Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

“The Electric utility is changing. But unlike the evolution of species, conscious collective choice can influence the evolutionary drift of the industry.” Rodney E. Stevenson and David W. Penn (1995)

Table of Contents
INTRODUCTION................................................................................................................................................ 4 OBJECTIVES ...................................................................................................................................................... 5 METHODOLOGY .............................................................................................................................................. 5 HISTORY OF ELECTRIC UTILITY INDUSTRY REGULATION................................................................. 8 THE BIRTH OF STATE PUBLIC UTILITY COMMISSIONS................................................................................................ 8 FEDERAL POWER ACT OF 1935................................................................................................................................. 9 PUBLIC UTILITY HOLDING COMPANY ACT OF 1935................................................................................................... 9 PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 ............................................................................................ 10 ENERGY POLICY ACT OF 1992 ............................................................................................................................... 10 CPUC “BLUE BOOK” PROPOSAL............................................................................................................................ 12 FERC MEGANOPR .............................................................................................................................................. 13 CPUC MAY 1995 DRAFT PROPOSALS AND STAKEHOLDER RESPONSES .................................................................... 14 CPUC DECEMBER 1995 DECISION AND CALIFORNIA ASSEMBLY BILL 1890............................................................. 17 RECENT STATE AND FEDERAL ACTIVITY ................................................................................................................ 20 FACTORS BEHIND THE DRIVE FOR DEREGULATION........................................................................... 21 LARGE CONSUMER PRESSURE ................................................................................................................................ 21 TECHNOLOGY ....................................................................................................................................................... 23 ECONOMIC RENT ................................................................................................................................................... 23 ACADEMICS & IDEOLOGUES .................................................................................................................................. 23 EXISTING COMPETITIVE FORCES ............................................................................................................................ 24 OTHER INDUSTRIES AND COUNTRIES ...................................................................................................................... 24 FEDERAL REGULATORY POLICY ............................................................................................................................. 24 STATE REGULATORY POLICY ................................................................................................................................. 26 ANALYSIS ......................................................................................................................................................... 27 SELECTION OF STAKEHOLDER GROUPS ................................................................................................................... 29 OVERVIEW OF WHAT THE STAKEHOLDERS WANTED AND WHAT THEY GOT ............................................................. 29 STAKEHOLDER INTERVIEWS CLUSTER ANALYSIS .................................................................................................... 36 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 40 Officeholder Staff Comments on Who Got What They Wanted and Why:.......................................................... 41 Synthesis of Stakeholder & Staff Comments on Who Prevailed, and Why:........................................................ 43

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Officeholder Staff Comments on Who Got Rolled Over, and Why: ................................................................... 44 Synthesis of Stakeholder & Staff Comments on Who Got Rolled, and Why:...................................................... 46 RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS ........................................................... 52 CONCLUSION................................................................................................................................................... 60 BIBLIOGRAPHY .............................................................................................................................................. 61 APPENDIX A: SEMI-STRUCTURED INTERVIEW QUESTIONS............................................................... 66 STAKEHOLDER INTERVIEWS ................................................................................................................................... 66 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 66 APPENDIX B: STAKEHOLDER INTERVIEWS............................................................................................ 67 INVESTOR-OWNED ELECTRIC UTILITIES ................................................................................................................. 67 Pacific Gas & Electric..................................................................................................................................... 67 San Diego Gas and Electric ............................................................................................................................ 70 Southern California Edison ............................................................................................................................. 74 MUNICIPAL ELECTRIC UTILITIES ............................................................................................................................ 76 California Municipal Utilities Association - Interview #1 ................................................................................ 76 California Municipal Utilities Association - Interview #2 ................................................................................ 79 Sacramento Municipal Utility District ............................................................................................................. 80 UTILITY LABOR UNIONS ........................................................................................................................................ 85 Coalition of California Utility Employees - Interview #1 ................................................................................. 85 Coalition of California Utility Employees - Interview #2 ................................................................................. 86 INDEPENDENT PRODUCERS .................................................................................................................................... 88 American Wind Energy Association................................................................................................................. 88 Independent Energy Producers........................................................................................................................ 92 LARGE ELECTRICITY CONSUMERS .......................................................................................................................... 96 Agricultural Energy Consumers Association.................................................................................................... 96 California Industrial Users.............................................................................................................................. 98 California Large Energy Consumers Association - Interview #1 .................................................................... 102 California Large Energy Consumers Association - Interview #2 .................................................................... 104 California Manufacturers Association ........................................................................................................... 107 SMALL ELECTRICITY CONSUMERS........................................................................................................................ 111 Latino Issues Forum ...................................................................................................................................... 111 The Utility Reform Network ........................................................................................................................... 114 ENVIRONMENTAL ADVOCATES ............................................................................................................................ 119 Environmental Defense Fund ........................................................................................................................ 119 Natural Resources Defense Council - Interview #1 ........................................................................................ 122 Natural Resources Defense Council - Interview #2 ........................................................................................ 125 Sierra Club/Center for Energy Efficiency and Renewable Technologies ........................................................ 127 Union of Concerned Scientists....................................................................................................................... 133 STATE INSTITUTIONS ........................................................................................................................................... 137 California Energy Commission...................................................................................................................... 137 University of California, California Institute for Energy Efficiency ............................................................... 141 ANONYMOUS STAKEHOLDER COMMENTS ............................................................................................................. 144 Anonymous Comments #1: Parties who could have improved their performance ........................................... 144 Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D............................................... 144 APPENDIX C: OFFICEHOLDER STAFF INTERVIEWS ........................................................................... 146 California Public Utilities Commission ......................................................................................................... 146 Legislative Conference Committee, Office of Senator Steve Peace ................................................................ 148 Legislative Conference Committee, Office of Senator Byron Sher.................................................................. 152 Legislative Conference Committee, Office of Senator Bill Leonard ............................................................... 153

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Anonymous Officeholder Staff Interview #1 ................................................................................................... 155 Anonymous Officeholder Staff Interview #2 ................................................................................................... 156 APPENDIX D: CLUSTER ANALYSIS OF STAKEHOLDER INTERVIEW DATA................................... 159 APPENDIX E: RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS DETAIL............................................................................................................................................................ 162 Table 1: Assemblymember Jim Brulte, 1995 Campaign Contributions........................................................... 162 Table 2: Assemblymember Jim Brulte, 1996 Campaign Contributions........................................................... 163 1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte ..................................................... 164 Table 3: Senator Steve Peace, 1995 Campaign Contributions ....................................................................... 164 Table 4: Senator Steve Peace, 1996 Campaign Contributions ....................................................................... 165 1995/1996 Stakeholder Gift Information for Senator Steve Peace.................................................................. 166 Table 5: Senator Byron Sher, 1995 Campaign Contributions......................................................................... 166 Table 6: Senator Byron Sher, 1996 Campaign Contributions......................................................................... 166 1995/1996 Stakeholder Gift Information for Senator Byron Sher................................................................... 170 Table 7: Senator Bill Leonard, 1995 Campaign Contributions ...................................................................... 170 Table 8: Senator Bill Leonard, 1996 Campaign Contributions ...................................................................... 171 1995/1996 Stakeholder Gift Information for Senator Bill Leonard................................................................. 171 Table 9: Assemblymember Mickey Conroy, 1995 Campaign Contributions.................................................... 172 Table 10: Assemblymember Mickey Conroy, 1996 Campaign Contributions.................................................. 173 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy.............................................. 173 Table 11: Assemblymember Diane Martinez, 1995 Campaign Contributions ................................................. 175 Table 12: Assemblymember Diane Martinez, 1996 Campaign Contributions ................................................. 176 Table 13: Assemblymember Steve Kuykendall, 1995 Campaign Contributions............................................... 177 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez ............................................. 177 Table 14: Assemblymember Steve Kuykendall, 1996 Campaign Contributions............................................... 178 1995/1996 Stakeholder Gift Information for Assemblymember Steve Kuykendall........................................... 178 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler................................................ 179 1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon ................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight, Jr. ................................................ 181 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway .................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper .................................................... 181 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque ..................................................... 181

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

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

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

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

10 Davis. this was the marginal cost associated with procuring new generation capacity. 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. The Federal Energy Regulatory Commission (FERC). PURPA was very significant in creating a market for non-traditional generators. recent successor to the FPC. PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. ERG Master’s Project Mark Stout 10 . started by PURPA.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan. Hempling. 11 Pechman. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. which is critical for wholesale competition. 343. It also created new 8 9 Pechman.investment options of utilities so that each was confined in scope to an “integrated public-utility system. towards more competition in electricity generation. 17. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates. 16.11 Energy Policy Act of 1992 EPAct continued the Federal trend. In capacity constrained systems. 166-167. was charged with writing the rules required to implement this legislation.

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

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

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

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

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

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

Aside from funding levels for low-income rate discounts. bilateral. the Decision does not define any public program funding levels. based on a wholesale Power Exchange. as well as a “minimum renewables purchase requirement”. “be based on need”. so that input can be made to the Legislature. requesting input from stakeholder working groups.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. the Decision proposed a nonbypassable “public goods charge” (PGC). with several key implementation areas to be hammered out by stakeholder working groups. which should. nor a renewables purchase requirement level. and an Independent System Operator centrally controlling California’s transmission system. ERG Master’s Project Mark Stout 17 . through a Competitive Transition Charge (CTC). direct access contracts. PG&E (Pacific Gas and Electric) and SCE. coupled with an IOU rate cap at January 1. The December Decision mirrored the market structure defined in the MOU.expand renewables development above 1993 levels while commercializing new renewable energy technologies. while the state Legislature took up the issue of electric utility deregulation on their own terms.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. and allow for uncapped low-income programs. 1995 which laid out a more defined vision of a deregulated ut ility environment. For public purpose programs. A legislative conference 28 Framework Parties. The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. 1996 levels. the CPUC released a policy decision on December 20. The Decision called for 100% stranded cost recovery by IOUs over a five year period. 1995. with financial incentives tied to the level of divestiture.

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

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

1997. The overall levels are: 45 % existing technologies. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 .42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1997 42 Weisman. “If the bill had failed. 1996 CEC. 1997 41 Marshall. 1998. 30% new technologies. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 10% emerging technologies. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. In March of 1997.41 There are currently several electric utility restructuring bills in Congress. including residential and small commercial consumers. 1997. chair of the House Energy and Power Subcommittee. and 15% consumer-side incentives.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. As Carter and Cavanagh have noted. It divides up this amount into four accounts that vary over four years of funding. including a prominent one authored by Representative Dan Schaefer (R-CO). would be eligible for direct access January 1. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.40 On May 6.

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

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

Gordon.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. ERG Master’s Project Mark Stout 23 . 50 Flavin and Lenssen. 1993.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 84-108.. “Discretionary Evolution.. who in the past had enjoyed privileged status with cheap rates. enabling increased competition. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 1994. 51 Stevenson.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. 150. but now had to pay higher rates.intense pressure from large industrial customers. 356-357.”. 195. Davis. 1993. greatly increasing opportunities for bulk power sales. 52 Gilbert. Hoffman 55-62. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 447-475.

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

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

”62 a form of integrated resource planning know as the BRPU. 355-356. 24. 62 Asmus.”.has noted. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. In 1994. 1997. the same year that California’s Blue Book proposal was released.. though it urges states to consider retail competition. were the key retail wheeling champions within the CPUC. according to Jeff Dassovich. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). “the DOE bill does not mandate retail markets by any date certain.. Maine. “Discretionary Evolution.. “Retail wheeling. Connecticut.. 1995.63 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.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. 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. Colorado. ERG Master’s Project Mark Stout 26 . and Wisconsin. New York. Michigan initiated a five year retail wheeling experiment involving two utilities. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. “DOE Restructuring Bill” Stevenson. an analyst with CPUC’s Division of Strategic Planning. Calls for bids have often been oversubscribed by a wide margin. 60 61 Levison. Massachusetts. Commissioner Knight.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. both appointees of Governor Pete Wilson.”.

including authorizations for legislative and regulatory study committees as well as direct access for certain customers to alternative generators. in that not all interest groups who might be impacted by the process participated in the 63 64 CPUC Blue Book. 1995. Wall Street Journal. “Freeing Californians from the monopoly grip of the utilities and granting consumers direct access to competitive power suppliers will greatly benefit the state’s economy and enhance the quality of life in my state. There are limits to this approach. Based on my experience as a representative for an environmental organization. letter to the editor.” [see Anonymous Officeholder Staff Interview #1] Because of this stakeholder-representative orientation. nineteen state legislatures have reviewed bills in response to the potential for greater competition in the electric utility industry. As it was too esoteric a topic. so there was not enough press coverage. 1995. “There was not enough education or public involvement. 32.65 Analysis The California electric utility deregulation experience has often been described as a stakeholder-driven process. Jesse J. I decided it would be insightful to interview people who represented stakeholder organizations that were active in the process.in a fit of political posturing. October 9. A15(Western). As a staffperson for a prominent officeholder noted during our interview. it was clear that the general public was not very involved in the process.. writes. Many of the outcomes of the deregulation policy formulation were a result of negotiations between organizations representing different stakeholder groups. Knight. as well as the staff of the officeholders they were trying to influence. ERG Master’s Project Mark Stout 27 . as well as interviews for this analysis.”64 As of October.

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

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

Most resist retail competition. • December Decision outcome: The CPUC Decision did not address municipal utilities. while ensuring their financial solvency. who are also their “shareholders”. where there was considerable support for staying clear of muni autonomy: “We have previously acknowledged that we do not have the authority to impose our vision on municipal or public power entities.” The inclusion of direct access was not embraced by munis. • AB 1890 outcome: The legislation codified the utilities opportunity to recover 100% of stranded costs. ERG Master’s Project Mark Stout 30 . Under legal mandates which we scrupulously respect the governance of these entities and their relation to their customers are committed to their duly constituted governing authorities. 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.• Investor Owned Utilities: The IOUs want to protect shareholders by maintaining their stock price and maximizing profits. 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 and pursue the ability to recover 100% of stranded costs from ratepayers. • Municipal Utilities: The munis want to retain their autonomy in making their own policy decisions. except for on the subject of reciprocity for allowing direct access. • December Decision outcome: The IOUs did get the ability to recover 100% of stranded costs. and pursue 100% stranded cost recovery from ratepayers. which was the strongest proponent of starting with a wholesale-only PoolCo proposal.

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

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

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

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

Environmentalists would like to see an end to the backsliding that has occurred in utility energy efficiency and R&D budgets. • December Decision outcome: Environmental advocates lost in their opposition to a market structure allowing direct access. while others perceived it as continued charity for poorly-run businesses that had already received more than adequate support. as well as in their opposition to the tying of stranded cost recovery to continued operation of nuclear plants. The rift in the community that had developed regarding renewables policy was only torn wider by renewables funding ERG Master’s Project Mark Stout 35 . although a lack of specific funding levels was troubling. The inclusion of the Renewables Portfolio Standard was heralded as strong renewables policy by some environmentalists. Direct access threatens to undermine both IRP and sales volume/profit decoupling. DSM. Most groups resist retail competition and support continued funding for new renewables. These groups want to accelerate the removal of coal and nuclear plants from operation. They want the idea of leastcost planning through IRP to be protected.• Environmental Organizations: Environmental organizations want the electric utility industry to evolve into a form which is environmentally and socially sustainable. 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. • AB 1890 outcome: Environmental advocates lost in their opposition to a market structure allowing direct access. and public interest RD&D. There is a significant rift that has developed over whether existing renewables generators should continue to receive subsidies. 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).

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

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

from the December Decision. 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 . The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. nearly half of the representatives say that their Rather Little Figure 3: How much of what your organization wanted was in AB 1890? organization got most of what it wanted from AB 1890. As Figures 3 indicates. as well as the majority of large electricity consumers. a similar number of representatives report a mixed or unclear outcome. and the remaining minority claim that their organization got rather little. 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. 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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. As Figures 5 indicates. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .

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

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

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

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

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

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

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

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

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

Industrial Users. and the Sierra Club. renewables with an incremental cost estimate from the BRPU. 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 . During the Conference Committee hearings. reduced funding to an average of 2.. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. “We reached a consensus on. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15..” However. The 3% [it was actually a cap of 3. These got translated into dollars. CLECA.. agricultural consumers. RD&D. and energy efficiency. the public interest groups did not have much leverage to oppose the dissolution of this consensus since they did not have an engaged constituency of activists to back them up. less than two weeks before the Bill would be reported out of committee. funding for public purpose programs: low income..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 legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus.3% of utility revenues. including IEP. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced. TURN was one of several public interest organizations who opposed the change.72 At this point late in the game. a perusal of legislative language that was proposed during the long.1% of IOU revenues. EDF. As a Sierra Club California legislative chair recounts on meetings between CMA. The August 15 language from a coalition of powerful interests.

. and unpopularity in the eyes of the public. public interest organizations have been “co-opted or bought off cheaply”. but outcomes will be systematically skewed against them.. As noted earlier. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. 1996 Conference Committee on Electric Restructuring AB 1890. section 381.73 However. one Senator’s Chief of Staff revealed. subdivision (e) 75 Dryzek.influential players relied on a “fairness and competition” argument. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. falling tax revenues. As he explains. 1996 ERG Master’s Project Mark Stout 50 ..for a static amount of renewables capacity.. “Large businesses articulated the issues. There was no significant opposition to this point during the hearing.. then they are punished by “capital strike”. To the extent that public policy remains under the sway of state imperatives. States simply must provide the conditions that facilitate capitalist investment and economic growth..74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value. if they pursue antibusiness policies..” An anonymous staffer’s comment also resonated with this state imperative. .the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. She pointed out the public relations/marketing dilemma that would result if “green” customers found out they were having no real impact on increasing the use of renewable generation. This had 73 74 California Senate TV video of August 10. 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. recession.. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff. “. They may be allowed to participate in the policymaking process. receiving “symbolic rewards only”.

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

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

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

031.630 $300 N/A $0 $5.758 $2.995 $596.000 $681.157 $0 $188.818 $0 $65.405 $0 $722.239 $0 N/A $0 $89.500 $78.675 $736.096 $971.516.112 $3.000 $480.595 $0 $21.S.000 $634.000 $225.101 $495 $10.000 $62.470 $10.752 $0 $51.079 $950 $14.203.981 $1.308 $516.125 $0 $4.180 $0 $209. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.608 $3.153 $750 N/A $8.075 $4.149 $3. (geothermal) California Solar Energy Industry Association Enron Capital & Trade Resources Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Energy Corporation (windpower) Solar Turbines Incorporated LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Conference Committee Campaign Total California Contributions Lobbying Expenses $59.419 $13.000 $0 $70.588 $500 $32.964 $0 $40.741 $21.819 $0 $323.166 $5.559 $0 $246. 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.079 $13.952 $1.000 $562.181 $0 $160.500 $190.592 $846 $0 ERG Master's Project Mark Stout 54 .496 $8.370 $648 N/A $0 $208.163 $0 $25.835 $1.416 $5.479 $2.092 $3.272 $0 $64.745 $68.500 $533.500 $263.000 $1.374 $1.000 N/A $0 $18.102 $0 $73.500 $1.675 $384.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.110 $34.

203 $0 $30.271 $0 $12.701 $0 $5.495 $27.167 $500 $25.145 $5.055 $0 $151.000 $0 $15.665 $0 $262.000 $526.551 $12.850 $1.230.000 $524.600 N/A $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.519 $11.500 $0 $0 ERG Master's Project Mark Stout 55 .600 $32.083 $0 $20. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.938 $0 $118.003. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $0 $6.675 $0 $1.000 $37.400 $100 $79.947 $500 $281. (gasoline refining and marketing) Tower Energy Group (oil.250 $0 $30.197 $500 N/A $2.596.723 $0 $38.401 $1.000 $383.207 $5.081 $1.291 $3.326 $0 $100. (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 $0 $171.492 $0 $66.319 $0 $10. natural gas.099 $12.495 $1.362.203 $5.716 $39.000 $20.

543 $29.845 $452. 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.179 $0 $3.281 $1.724 $500 not applicable $500 $57.571 $500 N/A $200 N/A $1.060 $6.589 $26.000 $33.S.200 $837.454 $3.862 $21.000 $209.250 N/A $100 N/A $2.450 $566. (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. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.000 $85.147 $500 $739. 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 $29.229 $100 N/A $1.750 $267.500 N/A $0 $211.118 $0 $144.159 $3.600 $276.331 $0 $97. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.611 $1.000 $35. Dist.100 $144. McQuat.460 $50.000 $50.195 $401.000 NA $500 $0 $2.590 $5. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.748 $32.750 $1. producers.032 $0 $172.905 $30.250 $148.000 N/A $100 N/A $7.100 $0 $500 N/A $100 $0 $500 N/A $2. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.025.1996 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.) 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.605 $250 N/A $1.917 $300 $5.286 $3. and Hamrin.500 N/A ERG Master's Project Mark Stout 56 .750 $418.017 $1.882 $15.717 $500 not applicable $0 $138.819 $921.400 $1.782 $981.240 $0 $178. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.

500 $47.900 $0 $21.958 $2.521 $1.407 $200 $61.090 $749 $38.780 ERG Master's Project Mark Stout 57 .177 $300 N/A $0 $29.245 $335.650 $3.712 $100 N/A $200 $16.622 $67.050 N/A $0 $214.761 $0 $73.989 N/A $9.000 $500 $456.296 $800 $25.925 $0 $44.532 $4.016 $1. natural gas. Texaco Tidelands Oil Tosco Corp.960 $2.750 $37.636 $0 $103.334 $498 $1.500 $277.511 $1.138 $1. (gasoline refining and marketing) Tower Energy Group (oil. (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.072 $918.137 $550 N/A $5.521 $0 N/A $50 $87.000 $76.900 $1.438 $500 N/A $0 $1.000 $22.181 $1.750 $23.384 $2.000 $233.800 not tracked $3.885 $300 $207.661.417 $9.250 $34.500 $251.573 $2.721 $748.754 $4.705 $19.521 $14. 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) $41.1996 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.995 N/A $100 N/A $0 $3.209.861 $1.878 $12.643 $1. diesel) Unocal (CMA member) Victory Oil Co.000 $65. (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.347 $9.050 $949.495 $22.478.950 $3.689 $2.

000 $700 $117.790 $100 $14.066 $500 $21.462 $500 $14.000 $15.250 $21.448 $424.066 $500 N/A $250 N/A $22. 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) $1.438 $4. of California.000 $2.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .462 $208.585 $33.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.068 $14.378 $100 $21.

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

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

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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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. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 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.. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.e. CPUC vs.

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

compared to the four year collection period in AB 1890.e. Also. 1995 Decision? PG&E got what it wanted on some of the more important issues in the CPUC’s Decision. the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. “Steve Peace forced everybody to confess what was important to them. Kathy indicated that the Decision included a plan for an orderly transition to a deregulated generation environment that PG&E desired. PG&E largely got what it wanted. Is your organization more comfortable with one policy decision over the other (i. restructuring as envisioned in the CPUC Decision would have been less likely to take place in an orderly manner due to legal wrangling and ongoing filings at the CPUC. AB 1890)? Why? Although the CPUC Decision was financially easier on PG&E.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. Kathy said that it was important for the Legislature to use a process which brought disparate parties together. CPUC vs. increasing the risk to full stranded cost recovery. and own up to what they would let go. 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 a shortened period for CTC collection. Several areas of compromise for PG&E included irrigation district exemptions for collection of the Competition Transition Charge. ERG Master’s Project Mark Stout 68 . what they perceive as significant funding for renewable energy support. but had to compromise a little more than in the CPUC decision..” according to Kathy.

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

E. 1996.”82 Enova Corporation has announced a merger with Pacific Enterprises. is a California Investor Owned Utility Company founded in 1881.15 million electric customers in San Diego and southern Orange Counties. “People who influenced the outcome were present. “a subsidiary of Enova Corporation. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. It allows an organization to get buy-in from other parties in advance. while holding on to what they really wanted. a gas utility which serves a territory largely overlapping with Southern California Edison’s. 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. App. and willing to be straightforward on what they can give on.7 million customers in San Diego County.reasonableness check.” according to Kathy. SDG&E provides service to 1. Sirard. ERG Master’s Project Mark Stout 70 . Jack. and gas service to 0. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. 1996. SDG&E. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements.” Organizations had to be able to make decisions right on the spot to shape the outcome. the parent company of Southern California Gas Company83. 82 83 CPUC Renewables Working Group.

AB 1890 mirrors the Decision in many ways. 1995 Decision? The PUC was on the right track. 84 CPUC Renewables Working Group. When Tom Page came in as CEO in 1981. We were very opposed to the BRPU. We went to FERC. Also. This would put us at a competitive disadvantage compared to PG&E and Edison. we had the highest rates in the nation. except for electricity purchases from Mexican geothermal generators. and got it struck down. but are not viable with competition. everyone should pay. 1996. they did not get there by investing in high cost renewables. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.84] SDG&E does not have any renewables. it would be difficult to get 5% renewables. [The CPUC’s proposal in the December Decision would have required roughly 10% of all retail sales to be backed up by tradable credits for renewables. High priced renewables are OK if you are not moving to a competitive future. ERG Master’s Project Mark Stout 71 . The lucky Arizona utilities went with coal.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Our main goals were stranded assets recovery and the creation of a new marketplace where we could compete. SDG&E was a supporter of the PoolCo market structure along with Edison. We were strongly opposed to the RPS. so we would have to buy energy or credits. SDG&E wanted to become the lowest priced California IOU. Throughout the ‘70s. with the exception of the legislation’s mechanism for a rate reduction. if you are a broker. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ERG Master’s Project Mark Stout 93 .] 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. 300 MW set aside for renewable generation. Direct access is a tool for future development. the Decision allowed for a direct access market developing. IEP did well from restructuring. [SCE succeeded in killing the BRPU at the Federal level in 1995. IEP also sought to maintain a policy for resource diversity in the mix of generation. we influenced the Memorandum of Understanding that was released in August of 1995. the CPUC Biennial Resource Plan Update. Over time. Ensuring the sanctity of existing contracts is our highest priority. the MOU allowed the restructuring process to move forward. A large portion of the MOU is reflected in the December Decision. and included a policy for maintaining resource diversity. IEP was invited to the meetings. 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. By allowing utilities an opportunity to recover 100% of their stranded costs. they had moved from using California’s Standard Offer process as a vehicle for the expansion of the independent power sector.and represents a diverse group of gas and coal-fired cogeneration and renewable energy plants. 1995 Decision? Overall. The BRPU had resulted in 1300 MW of contracts before being struck down. Over time. to spending millions of dollars developing California’s integrated resource planning process. For IEP. but not allowed to talk. In May. independent producers were better off working with customers. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. Initially.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

. In the end. but the utilities 99 CPUC RD&D Working Group. There was an offer on the table for renewables that had been agreed to. This was a sore point that had to be finessed between players. and the Sierra Club didn’t endorse.e. the DSM funding levels got dinged.RD&D expenditures = $140 million. which will be handled separately as regulated RD&D. arriving at an agreement of $62. III-3.5 million. The Framework language [Framework for Restructuring in the Public Interest] said that they would consider an Independent Administrator. we would lose dollars. The value of the RECs should go to the contract holder. I would have wanted to see what was done with the RPS. fearing that if administration of this funding was confused. ERG Master’s Project Mark Stout 131 . In the negotiations. they agreed. First. we don’t think AB 1890 is a good deal. the legislation does a better job. there is the presumption that energy efficiency money would die in the CPUC Decision. 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. An argument ensued on how much of this figure would be under their control. while I preferred independent administration. AB 1890)? Why? Overall.]99. Since the IOUs got some money for “reliability”. Having QF developers getting them was a political miscalculation. Renewables did well funding-wise in AB 1890. CPUC vs. Ralph advocating for utility administration. I felt double-crossed. we didn’t actually get pre-Blue Book levels. Ralph Cavanagh and I agreed not to go to war on who would handle administration of funds. John White [Sierra Club lobbyist and CEERT Executive Director] was on the fence because of a split in CEERT members. On energy efficiency. including RD&D for transmission and distribution. App. The final stake through the heart was where the RECs [Renewable Energy Credits] where going.

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

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

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

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

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

While Joe continued to lobby Senators.California in April. 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. counting only those copied to UCS. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . 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. Because of splintering and infighting within the public interest community. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard. 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”. a legislative education and lobbying event in early August. at the very least they could have stopped AB 1890 from passing unanimously. 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. as included in Assembly Bill 1202. I worked for UCS coordinating our participation in Clean Power Day. resulting in over two hundred letters to Sacramento. Jane believes that Clean Power Day was the one unifying experience for environmental and renewable energy organizations throughout an otherwise splintered legislative lobbying process. gathering dozens of hand written letters from California residents to their state legislators. She went on to say that if the whole environmental community was working under a unified strategy. which had passed the Assembly the previous year. the legislative outcome would have been different.

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

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

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

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

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

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. and commented publicly at the Conference Committee. We filed comments. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. The University has a counsel on the PUC service lists. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. We had a presence. ERG Master’s Project Mark Stout 143 . We had informal contacts with the CPUC staff. allowing for inertia. and their was a steady chatter amongst parties. myself and another University employee were there off and on. They have been favorable in principle the whole way through. supplemented by several support staff. and spoke at one public hearing. The office has two advocates. but they permitted some very big cuts in R&D funding in late 1994. For the conference committee we had an attorney representing the University. about five people in the meileu. In practice. The University is represented by a legislative affairs office. they have usually been good. The Governor can appoint one Commissioner a year. but not an overwhelming one. who handle all University issues. but nobody dedicated to the PUC proceedings.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 Natural Resources Defense Council .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 California Large Energy Consumers Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #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 #1 California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 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 #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .

Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .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 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 #1 California Municipal Utilities Association .

896 $3.000 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $1.000 $3.000 $3. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.995 $300 $12.800 $1.000 $1.495 $10.191 $2.500 $22.000 $3.000 $2.429 $498 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $4.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $495 $950 $696 $2.000 $1.000 $500 $1.495 $7.000 $1.995 $21.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $7.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.

000 $8. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $6.995 $0 $0 ERG Master’s Project Mark Stout 163 . 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. (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.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.750 $4.000 $2.250 $2.990 $1.995 $14.000 $1.495 $4.500 $47.000 $10.500 $1.995 $2.Table 2: Assemblymember Jim Brulte. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.460 $200 $500 $750 $2.000 $1.511 $3.500 $1.000 $1.995 $1.017 $749 $750 $3.500 $800 $498 $200 $9.000 $3.000 $2.

totaling $101. Brulte was taken on a $7. Sweden. Paling in comparison.250 $500 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. From 3/28/96 to 4/8/96.750 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $1.000 $1.000 $1. 1996. Chevron treated Brulte to two meals. Not to be outdone. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Conservation. and Budapest. 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.490 “Travel project to Europe on Electric Restructuring. Table 3: Senator Steve Peace.000 $3. Mobil treated Brulte to a $60 event in 1996. CFEE is a “non-profit.000 $2.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. by the California Foundation on the Environment and the Economy. as well as an event.500 $1. 4 ERG Master’s Project Mark Stout 164 .000 $750 $0 $0 103 Asmus.000 $2.750 $750 $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. and Privatization” visiting London.750 $3.

072 $2.815 $750 $6.500 $16.000 $1.100 $2.000 $300 $1.572 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $7.000 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.750 $0 $0 ERG Master’s Project Mark Stout 165 .500 $8.250 $1.000 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.Table 4: Senator Steve Peace.500 $3.115 $18.450 $7.250 $750 $500 $1.600 $2.000 $750 $750 $750 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.250 $2.050 $3.000 $500 $2.

In 1995. Southern California Edison was granted a high level of access.000 $5. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Table 5: Senator Byron Sher. while Edison treated him to five meals and a sports event.100 $2. Peace was treated to a $52 sports event by Mobil Oil. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. In 1996. IEP made a gift of $241 for his speech at a conference. 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.450 166 ELECTRIC/GAS $6.900 . as well as chair of the Senate Energy and Utilities Committee. SDG&E had Peace out to six meals.000 Table 6: Senator Byron Sher. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5. taking Steve to 11 meals.

and Hamrin.000 locals) Southern California Pipe Trades United Assoc. Brotherhood of Electrical Workers (various $9. $2.100 $500 $2. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.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. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (geothermal) Colmac Energy Inc.600 $13. (biomass) Edson + Modisette (lobbyist for indep. EVs) Hansen.882 $100 $1. McQuat.482 $100 $1.000 $500 $500 $9.000 $100 producers. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.500 Int.000 $500 $1.

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

of California.585 $100 $500 $2.Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $700 $4.448 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $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.000 $300 $300 $22.

Exxon. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.500 $300 $0 $0 $2.500 $0 $0 ERG Master’s Project Mark Stout 170 .000 $1. Table 7: Senator Bill Leonard. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996.400 $750 $150 $1.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.000 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting. and GE. totaling $2608. Sher received no other gifts that year from energy utility stakeholders.300 $500 $1. Mobil. totaling $758. Sher holds over $100. 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.

extending his stay from 12/8/96 to 12/13/96. While the Senator was there. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $2. 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. WA paid $734 for Leonard to moderate a conference session on utility deregulation. for a paltry $20. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $2.500 $150 $500 $3.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $2.650 $2. saving up for a $77 dinner with head lobbyist Bob Foster.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.730 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.Table 8: Senator Bill Leonard.000 $1.000 $5.000 $1. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.650 $500 $1. The Pacific Rim Conference of Seattle.000 $500 $500 $4. Edison again ERG Master’s Project Mark Stout 171 .500 $500 $1.080 $10. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.

600 $1. paying $44 for two meals and lodging. They also had Leonard out for two meals in Sacramento.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. including lunch with Bob Foster.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. for the modest tab of $56.000 $1.000 $1.600 $750 $750 $500 $1.250 $1. Table 9: Assemblymember Mickey Conroy. ARCO treated Leonard to a $19 meal at a reception.had Senator Leonard out for Legislative Ski Day. PG&E took Leonard out to a Kings game.750 $1.000 $750 $750 $650 $150 $500 $3.000 $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 California State Pipe Trades Council PAC Int. 4 ERG Master’s Project Mark Stout 173 . CFEE is a “non-profit.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. Shanghai. two meals for $44.050 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.600 $3. PG&E treated him to a basketball game with $51 tickets.Table 10: Assemblymember Mickey Conroy.000 $3. $7. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $500 $300 $550 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day. and Inner Mongolia. 1996.000 $5. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $750 $250 $500 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.300 junket to talk with Chinese central government and provincial leaders in Beijing.500 $2.600 $500 $1.700 $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. and to 104 Asmus.000 $500 $2.000 $2.

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

750 $2.000 $1.750 $4.675 $2.000 $1.750 $2.250 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.250 $1.000 $1.175 $500 $1.Table 11: Assemblymember Diane Martinez.

) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $500 $500 $1.000 $1.000 $4.Table 12: Assemblymember Diane Martinez. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $5.500 $1.000 $1.000 $7.000 $4. Dist. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $6. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.750 $1.000 $500 $500 $5.000 $500 $3.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 . 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 $1.250 $1.000 $500 $1.500 $1.

(bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.600 $1.850 $1.500 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.Table 13: Assemblymember Steve Kuykendall.000 $1. the Illinois Energy Association flew Martinez out for a $1.100 $100 $1.900 $3.467 trip to Northwestern University to discuss the deregulation of public utilities. ERG Master’s Project Mark Stout 177 .500 $1.000 $8.208 $0 $0 $1.058 $500 $500 $1.000 $500 $500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. natural gas.

374 $500 $2.500 $1.000 $500 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. and Budapest. and Privatization” visiting London. Conservation. natural gas. However. diesel) Unocal (CMA member) Victory Oil Co. Kuykendall’s social calendar was destined to pick up in 1996.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $1.000 $1.Table 14: Assemblymember Steve Kuykendall.000 $1.500 $0 $1. Sweden.374 $4.350 $500 $1.000 $19. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. From 3/28/96 to 4/8/96.250 $100 $500 $35.000 $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.443 $6. Kuykendall was taken on a $7. ERG Master’s Project Mark Stout 178 .254 $200 $500 $4.000 $1.490 “Travel project to Europe on Electric Restructuring.

051 to fly the President out to New York City for a ConEdison Management Conference. Edison. a trade association for publicly owned utilities. The California 105 Asmus. paid $1. to meet with CEOs of the electricity industry. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and Paris.”105 The Consolidated Edison IOU spent $1. SC to address their membership. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. was very interested in California moving to the UK-style. 4 ERG Master’s Project Mark Stout 179 . one of CFEE’s funders. According to investigative writer Peter Asmus.WEST. by the California Foundation on the Environment and the Economy. A trade association. The California Mining Association took him out for an evening of recreation and dinner costing $89. CO. known as the Council of States Government . The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. an Edison lobbyist was added to the international travel party at the last minute. The Aspen Institute. regulators. Fessler was taken on a $7. in Aspen. spent $1402 to fly Fessler to Charleston. wholesale PoolCo model.by the California Foundation on the Environment and the Economy. and environmental groups to discuss the British experience with deregulation of electricity. government ministers. 1996. The Large Public Power Council.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. for $610. Another non-profit organization. Brussels. Chevron treated Kuykendall to two dinners for $131.167 junket visiting London.

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

and less than $10.000 in each of Montana Power Company and Exxon stock. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1995. utility and General Electric stock. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Conlon was taken on a $7.000 in each of Chevron. spending $258. ERG Master’s Project Mark Stout 181 . Brussels. Edison.000 in each of Central & Southwest Corp. by the California Foundation on the Environment and the Economy. one of CFEE’s funders. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. PG&E had him out to three meals for $71. and Paris. He does own more than $10. government ministers. He does own less than $10. was very interested in California moving to the UK-style. and environmental groups to discuss the British experience with deregulation of electricity. He left office on February 23.167 junket visiting London. wholesale PoolCo model. regulators. and Schlumberger oilfield services stock. In 1995. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. to meet with CEOs of the electricity industry. Unocal. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.

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