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the largest source of greenhouse gas emissions and the largest source of air pollution in the U.S. which will be superseded to a great extent by the details of AB 1890.

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

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

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

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

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

forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. favored by CPUC President Fessler and two other Commissioners. is based on a common wholesale power pool. Generators are scheduled into the pool based on time-based bids submitted to the ISO. which is usually considered state jurisdiction. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. Status Report. meaning the utilities could not discriminate against other electricity suppliers. scheduled and dispatched by an independent system operator (ISO). Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. A common price for all electricity in the state would then be set by the market clearing price based on the bids. Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition. 1997.24 22 23 CPUC. The majority proposal known as PoolCo. Asmus and Smeloff.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. 1995. All power purchases would be made through the pool. in May of 1995. the California Commissioners released two draft proposals for pursuing rate deregulation in California.for wholesale transactions. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . Retail contracts with a particular generator could be handled with separate “contracts for differences”.

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

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

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

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

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

1997. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 1996 CEC. The overall levels are: 45 % existing technologies. 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.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. 1997. including residential and small commercial consumers. 10% emerging technologies. and 15% consumer-side incentives. would be eligible for direct access January 1. including a prominent one authored by Representative Dan Schaefer (R-CO). 30% new technologies. 1997 41 Marshall. 1998. 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. It divides up this amount into four accounts that vary over four years of funding. In March of 1997. 1997 42 Weisman.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. “If the bill had failed. 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.40 On May 6.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. As Carter and Cavanagh have noted.

Therefore.. services. “Restructuring Hearings on the Road” Levison. 1997. “12 companies--most foreign-owned--that really soak up the juice. Many forces have come together to create the push for electric utility deregulation in California.” Barbara Barkovich. and overcapitalized due to state regulation.”. a consultant representing CLECA explains their 43 44 Levison. 1997.44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation. 355. “Discretionary Evolution. and one of the largest gold mining firms in the world. Davis explains their reasoning: “the electric companies are inefficient. Retail wheeling sits at the top of the agenda of this coalition of steel. and future expansion. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation. ERG Master’s Project Mark Stout 21 . if a company wants more revenue it must invest more capital. too conservative. The state commissions typically calculate a company’s profits as a return on investment. “DOE Restructuring Bill” 45 Stevenson.43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. the companies have no incentive to be efficient. cement.. Because the PUCs determine the rates. There is literally no profit in it for them. these concerns are represented by the California Large Energy Consumers Association (CLECA). It has an incentive to build a new plant even if it is not really needed.”46 In California.requirement".45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition.

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

”.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.. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 52 Gilbert. 84-108. 50 Flavin and Lenssen.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. but now had to pay higher rates. 1993. Gordon. 150. 195. 1993. Hoffman 55-62. basing their arguments on welfare economics as applied to the changing electric utility landscape. Davis. who in the past had enjoyed privileged status with cheap rates. “Discretionary Evolution.. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1994.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 356-357. 447-475. enabling increased competition. 51 Stevenson.intense pressure from large industrial customers. greatly increasing opportunities for bulk power sales. ERG Master’s Project Mark Stout 23 .

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

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

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

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

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

municipal electric utilities.exercise of power from Lukes’ most “radical” view. their comments on restructuring filed with the CPUC69. I chose these categories based on personal experience representing a stakeholder organization in the process. Status Report.. large electricity consumers. since such a broad analysis would be outside of the scope of this project. I tried to cover as wide a range of participants as possible.. and a state institutions.. environmental advocates. and the final AB 1890 language. I first review what the different stakeholder groups wanted and got in both policy outcomes. 1995 CPUC Decision.. 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 considering those used in a status report from the CPUC to the Legislature. as well as independent producers. one important subcategory emerged because of its dominance: Oil and natural gas companies are often both large energy consumers. the December. 1995. Overview of What the Stakeholders Wanted and What They Got Before analyzing who got what they wanted. 67 68 CPUC. small electricity consumers. ERG Master’s Project Mark Stout 29 .. Status Report. 69 CPUC. 1995.68 I have broken oil and natural gas companies out as a separate category in the tabulations of campaign contributions. independent producers. CPUC. 1995.. Status Report. Selection of Stakeholder Groups In selecting stakeholder groups to focus on. utility labor unions.67 As I extended my analysis with a summary of campaign contributions from stakeholders to the conference committee members.

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

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

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

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

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

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

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

When combined with comments filed by that organization early in the restructuring process at the CPUC.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. as well as the majority of large electricity consumers. and the remaining minority claim that their organization got rather little. Figure 2 shows that all of the investor-owned utilities and independent producers. 1995 Decision. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . 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. a slightly smaller number of representatives report a mixed or unclear outcome. this provides a baseline to determine if they got what they wanted. 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.

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

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

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

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

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

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

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

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

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

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

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

RD&D. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. EDF. 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 . The 3% [it was actually a cap of 3..72 At this point late in the game. “We reached a consensus on. less than two weeks before the Bill would be reported out of committee. These got translated into dollars. CLECA. Industrial Users. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. During the Conference Committee hearings. agricultural consumers. 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.3% of utility revenues.. a perusal of legislative language that was proposed during the long. 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. renewables with an incremental cost estimate from the BRPU. and the Sierra Club.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.” However. As a Sierra Club California legislative chair recounts on meetings between CMA. and energy efficiency. TURN was one of several public interest organizations who opposed the change. The August 15 language from a coalition of powerful interests. including IEP. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.. funding for public purpose programs: low income. reduced funding to an average of 2.1% of IOU revenues..

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

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

Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts. in terms of complicated problem area. A full breakdown of contributions for each legislator is included in Appendix E. even though there some parts they might hate.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. everybody should suffer except for us.. OK?.start unilaterally resolving issues. Where data is available. Our largest problem area. these tables cover the years 1995 and 1996 for the author of AB 1890. 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. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package. The following campaign contribution summary tables were compiled from Officeholder. The other thing is. and my rule is when we are forced to unilaterally resolve issues. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 .. no attempt has been made at determining total annual contributions from all sources to each officeholder. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission.” That same hearing session. is clearly renewable folks.. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division. 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. Jim Brulte (R-Ontario). Candidate. in order to move forward with a product. if there is something you can bring to the table..

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

835 $1.000 $0 $70.112 $3.470 $10.608 $3.405 $0 $722.272 $0 $64.163 $0 $25.758 $2.101 $495 $10.079 $13.000 $62.588 $500 $32.500 $78.308 $516.479 $2.500 $263.096 $971.000 $562.239 $0 N/A $0 $89.031.370 $648 N/A $0 $208.102 $0 $73.000 $1.374 $1.500 $1.000 $480.981 $1.595 $0 $21.000 N/A $0 $18.000 $681.079 $950 $14.964 $0 $40.153 $750 N/A $8.157 $0 $188.995 $596.S.741 $21.092 $3.180 $0 $209.416 $5.203.745 $68.592 $846 $0 ERG Master's Project Mark Stout 54 .496 $8. 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.500 $190.181 $0 $160.818 $0 $65. (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 $59.675 $736.952 $1.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.516.752 $0 $51.110 $34.000 $225.819 $0 $323.149 $3.166 $5.125 $0 $4.500 $533.675 $384.630 $300 N/A $0 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $634.419 $13.075 $4.559 $0 $246.

230.000 $524.003.495 $1.495 $27.675 $0 $1.203 $5.362.600 $32.326 $0 $100.519 $11.000 $20.492 $0 $66.701 $0 $5.723 $0 $38.167 $500 $25.400 $100 $79.197 $500 N/A $2.203 $0 $30.551 $12. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.401 $1.500 $0 $0 ERG Master's Project Mark Stout 55 .947 $500 $281.145 $5.250 $0 $30. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $37.099 $12.055 $0 $151.000 $0 $15.319 $0 $10. natural gas.271 $0 $12.716 $39.000 $0 $6.000 $526.665 $0 $262. (gasoline refining and marketing) Tower Energy Group (oil.600 N/A $5.938 $0 $118.850 $1.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. 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 $4.083 $0 $20.000 $0 $171.291 $3.596.000 $383.207 $5.081 $1.

400 $1. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.025.000 $33.717 $500 not applicable $0 $138.782 $981. 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.460 $50.017 $1.331 $0 $97.626 $0 $8.195 $401.605 $250 N/A $1.590 $5.250 $148. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.060 $6.000 $85. and Hamrin.147 $500 $739. (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) $145.819 $921. Dist.882 $15.100 $0 $500 N/A $100 $0 $500 N/A $2.000 N/A $100 N/A $7.281 $1.845 $452.) 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. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.450 $566.917 $300 $5. McQuat.S.750 $1.750 $418.571 $500 N/A $200 N/A $1.032 $0 $172.862 $21. producers.543 $29. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.750 $267.500 N/A ERG Master's Project Mark Stout 56 .589 $26.454 $3. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.500 $29.118 $0 $144.000 NA $500 $0 $2.000 $35.000 $209.748 $32.905 $30.500 N/A $0 $211.240 $0 $178. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. 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.250 N/A $100 N/A $2.286 $3.200 $837.000 $50.600 $276.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.100 $144.159 $3.179 $0 $3.724 $500 not applicable $500 $57.229 $100 N/A $1.611 $1.

245 $335.750 $37.438 $500 N/A $0 $1.995 N/A $100 N/A $0 $3. (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.573 $2.925 $0 $44.754 $4.878 $12.181 $1. Texaco Tidelands Oil Tosco Corp.138 $1.661. natural gas.511 $1.750 $23.885 $300 $207.500 $47.636 $0 $103.500 $251.622 $67.072 $918.495 $22.500 $277.800 not tracked $3.090 $749 $38.521 $1.296 $800 $25.137 $550 N/A $5.478.705 $19.050 N/A $0 $214.958 $2.900 $0 $21.000 $76.000 $500 $456.000 $22.347 $9. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.650 $3.000 $65.050 $949.384 $2.712 $100 N/A $200 $16.000 $233.177 $300 N/A $0 $29.721 $748.643 $1.950 $3.900 $1.960 $2. 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. (gasoline refining and marketing) Tower Energy Group (oil.521 $14.209.780 ERG Master's Project Mark Stout 57 .250 $34.016 $1.334 $498 $1. diesel) Unocal (CMA member) Victory Oil Co.532 $4.861 $1.1996 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.407 $200 $61.417 $9.521 $0 N/A $50 $87.989 N/A $9.689 $2.761 $0 $73.

585 $33.000 $15. of California.790 $100 $14.066 $500 $21.068 $14.250 $21.066 $500 N/A $250 N/A $22.438 $4.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. 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 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .462 $500 $14.448 $424.000 $2.000 $700 $117.462 $208.378 $100 $21.

79 From 3/16/94 to 3/27/94. to meet with CEOs of the electricity industry. 1996. 4 Asmus. Conservation. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. and Inner Mongolia. and Paris. Brussels.As one would imagine. CFEE is a “non-profit.800 each.”80 In April of 1995. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. were able to far outspend environmental organizations (who were usually spread thin over many issues). 4 ERG Master’s Project Mark Stout 59 . an Edison lobbyist was added to the international travel party at the last minute. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and environmental groups to discuss the British experience with deregulation of electricity. including oil and natural gas companies. alternative energy producers. From 3/28/96 to 4/8/96. and small consumer groups. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. paying up to $7. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. their “Travel project to Europe on Electric Restructuring. regulators. 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. Shanghai. the lobbying summary tables above. According to investigative writer Peter Asmus. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. 1996. 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. government ministers. for $7.167 per guest.

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

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. 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 .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. CPUC vs. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings..

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

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

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

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

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

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

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

Our three principles. be we did get a principled ERG Master’s Project Mark Stout 74 . large and small customers. let’s do this the right way. a manifestation of these mutual interests. The regulatory compacts that we entered into need to be recognized. “the nation’s second largest utility. The 109-year old investor owned utility serves more than 4. With the encouragement of the Governor’s office. 000 square mile service territory has a population of more than 11 million. I would not say we got everything we wanted. Over time. and other energy service providers. We also pursued the opportunity for a return on investment. and served as a basis for AB 1890. and return on investment. If any customers are to benefit.2 million customers in Central and Southern California. were equity. First. so we decided if this was going to come into play. all customers should at the same time. 1995 Decision? Those three principles were significant components of the December Decision.”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. don’t rock the boat utility. we adopted a principled approach that recognized the interests of Edison. based on number of customers. not “the big guys eat first”. with a phase-in to direct access. and SCE investors as well as independent energy producers should have the opportunity for a return on investment. restructuring came to be viewed as inevitable. We could have been perceived as opposing direct access. equity. we were positioned as an anti-restructuring. opportunity. This is best implemented under a transition.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE. creating a level playing field. The utility’s 50. 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. in terms of headroom for shareholder returns. CPUC vs. otherwise you may open up doors to places you do not want to go. Since regulatory changes are subject to regulatory whims. App. We could always ask what principle is driving a requested amendment. 1996. Generally. Since there are still issues for Edison around stranded cost recovery. it is best to adopt a principled approach.approach which recognizes the different parties interests.. We made sure they knew 86 CPUC Renewables Working Group. ERG Master’s Project Mark Stout 75 . AB 1890)? Why? We were satisfied with AB 1890. it validated the direction taken by the December Decision. This made for touchy meetings with the parties. and CTC exemptions. we do not know how it will turn out. Is your organization more comfortable with one policy decision over the other (i. or over time? Absolutely. we were very consistent. 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? The same is true for this legislation. 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. E. This allowed us to be consistent. We will not know how Edison faired until after the transition. putting language in the statute made it more likely to get a known outcome. All AB 1890 represents is an unfolding framework.

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

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

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

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

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

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

If we do not go to direct access. This is a profound shift in how munis and IOUs relate to FERC. not to say that we can’t operate as business as usual. 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. For us. But this language could burden us with litigation. we can point to the legislation. We did not get everything we wanted. If the IOUs do not respect the munis. AB 1890 also set time limits on the duration of CTC recovery. and conditions on CTC recovery. this is not onerous or burdensome. ERG Master’s Project Mark Stout 82 . It would have been difficult for the IOUs to keep up with us on these programs and bring down rates. I do not know.public purpose programs. enhancing our stature at the federal level. Going in. this gives us political standing. The state’s regulation of Investor Owned Utilities differs from a muni’s ability to decide how to serve. This is not a problem for SMUD. A lot of AB 1890 is not crisp. If the Legislature had respect for the municipal affairs doctrine. but arguably gives standing to third parties to contest SMUD’s approach to restructuring. but got more than we asked for. This is arguably a meaningless statement. How this is playing out. AB 1890 states that filings to FERC would be jointly between the municipal utilities and the IOUs. This is an infringement on municipal autonomy. a cloud that we do not need. it would not have put this in. SMUD did get something more than we asked for also. but it might be for others. AB 1890 has language written that denies a muni’s ability to impose a CTC unless they allow direct access. because the repayment of current debt could be viewed as a CTC. As I mentioned. someone can accuse us of having rates too high.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

93

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

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

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

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

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

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

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

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

so he was amenable to this. very bad bill. a very. requiring a written. but had to be in the debate. Some customers got away with no CTC. On the good side. TURN felt it had turned AB 1890. into a very bad bill.So we were stuck with a bill that we hated. Edison gets coal cost increases. 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. divested power plants must come with a contract for the original staff for the first two years. Also.5 billion increase. but Edison successfully created this barrier under the guise of anti-slamming language. we decided not to oppose.. PG&E gets a $0. we did not oppose or support AB 1890. signed document with independent verification that a customer wants to be included in an aggregation. We had suggested that community access provide an out for people that did not want in. Since we felt that it was incrementally better than the December Decision. On the bad side. ERG Master’s Project Mark Stout 116 . AB 1890)? Why? At the end of the process. This raises a substantial barrier for municipalities to aggregate their residents’ loads. but a narrow set of projects. leading to a heated internal debate. In the end. It turns out that independent generation plants are run with much less staff. it limited CTC recovery to a shorter period of time. there were some self-generation projects in the pipeline. firmed up the nonbypassability of the CTC. We had the option of opposing it and jeopardizing the concessions in it. Unions got a huge bone by having the cost of retraining and severance included in the CTC. Peace’s residence had gotten slammed a couple times. and offered a good commitment to low income programs.e. Is your organization more comfortable with one policy decision over the other (i.

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

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

economics.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo.000 members nationwide. 2) an Integrated Resource Planning process should exist for energy efficiency. As stated in EDF’s first round comments on the Blue Book. 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. yes. and law to create innovative.000 of whom live in California.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. [which] represents 300. If focusing 94 CPUC Renewables Working Group. It gave us nothing until the Legislature tells us otherwise. 1995 Decision? Almost nothing. “a leading non-profit organization. more than 55. if restructuring is implemented properly: 1) energy efficiency investments should continue. and 4) incentives for uneconomic sales promotion minimized. and punted on the details to the Legislature.”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. economically viable solutions to today’s environmental problems. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. EDF links science. The Decision was vague. E-1. depending on interpretation. EDF has participated in California energy policy issues since 1975. we are in favor of competition. ERG Master’s Project Mark Stout 119 . Assuming these problems are resolved.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ERG Master’s Project Mark Stout 158 .while the Members were trying to do the right thing. 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 California Large Energy Consumers Association .Interview #1 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 . 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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.

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

Interview #1 California Municipal Utilities Association .Interview #1 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.Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS 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 . 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 Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

500 $22.896 $3.000 $3.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $4. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.495 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $2.500 $1.000 $1.800 $1.995 $300 $12.000 $495 $950 $696 $2.191 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $3.000 $3.995 $21.000 $500 $1.000 $7.000 $1.429 $498 $1.495 $7.495 $10.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

995 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.495 $4.500 $47.250 $2.017 $749 $750 $3.000 $1. (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.460 $200 $500 $750 $2.000 $1.995 $2.500 $800 $498 $200 $9.000 $2.500 $1.500 $6.000 $8.511 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .500 $1.000 $2.990 $1.Table 2: Assemblymember Jim Brulte. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.995 $14.000 $1.750 $4.000 $10.000 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

Conservation. and Privatization” visiting London.000 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1.250 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $3. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.750 $3. 4 ERG Master’s Project Mark Stout 164 . and Budapest. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. totaling $101.750 $750 $1.750 $2. Mobil treated Brulte to a $60 event in 1996.000 $750 $0 $0 103 Asmus. Not to be outdone. Table 3: Senator Steve Peace. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. CFEE is a “non-profit.500 $1.000 $1.490 “Travel project to Europe on Electric Restructuring. Paling in comparison. 1996. From 3/28/96 to 4/8/96. Chevron treated Brulte to two meals. Brulte was taken on a $7. as well as an event.000 $1.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.000 $2. Sweden. by the California Foundation on the Environment and the Economy.

250 $750 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.050 $3.450 $7.000 $750 $750 $750 $1.250 $2.072 $2.500 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.250 $1.115 $18.000 $1.000 $6.500 $16. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $300 $1.100 $2.000 $500 $2.815 $750 $6.Table 4: Senator Steve Peace.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $4.500 $8.250 $7.572 $1.600 $2.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.

000 $5. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.000 Table 6: Senator Byron Sher. Peace was treated to a $52 sports event by Mobil Oil. IEP made a gift of $241 for his speech at a conference. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.100 $2.450 166 ELECTRIC/GAS $6. 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. 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. taking Steve to 11 meals. SDG&E had Peace out to six meals. 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. In 1995. while Edison treated him to five meals and a sports event.900 . In 1996. Table 5: Senator Byron Sher.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.

Brotherhood of Electrical Workers (various $9. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.482 $100 $1.000 locals) Southern California Pipe Trades United Assoc.000 $500 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .000 $500 $500 $9. $2.100 $500 $2. McQuat.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 $1.500 Int.000 $100 producers. and Hamrin.882 $100 $1.600 $13. (biomass) Edson + Modisette (lobbyist for indep. (geothermal) Colmac Energy Inc. EVs) Hansen.

000 (tire $1.000 $100 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $100 $100 $500 $1.000 $1.000 $1.500 COMPANIES $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.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 Large Energy Consumers $3.

(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.Tosco Corp.448 $14.000 $300 $300 $22.585 $100 $500 $2. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $700 $4. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .

500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher holds over $100.400 $750 $150 $1. In 1996. Sher received no other gifts that year from energy utility stakeholders. Mobil. Exxon.000 $1. Table 7: Senator Bill Leonard. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. and GE.000 in each of Amoco. 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 $3.300 $500 $1. totaling $758.500 $300 $0 $0 $2. NARUC treated Sher to a two day trip to DC for another meeting. totaling $2608.

000 $1. for a paltry $20.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.500 $500 $1. 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.000 $500 $500 $4.650 $2.650 $500 $1.500 $150 $500 $3.080 $10. extending his stay from 12/8/96 to 12/13/96. SCE treated Leonard to dinner and lodging for Legislative Ski Day.730 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $2.000 $1. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. While the Senator was there.Table 8: Senator Bill Leonard. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $5. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. 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. The Pacific Rim Conference of Seattle.

Table 9: Assemblymember Mickey Conroy.000 $1. ARCO treated Leonard to a $19 meal at a reception.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . PG&E took Leonard out to a Kings game. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. including lunch with Bob Foster. They also had Leonard out for two meals in Sacramento.had Senator Leonard out for Legislative Ski Day.000 $1. paying $44 for two meals and lodging.000 $750 $750 $650 $150 $500 $3.600 $1.600 $750 $750 $500 $1. for the modest tab of $56.750 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.250 $1.000 $1.

PG&E treated him to a basketball game with $51 tickets.600 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. CFEE is a “non-profit.700 $500 $300 $550 $2. $7.300 junket to talk with Chinese central government and provincial leaders in Beijing. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.000 $3. Shanghai.700 $750 $450 $250 $250 $1. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $500 $750 $250 $500 $2.600 $500 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. and Inner Mongolia.050 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.Table 10: Assemblymember Mickey Conroy. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $2.000 $500 $2.500 $2. 1996.000 $5. and to 104 Asmus. two meals for $44. 4 ERG Master’s Project Mark Stout 173 .

it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. with investments of greater than $10. ERG Master’s Project Mark Stout 174 . $10 in candy. Pacificorp. Kansas City Power & Light. four rounds of “refreshments” for $30. After such a busy social calendar in 1995. and Westinghouse Electrical. In terms of investment.000 each in Edison. SDG&E. costing $99.make sure Conroy kept a sweet spot in his heart for them. and $25 of cookies and candy. Chevron took Conroy out for two business meals. and less than 10.000 in Orange & Rockland Utilities. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. General Electric. Edison wined and dined the Assemblymember with four meals at $134.

Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.675 $2.000 $1.750 $1.750 $1.175 $500 $1.000 $1.000 $1. 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 $1.750 $2.Table 11: Assemblymember Diane Martinez.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $4.

) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $4.500 $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.000 $500 $1.500 $1.000 $1.000 $7.500 $1.000 $500 $500 $5.250 $1.000 $1.000 $500 $500 $500 $500 $500 $3. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1.750 $1.000 $500 $3.Table 12: Assemblymember Diane Martinez.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $5. 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.000 $1.000 $4.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $500 $500 $1.

000 $8. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.467 trip to Northwestern University to discuss the deregulation of public utilities. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.000 $500 $500 $1. natural gas.500 $1.100 $100 $1.500 $1. the Illinois Energy Association flew Martinez out for a $1.Table 13: Assemblymember Steve Kuykendall. 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. ERG Master’s Project Mark Stout 177 .208 $0 $0 $1.000 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.058 $500 $500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.850 $1.900 $3.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.

254 $200 $500 $4.250 $100 $500 $35. natural gas. Kuykendall’s social calendar was destined to pick up in 1996.000 $500 $2. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. Conservation.000 $1.500 $1.000 $1. Sweden.500 $0 $1.443 $6. However. and Privatization” visiting London.490 “Travel project to Europe on Electric Restructuring.374 $4. 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. and Budapest. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.350 $500 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $2.374 $500 $2.000 $1. Kuykendall was taken on a $7. diesel) Unocal (CMA member) Victory Oil Co.500 $1. From 3/28/96 to 4/8/96.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.Table 14: Assemblymember Steve Kuykendall.000 $19. ERG Master’s Project Mark Stout 178 .

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

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

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

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