Mark Stout ERG Masters Project | Economies | Business

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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California electric utilities have a combined annual revenue of roughly $23 billion dollars1. selling 250 billion kWh of electricity per year2. 1994 4 WWW page: http://www. 1996.Introduction On September 23. which will be superseded to a great extent by the details of AB 1890.4 Given the stakes involved with this industry.html ERG Master’s Project Mark Stout 4 . acid rain and climate change. with varying success. there will probably be significant winners and losers as a result of this legislation. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). 1 2 CPUC RD&D Working Group. which sets in motion a process of electric utility deregulation beginning in 1998. 1995 3 Flavin and Lenssen. This paper develops a comparison of which stakeholder groups got what they wanted. contrasting the results of CPUC process resulting in their December.3 According to the Environmental Defense Fund. 1996 California Energy Commission. 1995 Electric Restructuring Decision. and why.S.edf. 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. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. a product with well documented environmental impacts including local air pollution. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. Various stakeholder groups. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. 1995 Decision with the California legislative process resulting in AB 1890.org/programs/Energy/green_power/a_better.

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

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

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

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

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.” 521. Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions.. “1) implementing Integrated Resource Planning (IRP). They likewise lose money when the encourage customers to engage in conservation.”.”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider. inadequate information available to customers. 14 Cavanagh..” 356-357.classes of IPPs including Exempt Wholesale Generators.. “Global Warming and Least-Cost. allowing larger generation plants to be exempt from traditional regulation.. “Social Goals. 356.12 While encouraging wholesale competition. utilities make money in only one way--selling [units of energy]. 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. This money-losing proposition is not significantly improved by any of the conservation cost recovery or incentive mechanisms now in use.and demand-side options systematically when seeking least-cost energy 12 13 Stevenson. Utilities lose money when customers engage in conservation. “Energy Efficiency Solutions. 15 Cavanagh. 14 Also. Stevenson. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options..13 and the transient nature of short term building owners and renters... “Discretionary Evolution.” 407. regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold.

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

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

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

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

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

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

omnibus legislation which preempts much of the PUC vision31. 33 CPUC press release. 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. cutting deals with the stakeholders that would be required to “deliver the votes” within the committee. the final product of this bipartisan conference committee handily passed on the Senate and Assembly floors with minimal debate. small consumer group.committee on deregulation worked at breakneck speed. neither process involved substantial public education or participation. but some have argued that the environmental organizations are not effectively representing the interests of their constituencies32. a prominent. While the pace of the PUC process was tempered so that their final policy decision could better reflect stakeholder interests. and confidential correspondence with stakeholder representative. 1996 31 Rader. 1996 32 Weisman. As the PUC stakeholder working group process drew to an end. 1996 ERG Master’s Project Mark Stout 18 . 1995 Decision. TURN. 1996 Roadmap CPUC press release."33 However. 1997. Pete Wilson signed AB 1890 on September 2330.34 There is concern that 29 30 CPUC. compared to the reckless pace of the legislative wrangling. December. Even given the large economic and environmental stakes. 1996 34 TURN press release. arguing that it should not be used as a national model for protection of residential and small commercial consumer interests. and especially residential and small commercial California ratepayers. other market participants. Several public interest organizations served as advocates for small consumer and environmental protection. since it was perceived as a best effort compromise between the two main political parties. has criticized AB 1890.

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

41 There are currently several electric utility restructuring bills in Congress. 1997 42 Weisman. 30% new technologies. In March of 1997. 1997. 1997 41 Marshall. It divides up this amount into four accounts that vary over four years of funding. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. would be eligible for direct access January 1. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1997. chair of the House Energy and Power Subcommittee. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . including a prominent one authored by Representative Dan Schaefer (R-CO). As Carter and Cavanagh have noted. 10% emerging technologies. “If the bill had failed. 1998.40 On May 6.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. 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. The overall levels are: 45 % existing technologies. including residential and small commercial consumers. 1996 CEC. and 15% consumer-side incentives.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.

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

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

1993.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. greatly increasing opportunities for bulk power sales. basing their arguments on welfare economics as applied to the changing electric utility landscape. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1994. Davis.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. “Discretionary Evolution. 150.intense pressure from large industrial customers. Gordon. 50 Flavin and Lenssen. 84-108. 52 Gilbert. ERG Master’s Project Mark Stout 23 .52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 195. 356-357. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 447-475. 1993. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. Hoffman 55-62.. but now had to pay higher rates. who in the past had enjoyed privileged status with cheap rates.”.. enabling increased competition. 51 Stevenson.

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

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

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.”62 a form of integrated resource planning know as the BRPU. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). Michigan initiated a five year retail wheeling experiment involving two utilities. 355-356. 62 Asmus.”... and Wisconsin. Connecticut. 24. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process.has noted. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. 1995. “Retail wheeling. an analyst with CPUC’s Division of Strategic Planning.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Colorado. Dassovich explained that they were frustrated with the “myriad of complex and controversial balancing accounts and rate adjustment mechanisms they had to contend with every 12 months” as part of the rate-making process. Maine. were the key retail wheeling champions within the CPUC. according to Jeff Dassovich.”.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. though it urges states to consider retail competition. Commissioner Knight. “DOE Restructuring Bill” Stevenson.. In 1994. ERG Master’s Project Mark Stout 26 .. both appointees of Governor Pete Wilson. “Discretionary Evolution. Massachusetts. 60 61 Levison. the same year that California’s Blue Book proposal was released. “the DOE bill does not mandate retail markets by any date certain. Calls for bids have often been oversubscribed by a wide margin. New York. 1997.

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

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

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

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

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

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

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

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

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

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

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

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

As Figures 5 indicates. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. either the CPUC December Decision or AB 1890.Figure 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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.516.031.370 $648 N/A $0 $208.153 $750 N/A $8. (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 $59.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $263.272 $0 $64.592 $846 $0 ERG Master's Project Mark Stout 54 .092 $3.952 $1.112 $3.157 $0 $188.101 $495 $10. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $480.000 $681.110 $34.079 $13.419 $13.180 $0 $209.981 $1.S.125 $0 $4.964 $0 $40.079 $950 $14.470 $10.818 $0 $65.595 $0 $21.000 $1.181 $0 $160.000 $0 $70.758 $2.819 $0 $323.500 $533.000 $562.752 $0 $51.405 $0 $722.741 $21.163 $0 $25.166 $5.239 $0 N/A $0 $89.608 $3.096 $971.500 $190.000 $225.500 $1.374 $1.675 $736.000 $62.995 $596.835 $1.102 $0 $73.149 $3.496 $8.559 $0 $246.500 $78.000 N/A $0 $18.630 $300 N/A $0 $5.588 $500 $32.203.479 $2.675 $384.075 $4.308 $516.745 $68.416 $5.000 $634.

197 $500 N/A $2.400 $100 $79.081 $1.000 $0 $15.000 $20.203 $5.003.675 $0 $1.723 $0 $38.600 N/A $5.167 $500 $25.271 $0 $12.600 $32.055 $0 $151.145 $5.938 $0 $118. (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. (gasoline refining and marketing) Tower Energy Group (oil.701 $0 $5.099 $12.947 $500 $281.000 $37.000 $524.250 $0 $30.500 $0 $0 ERG Master's Project Mark Stout 55 .207 $5.291 $3.319 $0 $10.000 $0 $6.326 $0 $100. 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 $4.596.665 $0 $262.230.000 $0 $171.000 $383.401 $1.203 $0 $30.716 $39.000 $526.850 $1.492 $0 $66.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.495 $27.519 $11.362.551 $12.495 $1. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.083 $0 $20. natural gas.

229 $100 N/A $1.750 $267. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.118 $0 $144. 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.611 $1. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 N/A $100 N/A $7.750 $1. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.571 $500 N/A $200 N/A $1.605 $250 N/A $1.882 $15.240 $0 $178.000 $50.331 $0 $97. 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.724 $500 not applicable $500 $57. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.589 $26.281 $1.782 $981.060 $6.250 $148.600 $276.179 $0 $3.590 $5.000 $85. and Hamrin.500 $29.500 N/A $0 $211. (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) $145.025.400 $1.748 $32. Dist. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.195 $401.500 N/A ERG Master's Project Mark Stout 56 . McQuat.905 $30.250 N/A $100 N/A $2.000 $35.862 $21. producers.845 $452.159 $3.454 $3.543 $29.819 $921.) 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.S.000 $209.000 $33.460 $50.917 $300 $5.717 $500 not applicable $0 $138.626 $0 $8.200 $837. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.147 $500 $739.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.000 NA $500 $0 $2.017 $1.032 $0 $172.286 $3.750 $418.450 $566.100 $144.100 $0 $500 N/A $100 $0 $500 N/A $2.

(CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.643 $1.960 $2.495 $22.900 $1.407 $200 $61.209.761 $0 $73.500 $251.878 $12.885 $300 $207.347 $9.090 $749 $38.800 not tracked $3.000 $500 $456.705 $19.950 $3.689 $2.500 $47.000 $233.532 $4.900 $0 $21.750 $23.622 $67.995 N/A $100 N/A $0 $3.000 $22.250 $34.245 $335.521 $1.438 $500 N/A $0 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co. diesel) Unocal (CMA member) Victory Oil Co.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.661.636 $0 $103.050 $949.754 $4.521 $0 N/A $50 $87.016 $1.721 $748. 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) $41.072 $918. natural gas.000 $76.511 $1.750 $37.989 N/A $9.650 $3.181 $1.296 $800 $25.712 $100 N/A $200 $16. Texaco Tidelands Oil Tosco Corp.137 $550 N/A $5.334 $498 $1.000 $65.573 $2.500 $277.958 $2.138 $1.050 N/A $0 $214.478.177 $300 N/A $0 $29.861 $1. (gasoline refining and marketing) Tower Energy Group (oil.780 ERG Master's Project Mark Stout 57 .925 $0 $44.521 $14.417 $9.384 $2.

000 $700 $117.462 $208.068 $14.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .790 $100 $14.462 $500 $14.250 $21.000 $2.378 $100 $21. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.000 $15.448 $424.066 $500 $21.1996 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. of California.438 $4.585 $33.066 $500 N/A $250 N/A $22.

CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. alternative energy producers. the lobbying summary tables above. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. CFEE is a “non-profit. 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. Brussels. and Inner Mongolia. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. and small consumer groups. were able to far outspend environmental organizations (who were usually spread thin over many issues). “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). to meet with CEOs of the electricity industry. government ministers. 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. 4 ERG Master’s Project Mark Stout 59 .79 From 3/16/94 to 3/27/94. regulators.As one would imagine. an Edison lobbyist was added to the international travel party at the last minute. paying up to $7. 1996. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. for $7. and environmental groups to discuss the British experience with deregulation of electricity. Conservation.800 each.”80 In April of 1995.167 per guest. Shanghai. From 3/28/96 to 4/8/96. and Paris. 1996. including oil and natural gas companies. their “Travel project to Europe on Electric Restructuring. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. According to investigative writer Peter Asmus. 4 Asmus.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

” The Committee Chairman. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. “incredible time crunch.” What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. Nancy remembers that the conference committee meetings were occurring in an. and it worked. resulting in very little control for AWEA.Nancy feels that.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. and people were not listening to arguments. “Knight was sold on the RPS concept because he is a believer in markets. but Peace killed it again. By melting down the proposed language. There were major egos on the Conference Committee with pre-formed opinions. AWEA lobbyist Joe Caves was able to get John White’s customer rebate proposal pulled from the draft language. The new CPUC President Conlon tried to put the RPS back on the table for discussion.” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. Steve Peace. with many issues being ironed out at once. Nancy continued to describe the process: “Time was too short. Nancy said she. had killed the RPS before any discussion began. “trusted in the process. Chairman Peace. Peace threw all of the stakeholders out of the room and told them to come back in one hour with their deals already ERG Master’s Project Mark Stout 91 . At one point towards the end of the Conference Committee process.” She was also invited to participate in a full panel hearing on public purpose programs. In retrospect. AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard.California in April. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . I worked for UCS coordinating our participation in Clean Power Day. as included in Assembly Bill 1202. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. a legislative education and lobbying event in early August. at the very least they could have stopped AB 1890 from passing unanimously. While Joe continued to lobby Senators. counting only those copied to UCS. “progressive legislators did not have the usual suspects all opposing it”. the legislative outcome would have been different. Because of splintering and infighting within the public interest community. which had passed the Assembly the previous year. She went on to say that if the whole environmental community was working under a unified strategy. resulting in over two hundred letters to Sacramento. UCS worked closely with AWEA at a June 1996 Senate Utility Committee hearing with both lobbyist Joe Caves and myself advocating for the Renewables Portfolio Standard and AB 1202. Jane believes that Clean Power Day was the one unifying experience for environmental and renewable energy organizations throughout an otherwise splintered legislative lobbying process. 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. gathering dozens of hand written letters from California residents to their state legislators.

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

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

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

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

AB 1890)? Why? I would see them as an appropriate sequence of decisions. but it was a reasonable outcome. More money could have been spent on public interest RD&D. and this comes through in our briefings.7 per year to the utilities. stating that their intent was that the PUC retain authority for energy efficiency funding. Conlon attended a briefing a few years back. There is an agreement that the PUC could continue funding after 4 years. ‘97 Decision on public purpose programs. or over time? I think so. Also. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. not end this authority after four years. Duque was very ERG Master’s Project Mark Stout 142 . realizing the dollars available for public purpose programs were limited. The funding for public interest RD&D will be reviewed after three years. compared to just 0. the Legislature or PUC could modify. In the February 14. working well together. we did not change our stance. Neeper did after the December. 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. ‘95 decision.. 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.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. CPUC vs. Fessler attended one earlier. very committed. We have good people involved in research.e. briefings to the IOUs were a standard part of the communication. Steve Peace and Byron Sher recently sent a letter to the PUC. most public interest RD&D money was allocated to the CEC: $61.8 million per year.

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

After seven hours of negotiation. The renewables could have fared much better if they stuck together as a coalition. 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. 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].Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. For example. current levels for moving to a future restructured market. They probably thought that this funding level included regulated transmission and distribution RD&D. The municipal utilities angered Peace so much that he asked. 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. historic levels [combined SCE. University of California representatives and I advocated for higher. the renewables community cam back in. They proposed to me funding at current RD&D budget levels. 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. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. “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.

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

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

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

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

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

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

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

then your voice was heard. lawyers. and Bill Leonard were the masterminds. The IOUs spent millions on astroturf such as “Shareholders for Equity”. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff.Legislative Conference Committee. The template was in large part formed by the CPUC’s December ‘95 Decision. Some groups also used press conferences. Which stakeholder groups do you think were best able to set the terms of the debate. but it mainly was a waste of money. If your case fit into the unfolding structure. Senator Peace established a process that was a model of openness. Because of the genius of the legislators. A lot of PR and press consultants got rich from this. due to the egalitarian nature of the structure. establishing a level playing field. One strategy was to get bills established early on in the session. getting a place at the table. based on the free market-driven ideologues on the Commission. Groups participated in coalition building. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 . There were also “grassroots” astroturf groups based on utility shareholders. and why? The PUC laid out the framework for restructuring in the Blue Book. Senators Byron Sher. Steve Peace. and accountants. 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. 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. 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.

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

To contrast this. 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. They needed to get their nukes off of the books. as well as an acceleration of recovery. and why? When the PUC December Decision came out. IOUs very quickly were able to get 100% stranded cost recovery firmed up. anyone could have influence. Groups that opposed the bill without participating also were ineffective. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. a small generation developer. they had the manpower to make sure their positions were taken care of. NEVs. and Working Assets were just not there when their issues came up. Wayne Rafesberger. The full recovery of their stranded assets was very important to them. A lot of their lawyers did technical language work in coalition with the legislative counsel. was a one-man machine. 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. They also were able to offer a lot of help with technical drafting. otherwise blew it up. such as CalPIRG and one of Ralph Nader’s organizations. This put everything on the table.Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? The IOUs were able to pull people together. If they were there and could contribute. no one was happy. Which stakeholder groups do you think were best able to set the terms of the debate. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . This was the greatest expression of coalition building. The Committee Members took some things from the Decision. and how could they have improved their approach? Power marketers such as Enron.

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

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

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

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

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

Interview #1 California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. 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 .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 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 California Large Energy Consumers Association .

Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .

) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $2.995 $300 $12.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $500 $1.000 $2.000 $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.800 $1.000 $495 $950 $696 $2.429 $498 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $3.896 $3.495 $10.191 $2.000 $1.000 $7.495 $1.000 $3.500 $22.495 $7.995 $21. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.500 $1.000 $4.

495 $4.000 $2.500 $6.511 $3.000 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $10.750 $4.017 $749 $750 $3.995 $2.460 $200 $500 $750 $2.990 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.995 $1.000 $3.500 $1.Table 2: Assemblymember Jim Brulte. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.995 $14.250 $2.500 $47.000 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.500 $1.500 $800 $498 $200 $9. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $8.000 $1.

charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $2. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. as well as an event.000 $3.000 $750 $0 $0 103 Asmus. and Budapest. by the California Foundation on the Environment and the Economy.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Table 3: Senator Steve Peace.490 “Travel project to Europe on Electric Restructuring. From 3/28/96 to 4/8/96. Not to be outdone. Mobil treated Brulte to a $60 event in 1996. totaling $101. Paling in comparison.750 $750 $1.250 $500 $1. 4 ERG Master’s Project Mark Stout 164 .000 $2. Sweden. Conservation. 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.500 $1.000 $1. and Privatization” visiting London.750 $2.000 $1.000 $1.750 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (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. 1996. Chevron treated Brulte to two meals. Brulte was taken on a $7. CFEE is a “non-profit.

Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.115 $18. (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.572 $1.Table 4: Senator Steve Peace.072 $2.500 $16.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.450 $7.250 $750 $500 $1.815 $750 $6.000 $4.600 $2.000 $300 $1.500 $3.500 $8.000 $750 $750 $750 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $6.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $2.100 $2.000 $1.000 $500 $2.050 $3.250 $7.250 $1.

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. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Peace was treated to a $52 sports event by Mobil Oil.000 Table 6: Senator Byron Sher.100 $2. IEP made a gift of $241 for his speech at a conference. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.450 166 ELECTRIC/GAS $6. In 1995.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. taking Steve to 11 meals. SDG&E had Peace out to six meals. In 1996. Table 5: Senator Byron Sher. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1.000 $5. as well as chair of the Senate Energy and Utilities Committee.900 . while Edison treated him to five meals and a sports event. Southern California Edison was granted a high level of access.

EVs) Hansen.100 $500 $2.882 $100 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $500 $1. and Hamrin.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 $1.482 $100 $1.000 locals) Southern California Pipe Trades United Assoc. (biomass) Edson + Modisette (lobbyist for indep. $2. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Brotherhood of Electrical Workers (various $9. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (geothermal) Colmac Energy Inc.600 $13.000 $500 $500 $9.500 Int. McQuat.000 $100 producers.

250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.000 $100 $100 $500 $1.000 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.000 $1.500 COMPANIES $1.000 Large Energy Consumers $3.

448 $14.000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $300 $300 $22. (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.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . of California.Tosco Corp.585 $100 $500 $2.

In 1996. NARUC treated Sher to a two day trip to DC for another meeting. 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. Table 7: Senator Bill Leonard. Sher holds over $100. Exxon.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. Mobil. and GE.000 $1.400 $750 $150 $1. totaling $758.300 $500 $1.500 $300 $0 $0 $2. Sher received no other gifts that year from energy utility stakeholders.500 $0 $0 ERG Master’s Project Mark Stout 170 . but his Statement of Economic Interest reveals large holding of oil and electricity stocks.000 in each of Amoco. totaling $2608.

) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. extending his stay from 12/8/96 to 12/13/96.730 $2.000 $1. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.500 $500 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day.650 $2.000 $5. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2.000 $500 $500 $4.Table 8: Senator Bill Leonard. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.500 $150 $500 $3.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $2. While the Senator was there. The Pacific Rim Conference of Seattle.650 $500 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Edison again ERG Master’s Project Mark Stout 171 .000 $1. for a paltry $20.080 $10.000 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. saving up for a $77 dinner with head lobbyist Bob Foster. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.

000 $1. Table 9: Assemblymember Mickey Conroy.600 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.000 $1.600 $750 $750 $500 $1. ARCO treated Leonard to a $19 meal at a reception.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. 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 . PG&E took Leonard out to a Kings game.had Senator Leonard out for Legislative Ski Day.000 $1.000 $750 $750 $650 $150 $500 $3.250 $1. for the modest tab of $56. including lunch with Bob Foster.

4 ERG Master’s Project Mark Stout 173 . and Inner Mongolia.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. $7. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. and to 104 Asmus.000 $5.050 $1. CFEE is a “non-profit. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $750 $450 $250 $250 $1. two meals for $44.500 $2.000 $500 $2.600 $3.Table 10: Assemblymember Mickey Conroy. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 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. 1996.000 $2.000 $3.300 junket to talk with Chinese central government and provincial leaders in Beijing. Shanghai. 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.600 $500 $1. PG&E treated him to a basketball game with $51 tickets.700 $500 $300 $550 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $500 $750 $250 $500 $2.

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

750 $1.250 $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.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 11: Assemblymember Diane Martinez.000 $1.750 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.675 $2.750 $4.750 $2.000 $1.175 $500 $1.750 $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 MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $1.Table 12: Assemblymember Diane Martinez.500 $1.000 $500 $500 $500 $500 $500 $3.000 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $500 $500 $1.500 $1.000 $7.000 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $0 $0 ERG Master’s Project Mark Stout 176 .750 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.000 $500 $500 $5.000 $500 $3.500 $1.000 $4. Dist.000 $4.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $1.500 $1.000 $500 $1.

600 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 .000 $8.208 $0 $0 $1.900 $3.Table 13: Assemblymember Steve Kuykendall. the Illinois Energy Association flew Martinez out for a $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.500 $1.500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.058 $500 $500 $1.000 $1.100 $100 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $500 $1.850 $1.467 trip to Northwestern University to discuss the deregulation of public utilities. natural gas.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.

and Privatization” visiting London. ERG Master’s Project Mark Stout 178 .000 $1.000 $500 $2.500 $0 $1.254 $200 $500 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Conservation. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.374 $4.250 $100 $500 $35.000 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $1. natural gas.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.Table 14: Assemblymember Steve Kuykendall. Kuykendall was taken on a $7.000 $2. However.443 $6.350 $500 $1. diesel) Unocal (CMA member) Victory Oil Co. Sweden. and Budapest.490 “Travel project to Europe on Electric Restructuring. From 3/28/96 to 4/8/96.000 $1.500 $1. Kuykendall’s social calendar was destined to pick up in 1996.000 $19.374 $500 $2.

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

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

spending $258. one of CFEE’s funders. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. In 1995. government ministers. and environmental groups to discuss the British experience with deregulation of electricity.000 in each of Chevron. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Central & Southwest Corp. Unocal. Brussels. He left office on February 23. and Paris. Jr. He does own more than $10. ERG Master’s Project Mark Stout 181 . PG&E had him out to three meals for $71. wholesale PoolCo model. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. Conlon was taken on a $7. utility and General Electric stock. and Schlumberger oilfield services stock. regulators.000 in each of Montana Power Company and Exxon stock.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Edison. to meet with CEOs of the electricity industry. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. 1995. and less than $10. He does own less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. by the California Foundation on the Environment and the Economy.167 junket visiting London.

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