 4 ERG Master’s Project Mark Stout 164 . totaling $101. Brulte was taken on a $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $750 $0 $0 103 Asmus. Mobil treated Brulte to a $60 event in 1996. Not to be outdone. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Sweden.000 $1. and Budapest. and Privatization” visiting London.

500 $16.115 $18.250 $750 $500 $1.Table 4: Senator Steve Peace.572 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48. 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 $8.000 $1.500 $3.600 $2.000 $750 $750 $750 $1.250 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .072 $2.450 $7.000 $4.815 $750 $6.000 $300 $1.050 $3.250 $2.100 $2.000 $500 $2.000 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (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 $7.

Table 5: Senator Byron Sher. 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. IEP made a gift of $241 for his speech at a conference.100 $2. SDG&E had Peace out to six meals. In 1995. In 1996.900 . Peace was treated to a $52 sports event by Mobil Oil.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Southern California Edison was granted a high level of access.000 $5.000 Table 6: Senator Byron Sher. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. taking Steve to 11 meals.450 166 ELECTRIC/GAS $6. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. while Edison treated him to five meals and a sports event. 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. as well as chair of the Senate Energy and Utilities Committee.

882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.500 Int.000 $500 $1. (geothermal) Colmac Energy Inc. and Hamrin.100 $500 $2.482 $100 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.600 $13. Brotherhood of Electrical Workers (various $9. (biomass) Edson + Modisette (lobbyist for indep.000 locals) Southern California Pipe Trades United Assoc. $2. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .000 $100 producers. EVs) Hansen.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. McQuat.000 $500 $500 $9.

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 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $1.000 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 (tire $1.000 Large Energy Consumers $3.000 $100 $1.

of California. (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.Tosco Corp.000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.448 $14.000 $300 $300 $22.

000 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. 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. and GE. 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.500 $300 $0 $0 $2.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.300 $500 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 .400 $750 $150 $1. In 1996.000 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting. Mobil. Sher holds over $100. Sher received no other gifts that year from energy utility stakeholders. totaling $758. Table 7: Senator Bill Leonard. Exxon.

650 $500 $1. extending his stay from 12/8/96 to 12/13/96. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.080 $10.500 $500 $1. The Pacific Rim Conference of Seattle.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $1. 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. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.730 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $500 $500 $4.000 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $5. saving up for a $77 dinner with head lobbyist Bob Foster.500 $150 $500 $3.000 $2.650 $2. While the Senator was there. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. for a paltry $20. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $1.000 $2. 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. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.Table 8: Senator Bill Leonard.

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. They also had Leonard out for two meals in Sacramento. ARCO treated Leonard to a $19 meal at a reception.250 $1. paying $44 for two meals and lodging.600 $1. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game.000 $1.000 $1. including lunch with Bob Foster.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . for the modest tab of $56.000 $750 $750 $650 $150 $500 $3.750 $1.000 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.600 $750 $750 $500 $1.had Senator Leonard out for Legislative Ski Day.

000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.700 $500 $300 $550 $2. 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.Table 10: Assemblymember Mickey Conroy.000 $500 $750 $250 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day. CFEE is a “non-profit. and Inner Mongolia.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $5.000 $2.700 $750 $450 $250 $250 $1.000 $500 $2. $7.600 $3.050 $1. 4 ERG Master’s Project Mark Stout 173 .500 $2.600 $500 $1. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.000 $3. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1996. two meals for $44.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. PG&E treated him to a basketball game with $51 tickets. 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. and to 104 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. Shanghai.

000 each in Edison. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. After such a busy social calendar in 1995.000 in Orange & Rockland Utilities. $10 in candy. SDG&E. costing $99. and less than 10. four rounds of “refreshments” for $30. Kansas City Power & Light. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. and $25 of cookies and candy. with investments of greater than $10. and Westinghouse Electrical.make sure Conroy kept a sweet spot in his heart for them. ERG Master’s Project Mark Stout 174 . In terms of investment. General Electric. Pacificorp. Chevron took Conroy out for two business meals. Edison wined and dined the Assemblymember with four meals at $134.

000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.750 $2.675 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2.750 $1.750 $1.Table 11: Assemblymember Diane Martinez. (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.250 $1.250 $1.750 $4.175 $500 $1.

(member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $500 $500 $5.500 $500 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.500 $1.000 $500 $1.000 $4.000 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $1.500 $1.250 $1.000 $7.500 $1.000 $500 $500 $500 $500 $500 $3. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $3.750 $1. Dist. 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.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $1.000 $1.500 $6. (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.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.Table 12: Assemblymember Diane Martinez.000 $4.

Table 13: Assemblymember Steve Kuykendall. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.000 $8. natural gas.058 $500 $500 $1.500 $1.900 $3.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.500 $1. the Illinois Energy Association flew Martinez out for a $1.000 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.100 $100 $1.850 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.467 trip to Northwestern University to discuss the deregulation of public utilities.208 $0 $0 $1. ERG Master’s Project Mark Stout 177 .000 $500 $500 $1.

443 $6.000 $1. From 3/28/96 to 4/8/96.350 $500 $1.374 $4.490 “Travel project to Europe on Electric Restructuring.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. natural gas.000 $500 $2. Sweden. 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. and Budapest. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.500 $0 $1. Kuykendall’s social calendar was destined to pick up in 1996.500 $1.000 $1.250 $100 $500 $35. and Privatization” visiting London. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. diesel) Unocal (CMA member) Victory Oil Co. Conservation.374 $500 $2.500 $1. However.000 $1. Kuykendall was taken on a $7.000 $2.000 $19.Table 14: Assemblymember Steve Kuykendall.254 $200 $500 $4. ERG Master’s Project Mark Stout 178 .

SC to address their membership. According to investigative writer Peter Asmus. spent $1402 to fly Fessler to Charleston.”105 The Consolidated Edison IOU spent $1. and Paris.167 junket visiting London. one of CFEE’s funders. The Large Public Power Council.WEST. for $610. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). a clean power auction the CPUC repeatedly postponed upon the urging of the utility. The California 105 Asmus. Brussels. Fessler was taken on a $7. regulators. Chevron treated Kuykendall to two dinners for $131. was very interested in California moving to the UK-style. by the California Foundation on the Environment and the Economy. government ministers. 1996. The California Mining Association took him out for an evening of recreation and dinner costing $89.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. wholesale PoolCo model. in Aspen.by the California Foundation on the Environment and the Economy. to meet with CEOs of the electricity industry. CO. 4 ERG Master’s Project Mark Stout 179 . The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. Another non-profit organization. Edison.051 to fly the President out to New York City for a ConEdison Management Conference. A trade association. an Edison lobbyist was added to the international travel party at the last minute. and environmental groups to discuss the British experience with deregulation of electricity. a trade association for publicly owned utilities. The Aspen Institute. known as the Council of States Government . paid $1.

The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. Utah to speak at the “Utility Restructuring. The Rocky Mountain Electrical League. a libertarian think-tank. had Fessler speak at their conference in Washington. for $61. The Cato Institute. In April of 1995. spending $1006. EEI is a trade association representing investor owned utilities. The Western States Coordinating Council. Shanghai. CO. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. NJ to speak at the 1994 DSM Implementation Conference. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. for $323.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. a utility planning association. the Center for Resource Management flew him to Midway. DC. spending $291. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. Finally. and Inner Mongolia. Fessler holds over $10. ERG Master’s Project Mark Stout 180 . in Fort Collins.000 in Ohio Edison stock. On the investment side. spent $314 to bring him to speak at their Spring Conference. Finally. the California Foundation on the Environment and the Economy took Fessler on an 11 day. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. for $467 airfare. $7.802 junket to talk with Chinese central government and provincial leaders in Beijing. Synergics Resources Corporation had Fessler out to Princeton. PG&E had him out for two lunches. spent $249 to fly him to their annual meeting in Las Vegas. a utility association. DC. ZEV’s and Rethinking the Environment Conference.

ERG Master’s Project Mark Stout 181 . and environmental groups to discuss the British experience with deregulation of electricity. PG&E had him out to three meals for $71. He left office on February 23. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. In 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. 1995. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. Unocal. government ministers.167 junket visiting London. by the California Foundation on the Environment and the Economy. spending $258. regulators. wholesale PoolCo model. and Schlumberger oilfield services stock. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. He does own more than $10. utility and General Electric stock. Edison.000 in each of Montana Power Company and Exxon stock.000 in each of Chevron.000 in each of Central & Southwest Corp. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Conlon was taken on a $7. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and Paris. one of CFEE’s funders. Brussels. to meet with CEOs of the electricity industry. and less than $10. He does own less than $10. was very interested in California moving to the UK-style.

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