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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html ERG Master’s Project Mark Stout 4 . fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. acid rain and climate change.Introduction On September 23. contrasting the results of CPUC process resulting in their December. there will probably be significant winners and losers as a result of this legislation. a product with well documented environmental impacts including local air pollution. and why. 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. 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. 1995 Electric Restructuring Decision. selling 250 billion kWh of electricity per year2. 1994 4 WWW page: http://www. Various stakeholder groups. 1996. which will be superseded to a great extent by the details of AB 1890.edf. with varying success. 1996 California Energy Commission.org/programs/Energy/green_power/a_better. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. which sets in motion a process of electric utility deregulation beginning in 1998.S. This paper develops a comparison of which stakeholder groups got what they wanted. 1995 3 Flavin and Lenssen. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. 1995 Decision with the California legislative process resulting in AB 1890.3 According to the Environmental Defense Fund. This bill is an important milestone in an ongoing process towards electric utility deregulation in California.

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

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

” The early 1900s were marked by the rapid increase in electric utility regulation by state public utility commissions (PUCs) to address this natural monopoly character. or were owned by. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation. by 1922 47 states and the District of Columbia were regulating electric utilities. led to the passage of the Federal Power Act. This being the case the best solution seemed to be regulation by public commission. this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers. A number of these holding companies owned. with at least 20% of electricity crossing state lines in 1935.8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids. Based on the Interstate Commerce Clause. Beginning in 1907 with New York and Wisconsin.” This legislation sought to avoid market abuses by limiting the size and 7 Davis. Hempling explains. a small number of holding companies owned most utilities in the United States.utilities as natural monopolies and hence inevitable. 166-167. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. large nonutility companies such as electric equipment contractors. ERG Master’s Project Mark Stout 9 .

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

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

the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. all residential consumers eligible on January 1.17 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. and if successful. sending “a shockwave through the electric industry”. and 3) rate changes to encourage efficiency and distribution of power. all commercial customers eligible 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. 1999. 55. 6. 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. 1996. A more definitive policy statement was 16 17 Haddad.supplies. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. with large. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations. 18 Mydans. customer class-staged schedule for direct access implementation.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. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers. In April of 1994. ERG Master’s Project Mark Stout 12 . Hoffman. 2002. industrial customers taking power at the transmission level eligible on January 1.

where CPUC President Fessler and Commissioner Knight testified on their proposal.21 This stakeholder response. 1994.scheduled to be issued by the CPUC in August of 1994.22 FERC MegaNOPR In March of 1995. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. and documentation resulting in a report back to the Governor and Legislature by January 31.20 Many stakeholders. such as “green pricing”. FERC released a dual-issue Notice of Proposed Rulemaking. “a vibrant market exists for energy efficiency services”. 1994. evidentiary hearings. 1. For instance. numerous other states have also proposed electric utility deregulation. Blue Book. This led to the passage of Assembly Concurrent Resolution 143. “alternative frameworks based on ‘let the market decide’”. and asserted that. 21 CPUC. 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. which had been dubbed the MegaNOPR. Blue Book. Status Report. 1995. including private and public-interest organizations. pushing back their goal for a policy decision until September of 1995. coupled with a lack of prior coordination with the state Legislature. where customers voluntarily pay more to promote renewables. the CPUC proposed. 1995. This process tempered the CPUC’s frenetic timetable. were concerned about the content and timetable of this proposal.19 Since the release of the Blue Book proposal. In their place. which requires the CPUC to engage in a series of public hearings. Wagner. ERG Master’s Project Mark Stout 13 . 1994.

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

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

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

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

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

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

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

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

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

Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 52 Gilbert. but now had to pay higher rates. Davis. 50 Flavin and Lenssen. 1993.50 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. enabling increased competition. basing their arguments on welfare economics as applied to the changing electric utility landscape. 51 Stevenson. “Discretionary Evolution. 150.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 195.. 84-108. Gordon. who in the past had enjoyed privileged status with cheap rates. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1994.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.intense pressure from large industrial customers.”. 356-357. ERG Master’s Project Mark Stout 23 . ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. greatly increasing opportunities for bulk power sales.. 447-475. 1993. Hoffman 55-62.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ERG Master’s Project Mark Stout 38 . The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. say that their organizations got most of what they wanted from AB 1890. 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. as well as the majority of large electricity consumers. 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. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. a similar number of representatives report a mixed or unclear outcome.from the December Decision. 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.

most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. As Figures 5 indicates.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. 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. 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.

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

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

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

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

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

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

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

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

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

A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. and energy efficiency. less than two weeks before the Bill would be reported out of committee. “We reached a consensus on.. 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 . renewables with an incremental cost estimate from the BRPU. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced.” However. TURN was one of several public interest organizations who opposed the change. 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. Industrial Users.3% of utility revenues.1% of IOU revenues. RD&D.. reduced funding to an average of 2. agricultural consumers. EDF. and the Sierra Club. including IEP.. During the Conference Committee hearings. As a Sierra Club California legislative chair recounts on meetings between CMA.. a perusal of legislative language that was proposed during the long. funding for public purpose programs: low income.72 At this point late in the game. The 3% [it was actually a cap of 3. The August 15 language from a coalition of powerful interests. These got translated into dollars. CLECA.

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

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

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

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

500 $533.995 $596.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.370 $648 N/A $0 $208.203.000 $1.964 $0 $40.S.000 N/A $0 $18.075 $4.559 $0 $246.592 $846 $0 ERG Master's Project Mark Stout 54 .181 $0 $160.595 $0 $21.000 $0 $70.110 $34.516.608 $3.079 $950 $14.835 $1.079 $13.675 $736.096 $971.157 $0 $188.470 $10.000 $562.031.416 $5.000 $62.166 $5.419 $13.092 $3. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.112 $3.741 $21.125 $0 $4.752 $0 $51.180 $0 $209. (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 $59.500 $78.000 $480. 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.308 $516.101 $495 $10.500 $263.588 $500 $32.405 $0 $722.630 $300 N/A $0 $5.000 $634.500 $190.496 $8.758 $2.000 $681.102 $0 $73.745 $68.272 $0 $64.153 $750 N/A $8.952 $1.149 $3.675 $384.500 $1.818 $0 $65.819 $0 $323.163 $0 $25.239 $0 N/A $0 $89.000 $225.374 $1.981 $1.479 $2.

081 $1.716 $39.000 $526.055 $0 $151.551 $12.362.197 $500 N/A $2.701 $0 $5. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.519 $11.230.203 $0 $30.495 $1.145 $5.938 $0 $118.083 $0 $20.326 $0 $100.000 $383. (gasoline refining and marketing) Tower Energy Group (oil.400 $100 $79.850 $1.003.203 $5. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $0 $171.596.665 $0 $262.000 $0 $6.319 $0 $10.167 $500 $25. natural gas.271 $0 $12.600 N/A $5.600 $32.000 $524.291 $3.723 $0 $38.495 $27.675 $0 $1.000 $20.492 $0 $66. 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 $4.099 $12.401 $1.250 $0 $30.000 $37.000 $0 $15.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.500 $0 $0 ERG Master's Project Mark Stout 55 .207 $5.947 $500 $281.

(member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.060 $6.750 $1.017 $1.782 $981. 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.000 N/A $100 N/A $7.862 $21.200 $837.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.454 $3.845 $452. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.543 $29.000 $209.) 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.000 $85. producers.450 $566.748 $32.S. Dist.750 $418.250 N/A $100 N/A $2.400 $1. McQuat.032 $0 $172.000 NA $500 $0 $2.611 $1.500 $29. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.195 $401. and Hamrin.750 $267.590 $5.025.819 $921.717 $500 not applicable $0 $138.281 $1.917 $300 $5.605 $250 N/A $1.460 $50. 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.250 $148.724 $500 not applicable $500 $57.229 $100 N/A $1.500 N/A $0 $211.000 $33.905 $30.000 $50.882 $15.600 $276.626 $0 $8. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.100 $0 $500 N/A $100 $0 $500 N/A $2.147 $500 $739.100 $144.571 $500 N/A $200 N/A $1.118 $0 $144.159 $3.179 $0 $3.500 N/A ERG Master's Project Mark Stout 56 .331 $0 $97. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.589 $26.286 $3. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $35.240 $0 $178.

diesel) Unocal (CMA member) Victory Oil Co.705 $19.000 $22.780 ERG Master's Project Mark Stout 57 .689 $2.636 $0 $103.761 $0 $73.347 $9.650 $3.138 $1.000 $500 $456.521 $0 N/A $50 $87. 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) $41.245 $335.500 $277.622 $67.878 $12.495 $22.209.521 $1.478.712 $100 N/A $200 $16.177 $300 N/A $0 $29.1996 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.521 $14.958 $2. (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.573 $2.885 $300 $207.950 $3. (gasoline refining and marketing) Tower Energy Group (oil.643 $1.417 $9.016 $1.050 N/A $0 $214.861 $1.661.500 $251.000 $76.989 N/A $9.800 not tracked $3.754 $4.925 $0 $44.500 $47. Texaco Tidelands Oil Tosco Corp.000 $65.000 $233.511 $1.721 $748.407 $200 $61.384 $2.900 $1.137 $550 N/A $5. natural gas. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.250 $34.072 $918.090 $749 $38.296 $800 $25.334 $498 $1.438 $500 N/A $0 $1.181 $1.750 $23.960 $2.532 $4.900 $0 $21.050 $949.995 N/A $100 N/A $0 $3.750 $37.

585 $33.000 $700 $117.448 $424.438 $4.462 $500 $14.068 $14.066 $500 N/A $250 N/A $22.378 $100 $21.000 $15. of California.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 . 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) $1.066 $500 $21.250 $21.462 $208.000 $2.790 $100 $14.

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

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

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

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

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

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

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

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

and got it struck down. When Tom Page came in as CEO in 1981. so we would have to buy energy or credits. We went to FERC. [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. We were strongly opposed to the RPS. we had the highest rates in the nation. 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. but are not viable with competition. AB 1890 mirrors the Decision in many ways. ERG Master’s Project Mark Stout 71 . with the exception of the legislation’s mechanism for a rate reduction. SDG&E wanted to become the lowest priced California IOU. Throughout the ‘70s.84] SDG&E does not have any renewables. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. they did not get there by investing in high cost renewables. SDG&E was a supporter of the PoolCo market structure along with Edison.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 you are a broker. it would be difficult to get 5% renewables. High priced renewables are OK if you are not moving to a competitive future. 1996. The lucky Arizona utilities went with coal. everyone should pay. Also. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. 1995 Decision? The PUC was on the right track. except for electricity purchases from Mexican geothermal generators.

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

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

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

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

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

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

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

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

see interviews]. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. We were prepared to oppose the bill if it did not include local control for municipal utilities. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. in other words we wanted to be able to recover our stranded costs. We maintained flexibility. but were concerned that legislation would handicap our ability to recover them. 1993. volunteering to do public purpose programs in exchange for other concessions. and sent out to negotiate. We never questioned that there would be stranded assets. and regulated by an elected district board which sets policy and rates for this electric utility. created in 1946.88 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. Stuart Wilson and me. SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies. SMUD is a Publicly Owned Utility for the Sacramento region. beat up. Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. We were called in by the Committee. 1997. ERG Master’s Project Mark Stout 80 . 88 Asmus & Smeloff.legislation passed. CMUA did not have the army of people Edison did. CMUA had two lobbyists. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. It was difficult to imagine how the Legislature would perceive a muni’s need. Reinventing Electric Utilities.

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

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

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

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

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

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

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

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

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

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

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

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

] 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. Over time.and represents a diverse group of gas and coal-fired cogeneration and renewable energy plants. we influenced the Memorandum of Understanding that was released in August of 1995. the CPUC Biennial Resource Plan Update. Over time. Ensuring the sanctity of existing contracts is our highest priority. For IEP. the Decision allowed for a direct access market developing. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. ERG Master’s Project Mark Stout 93 . Direct access is a tool for future development. The BRPU had resulted in 1300 MW of contracts before being struck down. IEP did well from restructuring. the MOU allowed the restructuring process to move forward. IEP was invited to the meetings. By allowing utilities an opportunity to recover 100% of their stranded costs. A large portion of the MOU is reflected in the December Decision. and included a policy for maintaining resource diversity. 300 MW set aside for renewable generation. 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. Initially. but not allowed to talk. IEP also sought to maintain a policy for resource diversity in the mix of generation. [SCE succeeded in killing the BRPU at the Federal level in 1995. In May. 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. 1995 Decision? Overall. independent producers were better off working with 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.. Is your organization more comfortable with one policy decision over the other (i. It was necessary to provide an underpinning. Overall we did well in terms of direct access to customers. AB 1890)? Why? IEP prefers AB 1890. the amount paid to QFs such as many IEP members under PURPA law]. leading to an almost unanimous understanding of the need for legislation. We also made a myriad of filings. The municipal utility issue also needed to be dealt with. we had historically tried to take the high road on public policy issues. There continues to be opportunities to take potshots over a lack of consistency. For example. a “settlement negotiation with a critical mass of interest groups”. Dan Fessler was a proponent of the PoolCo. as well as support for resource diversity. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. CPUC vs. or over time? Yes. but do not want their contracts challenged by the IOUs or have the IOUs driven into bankruptcy.e. ERG Master’s Project Mark Stout 94 . 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. some members do not agree with this. on the issue of full stranded cost recovery.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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ralph Cavanagh. but instead ensure that the rules were set up to achieve a good outcome. They also wanted to make sure the different proposed renewables policies not set up to be exclusive. ERG Master’s Project Mark Stout 124 . 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. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. NRDC entered into a public-interest coalition known as the Framework Parties to draft the “Joint Motion for Consideration of Framework for Restructuring in the Public Interest and for Further Public Process.Is your organization more comfortable with one policy decision over the other (i. low income. In a perfect world.e. It is not looking at what is best for the future of sustainability. 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.. and talking with staff. They tried to get a mixture of environmental. may have been better to specify goals for a renewables policy. with coalitions of varying members depending on the issue. and herself have similar ideologies. CPUC vs. The detailed language on renewables left much to be desired. and consumer advocates in these coalition visits. participation in full panel hearings. NRDC also relied on formal comments. They decided to not oppose restructuring. 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. or over time? Yes. Sheryl noted that Peter Miller.

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

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

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

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

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

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

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

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

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

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

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

which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS. as well as staff people for Commissioners Knight and Conlon. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. resulting in over 2. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 .000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process.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. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. UCS took part in a mailing to 60. To compliment this public participation strategy. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome.000 environmentalists in California. 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. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners. 143 adopted. as well as generating a large number of letters to the CPUC. asking them to respond to the CPUC through a Western Union automated fax number. 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.

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

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

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

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

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

Steve Peace and Byron Sher recently sent a letter to the PUC. We have good people involved in research. In the February 14. ‘97 Decision on public purpose programs. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. working well together. briefings to the IOUs were a standard part of the communication. not end this authority after four years. Duque was very ERG Master’s Project Mark Stout 142 . 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.7 per year to the utilities. There is an agreement that the PUC could continue funding after 4 years.. and this comes through in our briefings. but it was a reasonable outcome. Neeper did after the December.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. we did not change our stance. Also.e. CPUC vs. Fessler attended one earlier. AB 1890)? Why? I would see them as an appropriate sequence of decisions. More money could have been spent on public interest RD&D. The funding for public interest RD&D will be reviewed after three years. very committed. Conlon attended a briefing a few years back. ‘95 decision. the Legislature or PUC could modify. realizing the dollars available for public purpose programs were limited. Is your organization more comfortable with one policy decision over the other (i. most public interest RD&D money was allocated to the CEC: $61. stating that their intent was that the PUC retain authority for energy efficiency funding. compared to just 0.8 million per year. or over time? I think so. Whether or not the Legislature intended this was a point of contention.

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

at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. For example. pre-Blue Book. They probably thought that this funding level included regulated transmission and distribution RD&D. 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. The renewables could have fared much better if they stuck together as a coalition. the renewables community cam back in. They proposed to me funding at current RD&D budget levels. University of California representatives and I advocated for higher. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. historic levels [combined SCE. 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. The municipal utilities angered Peace so much that he asked. current levels for moving to a future restructured market. The IOUs wanted to use post-Blue Book. After seven hours of negotiation. After they finally recognized the problem ERG Master’s Project Mark Stout 144 .Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102].

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS 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 #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .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 #1 California Municipal Utilities Association .

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

995 $300 $12.000 $4.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.495 $7.896 $3.191 $2.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $3.429 $498 $1.000 $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.000 $1.500 $22.800 $1.000 $2.495 $1.000 $495 $950 $696 $2.995 $21.000 $500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.495 $10.000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $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 $7.500 $1.

) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.460 $200 $500 $750 $2.495 $4.750 $4.500 $800 $498 $200 $9.000 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.995 $1.500 $1.500 $1.250 $2.995 $14.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.017 $749 $750 $3.000 $1.000 $3.000 $2.000 $10.000 $8.500 $6.995 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.511 $3.500 $47.990 $1.000 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .Table 2: Assemblymember Jim Brulte.

charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Table 3: Senator Steve Peace.000 $2.250 $500 $1.490 “Travel project to Europe on Electric Restructuring. and Budapest. Paling in comparison.000 $2. 1996. From 3/28/96 to 4/8/96.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Chevron treated Brulte to two meals. Sweden. Conservation. CFEE is a “non-profit. and Privatization” visiting London.000 $1. (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. Brulte was taken on a $7.500 $1. Mobil treated Brulte to a $60 event in 1996.750 $3. totaling $101.000 $750 $0 $0 103 Asmus. Not to be outdone. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $750 $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 Int. as well as an event.750 $2. 4 ERG Master’s Project Mark Stout 164 . by the California Foundation on the Environment and the Economy.000 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.

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.050 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $8.250 $1.500 $3. (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.500 $16.000 $750 $750 $750 $1.000 $1.000 $500 $2.250 $750 $500 $1.000 $6.100 $2.000 $4.600 $2.072 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $2.115 $18.250 $7.Table 4: Senator Steve Peace.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.450 $7.815 $750 $6.000 $300 $1.572 $1.

000 $5. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. SDG&E had Peace out to six meals. as well as chair of the Senate Energy and Utilities Committee. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.000 Table 6: 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. 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 $5.450 166 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. Peace was treated to a $52 sports event by Mobil Oil. In 1996. Table 5: Senator Byron Sher. taking Steve to 11 meals.100 $2. In 1995. while Edison treated him to five meals and a sports event. IEP made a gift of $241 for his speech at a conference.900 .

(gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Brotherhood of Electrical Workers (various $9. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin.000 $500 $500 $9.482 $100 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .000 $500 $1. $2.882 $100 $1.500 Int.000 locals) Southern California Pipe Trades United Assoc.600 $13. EVs) Hansen. (biomass) Edson + Modisette (lobbyist for indep.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 $1.000 $100 producers. McQuat.100 $500 $2. (geothermal) Colmac Energy Inc.

000 $100 $100 $500 $1.000 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 Large Energy Consumers $3.500 COMPANIES $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $1.000 (tire $1.000 $100 $1.

(gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. of California.Tosco Corp.585 $100 $500 $2.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $300 $300 $22. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $700 $4.448 $14.

000 in each of Amoco. Exxon. totaling $758. Sher received no other gifts that year from energy utility stakeholders.400 $750 $150 $1. and GE.000 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 . NARUC treated Sher to a two day trip to DC for another meeting. Mobil. Table 7: Senator Bill Leonard.300 $500 $1. 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.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. 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. totaling $2608. Sher holds over $100.500 $300 $0 $0 $2. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996.

000 $1.500 $150 $500 $3. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2.000 $500 $500 $4.080 $10. for a paltry $20.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. Edison again ERG Master’s Project Mark Stout 171 .000 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. saving up for a $77 dinner with head lobbyist Bob Foster. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. extending his stay from 12/8/96 to 12/13/96.650 $500 $1. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day.500 $500 $1.000 $5. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. 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.000 $1.730 $2.Table 8: Senator Bill Leonard.650 $2. The Pacific Rim Conference of Seattle. WA paid $734 for Leonard to moderate a conference session on utility deregulation. While the Senator was there. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.

750 $1.had Senator Leonard out for Legislative Ski Day. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $750 $750 $650 $150 $500 $3.000 $1.250 $1. Table 9: Assemblymember Mickey Conroy.600 $750 $750 $500 $1. They also had Leonard out for two meals in Sacramento. including lunch with Bob Foster. ARCO treated Leonard to a $19 meal at a reception.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .600 $1. PG&E took Leonard out to a Kings game.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. for the modest tab of $56.000 $1. paying $44 for two meals and lodging.

CFEE is a “non-profit.000 $500 $750 $250 $500 $2. two meals for $44. and to 104 Asmus.700 $750 $450 $250 $250 $1. 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.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.600 $3. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.500 $2.000 $3.000 $500 $2.050 $1.000 $5. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 4 ERG Master’s Project Mark Stout 173 . 1996. Shanghai. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. PG&E treated him to a basketball game with $51 tickets. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.Table 10: Assemblymember Mickey Conroy.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. $7.000 $2.600 $500 $1.700 $500 $300 $550 $2. and Inner Mongolia.

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

675 $2.Table 11: Assemblymember Diane Martinez. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.000 $1.750 $1.750 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.750 $1.250 $1.750 $2.750 $4.175 $500 $1.250 $1.

500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.750 $1.000 $500 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $6.000 $500 $3.000 $5. Dist. (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.250 $1.500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $4.000 $500 $500 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 .) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $4.500 $1.500 $1.000 $1.500 $500 $500 $1.000 $7.000 $500 $500 $500 $500 $500 $3.000 $1.Table 12: Assemblymember Diane Martinez.

The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. natural gas.058 $500 $500 $1.850 $1.000 $500 $500 $1.900 $3.600 $1.500 $1. ERG Master’s Project Mark Stout 177 .500 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.Table 13: Assemblymember Steve Kuykendall.100 $100 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $8. the Illinois Energy Association flew Martinez out for a $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.208 $0 $0 $1.000 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.

989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.500 $1.500 $1.254 $200 $500 $4.000 $500 $2. Conservation. However. Kuykendall was taken on a $7. Sweden. ERG Master’s Project Mark Stout 178 . SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Kuykendall’s social calendar was destined to pick up in 1996. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. and Budapest.000 $1.490 “Travel project to Europe on Electric Restructuring. 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.350 $500 $1.000 $19.000 $2. natural gas.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.443 $6.500 $0 $1. and Privatization” visiting London.Table 14: Assemblymember Steve Kuykendall.374 $500 $2.000 $1.250 $100 $500 $35.374 $4. From 3/28/96 to 4/8/96.000 $1. diesel) Unocal (CMA member) Victory Oil Co.

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

Utah to speak at the “Utility Restructuring. the California Foundation on the Environment and the Economy took Fessler on an 11 day.802 junket to talk with Chinese central government and provincial leaders in Beijing. On the investment side. Synergics Resources Corporation had Fessler out to Princeton. ERG Master’s Project Mark Stout 180 . a utility planning association. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. ZEV’s and Rethinking the Environment Conference. The Western States Coordinating Council. and Inner Mongolia. a libertarian think-tank. spending $1006. The Rocky Mountain Electrical League. in Fort Collins. NJ to speak at the 1994 DSM Implementation Conference. for $61. $7. for $467 airfare. for $323. spending $291. Finally.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. spent $249 to fly him to their annual meeting in Las Vegas. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. DC. CO. Fessler holds over $10. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. PG&E had him out for two lunches. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. Finally. the Center for Resource Management flew him to Midway. EEI is a trade association representing investor owned utilities. spent $314 to bring him to speak at their Spring Conference. a utility association. had Fessler speak at their conference in Washington. In April of 1995.000 in Ohio Edison stock. Shanghai. DC. The Cato Institute.

1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. He does own more than $10. to meet with CEOs of the electricity industry. and Schlumberger oilfield services stock. spending $258.167 junket visiting London. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. one of CFEE’s funders.000 in each of Central & Southwest Corp. Unocal. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and less than $10. He does own less than $10. Edison. In 1995. regulators.000 in each of Chevron. Conlon was taken on a $7. Brussels. was very interested in California moving to the UK-style. 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. by the California Foundation on the Environment and the Economy. government ministers. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Montana Power Company and Exxon stock. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. PG&E had him out to three meals for $71. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. wholesale PoolCo model. utility and General Electric stock. ERG Master’s Project Mark Stout 181 . Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1995. He left office on February 23. and Paris.

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