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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and why.Introduction On September 23. there will probably be significant winners and losers as a result of this legislation. contrasting the results of CPUC process resulting in their December. 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. selling 250 billion kWh of electricity per year2. 1996. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).S.html ERG Master’s Project Mark Stout 4 . 1 2 CPUC RD&D Working Group. a product with well documented environmental impacts including local air pollution.4 Given the stakes involved with this industry. This paper develops a comparison of which stakeholder groups got what they wanted. Various stakeholder groups. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1996 California Energy Commission. 1995 3 Flavin and Lenssen. with varying success.org/programs/Energy/green_power/a_better. which sets in motion a process of electric utility deregulation beginning in 1998. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. which will be superseded to a great extent by the details of AB 1890. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. 1995 Decision with the California legislative process resulting in AB 1890.3 According to the Environmental Defense Fund.edf. 1994 4 WWW page: http://www. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. 1995 Electric Restructuring Decision.

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

11 Pechman. this was the marginal cost associated with procuring new generation capacity. which is critical for wholesale competition. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates. started by PURPA. ERG Master’s Project Mark Stout 10 .”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan. recent successor to the FPC. 10 Davis. was charged with writing the rules required to implement this legislation. 343. towards more competition in electricity generation. 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. 17. 166-167.11 Energy Policy Act of 1992 EPAct continued the Federal trend. The Federal Energy Regulatory Commission (FERC). In capacity constrained systems. 16. Hempling. PURPA was very significant in creating a market for non-traditional generators. PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. It also created new 8 9 Pechman.investment options of utilities so that each was confined in scope to an “integrated public-utility system.

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

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

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

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

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

does not actually propose a specific electric utility industry structure. including NRDC. small customer equity. but spells out a set of public interest concerns that should be addressed by any industry restructuring including mitigation of market power. a non-bypassable systems benefits charge is proposed. By combining this with effective Performance Based Ratemaking. uneconomic investments. To enhance energy efficiency efforts.26 The CPUC held a full-panel hearing to focus on the details of the MOU in September of 1995.1995 levels. The Framework calls for less than 100% stranded cost recovery. including residential and small commercial consumers. The Framework. a coalition of public interest groups and renewable energy advocates. EDF. should see short and long term rate reductions. as a response to the MOU. Utilities Consumer Action Network. 26 27 MOU Parties. (PBR). to decouple utility profits from sales volume. and continued progress for energy efficiency and renewable resources. in the spirit of the existing Electric Revenue Adjustment Mechanism (ERAM). As in the MOU.27 Outraged that they had been left out of the MOU negotiating process. Framework Parties. 1995. but with increased funding levels to restore energy efficiency and R&D spending at pre-Blue Book levels. with utility shareholders accepting some of the burden for past. A minimum level of renewables is proposed for each IOU supply portfolio to return the states resource diversity to 1993 levels. 1995. continuation of low income programs. and Towards Utility Rate Normalization (TURN) submitted a “Framework for Restructuring in the Public Interest” to the CPUC. and at the level of attention given to the MOU. The Framework calls for equitable opportunities for small consumer participation in any move to allow direct access. UCS. a new mechanism is to be developed. the Framework demands that each individual utility customer. ERG Master’s Project Mark Stout 16 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

nearly half of the representatives say that their organization got most of what it wanted from the December Decision. as well as the majority of large electricity consumers. As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. a slightly smaller number of representatives report a mixed or unclear outcome.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. When combined with comments filed by that organization early in the restructuring process at the CPUC. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . 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. Figure 2 shows that all of the investor-owned utilities and independent producers. and the remaining minority claim that their organization got rather little. 1995 Decision. this provides a baseline to determine if they got what they wanted.

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

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

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

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

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

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

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

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

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

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

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

The August 15 language from a coalition of powerful interests. During the Conference Committee hearings. renewables with an incremental cost estimate from the BRPU. EDF. less than two weeks before the Bill would be reported out of committee. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. “We reached a consensus on.” However. Industrial Users. CLECA..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. reduced funding to an average of 2. These got translated into dollars.3% of utility revenues. TURN was one of several public interest organizations who opposed the change. and the Sierra Club. funding for public purpose programs: low income. 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. 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. a perusal of legislative language that was proposed during the long. and energy efficiency. The 3% [it was actually a cap of 3. 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 .. agricultural consumers.72 At this point late in the game.1% of IOU revenues. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus.. RD&D.. including IEP. 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.

. This had 73 74 California Senate TV video of August 10.. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value. 1996 ERG Master’s Project Mark Stout 50 . then they are punished by “capital strike”. .influential players relied on a “fairness and competition” argument. “Large businesses articulated the issues. 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. States simply must provide the conditions that facilitate capitalist investment and economic growth. There was no significant opposition to this point during the hearing. one Senator’s Chief of Staff revealed. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. 1996 Conference Committee on Electric Restructuring AB 1890.73 However.. subdivision (e) 75 Dryzek. and unpopularity in the eyes of the public. if they pursue antibusiness policies..” An anonymous staffer’s comment also resonated with this state imperative.. recession. “. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff..74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. public interest organizations have been “co-opted or bought off cheaply”. 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. To the extent that public policy remains under the sway of state imperatives. but outcomes will be systematically skewed against them. As he explains. They may be allowed to participate in the policymaking process. falling tax revenues. receiving “symbolic rewards only”.for a static amount of renewables capacity...the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. As noted earlier. section 381.

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

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

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

272 $0 $64.559 $0 $246.819 $0 $323.405 $0 $722.101 $495 $10.153 $750 N/A $8.102 $0 $73.964 $0 $40.075 $4.308 $516.595 $0 $21.500 $533.157 $0 $188.675 $736.000 $681.096 $971.000 $0 $70.752 $0 $51.031.000 $634.000 $562.166 $5.500 $190.500 $263.000 $62.758 $2.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $225.835 $1.000 $480.479 $2.675 $384.516.125 $0 $4.181 $0 $160.110 $34. 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.149 $3.500 $1.180 $0 $209. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.163 $0 $25.092 $3.818 $0 $65.203.995 $596.741 $21.079 $950 $14.952 $1.745 $68.239 $0 N/A $0 $89.981 $1.630 $300 N/A $0 $5.112 $3.588 $500 $32.419 $13.416 $5.592 $846 $0 ERG Master's Project Mark Stout 54 .370 $648 N/A $0 $208.608 $3.000 $1.374 $1.S.470 $10.500 $78.000 N/A $0 $18.496 $8. (geothermal) California Solar Energy Industry Association Enron Capital & Trade Resources Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Energy Corporation (windpower) Solar Turbines Incorporated LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Conference Committee Campaign Total California Contributions Lobbying Expenses $59.079 $13.

(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.250 $0 $30.203 $5.000 $383.000 $0 $6.000 $20.716 $39.665 $0 $262.197 $500 N/A $2.492 $0 $66.000 $524.000 $37. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.167 $500 $25.203 $0 $30.600 $32.055 $0 $151.319 $0 $10.596.081 $1.003.083 $0 $20.271 $0 $12.291 $3.519 $11.000 $0 $15.401 $1. natural gas.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.675 $0 $1.362.947 $500 $281.500 $0 $0 ERG Master's Project Mark Stout 55 . (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.600 N/A $5.495 $27.000 $0 $171. (gasoline refining and marketing) Tower Energy Group (oil.230.551 $12.400 $100 $79.723 $0 $38.495 $1.938 $0 $118.145 $5.326 $0 $100.850 $1.000 $526.207 $5.099 $12.701 $0 $5.

159 $3.750 $1.750 $267. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.626 $0 $8.600 $276.100 $0 $500 N/A $100 $0 $500 N/A $2.000 N/A $100 N/A $7. 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.000 $85.454 $3.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.400 $1.605 $250 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .500 N/A $0 $211.032 $0 $172.240 $0 $178.147 $500 $739. McQuat. 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.118 $0 $144.845 $452. and Hamrin.882 $15. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.100 $144. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.179 $0 $3.286 $3.331 $0 $97. Dist.750 $418.782 $981.611 $1.S.748 $32.200 $837.819 $921. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.460 $50.000 $33.017 $1.250 $148.000 $50. (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) $145.195 $401. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.571 $500 N/A $200 N/A $1.281 $1.500 $29.229 $100 N/A $1.025.717 $500 not applicable $0 $138.250 N/A $100 N/A $2.724 $500 not applicable $500 $57.590 $5.589 $26.543 $29.000 $209.450 $566. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $35.905 $30.060 $6.917 $300 $5.862 $21.) 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. producers.000 NA $500 $0 $2.

958 $2.407 $200 $61. natural gas.750 $37.573 $2.334 $498 $1.500 $251.500 $277.016 $1.500 $47.900 $1.761 $0 $73.000 $233.495 $22.181 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.438 $500 N/A $0 $1.511 $1.750 $23. Texaco Tidelands Oil Tosco Corp.643 $1.209.861 $1.721 $748.622 $67.989 N/A $9.800 not tracked $3.478.000 $500 $456.689 $2.705 $19. (gasoline refining and marketing) Tower Energy Group (oil.245 $335.754 $4.000 $65.878 $12.661.1996 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.532 $4.000 $76.995 N/A $100 N/A $0 $3.384 $2.072 $918. diesel) Unocal (CMA member) Victory Oil Co.000 $22.925 $0 $44.960 $2.090 $749 $38.296 $800 $25. (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. 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) $41.780 ERG Master's Project Mark Stout 57 .050 $949.050 N/A $0 $214.650 $3.900 $0 $21.950 $3.712 $100 N/A $200 $16.885 $300 $207.137 $550 N/A $5.177 $300 N/A $0 $29.417 $9.521 $0 N/A $50 $87.347 $9.138 $1.636 $0 $103.250 $34.521 $1.521 $14.

790 $100 $14.066 $500 $21.462 $500 $14.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.438 $4.000 $15.462 $208.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .378 $100 $21.000 $700 $117. of California.585 $33.250 $21. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.066 $500 N/A $250 N/A $22.068 $14.448 $424.000 $2.

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

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

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

Now that PG&E has realized electric utility deregulation is inevitable. “Pacific Gas & Electric is a California Investor Owned Utility Company. 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. 81 CPUC Renewables Working Group. Secondly. ERG Master’s Project Mark Stout 67 . E-1. For one. PG&E provides gas and electric service to more than 13 million people in northern and central California. and 2) coverage for utility stranded costs and obligations. PG&E wants to avoid the stranding of deals that were made in an era of an intact regulatory compact. PG&E’s experience with the restructuring of the gas industry provided valuable insight that shaped this approach. they want to be able to shape the outcome more effectively according to Kathy. PG&E had two main goals from the California deregulation process: 1) an orderly transition to a restructured generation environment.”81 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Kathy. eventually giving in to it while creating tensions with some parties. PG&E does not want to have to automatically take the blame when reliability issues arise.

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

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

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

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

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

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

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

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

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

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

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

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

CMUA had two lobbyists. 88 Asmus & Smeloff. and regulated by an elected district board which sets policy and rates for this electric utility. SMUD is a Publicly Owned Utility for the Sacramento region. volunteering to do public purpose programs in exchange for other concessions. We maintained flexibility. beat up. 1993.88 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. but were concerned that legislation would handicap our ability to recover them. in other words we wanted to be able to recover our stranded costs. CMUA did not have the army of people Edison did. 1997. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. We never questioned that there would be stranded assets. ERG Master’s Project Mark Stout 80 . SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies. created in 1946. It was difficult to imagine how the Legislature would perceive a muni’s need. Stuart Wilson and me.legislation passed. We were prepared to oppose the bill if it did not include local control for municipal utilities. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. see interviews]. We were called in by the Committee. Reinventing Electric Utilities. and sent out to negotiate.

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

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

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

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

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

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

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

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

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

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

the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. The new CPUC President Conlon tried to put the RPS back on the table for discussion.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. Chairman Peace.” She was also invited to participate in a full panel hearing on public purpose programs. Nancy said she. Steve Peace. Nancy remembers that the conference committee meetings were occurring in an. In retrospect. and it worked. “incredible time crunch. Nancy continued to describe the process: “Time was too short. By melting down the proposed language. “Knight was sold on the RPS concept because he is a believer in markets. At one point towards the end of the Conference Committee process. but Peace killed it again. 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 . 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. There were major egos on the Conference Committee with pre-formed opinions. AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome.” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged.Nancy feels that.” 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. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. “trusted in the process. with many issues being ironed out at once.” The Committee Chairman. had killed the RPS before any discussion began. resulting in very little control for AWEA.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

more than 55. yes. It gave us nothing until the Legislature tells us otherwise. EDF has participated in California energy policy issues since 1975.000 of whom live in California. and punted on the details to the Legislature. if restructuring is implemented properly: 1) energy efficiency investments should continue. economics. and 4) incentives for uneconomic sales promotion minimized. 1995 Decision? Almost nothing. Assuming these problems are resolved. EDF links science. we are in favor of competition. depending on interpretation. economically viable solutions to today’s environmental problems. As stated in EDF’s first round comments on the Blue Book.000 members nationwide. “There is no reason to proffer the benefits of competition first to only selected classes of customers. E-1. ERG Master’s Project Mark Stout 119 . EDF supports the earliest possible implementation of direct access for all classes of customers. and law to create innovative.”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. “a leading non-profit organization.”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.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. [which] represents 300. The Decision was vague. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. 2) an Integrated Resource Planning process should exist for energy efficiency. If focusing 94 CPUC Renewables Working Group.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. 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.000 environmentalists in California. To compliment this public participation strategy. 143 adopted. UCS took part in a mailing to 60. 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. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS. resulting in over 2. 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. asking them to respond to the CPUC through a Western Union automated fax number. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 .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.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. as well as generating a large number of letters to the CPUC. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC.

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

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

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

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

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

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

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

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

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

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

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

the PX/ISO Oversight Board is not important. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. claiming that they are linked. The PX/ISO’s insertion into Federal jurisdiction was arrogant. 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. 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. Large businesses articulated the issues. 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 Office of Ratepayer Advocates’ [Tom’s current CPUC division] position is that there is no link between a rate reduction and these bonds. and WSPA [Western States Petroleum Association]. Legislative Conference Committee. The 10% rate reduction for small customers was final packaging to sell the bill for voters. utilities were fine with the rate freeze. since the FERC will approve their structure. It is tough to sell delayed gratification. as rates were supposed to come down due to the QF cliffs anyway.shorter compared to the December Decision. CMA and CLECA jointly made utility restructuring the issue for business. The utilities are trying to get an untaxed ruling from the IRS on these bonds. The utilities would fight this interpretation. so that the [legislative] Members and Governor bought in that restructuring would be good for ERG Master’s Project Mark Stout 148 . As a sidenote. CLECA. The level of influence on AB 1890 was a function of who was in the Conference Committee hearing room.

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

Senator Peace was making a decision. They waited until late in the process to get organized. He had a conversation with Senator Lockyer to staff up the Conference Committee. They were a guiding light.During the summer recess in July. These groups could not come to a resolution. John Rozsa and I were brought on board. CMA. The Conference Committee tried to put together legislation that made sense. Senator Peace decided on a process with long discussions. All of the munis were trying to figure out what to do in a restructured world that will not allow residential ERG Master’s Project Mark Stout 150 . Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. LADWP was trying to cause trouble with restructuring. They did not want to participate. Peace’s past experience with workman’s comp reform involved an extensive hearing process. decision makers at the table. It would not have happened without DJ Smith. and Edison set the tone. and Bob Foster. Which stakeholder groups do you think were best able to set the terms of the debate. and why? CLECA. you could get four votes. encouraging other people to accept the process who otherwise would not have. DJ Smith [CLECA] and Bob Foster [Edison] wanted to make a case to ratify the MOU. He wanted people who would get engaged. could not address the problem of a competitive market and participation. Most parties felt that with the right bill. CMA. and how could they have improved their approach? The environmental and renewables communities made the Committee punt. The Committee engaged in months of hearings issue by issue. CLECA. but not all six. getting everyone engaged for buy-in. we have to get everyone to sign off on the bill. Peace’s mind was made up. having conversations with the Governor’s office. Mark Timmerman. and Edison. The California Municipal Utilities Association folks lacked effectiveness also. It was unclear whether consensus among the Committee Members was going to happen.

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

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

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

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

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

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

The Governor has the same goal: empower people for economic development. TURN would say they want “X”. and the conference committee comes back with a 10% rate reduction instead. For example. Between the large manufacturers and utilities. Was it always clear what outcomes each stakeholder group wanted from the process? No. Which stakeholder groups do you think were best able to set the terms of the debate. A key witness before the Committee was Ann Cohn. who deal daily with issues of economic development. This was the first time for the Members to be looking at actual language. Ann sat down and read from the draft during the conference committee. But it was not the number of people in the room that mattered. However. Ann wrote it and brought it to the Committee for consideration. So ERG Master’s Project Mark Stout 157 . and how could they have improved their approach? Power marketers and brokers were not as involved. The Committee staff did not write the first draft of the bill. but the resources that could be allocated. Often what groups indicated that they wanted was not what they actually wanted. Senior Legal Counsel for Edison. the ratepayer groups did not jump up and grab it. This had validity for Committee Members. they accounted for 2/3 of the people in the hearing room. and why? The same stakeholder groups ran the discussions.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. Along the way the draft was changed of course. 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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .

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

Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #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 Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $2.995 $300 $12.000 $2.429 $498 $1.500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $7.000 $1.896 $3.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.495 $7.500 $22.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $3.995 $21.000 $500 $1.000 $3.191 $2.000 $3.495 $1.800 $1.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $495 $950 $696 $2.000 $4.495 $10.

000 $2.500 $6.Table 2: Assemblymember Jim Brulte.990 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .250 $2.750 $4.500 $47.000 $3.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.995 $14.995 $2.017 $749 $750 $3.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.500 $1.495 $4.500 $1.000 $10.500 $800 $498 $200 $9.000 $8.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.511 $3.000 $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.995 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.460 $200 $500 $750 $2.

1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. totaling $101. Table 3: Senator Steve Peace.000 $1. Not to be outdone. by the California Foundation on the Environment and the Economy. CFEE is a “non-profit. 4 ERG Master’s Project Mark Stout 164 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Sweden.000 $750 $0 $0 103 Asmus.000 $3. Brulte was taken on a $7. as well as an event.750 $3. Mobil treated Brulte to a $60 event in 1996. Paling in comparison. 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. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $1. Conservation.750 $2.000 $1. and Budapest. From 3/28/96 to 4/8/96.490 “Travel project to Europe on Electric Restructuring.500 $1.000 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. and Privatization” visiting London.000 $2. Chevron treated Brulte to two meals. 1996.750 $750 $1.250 $500 $1.

572 $1.500 $3.000 $500 $2.000 $1.115 $18.250 $7.250 $2. (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 $750 $750 $750 $1.450 $7.815 $750 $6.750 $0 $0 ERG Master’s Project Mark Stout 165 . 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.072 $2.250 $1.100 $2.000 $300 $1.250 $750 $500 $1.500 $8.600 $2.000 $4.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.050 $3.500 $16. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $6.Table 4: Senator Steve Peace.

while Edison treated him to five meals and a sports event. In 1995. Peace was treated to a $52 sports event by Mobil Oil. Table 5: Senator Byron Sher.450 166 ELECTRIC/GAS $6. IEP made a gift of $241 for his speech at a conference. 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 $1.900 .100 $2. In 1996.000 $5. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.000 Table 6: Senator Byron Sher. SDG&E had Peace out to six meals. 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. Southern California Edison was granted a high level of access. taking Steve to 11 meals. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.

882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $100 producers.500 Int.000 locals) Southern California Pipe Trades United Assoc. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . EVs) Hansen. (geothermal) Colmac Energy Inc.000 $500 $1.482 $100 $1. and Hamrin. $2. Brotherhood of Electrical Workers (various $9.100 $500 $2. McQuat. (biomass) Edson + Modisette (lobbyist for indep.000 $500 $500 $9.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 $1.600 $13.

000 $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.500 COMPANIES $1.000 $100 $100 $500 $1.000 Large Energy Consumers $3.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $100 $1.000 (tire $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 $1.

California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $700 $4.448 $14.Tosco Corp.000 $300 $300 $22.585 $100 $500 $2. (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.

400 $750 $150 $1. and GE. Table 7: Senator Bill Leonard.500 $300 $0 $0 $2. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Sher received no other gifts that year from energy utility stakeholders. totaling $2608.000 $1. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher holds over $100. Exxon.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.300 $500 $1. In 1996. Mobil. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. NARUC treated Sher to a two day trip to DC for another meeting. totaling $758.000 in each of Amoco.

WA paid $734 for Leonard to moderate a conference session on utility deregulation. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $2. While the Senator was there. for a paltry $20.080 $10. saving up for a $77 dinner with head lobbyist Bob Foster.000 $1. (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. The Pacific Rim Conference of Seattle. SCE treated Leonard to dinner and lodging for Legislative Ski Day.730 $2.000 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.650 $500 $1.650 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.500 $150 $500 $3. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2.000 $5. Edison again ERG Master’s Project Mark Stout 171 . extending his stay from 12/8/96 to 12/13/96.000 $500 $500 $4.500 $500 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. 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.Table 8: Senator Bill Leonard.

had Senator Leonard out for Legislative Ski Day. ARCO treated Leonard to a $19 meal at a reception.000 $750 $750 $650 $150 $500 $3.600 $750 $750 $500 $1. for the modest tab of $56.750 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. 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. They also had Leonard out for two meals in Sacramento.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . including lunch with Bob Foster. Table 9: Assemblymember Mickey Conroy. paying $44 for two meals and lodging. PG&E took Leonard out to a Kings game.000 $1.600 $1.000 $1.000 $1.250 $1.

000 $3.000 $5. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.600 $3. two meals for $44.600 $500 $1. and Inner Mongolia.000 $500 $750 $250 $500 $2.700 $500 $300 $550 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing. and to 104 Asmus.000 $500 $2.000 $2. $7. 1996. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. 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. 4 ERG Master’s Project Mark Stout 173 .Table 10: Assemblymember Mickey Conroy.700 $750 $450 $250 $250 $1. the California Foundation on the Environment and the Economy took Conroy on an 11 day. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. PG&E treated him to a basketball game with $51 tickets.050 $1. Shanghai.500 $2. CFEE is a “non-profit. 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.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.

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

750 $4.675 $2.750 $2.750 $1.750 $2.Table 11: Assemblymember Diane Martinez.000 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.000 $1.750 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.250 $1.175 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .

(member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.Table 12: Assemblymember Diane Martinez.000 $5.000 $1.000 $500 $500 $5.000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $1.000 $500 $1.750 $1.500 $1.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.250 $1.000 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) 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 $500 $500 $500 $3.500 $1.500 $500 $500 $1.000 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $500 $3.500 $1.000 $7. Dist.

900 $3.Table 13: Assemblymember Steve Kuykendall.850 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.000 $1.100 $100 $1. natural gas. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.000 $8.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $500 $500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. 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. the Illinois Energy Association flew Martinez out for a $1.208 $0 $0 $1.600 $1.500 $1.058 $500 $500 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. ERG Master’s Project Mark Stout 177 .500 $1.

374 $4.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.Table 14: Assemblymember Steve Kuykendall. ERG Master’s Project Mark Stout 178 . SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $1. Sweden. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.500 $1.000 $2. Kuykendall’s social calendar was destined to pick up in 1996.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1.350 $500 $1. and Budapest.443 $6. From 3/28/96 to 4/8/96.000 $19.254 $200 $500 $4. and Privatization” visiting London.000 $1.490 “Travel project to Europe on Electric Restructuring. diesel) Unocal (CMA member) Victory Oil Co. Kuykendall was taken on a $7.000 $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. Conservation.250 $100 $500 $35.000 $1.374 $500 $2. natural gas. However.500 $0 $1.

wholesale PoolCo model. 1996. one of CFEE’s funders. spent $1402 to fly Fessler to Charleston. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). Chevron treated Kuykendall to two dinners for $131. The Large Public Power Council. A trade association. regulators. Brussels. by the California Foundation on the Environment and the Economy. CO. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94.”105 The Consolidated Edison IOU spent $1. 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. According to investigative writer Peter Asmus. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. a trade association for publicly owned utilities. The California Mining Association took him out for an evening of recreation and dinner costing $89.167 junket visiting London. government ministers. in Aspen. and Paris. known as the Council of States Government . SC to address their membership.051 to fly the President out to New York City for a ConEdison Management Conference. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. Another non-profit organization.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The Aspen Institute. for $610. Edison. and environmental groups to discuss the British experience with deregulation of electricity.WEST. Fessler was taken on a $7. to meet with CEOs of the electricity industry.by the California Foundation on the Environment and the Economy. paid $1. was very interested in California moving to the UK-style. 4 ERG Master’s Project Mark Stout 179 . The California 105 Asmus.

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

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

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