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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

166-167. started by PURPA. In capacity constrained systems. which is critical for wholesale competition. Hempling. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates.investment options of utilities so that each was confined in scope to an “integrated public-utility system. 10 Davis. recent successor to the FPC. this was the marginal cost associated with procuring new generation capacity. It also created new 8 9 Pechman. towards more competition in electricity generation. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. The Federal Energy Regulatory Commission (FERC). 16. 11 Pechman. PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. 343.11 Energy Policy Act of 1992 EPAct continued the Federal trend. PURPA was very significant in creating a market for non-traditional generators. 17. ERG Master’s Project Mark Stout 10 . was charged with writing the rules required to implement this legislation. 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.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan.

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

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

Wagner. 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. The first issue addressed open access to the transmission system 19 20 CPUC. “alternative frameworks based on ‘let the market decide’”. which requires the CPUC to engage in a series of public hearings. Status Report. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. and documentation resulting in a report back to the Governor and Legislature by January 31. including private and public-interest organizations. evidentiary hearings. 1995. 1994. In their place. 21 CPUC. This led to the passage of Assembly Concurrent Resolution 143. numerous other states have also proposed electric utility deregulation. ERG Master’s Project Mark Stout 13 . the CPUC proposed. such as “green pricing”. where customers voluntarily pay more to promote renewables. 1. For instance. 1995. coupled with a lack of prior coordination with the state Legislature. This process tempered the CPUC’s frenetic timetable. FERC released a dual-issue Notice of Proposed Rulemaking.20 Many stakeholders.21 This stakeholder response. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1994. Blue Book. Blue Book.scheduled to be issued by the CPUC in August of 1994. which had been dubbed the MegaNOPR.22 FERC MegaNOPR In March of 1995. pushing back their goal for a policy decision until September of 1995.19 Since the release of the Blue Book proposal. “a vibrant market exists for energy efficiency services”. and asserted that. were concerned about the content and timetable of this proposal. 1994.

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

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

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

ERG Master’s Project Mark Stout 17 .28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. while the state Legislature took up the issue of electric utility deregulation on their own terms. PG&E (Pacific Gas and Electric) and SCE. through a Competitive Transition Charge (CTC). 1995. The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. “be based on need”. 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. 1996 levels.expand renewables development above 1993 levels while commercializing new renewable energy technologies. with several key implementation areas to be hammered out by stakeholder working groups. direct access contracts. A legislative conference 28 Framework Parties. so that input can be made to the Legislature. which should. as well as a “minimum renewables purchase requirement”. For public purpose programs. with financial incentives tied to the level of divestiture. The Decision called for 100% stranded cost recovery by IOUs over a five year period. and an Independent System Operator centrally controlling California’s transmission system. bilateral. the Decision proposed a nonbypassable “public goods charge” (PGC). coupled with an IOU rate cap at January 1. Aside from funding levels for low-income rate discounts. requesting input from stakeholder working groups. 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. the CPUC released a policy decision on December 20. based on a wholesale Power Exchange. the Decision does not define any public program funding levels. and allow for uncapped low-income programs.

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

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

It divides up this amount into four accounts that vary over four years of funding.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.41 There are currently several electric utility restructuring bills in Congress. 10% emerging technologies. 1997. In March of 1997. 1997. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1997 41 Marshall. The overall levels are: 45 % existing technologies. 1997 42 Weisman. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890.40 On May 6. including a prominent one authored by Representative Dan Schaefer (R-CO). including residential and small commercial consumers. “If the bill had failed. and 15% consumer-side incentives. 30% new technologies.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1996 CEC. would be eligible for direct access January 1. As Carter and Cavanagh have noted. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 1998.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. chair of the House Energy and Power Subcommittee. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.

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

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

who in the past had enjoyed privileged status with cheap rates. Hoffman 55-62.. 356-357.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. but now had to pay higher rates. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. greatly increasing opportunities for bulk power sales. 447-475.50 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. 50 Flavin and Lenssen. 84-108.intense pressure from large industrial customers. 52 Gilbert. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. basing their arguments on welfare economics as applied to the changing electric utility landscape. “Discretionary Evolution. Gordon. enabling increased competition. 1993.”.. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. Davis. 1993. 150. ERG Master’s Project Mark Stout 23 . 51 Stevenson. 195. 1994.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

either the CPUC December Decision or 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.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. As Figures 5 indicates.

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

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

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

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

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

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

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

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

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

The 3% [it was actually a cap of 3. As a Sierra Club California legislative chair recounts on meetings between CMA.3% of utility revenues. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced. and the Sierra Club. and energy efficiency. RD&D. Industrial Users.1% of IOU revenues. “We reached a consensus on. CLECA. reduced funding to an average of 2.72 At this point late in the game. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. 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 .. less than two weeks before the Bill would be reported out of committee. 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.. The August 15 language from a coalition of powerful interests. renewables with an incremental cost estimate from the BRPU. including IEP. funding for public purpose programs: low income. TURN was one of several public interest organizations who opposed the change.” However. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. EDF.. agricultural consumers. These got translated into dollars.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. a perusal of legislative language that was proposed during the long. During the Conference Committee hearings..

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

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

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

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

000 $62.819 $0 $323.370 $648 N/A $0 $208.102 $0 $73.149 $3.588 $500 $32.835 $1.166 $5.675 $736.000 $634.000 $562.079 $950 $14.952 $1.745 $68.112 $3.000 $1.272 $0 $64.000 $225.630 $300 N/A $0 $5.000 N/A $0 $18.416 $5.675 $384.741 $21.163 $0 $25.153 $750 N/A $8.516.981 $1.419 $13.479 $2.500 $78.239 $0 N/A $0 $89.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.092 $3.180 $0 $209.470 $10.608 $3.125 $0 $4.752 $0 $51.592 $846 $0 ERG Master's Project Mark Stout 54 .964 $0 $40.496 $8.031.405 $0 $722.500 $533. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.500 $190.181 $0 $160.101 $495 $10.308 $516.000 $0 $70.157 $0 $188.758 $2.203.500 $1.110 $34.075 $4.S.818 $0 $65.079 $13.559 $0 $246.096 $971.000 $681. (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 $59.374 $1.595 $0 $21. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.995 $596.500 $263.000 $480.

495 $1.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $383.000 $526.551 $12.500 $0 $0 ERG Master's Project Mark Stout 55 .675 $0 $1.203 $0 $30.938 $0 $118.197 $500 N/A $2.000 $524.000 $0 $171.401 $1.701 $0 $5.250 $0 $30.400 $100 $79.716 $39.291 $3.145 $5.596.003.947 $500 $281.723 $0 $38. (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.000 $37. 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 $4.326 $0 $100. (gasoline refining and marketing) Tower Energy Group (oil.600 N/A $5.000 $20. natural gas.271 $0 $12.083 $0 $20.000 $0 $15.492 $0 $66.207 $5.495 $27.203 $5.055 $0 $151.081 $1. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $0 $6.167 $500 $25.519 $11.319 $0 $10.850 $1.665 $0 $262.362.099 $12.230.600 $32.

of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.782 $981.100 $0 $500 N/A $100 $0 $500 N/A $2. McQuat.147 $500 $739.159 $3. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. producers.229 $100 N/A $1.S.118 $0 $144.000 $35.750 $418.) Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District Turlock Irrigation District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int. Dist.286 $3.195 $401.917 $300 $5.750 $1.543 $29.000 $50.032 $0 $172.100 $144.454 $3.590 $5.200 $837.281 $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.626 $0 $8.500 N/A $0 $211.000 $85.600 $276.000 NA $500 $0 $2.500 $29. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.240 $0 $178. and Hamrin.717 $500 not applicable $0 $138.862 $21.571 $500 N/A $200 N/A $1. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.000 $33.060 $6.819 $921.611 $1.017 $1.400 $1.460 $50. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn.450 $566.589 $26.331 $0 $97.025.179 $0 $3.000 $209. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.250 $148. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.724 $500 not applicable $500 $57. 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.500 N/A ERG Master's Project Mark Stout 56 .750 $267.605 $250 N/A $1.000 N/A $100 N/A $7.748 $32.845 $452.905 $30.882 $15.250 N/A $100 N/A $2.

407 $200 $61.885 $300 $207.532 $4. (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.800 not tracked $3. natural gas.521 $14.950 $3.495 $22.900 $1.511 $1.016 $1.000 $76.347 $9.761 $0 $73.521 $0 N/A $50 $87. (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.995 N/A $100 N/A $0 $3.521 $1.712 $100 N/A $200 $16.705 $19.958 $2.000 $233.296 $800 $25.925 $0 $44.250 $34.878 $12.384 $2.209.721 $748.478.000 $500 $456.500 $251.661.072 $918. Texaco Tidelands Oil Tosco Corp.500 $277.622 $67.636 $0 $103.1996 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.643 $1. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.245 $335.861 $1.960 $2.334 $498 $1.754 $4.050 $949.650 $3.050 N/A $0 $214.500 $47.137 $550 N/A $5.900 $0 $21.689 $2.750 $23.138 $1.181 $1.177 $300 N/A $0 $29. diesel) Unocal (CMA member) Victory Oil Co.573 $2.000 $22.989 N/A $9.000 $65.438 $500 N/A $0 $1.750 $37.090 $749 $38. (gasoline refining and marketing) Tower Energy Group (oil.780 ERG Master's Project Mark Stout 57 .417 $9.

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 .000 $2.585 $33.462 $500 $14.068 $14.066 $500 $21. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.378 $100 $21.790 $100 $14.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.438 $4. of California.448 $424.000 $15.250 $21.000 $700 $117.462 $208.

to meet with CEOs of the electricity industry. including oil and natural gas companies. Conservation. regulators. paying up to $7.800 each. the lobbying summary tables above. their “Travel project to Europe on Electric Restructuring. According to investigative writer Peter Asmus. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. were able to far outspend environmental organizations (who were usually spread thin over many issues). alternative energy producers. 4 Asmus. an Edison lobbyist was added to the international travel party at the last minute.167 per guest. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and small consumer groups.79 From 3/16/94 to 3/27/94. for $7.”80 In April of 1995. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. 1996. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. Brussels. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. government ministers. 4 ERG Master’s Project Mark Stout 59 .As one would imagine. 1996. and environmental groups to discuss the British experience with deregulation of electricity. 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. Shanghai. and Inner Mongolia. From 3/28/96 to 4/8/96. and Paris.

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

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 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 .e. CPUC vs. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.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.. 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.

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

Kathy said that it was important for the Legislature to use a process which brought disparate parties together.e. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? In the formulation of AB 1890. and own up to what they would let go. compared to the four year collection period in AB 1890.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. “Steve Peace forced everybody to confess what was important to them. and a shortened period for CTC collection. what they perceive as significant funding for renewable energy support. Is your organization more comfortable with one policy decision over the other (i. Several areas of compromise for PG&E included irrigation district exemptions for collection of the Competition Transition Charge. 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. 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 . the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. Also.. Kathy indicated that the Decision included a plan for an orderly transition to a deregulated generation environment that PG&E desired. AB 1890)? Why? Although the CPUC Decision was financially easier on PG&E. increasing the risk to full stranded cost recovery. CPUC vs. but had to compromise a little more than in the CPUC decision.” according to Kathy. PG&E largely got what it wanted.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Although she says the Decision language was vague. However. “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. includes 7 turbine manufacturers. with implementation details to be worked out through a CPUC stakeholder Renewables Working Group process.” for supporting renewable electricity generation.AWEA’s 750 members. “corrects market failures and market barriers. ERG Master’s Project Mark Stout 89 . including 155 members in California.” from the California electric utility deregulation process. The RPS. 12 accessory parts manufacturers.”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. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. academicians and interested individuals. E-1. She mentioned that another stumbling block for the 90 CPUC Renewables Working Group. 10 project developers/operators.” EDF led a coalition with the only non-MRPR proposal in the CPUC Renewables Working Group. and is a long-term. the MRPR was. efficient policy mechanism. Nancy had developed the RPS concept for AWEA since being hired on. 22 consultants. such as the Renewables Portfolio Standard. which Nancy and I found to be clearly outside of the purview of the Working Group’s charter. the essential elements of the RPS were included in the MRPR so that AWEA could largely get what they wanted. 1995 Decision? Nancy was successful in getting the RPS embodied in the CPUC’s Decision as a minimum renewables purchase requirement (MRPR).

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

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

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

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

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

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

the nukes were not. three have. Although more than 70 irrigation districts never have sought to utilize this power. Large Electricity Consumers Agricultural Energy Consumers Association Michael Boccadoro is the Executive Director of AECA. The IOUs were able to protect the whole concept of CTCs. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. playing a significant role in planning and cost overruns. who have a choice in all of their other commodity inputs. but lost everything else. While we recognized that contracts with QFs were forced. An irrigation district is a type of water district. This is based on input from growers.“Law generates push for gas-fired power plants”]. independent power developer] bought Zond [wind turbine developer] speaks of significant market potential. Then there is the announcement by SCE that they will be divesting 100% of their generation. Giving choices to folks will lower rates. sell. Finally. the fact that Enron [large. 1995 Decision? AECA got direct access with a slow phase-in. Agriculture had been fuel switching for a number of years. Now others are precluded by the non-bypassability of the CTC which will not allow for competition. 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. We also desired that the IOUs share in some of the burden of their stranded costs. ERG Master’s Project Mark Stout 96 . a lobbing group representing all farm groups in California except for those represented by the Farm Bureau. non-bypassable meant something. and distribute electricity. This got traded away. which has significant power to buy. To the PUC.

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

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

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

Each brought a new dimension and set of sub-issues to be absorbed into our area of interest. and that they needed a legislative backstop.defined period of time in which CTC obligations would be disposed of. In terms of process. AB 1890)? Why? The December Decision advanced the cause another step. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Incorporation of the Commission’s policy and some additional elements into the Bill took California another big step down the road towards restructuring. But the basics of our position have remained unchanged throughout ERG Master’s Project Mark Stout 100 . or over time? CIU had no problem speaking with one voice. for instance both included language regarding no cost shifting.e. need to get into the specifics of the bill. This carried over directly to AB 1890. We have seen our position evolve at each major waystation.. CPUC vs. There were a lot of areas of overlap between the December Decision and AB 1890. Provisions of the MOU had a lot to do with the process moving to the Legislature. laying out requirements for the parties to get specific Legislation. Along with the rate freeze concept. many parties felt legislation was necessary to assure a measure of permanence in the Commission’s policy Decision. To fully answer. CIU was not a signatory to the MOU. There was a perception that Edison’s zeal reflected a concern that their hard-fought victory for 100% CTC recovery might be ephemeral. this time frame foreshortened the transition to the new competitive market and meaningful customer choice. The provisions presenting a definite time period within which the CTC would have to be recovered were critical. 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 were involved in all formal proceedings. We have occasionally lobbied on more specific issues. The issuance of the Blue Book sent seismic waves through the community. able to draw on experts knowledgeable on energy policy and acquisition. We have also met with the Commissioners. Early on. as well as the caucusing and preparatory sessions amongst parties. CIU took part in most full panel hearings. due to the length of the policy phase proceedings. and filed comments at every opportunity. bringing member company representatives in from time to time to discuss broader agendas. This applies to the formal Committee. ERG Master’s Project Mark Stout 101 . The raw material of the initial bill came from coalition participants. but had no idea of the magnitude of tasks in the implementation phase over the last 18 months. some were at the request or demand of the Committee. we commented on the Yellow Book. for instance on the rate restructuring settlement. particularly in the collateral coalition meetings. 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 our concerns at the time were still rate-case focused. Our members are business entities with a nationwide presence. and made our contribution. Some of these meetings were spontaneous. it felt like “we’ve been here before”. Rather than have counsel speak. It is important for the Commissioners to hear from the people actually running the businesses whose electricity needs have been our focus. We thought that we were busy during the policy phases of restructuring. we had member company representatives participate in several full panel hearings. At some points. We were there for the great bulk of the hearings.

In the course of this process. there has been a warming in the cordiality of the relationship between the Legislature and the Commission. This recent process marks the first time the Legislature has taken such a broad role interacting with the CPUC. We have made some legislative appearances. representing CLECA during the process leading up to the CPUC December Decision. ERG Master’s Project Mark Stout 102 . It is remarkable how much AB 1890 was a product of broad-based discussions. direct visits with the members. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? CLECA wanted lower rates in the long run. (SB 960 was pulled together over several days following the AB 1890 deliberations. industrial electricity customers. There will likely be follow-up at the Legislature principally with respect to SB 960 which dealt with PUC reform. however. has been very useful in the implementation phase. Some aspects of the Bill developed in off-line. cost-based rates. 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. aside from being painful.This time spent. such as in September of ‘95 at the SONGS hearings.) California Large Energy Consumers Association .. We were interested. The Governor’s office was also party to several discussions.Interview #1 Dianne Hawk was a Utility Regulatory Consultant for Barkovich and Yap. CLECA is an organization representing large. and have monitored the legislative process but have chosen to focus on the Commission. Inc. and there was a perception of considerable influence emanating from the Governor’s office.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and testified whenever we had the opportunity. They were understaffed. mono-lingual english only. we found out that the staffing for PUC complaints was utterly inadequate. Some of this year’s cleanup legislation will exclude municipalities from the anti-slamming ERG Master’s Project Mark Stout 113 . and spoke to the press on critical issues. This Division was actually using AT&T language translation. After a meeting with the Consumer Services Division of the PUC. This may come under attack in the future. We also wrote letter to Commissioners that have been influential. It caused some embarrassment because of the total inadequacy. We are also a member of the Greenlining Institute [a non-profit organization representing low-income communities of color]. 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. 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. a very expensive service. We also had small consumers mail in postcards to the Commissioners on rate issues. but because of a lack of resources. had short hours. only part time. we interacted with the Legislature. a possible profit source for them. have historically focused on the PUC. At times. We also participated with the Commissioners in community briefings to inform the public of upcoming changes.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. which has partnership agreements with PG&E and Edison that they will represent some of Greenlining’s issues. The utilities were hoping that they could administer CARE and low income weatherization.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

see interview] thought she got and what she got from the Commission. 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. There was a concern that the RPS was seen as ratcheting up the compact of the BRPU [Biennial Resource Plan Update. It is a hard call from a policy standpoint: Sierra Club members would love the RPS. In the PUC Decision. I do not know why the PUC put it in the Decision. the RPS Working Group is not reality. We did not want to have to pass new legislation. so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. 98 Personal communication with Sierra Club Committee members. and we won’t need this regulation stuff”. ERG Master’s Project Mark Stout 129 . A deal was made with the consumer groups and IOUs: Take a wait and see approach on the duration of renewable and energy efficiency funding. There always was a disconnect between what Nancy Rader [West Coast Representative for AWEA. an earlier legislative vehicle for the RPS98]. creating a tension. People close to Sacramento knew the RPS did not have a chance. while the latest CPUC Decision sunsets energy efficiency. environmental programs are seen as transitional. 1995 Decision? The Renewables Portfolio Standard (RPS) was included in the Decision as a renewables policy [the Sierra Club California Legislative Committee had voted to endorse AB 1202. The customer groups had the same attitude. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. Energy efficiency and RD&D funding does not sunset in AB 1890. “set up the market. but you have to be a political pragmatist. I knew the consumer groups and power marketers hated it.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. we didn’t want it or not want it.

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

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

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

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

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

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

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

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

and the unbundling of rates and services. reciprocity for direct access.Board which has been created as a result of AB 1890. I can understand the concern for the concentration of power in one entity that drove this separation. customer direct access. and the ISO winds up making schedule changes for physical feasibility anyway. except for voltage support to let transactions occur. The CEC is a state agency that implements state energy policy and collects data on California energy usage and generation. 1995 Decision? The commission did not like the discrete power exchange and ISO. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Well before the December Decision. but had trouble applying it to this situation. The wholesale pool is not really a buyer. ERG Master’s Project Mark Stout 138 . it is really just a clearinghouse. including open transmission access. The commission has been supportive of investments with payouts over time for energy efficiency and RD&D. the Energy Commission had been supportive of core aspects of the proposed generation deregulation. There is a need for much of the same information in both entities. We did not share the sentiments as to the structure of the December Decision. the completely distinct power exchange and ISO. as has been put into place in foreign nations as well as US regional pools. There is an added cost of having two mandatory entities. We were more inclined to a unified structure.

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

some of which would be “interested”. For the ISO. a simple majority is to be unaffiliated with generation. There was no advocacy at all. our Executive Director. except for when I read into the record a statement for the Energy Commission Chair on the governance of the ISO and PX: they should have a significantly disinterested makeup in order to remove market power influence. The legislators were in a vacuum trying to figure out how the allocation of public program funding got made. The legislative language has multiple categories that should be included on the power exchange and ISO boards. were called up to testify on specific issues as an information source only. however. The Governor’s office’s participation was punctuated.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. This would have required state agencies to ERG Master’s Project Mark Stout 140 . if any other forum we took part in. and I. There was little. including Assistant Chief Counsel John Chandley. 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. outside of a disinterested role in hearings and filings. They weighed in against the minimum renewables purchase requirement. 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. put in by the renewables community. These board members will not certainly be disinterested. transmission. We also made testimony and participated in CPUC hearings as an examiner. They also killed the state agency renewable purchase requirement. or distribution companies. our Public Affairs Director. A few people.

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

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

myself and another University employee were there off and on. and their was a steady chatter amongst parties. but they permitted some very big cuts in R&D funding in late 1994. The University has a counsel on the PUC service lists. The office has two advocates. For the conference committee we had an attorney representing the University. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. We had informal contacts with the CPUC staff. but nobody dedicated to the PUC proceedings. The University is represented by a legislative affairs office. The Governor can appoint one Commissioner a year. We filed comments.interested in technology and became a CIEE board member. Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D. who handle all University issues. and commented publicly at the Conference Committee. We had a presence. They have been favorable in principle the whole way through. In practice. ERG Master’s Project Mark Stout 143 . allowing for inertia. and spoke at one public hearing. supplemented by several support staff. they have usually been good. about five people in the meileu. but not an overwhelming one. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill.

SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. 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. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. pre-Blue Book. the renewables community cam back in. The municipal utilities angered Peace so much that he asked. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low. They probably thought that this funding level included regulated transmission and distribution RD&D. University of California representatives and I advocated for higher. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. The IOUs wanted to use post-Blue Book. but they allowed me to put in definitions derived from the CPUC RD&D Working Group Report on RD&D [which distinguished between public interest and regulated T&D RD&D] and other language. historic levels [combined SCE. current levels for moving to a future restructured market. After seven hours of negotiation. They proposed to me funding at current RD&D budget levels. For example. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . The renewables could have fared much better if they stuck together as a coalition.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings.

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

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

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

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

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

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

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

due to the egalitarian nature of the structure. The IOUs spent millions on astroturf such as “Shareholders for Equity”. Senator Peace established a process that was a model of openness. Senators Byron Sher. and accountants. and Bill Leonard were the masterminds. then your voice was heard. lawyers. The template was in large part formed by the CPUC’s December ‘95 Decision. Groups participated in coalition building. getting a place at the table. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? All employed lobbyists.Legislative Conference Committee. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. A lot of PR and press consultants got rich from this. Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? None were terribly effective. One strategy was to get bills established early on in the session. Steve Peace. based on the free market-driven ideologues on the Commission. and why? The PUC laid out the framework for restructuring in the Blue Book. There were also “grassroots” astroturf groups based on utility shareholders. all of the outside lobbying did not matter. but it mainly was a waste of money. If your case fit into the unfolding structure. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 . Which stakeholder groups do you think were best able to set the terms of the debate. Some groups also used press conferences. establishing a level playing field. Because of the genius of the legislators. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee.

The Decision by the PUC was going to be implemented unless the Legislature was able to deliver a package. Was it always clear what outcomes each stakeholder group wanted from the process? Peace forced clarity. Peace was demanding in terms of defining your position. ERG Master’s Project Mark Stout 153 . as when he threw the munis out of the Committee for their inability to articulate what they wanted. Large. Later on in the Committee. The utilities established early on the full reimbursement for stranded costs. It was very unhelpful to have put themselves in that position.Legislature. the fact that the renewables and environmentalists were divided was damaging. Renewables and energy efficiency were also guaranteed protection. This schism was a recipe for having the least influence. Office of Senator Bill Leonard Delaney Hunter is a Legislative Aide for Republican Assemblyman Bill Leonard. but the playing field was tilted. He ended up doing quite well. large entities had unified positions. To a lesser extent. and how could they have improved their approach? Early on the munis were not able to define a single coherent position or proposal. He threw the munis out. the residential ratepayers also had trouble. Legislative Conference Committee. and they subsequently came around with an articulated position a day later. powerful interests already had an advantage from the PUC Decision. Lenny Goldberg from TURN was stellar. Leonard was a Senator on the Conference Committee during the summer of ‘96. fiscally conservative member of the Conference Committee. As a general matter. it is illuminating to get a perspective from one of his key staff who was quite active on the Committee. considering the situation. Since several interview subjects described Bill Leonard as a powerful. 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. A lot of their lawyers did technical language work in coalition with the legislative counsel. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . 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. was a one-man machine. a small generation developer. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. could not go to a competitive market with a debt hindrance. and why? When the PUC December Decision came out. This put everything on the table. This was the greatest expression of coalition building. as well as an acceleration of recovery. Wayne Rafesberger. They also were able to offer a lot of help with technical drafting. Groups that opposed the bill without participating also were ineffective. To contrast this. He represented himself well in the hearings and actually helped to draft language that made it into the bill. they had the manpower to make sure their positions were taken care of. and how could they have improved their approach? Power marketers such as Enron. NEVs. such as CalPIRG and one of Ralph Nader’s organizations. otherwise blew it up. The Committee Members took some things from the Decision. They needed to get their nukes off of the books. The full recovery of their stranded assets was very important to them. and Working Assets were just not there when their issues came up. anyone could have influence.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. IOUs very quickly were able to get 100% stranded cost recovery firmed up. no one was happy. If they were there and could contribute.

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

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

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

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

Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .

Interview #1 Natural Resources Defense Council . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees .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.How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .

Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association . 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 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 .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 .

000 $495 $950 $696 $2.000 $1.000 $3.000 $1.495 $10.000 $7.000 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.495 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.191 $2.495 $7.000 $2.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $3.429 $498 $1.000 $1.995 $300 $12.896 $3.000 $4.995 $21.000 $0 $0 ERG Master’s Project Mark Stout 162 . (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.500 $1.000 $500 $1.500 $22.800 $1.000 $3.

000 $1.017 $749 $750 $3.000 $8. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $10.000 $2.995 $2.500 $1.995 $1.995 $14.460 $200 $500 $750 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $1.000 $1.250 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 .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.750 $4.511 $3.500 $800 $498 $200 $9.990 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.500 $47.500 $6.495 $4.000 $3.Table 2: Assemblymember Jim Brulte.000 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

Not to be outdone.750 $3.000 $1. as well as an event.000 $2. Conservation.000 $1.000 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.750 $2.490 “Travel project to Europe on Electric Restructuring. Paling in comparison. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Table 3: Senator Steve Peace. 1996. by the California Foundation on the Environment and the Economy. Mobil treated Brulte to a $60 event in 1996. CFEE is a “non-profit. Chevron treated Brulte to two meals.000 $750 $0 $0 103 Asmus. totaling $101. Brulte was taken on a $7.500 $1. and Privatization” visiting London. and Budapest. From 3/28/96 to 4/8/96.750 $750 $1. 4 ERG Master’s Project Mark Stout 164 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Sweden.000 $1.000 $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 Int.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.250 $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.

000 $1.500 $3.000 $300 $1.250 $2.600 $2.000 $4.250 $7.072 $2.050 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $6.500 $8.250 $750 $500 $1.572 $1.Table 4: Senator Steve Peace. 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.450 $7.250 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .815 $750 $6.115 $18.500 $16.000 $500 $2.100 $2.000 $750 $750 $750 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.

Southern California Edison was granted a high level of access. Peace was treated to a $52 sports event by Mobil Oil.450 166 ELECTRIC/GAS $6. 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. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals. while Edison treated him to five meals and a sports event.100 $2. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.000 Table 6: Senator Byron Sher. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. In 1996.900 . In 1995. taking Steve to 11 meals. as well as chair of the Senate Energy and Utilities Committee. 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. IEP made a gift of $241 for his speech at a conference. Table 5: Senator Byron Sher.

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. and Hamrin. Brotherhood of Electrical Workers (various $9.882 $100 $1. $2. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .500 Int.000 locals) Southern California Pipe Trades United Assoc. McQuat. (geothermal) Colmac Energy Inc.482 $100 $1. (biomass) Edson + Modisette (lobbyist for indep. EVs) Hansen. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $500 $9.000 $100 producers.100 $500 $2. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $500 $1.600 $13.

Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $100 $500 $1.000 Large Energy Consumers $3.000 $1.000 $100 $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 $1.500 COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.

(gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $300 $300 $22.585 $100 $500 $2.000 $700 $4.Tosco Corp.448 $14. of California.

500 $0 $0 ERG Master’s Project Mark Stout 170 .400 $750 $150 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. 1995 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 $3.500 $300 $0 $0 $2. Exxon.000 $1. Sher received no other gifts that year from energy utility stakeholders. totaling $2608. Sher holds over $100.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. NARUC treated Sher to a two day trip to DC for another meeting. In 1996.300 $500 $1. Table 7: Senator Bill Leonard. and GE. totaling $758.000 in each of Amoco. Mobil.

000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. for a paltry $20. Edison again ERG Master’s Project Mark Stout 171 . Edison’s lobbyists got to spend a little more quality time with Leonard for their money. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. The Pacific Rim Conference of Seattle.080 $10. While the Senator was there.500 $150 $500 $3. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $5.Table 8: Senator Bill Leonard. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.730 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day.500 $500 $1.000 $2. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $1. saving up for a $77 dinner with head lobbyist Bob Foster.650 $2. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. WA paid $734 for Leonard to moderate a conference session on utility deregulation. extending his stay from 12/8/96 to 12/13/96. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $2.000 $500 $500 $4.000 $1.650 $500 $1.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.

600 $750 $750 $500 $1. ARCO treated Leonard to a $19 meal at a reception.250 $1. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game.000 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . They also had Leonard out for two meals in Sacramento.000 $750 $750 $650 $150 $500 $3. 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.had Senator Leonard out for Legislative Ski Day.600 $1. paying $44 for two meals and lodging.000 $1. for the modest tab of $56.750 $1. including lunch with Bob Foster.

700 $750 $450 $250 $250 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co.000 $2. two meals for $44. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. CFEE is a “non-profit. $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. 1996.000 $3.050 $1.600 $500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. and to 104 Asmus.600 $3. 4 ERG Master’s Project Mark Stout 173 .700 $500 $300 $550 $2.000 $500 $750 $250 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day.Table 10: Assemblymember Mickey Conroy.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. Shanghai.500 $2. and Inner Mongolia.000 $5. PG&E treated him to a basketball game with $51 tickets.

and less than 10. costing $99. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. Pacificorp. $10 in candy. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. Chevron took Conroy out for two business meals.000 in Orange & Rockland Utilities. In terms of investment. General Electric. After such a busy social calendar in 1995. four rounds of “refreshments” for $30.000 each in Edison. Kansas City Power & Light. Edison wined and dined the Assemblymember with four meals at $134. ERG Master’s Project Mark Stout 174 . with investments of greater than $10.make sure Conroy kept a sweet spot in his heart for them. SDG&E. and Westinghouse Electrical. and $25 of cookies and candy.

250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.675 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 11: Assemblymember Diane Martinez.750 $1.750 $2.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . 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 $1.250 $1.175 $500 $1.750 $4.000 $1.000 $1.

000 $1.500 $6.500 $500 $500 $1.000 $1.000 $7. (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. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.250 $1.000 $4.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $500 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $1.500 $1.750 $1.000 $500 $500 $5.500 $1. Dist.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.Table 12: Assemblymember Diane Martinez.000 $5.000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.000 $500 $3. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $0 $0 ERG Master’s Project Mark Stout 176 .

000 $500 $500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. natural gas. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.500 $1.208 $0 $0 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.Table 13: Assemblymember Steve Kuykendall. the Illinois Energy Association flew Martinez out for a $1.000 $1.000 $8.100 $100 $1.058 $500 $500 $1.600 $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.500 $1.850 $1.900 $3. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 .467 trip to Northwestern University to discuss the deregulation of public utilities.

254 $200 $500 $4. and Budapest. ERG Master’s Project Mark Stout 178 .) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $500 $2.000 $1.000 $19. natural gas. Conservation. and Privatization” visiting London. From 3/28/96 to 4/8/96.500 $0 $1.374 $500 $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 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. However. Kuykendall’s social calendar was destined to pick up in 1996.000 $2.Table 14: Assemblymember Steve Kuykendall.500 $1.000 $1.443 $6.490 “Travel project to Europe on Electric Restructuring.500 $1. diesel) Unocal (CMA member) Victory Oil Co.000 $1.374 $4. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.350 $500 $1.250 $100 $500 $35. Sweden.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. Kuykendall was taken on a $7.

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

Finally. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton.000 in Ohio Edison stock. spent $249 to fly him to their annual meeting in Las Vegas. DC. Finally. Fessler holds over $10. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. Shanghai. EEI is a trade association representing investor owned utilities. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. a utility association. spent $314 to bring him to speak at their Spring Conference. for $467 airfare. Synergics Resources Corporation had Fessler out to Princeton. in Fort Collins. a libertarian think-tank. ZEV’s and Rethinking the Environment Conference. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. In April of 1995. On the investment side. spending $1006. PG&E had him out for two lunches. Utah to speak at the “Utility Restructuring. The Cato Institute. for $61.802 junket to talk with Chinese central government and provincial leaders in Beijing. NJ to speak at the 1994 DSM Implementation Conference. the California Foundation on the Environment and the Economy took Fessler on an 11 day. ERG Master’s Project Mark Stout 180 . the Center for Resource Management flew him to Midway. and Inner Mongolia. CO. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. $7. The Rocky Mountain Electrical League. for $323. spending $291. The Western States Coordinating Council. had Fessler speak at their conference in Washington. a utility planning association. DC.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting.

The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. Unocal. by the California Foundation on the Environment and the Economy. government ministers. PG&E had him out to three meals for $71.000 in each of Montana Power Company and Exxon stock. spending $258. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. In 1995. and Paris. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and environmental groups to discuss the British experience with deregulation of electricity. and less than $10. ERG Master’s Project Mark Stout 181 .167 junket visiting London.000 in each of Chevron.000 in each of Central & Southwest Corp. wholesale PoolCo model. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. to meet with CEOs of the electricity industry. He left office on February 23. Conlon was taken on a $7. He does own more than $10. He does own less than $10. Edison. Brussels. 1995. and Schlumberger oilfield services stock. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. regulators. was very interested in California moving to the UK-style. utility and General Electric stock. one of CFEE’s funders. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference.

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