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the largest source of greenhouse gas emissions and the largest source of air pollution in the U. which will be superseded to a great extent by the details of AB 1890.Introduction On September 23.S. This paper develops a comparison of which stakeholder groups got what they wanted.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

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

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

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

” 407.” 356-357. 356.. 15 Cavanagh. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options. Stevenson.classes of IPPs including Exempt Wholesale Generators. They likewise lose money when the encourage customers to engage in conservation.”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider. One prominent utility regulator remarked on the situation that had developed in the 1980s: “In the current scheme of regulation.and demand-side options systematically when seeking least-cost energy 12 13 Stevenson.. regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold... “Social Goals. 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.”. allowing larger generation plants to be exempt from traditional regulation..13 and the transient nature of short term building owners and renters. Utilities lose money when customers engage in conservation. “Discretionary Evolution. Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions. 14 Cavanagh. which compares supply.. ERG Master’s Project Mark Stout 11 .. inadequate information available to customers.” 521. utilities make money in only one way--selling [units of energy]. 14 Also.. These lead to what the National Association of Regulatory Commissioners calls the “payback gap”: substantially higher rate of return expectations for energy efficiency measures compared to supply-side investments.12 While encouraging wholesale competition. “Energy Efficiency Solutions. “1) implementing Integrated Resource Planning (IRP).

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

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

the California Commissioners released two draft proposals for pursuing rate deregulation in California. in May of 1995. favored by CPUC President Fessler and two other Commissioners. Status Report. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . Retail contracts with a particular generator could be handled with separate “contracts for differences”. is based on a common wholesale power pool. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level.for wholesale transactions. 1997.24 22 23 CPUC.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. scheduled and dispatched by an independent system operator (ISO). forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. Asmus and Smeloff. The majority proposal known as PoolCo. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. 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. which is usually considered state jurisdiction. 1995. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. All power purchases would be made through the pool. A common price for all electricity in the state would then be set by the market clearing price based on the bids. meaning the utilities could not discriminate against other electricity suppliers.

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

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

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

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

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

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

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

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

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

. Many electrical applications have substitutable fuels..54 Since 1992.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. over half of new U.”. 357. non-utility providers. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. 1994.. generating capacity has been supplied by alternative.53 allowing a policy trend that emphasizes markets rather than social welfare.”. “With this act.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. Stevenson. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. competition takes on several forms in this market. ERG Master’s Project Mark Stout 24 . such as natural gas for space heating.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway. 355-356. Utilities compete for industrial customers who are relocating.. There is significant competition in the wholesale electric generation market. “Discretionary Evolution. the camel of competition forced its nose under the monopoly tent. as well as those on the border of service districts. 55 Flavin and Lenssen.S. and it was only 53 54 Stevenson. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. “Discretionary Evolution.

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

Connecticut.. 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.”. according to Jeff Dassovich. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. 60 61 Levison. “DOE Restructuring Bill” Stevenson. Calls for bids have often been oversubscribed by a wide margin.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. and Wisconsin.”62 a form of integrated resource planning know as the BRPU. New York. Maine. “Discretionary Evolution. 1997. “Retail wheeling. In 1994. 62 Asmus. 355-356. the same year that California’s Blue Book proposal was released. Colorado. Michigan initiated a five year retail wheeling experiment involving two utilities... ERG Master’s Project Mark Stout 26 .has noted. an analyst with CPUC’s Division of Strategic Planning. 24. though it urges states to consider retail competition.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.”.. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. “the DOE bill does not mandate retail markets by any date certain. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). Commissioner Knight. Massachusetts. 1995.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. both appointees of Governor Pete Wilson.

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

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

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

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

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

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

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

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

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

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

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

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

Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . As Figures 5 indicates. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. 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. 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.

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

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

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

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

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

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

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

NRDC had no media strategy.” • Cavanagh offers a different perspective on NRDC’s substantial media work. In the end.70 [also see numerous comments in interview transcripts] An American Wind Energy Association representative was disheartened that Cavanagh would not pull NRDC’s endorsement for AB 1890.” 70 Weisman. the San Francisco Chronicle. not turning it into a media tank battle. made no attempt to build clout. The environmental groups and consumer groups such as TURN worked well together.• A senior analyst for the Environmental Defense Fund comments on their participation in the CPUC process. San Francisco Examiner. largely because no public interest group was willing to oppose the bill. We were on separate tracks with industrial customers to ensure no cost shifting occurred. we could have killed it. “wanted a win. didn’t want to ruffle any strategies. one on one. and the Sacramento Bee focusing on public purpose programs. “NRDC did press work through editorial boards including the San Jose Mercury News. Critical stakeholders who could have derailed did not. NRDC’s relationship with the IOUs was important. but relied on their name instead.” • Ralph Cavanagh has served as a lightning rod for praise and criticism of the environmental community’s focus on an insider strategy. If environmental groups collectively walked. because he. not grassroots activists: “It was a consensus-based process. “Environmentalist Defends His Stance” ERG Master’s Project Mark Stout 47 . there was not enough activity. AWEA endorsed the bill reported out of the conference committee.” Later in my interview with Ralph. “Past EDF’s filing comments. 1997. it did become clear that NRDC’s strategy was based on coalitions of insiders. It was strong going in and going out of the process. We were in constant contact.

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

roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. As a Sierra Club California legislative chair recounts on meetings between CMA.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.. During the Conference Committee hearings.” However. and the Sierra Club. 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 . funding for public purpose programs: low income. less than two weeks before the Bill would be reported out of committee. The August 15 language from a coalition of powerful interests. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus.... a perusal of legislative language that was proposed during the long. EDF. “We reached a consensus on. 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. CLECA. renewables with an incremental cost estimate from the BRPU. agricultural consumers. 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.3% of utility revenues.72 At this point late in the game. including IEP. reduced funding to an average of 2. These got translated into dollars. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. Industrial Users. TURN was one of several public interest organizations who opposed the change.1% of IOU revenues. The 3% [it was actually a cap of 3. and energy efficiency. RD&D.

There was no significant opposition to this point during the hearing. receiving “symbolic rewards only”. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value.73 However. States simply must provide the conditions that facilitate capitalist investment and economic growth. 1996 Conference Committee on Electric Restructuring AB 1890.. She pointed out the public relations/marketing dilemma that would result if “green” customers found out they were having no real impact on increasing the use of renewable generation. without making it at all clear if these voluntary contributions will actually decrease the amount the IOUs must contribute towards renewables support funding from their frozen revenues.. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development.influential players relied on a “fairness and competition” argument. As noted earlier. . so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses... “Large businesses articulated the issues. if they pursue antibusiness policies. public interest organizations have been “co-opted or bought off cheaply”. falling tax revenues.” An anonymous staffer’s comment also resonated with this state imperative..for a static amount of renewables capacity. They may be allowed to participate in the policymaking process. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff. As he explains. and unpopularity in the eyes of the public.. To the extent that public policy remains under the sway of state imperatives.. then they are punished by “capital strike”. “.74 Dryzek has voiced concern that by accepting a seat at government policymaking tables.. subdivision (e) 75 Dryzek. section 381. one Senator’s Chief of Staff revealed.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. 1996 ERG Master’s Project Mark Stout 50 . This had 73 74 California Senate TV video of August 10. but outcomes will be systematically skewed against them. recession.

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

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

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

101 $495 $10.102 $0 $73.075 $4. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.079 $950 $14.758 $2.588 $500 $32.995 $596.S.096 $971. (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 $59.239 $0 N/A $0 $89.125 $0 $4.000 $480.181 $0 $160.112 $3.952 $1.835 $1.203.000 N/A $0 $18.752 $0 $51.000 $225.675 $384.675 $736.163 $0 $25.308 $516.157 $0 $188.516.595 $0 $21.964 $0 $40.559 $0 $246.031.079 $13.180 $0 $209.000 $62.110 $34.092 $3.818 $0 $65.000 $681.166 $5.500 $190.819 $0 $323.000 $0 $70.479 $2.500 $1.630 $300 N/A $0 $5.149 $3.608 $3.419 $13.272 $0 $64.000 $1.470 $10.000 $562.374 $1.500 $533.370 $648 N/A $0 $208.405 $0 $722.496 $8.500 $263.416 $5.153 $750 N/A $8.741 $21.500 $78.981 $1.745 $68.000 $634.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.592 $846 $0 ERG Master's Project Mark Stout 54 .

083 $0 $20.665 $0 $262.003.701 $0 $5.000 $526.000 $383.197 $500 N/A $2.000 $0 $171.716 $39.203 $0 $30.596.723 $0 $38.675 $0 $1.250 $0 $30.600 N/A $5. (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.362.938 $0 $118.271 $0 $12.000 $20.000 $37.492 $0 $66.319 $0 $10.291 $3.055 $0 $151.495 $27. natural gas.099 $12.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $0 $6.600 $32. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.326 $0 $100.207 $5.401 $1.519 $11.000 $524.400 $100 $79.203 $5.230.850 $1.081 $1. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.145 $5.000 $0 $15. (gasoline refining and marketing) Tower Energy Group (oil.167 $500 $25.947 $500 $281.500 $0 $0 ERG Master's Project Mark Stout 55 .495 $1.551 $12.

100 $0 $500 N/A $100 $0 $500 N/A $2. and Hamrin.281 $1.000 $50.032 $0 $172.195 $401.717 $500 not applicable $0 $138. McQuat.605 $250 N/A $1.460 $50. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.819 $921.229 $100 N/A $1. producers.400 $1.000 $85.571 $500 N/A $200 N/A $1.118 $0 $144.286 $3.017 $1.100 $144.025. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.626 $0 $8.000 NA $500 $0 $2.905 $30.590 $5.750 $267.331 $0 $97. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.240 $0 $178.500 $29.454 $3.862 $21.882 $15.611 $1. 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.750 $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.589 $26. Dist.159 $3.917 $300 $5.S.543 $29.000 N/A $100 N/A $7.782 $981.748 $32. 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. (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.) 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.250 $148.250 N/A $100 N/A $2. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $209.147 $500 $739.500 N/A ERG Master's Project Mark Stout 56 .000 $35. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.450 $566.600 $276.060 $6. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.179 $0 $3.000 $33.200 $837.845 $452.724 $500 not applicable $500 $57.750 $418.500 N/A $0 $211.

438 $500 N/A $0 $1.181 $1.925 $0 $44.878 $12.622 $67.950 $3.072 $918. (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.050 $949.900 $1. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.705 $19.000 $76.000 $22.347 $9.573 $2.384 $2.689 $2.861 $1.650 $3.138 $1.016 $1.478.245 $335. (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.250 $34.754 $4.050 N/A $0 $214.750 $37.643 $1.780 ERG Master's Project Mark Stout 57 .521 $1.800 not tracked $3.532 $4.960 $2.000 $65.636 $0 $103. (gasoline refining and marketing) Tower Energy Group (oil.712 $100 N/A $200 $16.000 $233.995 N/A $100 N/A $0 $3.417 $9. diesel) Unocal (CMA member) Victory Oil Co.137 $550 N/A $5.989 N/A $9.495 $22.958 $2. Texaco Tidelands Oil Tosco Corp.090 $749 $38.521 $0 N/A $50 $87.750 $23.500 $47.761 $0 $73.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.661.209.500 $251.721 $748.885 $300 $207.500 $277.407 $200 $61.296 $800 $25.177 $300 N/A $0 $29.900 $0 $21.511 $1.000 $500 $456. natural gas.334 $498 $1.521 $14.

000 $700 $117. of California.250 $21.462 $500 $14.066 $500 N/A $250 N/A $22.068 $14.000 $2.438 $4.066 $500 $21.448 $424.790 $100 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.585 $33.000 $15.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .462 $208.1996 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.378 $100 $21.

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

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

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

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e. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. CPUC vs. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process..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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

‘96 Rate Restructuring Settlement. this made the question go away. he does not see a role for munis in a deregulated world. But in reality. SMUD is very committed to renewables. Assemblyman Steve Kuykendall was direct in his comments. we have to resolve this by 2002.Going into the process. energy efficiency -. Some would argue that the SMUD customer did not decide to open Rancho Seco. 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. SMUD’s territory is a small island surrounded by PG&E.clean energy. there was a question of whether we would get 100% stranded cost recovery. it is planned that PG&E will drop their rates below SMUDs by 2002. This is a classic question of public versus private decision making. The munis are in a foreign land with the PUC. if any. it seemed obvious that these principles were a gimme. Since our rates were 25% below PG&E’s. In the June. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. It is difficult to maintain public purpose programs if everyone else abandons them. The Legislature did not elevate this to a well-reasoned. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained. SMUD responded. that some other source should pay. Even though municipal utilities have the authority to recover costs. philosophical debate. there was a questioning of what role. SMUD will finish recovering our CTC by 2002. This was the bottom line. should a public agency have in a restructured environment. We are a consumer elected entity. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. this impacts munis. By constructing a brave new world for IOUs. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . It created an environment of uncertainty. what equity or fairness issues were raised by them being in the marketplace.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

including low income. in concert with oil companies. although by July. Some commercial customers had wanted aggregation for different locations. with incentives for divestiture of utility generation. We thought there would not be comprehensive legislation that year. based on geographical region. but the incentives were weak. everyone except for small consumers. ERG Master’s Project Mark Stout 115 . but TURN did not like the allocation of CTC costs to different classes. it was clear that the Legislature would be moving forward. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? We fought AB 1890 because of its putting in place items from the PUC’s December Decision that we hated. but did include language describing it. and its inclusion of giveaways to large customer groups. for aggregation of small customers to take advantage of direct access. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.to Supreme Court decisions allowing a “reasonable chance of recovery”. The PUC was vague on aggregation. it was OK for regulators to deny full recovery. 1995 Decision? There was good language on the non-bypassability of the CTC. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. Under these decisions they cite. as opposed to the rate cap in the PUC December Decision. We had advocated a community access model. TURN applauded the focus. TURN also did not like it because we got a rate freeze. The Decision made a good commitment to maintaining public purpose programs. It also included a recognition of the importance of market power. TURN was able to knock out an earlier Brulte bill. Regulated entities can achieve their own version of the truth by repetition.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As for renewable energy. the legislation. “Environmentalist Defends. with no support for commercialization over a longer duration. “thrown a bone” with the moderate level of public-interest research. and no guaranteed market for renewable energy. and demonstration (RD&D) funding.bailout for poor investments in nuclear power generation. Jane said the inclusion of the renewables purchase requirement was. AB 1890 was not a victory” for environmental goals. so UCS also supported low income program protection as defined by coalition partners. 101 Weisman. Jane indicated that. Jane said that environmental organizations were. an allocation that was “responsible public policy”. development. 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.” She said the whole battle for continuing renewables support will need to be refought in a few years. She also noted that no stakeholders seemed to resist the lack of a cap on surcharge collection for low income programs.” ERG Master’s Project Mark Stout 134 . “despite other interpretations. 1995 Decision? UCS was pleased that the CPUC’s December Decision called for a minimum renewables purchase requirement. working in progressive coalitions was important for UCS. “one of a few good pieces UCS was in a position to defend”. The Greenlining Institute.. “did not set public policy so much as doling out money in the transition period.. based on the Renewables Portfolio Standard devised by UCS’s coalition partner Nancy Rader of the American Wind Energy Association. and Latino Issues Forum. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.101 To Jane.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

429 $498 $1.191 $2.000 $3.000 $1.000 $495 $950 $696 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $4.000 $3.495 $10.000 $7.995 $300 $12.000 $3.000 $500 $1.000 $2.995 $21.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $2.500 $1.800 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.896 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $1.495 $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.500 $22.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.495 $7.

500 $47.995 $2.000 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.500 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.Table 2: Assemblymember Jim Brulte. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.511 $3.000 $10.250 $2.495 $4.750 $4.500 $1.000 $2.000 $1.995 $1.500 $800 $498 $200 $9.000 $1.995 $14.460 $200 $500 $750 $2.000 $8. (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.017 $749 $750 $3.990 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .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 $28.000 $1.

1996.000 $1.250 $500 $1.000 $1. 4 ERG Master’s Project Mark Stout 164 .750 $2.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. CFEE is a “non-profit. Not to be outdone.500 $1.000 $3. Brulte was taken on a $7. totaling $101. as well as an event.000 $2. Conservation. and Budapest. Table 3: Senator Steve Peace.750 $750 $1.000 $2.750 $3. 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. (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. Mobil treated Brulte to a $60 event in 1996.000 $750 $0 $0 103 Asmus. Sweden. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. From 3/28/96 to 4/8/96. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Chevron treated Brulte to two meals.490 “Travel project to Europe on Electric Restructuring. Paling in comparison. by the California Foundation on the Environment and the Economy.000 $1.

) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $500 $2.500 $8.000 $750 $750 $750 $1.072 $2.050 $3.000 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 . (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $2.815 $750 $6.450 $7.250 $1.500 $3.000 $4.100 $2.600 $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 Int.572 $1.500 $16.250 $750 $500 $1.000 $300 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $7.Table 4: Senator Steve Peace.115 $18.000 $6.

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 $5.100 $2. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. as well as chair of the Senate Energy and Utilities Committee.450 166 ELECTRIC/GAS $6. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Peace was treated to a $52 sports event by Mobil Oil. In 1995.000 $5. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. In 1996. SDG&E had Peace out to six meals. while Edison treated him to five meals and a sports event. Table 5: Senator Byron Sher. Southern California Edison was granted a high level of access.000 Table 6: Senator Byron Sher. IEP made a gift of $241 for his speech at a conference.900 .1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. taking Steve to 11 meals.

EVs) Hansen. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .882 $100 $1.482 $100 $1.000 $500 $500 $9. (biomass) Edson + Modisette (lobbyist for indep.600 $13. (geothermal) Colmac Energy Inc. McQuat.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. $2.100 $500 $2.500 Int. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $500 $1.000 $100 producers. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Brotherhood of Electrical Workers (various $9. and Hamrin.000 locals) Southern California Pipe Trades United Assoc.

000 Large Energy Consumers $3.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $1.000 (tire $1.500 COMPANIES $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.000 $1.000 $100 $100 $500 $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 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .585 $100 $500 $2.448 $14. of California.Tosco Corp.000 $300 $300 $22.

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. Table 7: Senator Bill Leonard.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. and GE.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Sher received no other gifts that year from energy utility stakeholders.300 $500 $1. totaling $758.500 $300 $0 $0 $2. Mobil. Sher holds over $100. Exxon.400 $750 $150 $1.000 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting.500 $0 $0 ERG Master’s Project Mark Stout 170 . totaling $2608. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996.

080 $10.500 $500 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $2. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.650 $500 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day.Table 8: Senator Bill Leonard.000 $500 $500 $4.730 $2. extending his stay from 12/8/96 to 12/13/96. The Pacific Rim Conference of Seattle. saving up for a $77 dinner with head lobbyist Bob Foster. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $5.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. Edison again ERG Master’s Project Mark Stout 171 . While the Senator was there. for a paltry $20.000 $2.000 $1.500 $150 $500 $3.650 $2. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.

600 $750 $750 $500 $1.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. ARCO treated Leonard to a $19 meal at a reception.000 $750 $750 $650 $150 $500 $3. They also had Leonard out for two meals in Sacramento.000 $1.000 $1. paying $44 for two meals and lodging.250 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.750 $1. for the modest tab of $56.had Senator Leonard out for Legislative Ski Day. including lunch with Bob Foster. PG&E took Leonard out to a Kings game.600 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . Table 9: Assemblymember Mickey Conroy.

600 $500 $1.700 $500 $300 $550 $2.000 $500 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. 4 ERG Master’s Project Mark Stout 173 .000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. PG&E treated him to a basketball game with $51 tickets. $7.000 $500 $750 $250 $500 $2.000 $5. Shanghai. 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.500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.050 $1.000 $3.600 $3. 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.700 $750 $450 $250 $250 $1. and to 104 Asmus.300 junket to talk with Chinese central government and provincial leaders in Beijing. CFEE is a “non-profit.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.000 $2. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 1996. and Inner Mongolia.Table 10: Assemblymember Mickey Conroy. two meals for $44.

In terms of investment. SDG&E. and Westinghouse Electrical.000 each in Edison.make sure Conroy kept a sweet spot in his heart for them. Pacificorp. ERG Master’s Project Mark Stout 174 . costing $99. General Electric. Edison wined and dined the Assemblymember with four meals at $134. with investments of greater than $10. and $25 of cookies and candy. After such a busy social calendar in 1995. 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. Kansas City Power & Light. Chevron took Conroy out for two business meals. and less than 10. $10 in candy.000 in Orange & Rockland Utilities. four rounds of “refreshments” for $30.

000 $1.Table 11: Assemblymember Diane Martinez.250 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $1.000 $1.250 $1.175 $500 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.675 $2.750 $1.750 $4.

500 $1.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 . Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $7.500 $500 $500 $1.000 $500 $3.000 $1.250 $1.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $500 $500 $500 $500 $500 $3.000 $1.000 $500 $500 $5.500 $1.500 $1. Dist.000 $500 $1.500 $1.750 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. (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 $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 $4.Table 12: Assemblymember Diane Martinez.000 $5.

000 $1.Table 13: Assemblymember Steve Kuykendall. the Illinois Energy Association flew Martinez out for a $1.100 $100 $1.000 $8.500 $1.058 $500 $500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $500 $500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.208 $0 $0 $1. natural gas.600 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 .900 $3.850 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

and Privatization” visiting London.000 $2. Conservation.Table 14: Assemblymember Steve Kuykendall.000 $19. However.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. Kuykendall was taken on a $7.350 $500 $1. Kuykendall’s social calendar was destined to pick up in 1996. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $1.000 $500 $2. and Budapest. Sweden.250 $100 $500 $35.443 $6.000 $1.500 $0 $1.374 $4.490 “Travel project to Europe on Electric Restructuring. natural gas.000 $1.500 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.500 $1. From 3/28/96 to 4/8/96. diesel) Unocal (CMA member) Victory Oil Co. 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. ERG Master’s Project Mark Stout 178 .254 $200 $500 $4.374 $500 $2. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.

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

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

1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.167 junket visiting London. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He does own more than $10.000 in each of Montana Power Company and Exxon stock. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. In 1995. and Schlumberger oilfield services stock. ERG Master’s Project Mark Stout 181 . He does own less than $10. utility and General Electric stock. by the California Foundation on the Environment and the Economy.000 in each of Chevron. wholesale PoolCo model. PG&E had him out to three meals for $71. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. and environmental groups to discuss the British experience with deregulation of electricity. was very interested in California moving to the UK-style. Edison. to meet with CEOs of the electricity industry. Jr. regulators. spending $258. government ministers. and Paris. 1995. Conlon was taken on a $7. Brussels.000 in each of Central & Southwest Corp. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and less than $10.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. one of CFEE’s funders. Unocal. He left office on February 23. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.

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