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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

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. Hoffman. all commercial customers eligible January 1.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. 6. ERG Master’s Project Mark Stout 12 . 18 Mydans. The Blue Book laid out an aggressive. A more definitive policy statement was 16 17 Haddad. 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. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. sending “a shockwave through the electric industry”.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. customer class-staged schedule for direct access implementation. industrial customers taking power at the transmission level eligible on January 1. all residential consumers eligible on January 1. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 1999. 55. 1996. and 3) rate changes to encourage efficiency and distribution of power. 2002. and if successful. with large. In April of 1994. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures.supplies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. As excerpted from the PG&E stakeholder interview. as well as three subjects ERG Master’s Project Mark Stout 40 . forward Decision.[see American Wind Energy Association. and Union of Concerned Scientists interviews]. 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. and to begin to build theories for why. 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. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. Natural Resources Defense Council #1.

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

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

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

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

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

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

didn’t want to ruffle any strategies. largely because no public interest group was willing to oppose the bill.70 [also see numerous comments in interview transcripts] An American Wind Energy Association representative was disheartened that Cavanagh would not pull NRDC’s endorsement for AB 1890. “NRDC did press work through editorial boards including the San Jose Mercury News. If environmental groups collectively walked. the San Francisco Chronicle. there was not enough activity.” Later in my interview with Ralph. “wanted a win. because he. In the end. made no attempt to build clout.” • Cavanagh offers a different perspective on NRDC’s substantial media work. we could have killed it. It was strong going in and going out of the process. “Environmentalist Defends His Stance” ERG Master’s Project Mark Stout 47 .” • Ralph Cavanagh has served as a lightning rod for praise and criticism of the environmental community’s focus on an insider strategy. NRDC had no media strategy. “Past EDF’s filing comments.” 70 Weisman. NRDC’s relationship with the IOUs was important. it did become clear that NRDC’s strategy was based on coalitions of insiders. not turning it into a media tank battle. We were in constant contact. San Francisco Examiner. one on one. but relied on their name instead. 1997. The environmental groups and consumer groups such as TURN worked well together. We were on separate tracks with industrial customers to ensure no cost shifting occurred. not grassroots activists: “It was a consensus-based process. and the Sacramento Bee focusing on public purpose programs.• A senior analyst for the Environmental Defense Fund comments on their participation in the CPUC process. AWEA endorsed the bill reported out of the conference committee. Critical stakeholders who could have derailed did not.

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

3% of utility revenues. and the Sierra Club. a perusal of legislative language that was proposed during the long. funding for public purpose programs: low income. renewables with an incremental cost estimate from the BRPU. Industrial Users. During the Conference Committee hearings. RD&D.. CLECA. less than two weeks before the Bill would be reported out of committee. reduced funding to an average of 2.. These got translated into dollars.. The 3% [it was actually a cap of 3. 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. TURN was one of several public interest organizations who opposed the change. 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.” However. “We reached a consensus on. The August 15 language from a coalition of powerful interests. As a Sierra Club California legislative chair recounts on meetings between CMA.. EDF. agricultural consumers.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. 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 . and energy efficiency. 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.1% of IOU revenues. including IEP.72 At this point late in the game.

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

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

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

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

110 $34.500 $533.675 $736.516.163 $0 $25.166 $5.000 N/A $0 $18.308 $516.092 $3.479 $2. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.741 $21.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.818 $0 $65.000 $62.608 $3.000 $480.157 $0 $188.079 $950 $14.588 $500 $32.500 $78.595 $0 $21.995 $596.180 $0 $209.000 $1.153 $750 N/A $8.239 $0 N/A $0 $89.416 $5.079 $13.500 $190.272 $0 $64.000 $681.102 $0 $73.000 $225. 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.000 $0 $70.819 $0 $323.405 $0 $722.000 $634.758 $2.181 $0 $160.496 $8.470 $10.031.374 $1.101 $495 $10. (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 $59.419 $13.112 $3.752 $0 $51.559 $0 $246.592 $846 $0 ERG Master's Project Mark Stout 54 .500 $1.000 $562.370 $648 N/A $0 $208.675 $384.964 $0 $40.203.952 $1.096 $971.149 $3.835 $1.630 $300 N/A $0 $5.745 $68.500 $263.S.981 $1.125 $0 $4.075 $4.

(bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp. (gasoline refining and marketing) Tower Energy Group (oil.207 $5.203 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.083 $0 $20. natural gas.003.495 $27.850 $1.947 $500 $281.081 $1.203 $0 $30.000 $0 $171.197 $500 N/A $2.492 $0 $66.000 $0 $15. 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 $4.055 $0 $151.291 $3.167 $500 $25.000 $20.362.271 $0 $12.596.701 $0 $5.519 $11.400 $100 $79.099 $12.000 $526.250 $0 $30.000 $383.716 $39.938 $0 $118.665 $0 $262.600 $32.500 $0 $0 ERG Master's Project Mark Stout 55 .000 $37.326 $0 $100.723 $0 $38.230.145 $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.495 $1.000 $0 $6.600 N/A $5.401 $1.000 $524.551 $12.319 $0 $10.675 $0 $1.

717 $500 not applicable $0 $138.589 $26.819 $921.450 $566.905 $30. 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.281 $1.460 $50.882 $15. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.500 $29.147 $500 $739.240 $0 $178.229 $100 N/A $1.750 $267.200 $837.626 $0 $8.454 $3. (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) $145.331 $0 $97.025.400 $1. 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. and Hamrin.782 $981.724 $500 not applicable $500 $57.017 $1.917 $300 $5. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. McQuat.600 $276.250 N/A $100 N/A $2. producers.611 $1. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.845 $452.605 $250 N/A $1.000 $85.100 $0 $500 N/A $100 $0 $500 N/A $2. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.250 $148.118 $0 $144. Dist.286 $3.) 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 NA $500 $0 $2.000 $33.060 $6.032 $0 $172.500 N/A ERG Master's Project Mark Stout 56 .195 $401.000 $209.543 $29.500 N/A $0 $211.179 $0 $3.750 $418.100 $144.750 $1.000 N/A $100 N/A $7.862 $21.159 $3.748 $32.590 $5.000 $35.S. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $50.571 $500 N/A $200 N/A $1.

(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.384 $2.138 $1.925 $0 $44.780 ERG Master's Project Mark Stout 57 .137 $550 N/A $5.500 $277.438 $500 N/A $0 $1.900 $1.800 not tracked $3.000 $22.750 $37.209.511 $1.245 $335.958 $2.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co. diesel) Unocal (CMA member) Victory Oil Co.000 $500 $456.750 $23.177 $300 N/A $0 $29.347 $9. (gasoline refining and marketing) Tower Energy Group (oil.721 $748. (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.689 $2.500 $47.622 $67.417 $9.296 $800 $25. 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) $41.532 $4.478.407 $200 $61.950 $3.650 $3.000 $65.495 $22.090 $749 $38.250 $34.000 $233.072 $918.573 $2.181 $1.016 $1.050 $949.000 $76. Texaco Tidelands Oil Tosco Corp. natural gas.500 $251.521 $1.878 $12.989 N/A $9.995 N/A $100 N/A $0 $3.712 $100 N/A $200 $16.885 $300 $207.900 $0 $21.754 $4.334 $498 $1.761 $0 $73.521 $0 N/A $50 $87.661.705 $19.050 N/A $0 $214.861 $1.643 $1.521 $14.636 $0 $103.960 $2.

068 $14.462 $500 $14.585 $33.462 $208.000 $2.790 $100 $14.066 $500 N/A $250 N/A $22.000 $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) $1.448 $424.000 $700 $117.1996 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.066 $500 $21.250 $21. of California.000 $15.378 $100 $21.438 $4.

167 per guest. regulators. alternative energy producers. the lobbying summary tables above. One example of the type of access to officeholders that money can buy is the junkets run by the California Foundation on the Environment and the Economy. including oil and natural gas companies. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. for $7. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. 4 ERG Master’s Project Mark Stout 59 . paying up to $7. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and environmental groups to discuss the British experience with deregulation of electricity. were able to far outspend environmental organizations (who were usually spread thin over many issues). 4 Asmus. and small consumer groups. 1996. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. Shanghai. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. According to investigative writer Peter Asmus. their “Travel project to Europe on Electric Restructuring.”80 In April of 1995. Brussels. government ministers. From 3/28/96 to 4/8/96. to meet with CEOs of the electricity industry.As one would imagine. and Paris. Conservation. 1996.79 From 3/16/94 to 3/27/94. CFEE is a “non-profit. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. an Edison lobbyist was added to the international travel party at the last minute.800 each. and Inner Mongolia. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SMUD is very committed to renewables. It is difficult to maintain public purpose programs if everyone else abandons them. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained. this impacts munis. we have to resolve this by 2002. there was a questioning of what role. that some other source should pay. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. It created an environment of uncertainty.clean energy. The Legislature did not elevate this to a well-reasoned. By constructing a brave new world for IOUs. We are a consumer elected entity. In the June. 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. SMUD’s territory is a small island surrounded by PG&E. The munis are in a foreign land with the PUC. ‘96 Rate Restructuring Settlement. there was a question of whether we would get 100% stranded cost recovery. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . Even though municipal utilities have the authority to recover costs. energy efficiency -. what equity or fairness issues were raised by them being in the marketplace. if any. This is a classic question of public versus private decision making. But in reality. This was the bottom line.Going into the process. Some would argue that the SMUD customer did not decide to open Rancho Seco. philosophical debate. Assemblyman Steve Kuykendall was direct in his comments. SMUD responded. he does not see a role for munis in a deregulated world. it is planned that PG&E will drop their rates below SMUDs by 2002. Since our rates were 25% below PG&E’s. this made the question go away. SMUD will finish recovering our CTC by 2002. should a public agency have in a restructured environment. it seemed obvious that these principles were a gimme. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. but we came closer. but wanted multiple ways to purchase electricity. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? In addition to filing formal comments. The defining of industry structure for competition to drive prices down was important. given the PoolCo structure in the May. 1995 CPUC majority proposal. or over time? CLECA’s positions were consistent. Prior to this proceeding. I am unsure of whether it will happen. even over time. we met directly with Commissioners. It used to be that the IOUs were driving everything. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. The MOU set the tone for that. there was not as much coordination or compromise amongst stakeholders. We did not have the expectation that it would happen tomorrow. We also wanted the separation of the ISO and PX. but would trade off short term for long term gains. There was a lot of compromise. ERG Master’s Project Mark Stout 103 . On this question. 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. CLECA did not want a single market. They were based on a consistent thread of how to organize a market.

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

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

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

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

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

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

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

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

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

93

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

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

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

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

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

The utilities were hoping that they could administer CARE and low income weatherization. a possible profit source for them. we found out that the staffing for PUC complaints was utterly inadequate. only part time. They were understaffed. After a meeting with the Consumer Services Division of the PUC. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Latino Issues Forum depended on Ralph Cavanagh to articulate positions there. and testified whenever we had the opportunity. have historically focused on the PUC. At times. which has partnership agreements with PG&E and Edison that they will represent some of Greenlining’s issues. We also participated with the Commissioners in community briefings to inform the public of upcoming changes. We also had small consumers mail in postcards to the Commissioners on rate issues. and spoke to the press on critical issues.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We filed dozens of briefs in the last few years. but because of a lack of resources. Our letter to the Commissioners sparked modification and an investment of resources as part of the PUC’s internal restructuring plan. and had no 800 numbers. we interacted with the Legislature. had short hours. a very expensive service. Some of this year’s cleanup legislation will exclude municipalities from the anti-slamming ERG Master’s Project Mark Stout 113 . mono-lingual english only. This may come under attack in the future. This Division was actually using AT&T language translation. It caused some embarrassment because of the total inadequacy. We also wrote letter to Commissioners that have been influential. We are also a member of the Greenlining Institute [a non-profit organization representing low-income communities of color].

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

based on geographical region. We had advocated a community access model. for aggregation of small customers to take advantage of direct access. ERG Master’s Project Mark Stout 115 . and its inclusion of giveaways to large customer groups. with incentives for divestiture of utility generation. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? We fought AB 1890 because of its putting in place items from the PUC’s December Decision that we hated. Regulated entities can achieve their own version of the truth by repetition. TURN applauded the focus. but did include language describing it. but TURN did not like the allocation of CTC costs to different classes. We thought there would not be comprehensive legislation that year. including low income. it was OK for regulators to deny full recovery. 1995 Decision? There was good language on the non-bypassability of the CTC. in concert with oil companies. as opposed to the rate cap in the PUC December Decision. The PUC was vague on aggregation. Some commercial customers had wanted aggregation for different locations. although by July. but the incentives were weak. It also included a recognition of the importance of market power. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. TURN also did not like it because we got a rate freeze. TURN was able to knock out an earlier Brulte bill.to Supreme Court decisions allowing a “reasonable chance of recovery”. The Decision made a good commitment to maintaining public purpose programs. Under these decisions they cite. everyone except for small consumers. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. it was clear that the Legislature would be moving forward.

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

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

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

Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. EDF supports the earliest possible implementation of direct access for all classes of customers. if restructuring is implemented properly: 1) energy efficiency investments should continue.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and law to create innovative. and 4) incentives for uneconomic sales promotion minimized. ERG Master’s Project Mark Stout 119 . we are in favor of competition. EDF has participated in California energy policy issues since 1975. The Decision was vague. Assuming these problems are resolved. EDF links science. As stated in EDF’s first round comments on the Blue Book. economics. 2) an Integrated Resource Planning process should exist for energy efficiency. more than 55. economically viable solutions to today’s environmental problems. “a leading non-profit organization.000 of whom live in California. depending on interpretation.”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. yes. and punted on the details to the Legislature. 1995 Decision? Almost nothing. If focusing 94 CPUC Renewables Working Group. [which] represents 300. It gave us nothing until the Legislature tells us otherwise. E-1.000 members nationwide. “There is no reason to proffer the benefits of competition first to only selected classes of customers.

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

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

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

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

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

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

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

we could have killed it. ERG Master’s Project Mark Stout 127 . these positions are substantially similar to those of CEERT.became more supportive. stating that although there were some divergences between the Sierra Club and CEERT positions. and UCS. Campaign contributions were meaningless. Sierra Club/Center for Energy Efficiency and Renewable Technologies Rich Ferguson is the Energy Chair of the Sierra Club California Legislative Committee and the Research Director of CEERT. not turning it into a media tank battle. We were in constant contact. If environmental groups collectively walked. During our interview. May/June 1997. 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. as well as members of the energy efficiency and renewable energy industries. “a non- profit public education organization dedicated to the sustained. Rich spoke as a representative of Sierra Clubs positions. 97 Sierra Magazine. orderly development of energy conservation and clean power resources. the Sierra Club. to educate and enlist humanity to protect and restore the quality of the natural and human environments. NRDC’s relationship with the IOUs was important. page 4. Critical stakeholders who could have derailed did not. non-profit organization chartered. one on one. and protect the wild places of the earth. enjoy. “To explore. NRDC.”97 CEERT is.” CEERT’s members include EDF. It was a consensus-based process. The Sierra Club is a national. The environmental groups and consumer groups such as TURN worked well together. It was strong going in and going out of the process.

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

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

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

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

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

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

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

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

143 adopted. 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. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. as well as generating a large number of letters to the CPUC. 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. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners. To compliment this public participation strategy. UCS took part in a mailing to 60.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? UCS used a dual approach outsider/insider strategy to influence policy formulation at the CPUC. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 . which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS. as well as staff people for Commissioners Knight and Conlon. asking them to respond to the CPUC through a Western Union automated fax number. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. 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. By helping to get Assembly Concurrent Resolution No.000 environmentalists in California.

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

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

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

were called up to testify on specific issues as an information source only. some of which would be “interested”. outside of a disinterested role in hearings and filings. They weighed in against the minimum renewables purchase requirement. and I. These board members will not certainly be disinterested. A few people. There was no advocacy at all. however. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were technically relevant in the process. or distribution companies.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? The Energy Commission was a party in every comments filing. some members perceived it as a tack-on. Edison and PG&E made arguments on takings [with regards to less than 100% stranded cost recovery] and coerced divestiture. our Public Affairs Director. We also made testimony and participated in CPUC hearings as an examiner. The legislative language has multiple categories that should be included on the power exchange and ISO boards. They also killed the state agency renewable purchase requirement. There was little. including Assistant Chief Counsel John Chandley. a simple majority is to be unaffiliated with generation. The legislators were in a vacuum trying to figure out how the allocation of public program funding got made. our Executive Director. For the ISO. transmission. 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. put in by the renewables community. The Governor’s office’s participation was punctuated. This would have required state agencies to ERG Master’s Project Mark Stout 140 . if any other forum we took part in.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

However. The IOUs were clear that they wanted full recovery. and look for ways to get around paying the CTC. such as irrigation districts and economic development rates. Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. it was all over. Labor wanted to protect their employees. causing chaos. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. There was a lot of play between SMUD and the large customers. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. Bill Leonard said that if you want to charge an exit fee. Political clout can be bought with lobbying and campaign contributions. The IOUs got complete stranded cost recovery. Once the Governor’s office was behind the MOU. Bill Leonard did not historically support ratepayer funding for renewables. ERG Master’s Project Mark Stout 155 . SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. He walked out at one point to force the munis to make up their mind. It looks most likely that it will be adopted. The ability to fund politicians helped. 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.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. while the large customers got the ability to go first on direct access. you must play.

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

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

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

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

California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #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 #1 Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

500 $1.191 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.995 $21.495 $10.000 $2.429 $498 $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.500 $22.000 $495 $950 $696 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.800 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $0 $0 ERG Master’s Project Mark Stout 162 .995 $300 $12.000 $1.896 $3.000 $2.495 $7.000 $500 $1.000 $1.000 $7.000 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $1.495 $1.000 $4.000 $3.000 $3.

000 $2.Table 2: Assemblymember Jim Brulte.511 $3.000 $2.500 $1.750 $4.460 $200 $500 $750 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $10.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $6.000 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.990 $1.500 $800 $498 $200 $9.500 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $8.995 $14.000 $1.995 $2.995 $1.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.250 $2.017 $749 $750 $3.495 $4. (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.500 $47.

totaling $101. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.000 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. Conservation. Chevron treated Brulte to two meals. Sweden. Paling in comparison. 1996.000 $750 $0 $0 103 Asmus.250 $500 $1.750 $2. Not to be outdone.000 $1. by the California Foundation on the Environment and the Economy. Brulte was taken on a $7. Mobil treated Brulte to a $60 event in 1996. CFEE is a “non-profit.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Table 3: Senator Steve Peace. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $1.750 $3. From 3/28/96 to 4/8/96.750 $750 $1.000 $3.500 $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. as well as an event.490 “Travel project to Europe on Electric Restructuring. and Budapest. and Privatization” visiting London. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2. 4 ERG Master’s Project Mark Stout 164 .

(geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $300 $1.250 $750 $500 $1.000 $6.250 $7. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $1.050 $3.000 $4.572 $1.000 $750 $750 $750 $1.450 $7.815 $750 $6.100 $2.600 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .Table 4: Senator Steve Peace.500 $3.250 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.115 $18.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.072 $2.000 $500 $2.500 $8.500 $16.000 $1.

Table 5: Senator Byron Sher. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. while Edison treated him to five meals and a sports event. Southern California Edison was granted a high level of access. IEP made a gift of $241 for his speech at a conference. as well as chair of the Senate Energy and Utilities Committee.000 Table 6: Senator Byron Sher. 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. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. SDG&E had Peace out to six meals.900 .1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. Peace was treated to a $52 sports event by Mobil Oil. In 1996.450 166 ELECTRIC/GAS $6. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.000 $5. taking Steve to 11 meals. In 1995.100 $2.

000 $500 $500 $9. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .600 $13.000 $100 producers.882 $100 $1.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. (biomass) Edson + Modisette (lobbyist for indep.482 $100 $1. (geothermal) Colmac Energy Inc.100 $500 $2. McQuat.500 Int. EVs) Hansen. and Hamrin.000 $500 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. $2.000 locals) Southern California Pipe Trades United Assoc. Brotherhood of Electrical Workers (various $9. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.

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 $100 $1.000 $100 $100 $500 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.000 $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.500 COMPANIES $1.000 Large Energy Consumers $3.

000 $300 $300 $22. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $700 $4.585 $100 $500 $2.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .Tosco Corp.448 $14. of California. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.

000 in each of Amoco.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.300 $500 $1.400 $750 $150 $1. Sher received no other gifts that year from energy utility stakeholders. Mobil. 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. Sher holds over $100.500 $300 $0 $0 $2. totaling $2608. Table 7: Senator Bill Leonard. and GE.000 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996. Exxon.500 $0 $0 ERG Master’s Project Mark Stout 170 . totaling $758. NARUC treated Sher to a two day trip to DC for another meeting.

650 $2. extending his stay from 12/8/96 to 12/13/96.000 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $5. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.500 $150 $500 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.080 $10.000 $2.730 $2.650 $500 $1. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $500 $500 $4. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. While the Senator was there. 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. Edison again ERG Master’s Project Mark Stout 171 . saving up for a $77 dinner with head lobbyist Bob Foster.Table 8: Senator Bill Leonard.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. for a paltry $20.500 $500 $1. The Pacific Rim Conference of Seattle.

ARCO treated Leonard to a $19 meal at a reception. for the modest tab of $56.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.750 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . paying $44 for two meals and lodging.600 $1.000 $1.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.600 $750 $750 $500 $1.000 $750 $750 $650 $150 $500 $3.had Senator Leonard out for Legislative Ski Day.250 $1. They also had Leonard out for two meals in Sacramento. including lunch with Bob Foster. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game.

charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. and Inner Mongolia.Table 10: Assemblymember Mickey Conroy.600 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Shanghai. 4 ERG Master’s Project Mark Stout 173 . the California Foundation on the Environment and the Economy took Conroy on an 11 day. CFEE is a “non-profit.300 junket to talk with Chinese central government and provincial leaders in Beijing. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.050 $1.500 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. PG&E treated him to a basketball game with $51 tickets.000 $500 $750 $250 $500 $2.700 $750 $450 $250 $250 $1. and to 104 Asmus.000 $5.000 $500 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $3.700 $500 $300 $550 $2. $7. two meals for $44.600 $500 $1.000 $2. 1996.

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

Table 11: Assemblymember Diane Martinez.750 $1.750 $2.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.000 $1.250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.675 $2.175 $500 $1.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2. 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 $4.000 $1.

000 $5.Table 12: Assemblymember Diane Martinez.500 $1.250 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $500 $500 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. Dist. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield 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 MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $1.750 $1.500 $1.500 $500 $500 $1.000 $500 $500 $500 $500 $500 $3.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $4.000 $500 $1.000 $4.000 $500 $3. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $7.500 $1.500 $6.000 $1.000 $1.

900 $3. 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. natural gas.058 $500 $500 $1.100 $100 $1.000 $500 $500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.500 $1.500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.600 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.000 $8.000 $1.208 $0 $0 $1. ERG Master’s Project Mark Stout 177 .Table 13: Assemblymember Steve Kuykendall.850 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.

Table 14: Assemblymember Steve Kuykendall.443 $6.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1.000 $2.250 $100 $500 $35. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. and Budapest.000 $1. diesel) Unocal (CMA member) Victory Oil Co.374 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.500 $1. From 3/28/96 to 4/8/96. Kuykendall was taken on a $7. Sweden. However. ERG Master’s Project Mark Stout 178 . Conservation.350 $500 $1.000 $19.000 $500 $2.254 $200 $500 $4.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.490 “Travel project to Europe on Electric Restructuring. natural gas.000 $1.374 $500 $2. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $0 $1. Kuykendall’s social calendar was destined to pick up in 1996. and Privatization” visiting London.

Fessler was taken on a $7. The Aspen Institute.”105 The Consolidated Edison IOU spent $1.051 to fly the President out to New York City for a ConEdison Management Conference. a trade association for publicly owned utilities. Another non-profit organization. The California Mining Association took him out for an evening of recreation and dinner costing $89. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. regulators. and Paris. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). According to investigative writer Peter Asmus. Edison. and environmental groups to discuss the British experience with deregulation of electricity. by the California Foundation on the Environment and the Economy.by the California Foundation on the Environment and the Economy. 1996. government ministers. in Aspen. for $610. 4 ERG Master’s Project Mark Stout 179 . known as the Council of States Government . The California 105 Asmus. was very interested in California moving to the UK-style. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. A trade association. SC to address their membership. an Edison lobbyist was added to the international travel party at the last minute.WEST.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. Chevron treated Kuykendall to two dinners for $131. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. paid $1. one of CFEE’s funders. wholesale PoolCo model. spent $1402 to fly Fessler to Charleston. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings.167 junket visiting London. CO. The Large Public Power Council. to meet with CEOs of the electricity industry. Brussels.

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

Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. PG&E had him out to three meals for $71. spending $258. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and environmental groups to discuss the British experience with deregulation of electricity. Brussels. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Montana Power Company and Exxon stock. He does own more than $10. Jr. In 1995.000 in each of Chevron. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. 1995. utility and General Electric stock.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. He does own less than $10. by the California Foundation on the Environment and the Economy. ERG Master’s Project Mark Stout 181 . wholesale PoolCo model. and less than $10. was very interested in California moving to the UK-style. and Schlumberger oilfield services stock. Unocal. and Paris. Edison. regulators. He left office on February 23. one of CFEE’s funders. Conlon was taken on a $7. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.000 in each of Central & Southwest Corp.167 junket visiting London. to meet with CEOs of the electricity industry. government ministers.

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