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 which will be superseded to a great extent by the details of AB 1890.org/programs/Energy/green_power/a_better. 1996. 1995 3 Flavin and Lenssen.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

Objectives
• Evaluate which stakeholder groups got what they wanted: Each stakeholder group influencing the process pursued policy outcomes that they felt were in their self-interest. This paper determines which groups had their requests granted, and which had their requests ignored, looking at both the language of AB 1890, as well as the CPUC December, 1995 decision. Groups that fared better in one arena than the other are highlighted. Determine why or why not a stakeholder group was successful in getting what they wanted out of each policy process: In many cases, interest groups were able to influence outcomes in the legislative and/or CPUC forums through well reasoned comment filings, direct lobbying, campaign contributions, as well as other avenues. This paper explores what mechanisms the different interest groups used to influence these policy outcomes, contrasting differences in techniques applied between the Legislature and CPUC, focusing on whether each decision making body or individual had particular avenues that were most effective.

Methodology
In order to answer the questions of which stakeholder groups got what they wanted and why, I based my research on an analysis of three categories of data: 1) background utility regulation literature, 2) semi-structured interviews with stakeholders as well as CPUC and legislative staff, and 3) archival analysis of CPUC filings, legislative language and videos, and state officeholder filings. Rather than approaching the data with a hypothesis to verify, I compare and cluster the data to allow patterns to flow out that can then generate theories. I compare the CPUC and legislative policy processes, determining similarities and differences in how each party fared in each forum, as well as why each party fared as they did. This data-driven approach to the generation of theory is based on the work of Glaser and Strauss, who contrast the use of data to

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generate grounded theory with the use of data to verify logico-deductive theory.5 Below I describe the use of each of these data types. Background literature on electric utility regulation is used to provide a historical context for California’s electric utility deregulation, which is presented in the next two sections of this report, History of Electric Utility Industry Regulation and Factors Behind the Drive for Deregulation. Semi-structured interviews were conducted with 26 representatives of different stakeholder organizations. The semi-structured format allows flexibility in altering the flow of the interview, following up on interesting points as they arise. I selected an initial set of organizations to contact, trying to cover as wide a spectrum of stakeholder groups as possible, based on my experience representing a stakeholder organization on the issue of electric utility deregulation in the CPUC and legislative arenas. Most interviews were conducted in person, while several where over the phone. As I conducted interviews, subjects referred me to additional representatives to contact, both in their organizations as well as in others. An interview guide was used for

recording notes, which were typed up later. Questions were developed for the interview guide to determine for each organization what outcomes were sought, what outcomes were obtained in each of the policy decisions, and what methods and strategies were used to influence each policy decision. A list of questions for the semi-structured stakeholder interviews is included in

Appendix A. A full transcript of these interviews is included in Appendix B. These interview subjects are clustered into the following categories for analysis: investor-owned electric utilities, municipal electric utilities, utility labor unions, independent producers, large electricity consumers,

5

Glaser and Strauss, 1967, Glaser, 1978.

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small electricity consumers, environmental advocates, and state institutions. The organizations represented by each interview subject are listed, by category, in the Table of Contents for Appendix B. Semi-structured interviews were conducted with two staff of the CPUC and three staff of members of the legislative Conference Committee on Electric Industry Restructuring. An

interview guide was used, with questions developed to determine which stakeholder organizations were perceived by the staff as being most effective in influencing the respective policy outcome, and why; which stakeholder organizations were perceived as being able to set the terms of the debate, and why; as well as which stakeholder organizations were perceived as least effective in influencing that policy outcome, and why. A list of questions for the semi-structured officeholder staff interviews is included in Appendix A. A full transcript of these interviews is included in Appendix C. Finally, an archival analysis was performed on the CPUC formal filings, Fair Political Practices Commission records, Secretary of State Political Reform Division records, proposed and final legislative language, as well as legislative conference committee videos. The CPUC filings can be used to cross-check what each major interested party had originally requested from the process, tracking how that may change over time, as well as to determine policy outcomes from the CPUC. The California Fair Political Practices Commission archives an annual Statement of Economic Interest for each state office holder. The EIS forms for the CPUC Commissioners and Conference Committee members were examined to determine which organizations used trips, events, meals, and other gifts to gain access to decision makers. The California Secretary of State Political Reform Division keeps Officeholder, Candidate, and Controlled Committee Campaign Statements on file for each elected state officeholder and candidate. These Statements were ERG Master’s Project Mark Stout 7

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

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

which is critical for wholesale competition. started by PURPA. towards more competition in electricity generation. recent successor to the FPC. 17. this was the marginal cost associated with procuring new generation capacity.”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. It also created new 8 9 Pechman. 343. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates. 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. 10 Davis. ERG Master’s Project Mark Stout 10 . PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. PURPA was very significant in creating a market for non-traditional generators. was charged with writing the rules required to implement this legislation. Hempling. 16. 11 Pechman. The Federal Energy Regulatory Commission (FERC). In capacity constrained systems.11 Energy Policy Act of 1992 EPAct continued the Federal trend. 166-167.

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

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

the CPUC proposed. evidentiary hearings. and documentation resulting in a report back to the Governor and Legislature by January 31.19 Since the release of the Blue Book proposal. Blue Book. 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.scheduled to be issued by the CPUC in August of 1994. For instance.22 FERC MegaNOPR In March of 1995. including private and public-interest organizations. 1995. Status Report. This led to the passage of Assembly Concurrent Resolution 143. which had been dubbed the MegaNOPR. coupled with a lack of prior coordination with the state Legislature. The first issue addressed open access to the transmission system 19 20 CPUC. where customers voluntarily pay more to promote renewables. which requires the CPUC to engage in a series of public hearings. 1994. 1. pushing back their goal for a policy decision until September of 1995. Blue Book. 1994. “alternative frameworks based on ‘let the market decide’”. This process tempered the CPUC’s frenetic timetable.20 Many stakeholders. 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. numerous other states have also proposed electric utility deregulation. ERG Master’s Project Mark Stout 13 . were concerned about the content and timetable of this proposal. Wagner. In their place. 1995.21 This stakeholder response. and asserted that. 21 CPUC. where CPUC President Fessler and Commissioner Knight testified on their proposal. “a vibrant market exists for energy efficiency services”. such as “green pricing”. FERC released a dual-issue Notice of Proposed Rulemaking.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 . as well as the majority of large electricity consumers. say that their organizations got most of what they wanted from AB 1890. a similar number of representatives report a mixed or unclear outcome. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. 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.from the December Decision. and the remaining minority claim that their organization got rather little. The small consumer and environmental organization representatives appear to have taken a step backwards in terms of getting what they wanted compared to the CPUC December Decision policy outcome. As Figures 3 indicates.

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

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

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

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

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

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

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

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

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

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

.1% of IOU revenues. The August 15 language from a coalition of powerful interests. TURN was one of several public interest organizations who opposed the change. CLECA. These got translated into dollars.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. less than two weeks before the Bill would be reported out of committee. 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. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. EDF. agricultural consumers..72 At this point late in the game. and the Sierra Club. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus.. including IEP. 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 . RD&D.. and energy efficiency. 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. a perusal of legislative language that was proposed during the long. The 3% [it was actually a cap of 3. reduced funding to an average of 2.3% of utility revenues. As a Sierra Club California legislative chair recounts on meetings between CMA. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. funding for public purpose programs: low income. renewables with an incremental cost estimate from the BRPU. During the Conference Committee hearings.” However.

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

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

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

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

981 $1.092 $3.500 $190.818 $0 $65.149 $3.157 $0 $188.952 $1.125 $0 $4.675 $384.075 $4.496 $8.031.166 $5.500 $533.374 $1.153 $750 N/A $8.608 $3.588 $500 $32.819 $0 $323.500 $263.000 $480.308 $516.500 $1.272 $0 $64.000 $634.079 $13.000 $1.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $562.470 $10.835 $1.595 $0 $21.741 $21.181 $0 $160.500 $78.110 $34.079 $950 $14.102 $0 $73.163 $0 $25. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.000 $681.112 $3.592 $846 $0 ERG Master's Project Mark Stout 54 .180 $0 $209.000 $0 $70.416 $5.964 $0 $40.203.S.675 $736.096 $971.370 $648 N/A $0 $208.419 $13.758 $2.479 $2.101 $495 $10.745 $68.516.000 N/A $0 $18.559 $0 $246.752 $0 $51.000 $62.405 $0 $722.000 $225. (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. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.630 $300 N/A $0 $5.995 $596.239 $0 N/A $0 $89.

600 $32.081 $1.716 $39.495 $1.250 $0 $30.850 $1. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.099 $12. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.203 $5.003.271 $0 $12. (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.500 $0 $0 ERG Master's Project Mark Stout 55 .000 $0 $6.000 $20.938 $0 $118.701 $0 $5.083 $0 $20.000 $526.000 $524. natural gas.197 $500 N/A $2.600 N/A $5.207 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.665 $0 $262.362.551 $12. (gasoline refining and marketing) Tower Energy Group (oil.326 $0 $100.675 $0 $1.401 $1.000 $37.230.596.519 $11.203 $0 $30.167 $500 $25.145 $5.000 $0 $15.723 $0 $38.495 $27.400 $100 $79.000 $383.291 $3.000 $0 $171.055 $0 $151.492 $0 $66.319 $0 $10.947 $500 $281.

750 $1.195 $401. McQuat. (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. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.179 $0 $3. 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.400 $1.500 $29.454 $3.200 $837.717 $500 not applicable $0 $138.118 $0 $144.724 $500 not applicable $500 $57.748 $32.000 $50.032 $0 $172.500 N/A $0 $211. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.905 $30. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.331 $0 $97. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.845 $452.250 N/A $100 N/A $2.017 $1.147 $500 $739.286 $3.882 $15.000 NA $500 $0 $2. 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.862 $21.281 $1.611 $1.750 $267. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.450 $566.100 $144.025.000 N/A $100 N/A $7.000 $33.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.626 $0 $8. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.) 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.571 $500 N/A $200 N/A $1.159 $3.543 $29.605 $250 N/A $1.750 $418.S.250 $148.590 $5. producers.917 $300 $5. Dist.100 $0 $500 N/A $100 $0 $500 N/A $2.600 $276.460 $50.240 $0 $178.060 $6.000 $35.000 $85.000 $209.229 $100 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .819 $921.589 $26.782 $981. and Hamrin.

334 $498 $1.521 $1.384 $2.478.521 $0 N/A $50 $87.925 $0 $44. Texaco Tidelands Oil Tosco Corp.960 $2.072 $918.885 $300 $207.650 $3.138 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.689 $2.500 $277.000 $76.950 $3.661.532 $4.245 $335.761 $0 $73.521 $14.209.137 $550 N/A $5.500 $251.438 $500 N/A $0 $1.780 ERG Master's Project Mark Stout 57 .750 $23.712 $100 N/A $200 $16.643 $1.016 $1.636 $0 $103.417 $9.754 $4.296 $800 $25. diesel) Unocal (CMA member) Victory Oil Co.000 $65.000 $233.000 $22.989 N/A $9. (gasoline refining and marketing) Tower Energy Group (oil. natural gas.500 $47.721 $748.090 $749 $38.407 $200 $61.495 $22. (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.705 $19.181 $1.511 $1.573 $2. 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) $41.050 $949.1996 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.347 $9.958 $2.622 $67.861 $1.995 N/A $100 N/A $0 $3.750 $37.900 $1.800 not tracked $3.900 $0 $21.250 $34.000 $500 $456.878 $12.177 $300 N/A $0 $29.050 N/A $0 $214.

068 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.378 $100 $21.448 $424.000 $700 $117.066 $500 $21.000 $15.585 $33.790 $100 $14.462 $500 $14. of California.438 $4.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.066 $500 N/A $250 N/A $22.000 $2.250 $21.462 $208.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .

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

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

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

Bibliography
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and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.e. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i.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 . 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.. CPUC vs.

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

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

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

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

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

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

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

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

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

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

1995. We came up with a proposal to prepare for the December Decision. we will end up playing defense. 3. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.87] CMUA also sought the option of long CTC recovery periods for its members. referring to access to tax-exempt bonds and inexpensive. AB 1890 also includes a requirement for our munis to begin direct access by January 1. Our proposal included voluntary participation in the PoolCo... 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.could be used to disallow CTC collection. and an outline of flexible. [IOUs have made arguments about unfair competition from municipal utilities. The Legislature did not need to mandate this. What 87 CPUC. AB 1890 has good stranded cost recovery language which includes physical bypass. an argument which CMUA refutes. as well as a longer transition period for direct access.. This forced the munis to support full stranded cost recovery in the IOU CTC. public benefits programs. Also. we avoided “level playing field” language on tax exempt financing. We had to stay at the table in order to ensure that our concerns were addressed. We wanted to avoid mandates or language on an “un-level playing field”. Federal power. other than not wanting deregulation to happen. CMUA decided that if we do not take a more proactive approach. The direct access reciprocity requirements were expected. 2000. in order to get the legislative authority for CTC recovery. 1995 Decision? CMUA had no clear objective at the CPUC. Status Report on Restructuring. our customers would have insisted on direct access because of competitiveness concerns. ERG Master’s Project Mark Stout 77 . a quid pro quo for CTC protection. App.

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

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

We were called in by the Committee. 1997.88 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We had one guiding principle: Preserve the autonomy of SMUD and other munis to determine their role in a restructured environment. ERG Master’s Project Mark Stout 80 . beat up. 1993. and regulated by an elected district board which sets policy and rates for this electric utility. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. see interviews]. but were concerned that legislation would handicap our ability to recover them. We were prepared to oppose the bill if it did not include local control for municipal utilities. We never questioned that there would be stranded assets. in other words we wanted to be able to recover our stranded costs. volunteering to do public purpose programs in exchange for other concessions. CMUA did not have the army of people Edison did. It was difficult to imagine how the Legislature would perceive a muni’s need. Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. Stuart Wilson and me. created in 1946.legislation passed. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. 88 Asmus & Smeloff. Reinventing Electric Utilities. and sent out to negotiate. SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. We maintained flexibility. CMUA had two lobbyists. SMUD is a Publicly Owned Utility for the Sacramento region.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

it was vague. from renewable generators. ERG Master’s Project Mark Stout 141 . The CEC has a role allocating the lion’s share of the $62. there were no dollar figures given for public interest RD&D. We were fighting for restoration of this funding from October of ‘94 to December of ‘95. Also. Consequently. After the passage of AB 1890. This has been affirmed in statements by University Provosts. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.5 million public purpose RD&D annual budget. there was no attempt to amend it. contacts between the two commissions has been informal. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? The general policy of the University has been that public goods R&D is a good thing that should be preserved. California Institute for Energy Efficiency Carl Blumstein is the Associate Director of the California Institute for Energy Efficiency (CIEE). the Vice-Provost of the UC system. for instance by Jud King. phasing in over time. 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. AB 1890 passed unanimously on the floor. a group at the University of California involved with energy efficiency research and development (R&D). In the process of recent years. One would need to augment budgets so the agencies were not hit. 1995 Decision? We agreed with the stated principles of the Decision. he is not representing the position of the University. University of California. In this interview. but is instead offering personal observations.purchase a given percentage of their electricity. utility funding for CIEE had been cut off.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 California Large Energy Consumers 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 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 .Interview #1 Coalition of California Utility Employees .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Natural Resources Defense Council .

Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .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 #1 California Large Energy Consumers 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. 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 .

Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $4.000 $500 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.495 $10.995 $21.495 $7.000 $495 $950 $696 $2.000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $7.500 $22.429 $498 $1.995 $300 $12.000 $1.000 $3.800 $1.000 $3.191 $2.000 $2.495 $1.000 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.896 $3.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $1.500 $1.

1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.) 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 $3.000 $2.250 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $2.500 $1.750 $4.500 $800 $498 $200 $9.495 $4.511 $3.000 $1.500 $6.000 $1.995 $2.995 $14.990 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.460 $200 $500 $750 $2.995 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .017 $749 $750 $3.500 $47.000 $10.000 $8.500 $1.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 2: Assemblymember Jim Brulte.

000 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. by the California Foundation on the Environment and the Economy. From 3/28/96 to 4/8/96. 1996.000 $750 $0 $0 103 Asmus.750 $2. Brulte was taken on a $7. Chevron treated Brulte to two meals. Sweden. Table 3: Senator Steve Peace. totaling $101. Not to be outdone. as well as an event.000 $1.750 $750 $1.000 $3.500 $1.250 $500 $1.000 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $2.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. and Privatization” visiting London. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.750 $3. Paling in comparison. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and Budapest.490 “Travel project to Europe on Electric Restructuring. 4 ERG Master’s Project Mark Stout 164 . Mobil treated Brulte to a $60 event in 1996. Conservation.000 $1. CFEE is a “non-profit.

050 $3.250 $750 $500 $1.Table 4: Senator Steve Peace.072 $2.815 $750 $6. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $4.115 $18.500 $8.500 $16.250 $2.000 $500 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 . Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $300 $1.600 $2.500 $3.000 $750 $750 $750 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $6.250 $7.100 $2.572 $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.450 $7.250 $1.000 $1.

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. IEP made a gift of $241 for his speech at a conference. SDG&E had Peace out to six meals. while Edison treated him to five meals and a sports event. Southern California Edison was granted a high level of access. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Peace was treated to a $52 sports event by Mobil Oil.000 $5.900 . In 1996. Table 5: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. as well as chair of the Senate Energy and Utilities Committee.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.450 166 ELECTRIC/GAS $6. taking Steve to 11 meals. In 1995. 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. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.100 $2.000 Table 6: Senator Byron Sher.

882 $100 $1. and Hamrin.000 $100 producers.600 $13.500 Int. (geothermal) Colmac Energy Inc. (biomass) Edson + Modisette (lobbyist for indep.000 locals) Southern California Pipe Trades United Assoc. Brotherhood of Electrical Workers (various $9.000 $500 $500 $9. EVs) Hansen.000 $500 $1. $2. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .100 $500 $2.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. McQuat. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.

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

448 $14.000 $700 $4.Tosco Corp. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $300 $300 $22.585 $100 $500 $2.

Sher holds over $100. and GE. Sher received no other gifts that year from energy utility stakeholders. NARUC treated Sher to a two day trip to DC for another meeting. totaling $758. Exxon.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.500 $0 $0 ERG Master’s Project Mark Stout 170 . Mobil. Table 7: Senator Bill Leonard.300 $500 $1.000 in each of Amoco. 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. In 1996. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.400 $750 $150 $1.500 $300 $0 $0 $2. 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 $3.000 $1. totaling $2608.

000 $500 $500 $4.000 $2.000 $5. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. Edison again ERG Master’s Project Mark Stout 171 . SCE treated Leonard to dinner and lodging for Legislative Ski Day.500 $150 $500 $3. The Pacific Rim Conference of Seattle. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.650 $2.000 $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. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.080 $10.730 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation. While the Senator was there. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $500 $1.000 $1.000 $2. extending his stay from 12/8/96 to 12/13/96. for a paltry $20. saving up for a $77 dinner with head lobbyist Bob Foster. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $1.Table 8: Senator Bill Leonard.650 $500 $1.

000 $1. for the modest tab of $56.had Senator Leonard out for Legislative Ski Day.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. including lunch with Bob Foster. Table 9: Assemblymember Mickey Conroy.000 $1.600 $750 $750 $500 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . PG&E took Leonard out to a Kings game.000 $750 $750 $650 $150 $500 $3. ARCO treated Leonard to a $19 meal at a reception.750 $1. They also had Leonard out for two meals in Sacramento.600 $1.000 $1. paying $44 for two meals and lodging.250 $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.

050 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. the California Foundation on the Environment and the Economy took Conroy on an 11 day.500 $2. 4 ERG Master’s Project Mark Stout 173 .700 $500 $300 $550 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $500 $2.000 $3.Table 10: Assemblymember Mickey Conroy. CFEE is a “non-profit. and Inner Mongolia. 1996. Shanghai.600 $3.000 $5.000 $500 $750 $250 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. $7. and to 104 Asmus.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $500 $1. two meals for $44. PG&E treated him to a basketball game with $51 tickets.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $750 $450 $250 $250 $1.

it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. Kansas City Power & Light. with investments of greater than $10. Pacificorp. and Westinghouse Electrical. In terms of investment. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. Chevron took Conroy out for two business meals. SDG&E. four rounds of “refreshments” for $30. and $25 of cookies and candy. After such a busy social calendar in 1995.000 in Orange & Rockland Utilities.make sure Conroy kept a sweet spot in his heart for them. ERG Master’s Project Mark Stout 174 . Edison wined and dined the Assemblymember with four meals at $134. costing $99. $10 in candy. General Electric. and less than 10.000 each in Edison.

Table 11: Assemblymember Diane Martinez.675 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2.175 $500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $1.000 $1.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.250 $1.250 $1.750 $4. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $1.

500 $500 $500 $1.500 $1.000 $500 $500 $500 $500 $500 $3.000 $500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $1.500 $1.250 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $500 $500 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $1.000 $4.500 $6.750 $1.000 $1. Dist.Table 12: Assemblymember Diane Martinez.000 $7. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $4.500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $500 $3.000 $5.

500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.058 $500 $500 $1.900 $3.600 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.100 $100 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.500 $1. ERG Master’s Project Mark Stout 177 .850 $1. natural gas.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.208 $0 $0 $1.Table 13: Assemblymember Steve Kuykendall. the Illinois Energy Association flew Martinez out for a $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.000 $8.000 $500 $500 $1.

000 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1. diesel) Unocal (CMA member) Victory Oil Co. and Privatization” visiting London. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.443 $6. However. Kuykendall’s social calendar was destined to pick up in 1996.490 “Travel project to Europe on Electric Restructuring. Conservation.000 $19.374 $4.000 $1. From 3/28/96 to 4/8/96.000 $2.500 $0 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.350 $500 $1. natural gas. Sweden.250 $100 $500 $35.374 $500 $2.000 $1. and Budapest.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.254 $200 $500 $4. Kuykendall was taken on a $7.Table 14: Assemblymember Steve Kuykendall. ERG Master’s Project Mark Stout 178 .000 $1.500 $1.

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

DC. in Fort Collins.000 in Ohio Edison stock. had Fessler speak at their conference in Washington. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. a utility association. ERG Master’s Project Mark Stout 180 . spent $249 to fly him to their annual meeting in Las Vegas. CO. a utility planning association. Finally. and Inner Mongolia. In April of 1995. spending $1006. for $61. ZEV’s and Rethinking the Environment Conference. for $323. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. On the investment side. Synergics Resources Corporation had Fessler out to Princeton. Utah to speak at the “Utility Restructuring. the California Foundation on the Environment and the Economy took Fessler on an 11 day. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. NJ to speak at the 1994 DSM Implementation Conference. Finally. EEI is a trade association representing investor owned utilities. Shanghai. $7.802 junket to talk with Chinese central government and provincial leaders in Beijing. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. for $467 airfare. Fessler holds over $10. spending $291. The Rocky Mountain Electrical League. The Western States Coordinating Council. a libertarian think-tank. DC. The Cato Institute. PG&E had him out for two lunches. the Center for Resource Management flew him to Midway. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. spent $314 to bring him to speak at their Spring Conference.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting.

Jr. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Central & Southwest Corp. Unocal. by the California Foundation on the Environment and the Economy. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.167 junket visiting London. utility and General Electric stock. PG&E had him out to three meals for $71. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. wholesale PoolCo model. and less than $10. Edison. government ministers. was very interested in California moving to the UK-style. and Paris. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Brussels.000 in each of Montana Power Company and Exxon stock. regulators. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. He does own less than $10. and environmental groups to discuss the British experience with deregulation of electricity. In 1995. and Schlumberger oilfield services stock. 1995. Conlon was taken on a $7. one of CFEE’s funders. spending $258. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. to meet with CEOs of the electricity industry.000 in each of Chevron.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. He does own more than $10. ERG Master’s Project Mark Stout 181 . He left office on February 23.

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