Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

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

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

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

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

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edf. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. This paper develops a comparison of which stakeholder groups got what they wanted. there will probably be significant winners and losers as a result of this legislation.html ERG Master’s Project Mark Stout 4 . 1995 Electric Restructuring Decision. 1996 California Energy Commission. selling 250 billion kWh of electricity per year2. Various stakeholder groups.Introduction On September 23. 1 2 CPUC RD&D Working Group. which sets in motion a process of electric utility deregulation beginning in 1998.4 Given the stakes involved with this industry. which will be superseded to a great extent by the details of AB 1890.S. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. 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. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1995 3 Flavin and Lenssen.org/programs/Energy/green_power/a_better.3 According to the Environmental Defense Fund. a product with well documented environmental impacts including local air pollution. 1994 4 WWW page: http://www. 1995 Decision with the California legislative process resulting in AB 1890. and why. with varying success. acid rain and climate change. 1996. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. contrasting the results of CPUC process resulting in their December. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).

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

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

” This legislation sought to avoid market abuses by limiting the size and 7 Davis. with at least 20% of electricity crossing state lines in 1935.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids.8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law. by 1922 47 states and the District of Columbia were regulating electric utilities. Based on the Interstate Commerce Clause. Beginning in 1907 with New York and Wisconsin. Hempling explains. This being the case the best solution seemed to be regulation by public commission. large nonutility companies such as electric equipment contractors. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. a small number of holding companies owned most utilities in the United States. this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers. or were owned by. led to the passage of the Federal Power Act. 166-167.utilities as natural monopolies and hence inevitable. A number of these holding companies owned.” 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. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). ERG Master’s Project Mark Stout 9 . State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation.

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

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

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

and documentation resulting in a report back to the Governor and Legislature by January 31. where CPUC President Fessler and Commissioner Knight testified on their proposal. “a vibrant market exists for energy efficiency services”.22 FERC MegaNOPR In March of 1995. 1994.20 Many stakeholders. Wagner. Status Report.scheduled to be issued by the CPUC in August of 1994. 1994.21 This stakeholder response. 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. In their place. numerous other states have also proposed electric utility deregulation.19 Since the release of the Blue Book proposal. This process tempered the CPUC’s frenetic timetable. 21 CPUC. For instance. FERC released a dual-issue Notice of Proposed Rulemaking. including private and public-interest organizations. 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. ERG Master’s Project Mark Stout 13 . which had been dubbed the MegaNOPR. 1995. were concerned about the content and timetable of this proposal. such as “green pricing”. The first issue addressed open access to the transmission system 19 20 CPUC. Blue Book. where customers voluntarily pay more to promote renewables. “alternative frameworks based on ‘let the market decide’”. 1994. evidentiary hearings. Blue Book. the CPUC proposed. pushing back their goal for a policy decision until September of 1995. coupled with a lack of prior coordination with the state Legislature. 1. 1995. and asserted that. which requires the CPUC to engage in a series of public hearings.

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

The MOU also proposed a nonbypassable charge to fund public policy programs.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. at the prompting of California Governor Pete Wilson. and low-income weatherization would be funded at 25 CPUC Direct Access Proposal ERG Master’s Project Mark Stout 15 . In structure. although generators would submit projections to an independent system operator (OPCO). met to iron out differences between them and draft their own industry restructuring proposal. California Large Energy Consumers Association. it is a hybrid of the two proposals. as-needed basis. including bilateral contracts for direct access customers. who is responsible for maintaining transmission system reliability. as well as a central. Southern California Edison Company (one of three regulated. wholesale pool. Full stranded cost recovery is agreed to for Edison. Out of this surcharge. investor owned utilities in California). No central entity would schedule power generation. the only IOU signing the MOU. 1995. Bids for generation into the pool would be processed by a Power Exchange (PX).3% of total utility revenue requirements as of January 1.25 In response to the Commissioner proposals. and R&D were not to exceed 3. a group of seemingly influential special interests. and Independent Energy Producers. or through the creation of optional pools which could manage bids in a manner similar to the PoolCo proposal. funding levels for energy efficiency. know as the “Memorandum of Understanding” (MOU). Prices would be determined either through bilateral contracts between direct access customers and generators. low-income ratepayer assistance would be funded at an uncapped. renewables. California Manufacturers Association.

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

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

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

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

environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. including residential and small commercial consumers.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. 10% emerging technologies. would be eligible for direct access January 1. It divides up this amount into four accounts that vary over four years of funding. 1997 41 Marshall. including a prominent one authored by Representative Dan Schaefer (R-CO). “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 1997. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. and 15% consumer-side incentives. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1998. In March of 1997.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1996 CEC. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. chair of the House Energy and Power Subcommittee.40 On May 6.41 There are currently several electric utility restructuring bills in Congress. The overall levels are: 45 % existing technologies. 1997. As Carter and Cavanagh have noted. 1997 42 Weisman. “If the bill had failed. 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. 30% new technologies.

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

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

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

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

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

“the DOE bill does not mandate retail markets by any date certain. Massachusetts. Calls for bids have often been oversubscribed by a wide margin. 24. New York. 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. 60 61 Levison.”.”.has noted.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. 1997. and Wisconsin. “Discretionary Evolution. though it urges states to consider retail competition. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. the same year that California’s Blue Book proposal was released.”62 a form of integrated resource planning know as the BRPU.63 This move towards greater reliance on the marketplace to make supply decisions is clearly in line with the free-market ideologies of the Republican Governor. Michigan initiated a five year retail wheeling experiment involving two utilities. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU).61 California Public Utility Commissioners Jesse Knight and Norm Shumway. Maine. Colorado. Commissioner Knight. an analyst with CPUC’s Division of Strategic Planning. were the key retail wheeling champions within the CPUC. In 1994. “Retail wheeling.. “DOE Restructuring Bill” Stevenson. 355-356. ERG Master’s Project Mark Stout 26 . 1995... Connecticut. both appointees of Governor Pete Wilson. 62 Asmus. according to Jeff Dassovich.

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

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

large electricity consumers.exercise of power from Lukes’ most “radical” view. 1995. I chose these categories based on personal experience representing a stakeholder organization in the process. their comments on restructuring filed with the CPUC69. I tried to cover as wide a range of participants as possible.. CPUC. small electricity consumers. environmental advocates. I first review what the different stakeholder groups wanted and got in both policy outcomes... utility labor unions.. Status Report. since such a broad analysis would be outside of the scope of this project. as well as considering those used in a status report from the CPUC to the Legislature.68 I have broken oil and natural gas companies out as a separate category in the tabulations of campaign contributions. independent producers. 1995.67 As I extended my analysis with a summary of campaign contributions from stakeholders to the conference committee members. Status Report. 67 68 CPUC. municipal electric utilities. talking with at least one prominent representative from a number of categories: investor-owned electric utilities. Selection of Stakeholder Groups In selecting stakeholder groups to focus on.. ERG Master’s Project Mark Stout 29 . and the final AB 1890 language.. 1995. and a state institutions. 1995 CPUC Decision. one important subcategory emerged because of its dominance: Oil and natural gas companies are often both large energy consumers. Status Report. Overview of What the Stakeholders Wanted and What They Got Before analyzing who got what they wanted. based on 26 stakeholder interviews [see Appendix B]. as well as independent producers. the December. 69 CPUC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As a Sierra Club California legislative chair recounts on meetings between CMA. During the Conference Committee hearings. The 3% [it was actually a cap of 3. renewables with an incremental cost estimate from the BRPU. CLECA. and energy efficiency. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding.. reduced funding to an average of 2. agricultural consumers.72 At this point late in the game. 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. RD&D.” However. the public interest groups did not have much leverage to oppose the dissolution of this consensus since they did not have an engaged constituency of activists to back them up. The August 15 language from a coalition of powerful interests. TURN was one of several public interest organizations who opposed the change. including IEP. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced.3% of utility revenues. less than two weeks before the Bill would be reported out of committee. Industrial Users.. funding for public purpose programs: low income. and the Sierra Club.. EDF. 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 .. “We reached a consensus on.1% of IOU revenues. These got translated into dollars. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.

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

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

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

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

981 $1.079 $13.964 $0 $40.500 $1.588 $500 $32.500 $78.500 $263.149 $3.819 $0 $323.203.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.835 $1.952 $1.157 $0 $188.181 $0 $160.741 $21.125 $0 $4.000 $0 $70.758 $2.405 $0 $722.000 $62.153 $750 N/A $8.000 $225.092 $3.308 $516.592 $846 $0 ERG Master's Project Mark Stout 54 .000 $480.745 $68.031.500 $533.416 $5.470 $10.101 $495 $10.000 N/A $0 $18.995 $596.000 $634.516.496 $8.000 $681.272 $0 $64.096 $971. 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.559 $0 $246.110 $34.675 $736.419 $13.370 $648 N/A $0 $208.675 $384.102 $0 $73. (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 $59.000 $1.374 $1.818 $0 $65.752 $0 $51.630 $300 N/A $0 $5.180 $0 $209.500 $190.075 $4.112 $3.479 $2.166 $5.163 $0 $25. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $562.079 $950 $14.595 $0 $21.608 $3.S.239 $0 N/A $0 $89.

145 $5.492 $0 $66.000 $383.000 $37.596.291 $3.099 $12.003.600 N/A $5.362.701 $0 $5.495 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.271 $0 $12.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.665 $0 $262.675 $0 $1.716 $39.083 $0 $20.081 $1.203 $0 $30.250 $0 $30. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.197 $500 N/A $2.938 $0 $118.207 $5.495 $27.055 $0 $151.551 $12.850 $1.600 $32.519 $11.000 $0 $15.167 $500 $25.000 $0 $6.319 $0 $10.230.203 $5.723 $0 $38.400 $100 $79.947 $500 $281.000 $20.000 $526.500 $0 $0 ERG Master's Project Mark Stout 55 .401 $1.000 $0 $171. (gasoline refining and marketing) Tower Energy Group (oil. 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 $4.000 $524.326 $0 $100. natural gas.

229 $100 N/A $1.000 NA $500 $0 $2.240 $0 $178.882 $15. (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) $145.750 $267. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. producers.000 N/A $100 N/A $7. Dist. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.250 N/A $100 N/A $2.286 $3.025.717 $500 not applicable $0 $138.100 $144. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.281 $1.331 $0 $97.862 $21.543 $29.589 $26.000 $35.200 $837.590 $5.032 $0 $172.460 $50.750 $418.000 $33.750 $1.060 $6.917 $300 $5.626 $0 $8.845 $452.400 $1.159 $3.147 $500 $739.000 $50.605 $250 N/A $1. 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.905 $30.000 $209.450 $566.250 $148. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.500 N/A $0 $211.195 $401.) 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. 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.454 $3.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.179 $0 $3.500 N/A ERG Master's Project Mark Stout 56 .500 $29.571 $500 N/A $200 N/A $1.748 $32. and Hamrin.600 $276.017 $1.782 $981.S. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.819 $921.724 $500 not applicable $500 $57.118 $0 $144.000 $85. McQuat.611 $1.100 $0 $500 N/A $100 $0 $500 N/A $2.

500 $277.958 $2.689 $2.622 $67.900 $1.495 $22.750 $37.016 $1.050 $949.573 $2.090 $749 $38.000 $22.347 $9.521 $0 N/A $50 $87.995 N/A $100 N/A $0 $3.296 $800 $25.137 $550 N/A $5.334 $498 $1.384 $2. natural gas.780 ERG Master's Project Mark Stout 57 .643 $1.438 $500 N/A $0 $1.989 N/A $9. (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.636 $0 $103.050 N/A $0 $214.478.750 $23.138 $1.521 $1.511 $1.900 $0 $21. diesel) Unocal (CMA member) Victory Oil Co.000 $233.1996 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.072 $918.000 $76.250 $34.878 $12.712 $100 N/A $200 $16. 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) $41.861 $1.650 $3.960 $2.417 $9. (gasoline refining and marketing) Tower Energy Group (oil.721 $748.661.885 $300 $207.407 $200 $61.000 $65.245 $335.000 $500 $456.925 $0 $44.209. (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.500 $47.800 not tracked $3.181 $1.705 $19.521 $14.761 $0 $73.500 $251. Texaco Tidelands Oil Tosco Corp.950 $3.754 $4.532 $4.177 $300 N/A $0 $29.

of California.066 $500 $21.250 $21.448 $424.000 $700 $117.000 $2.000 $15.378 $100 $21.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.066 $500 N/A $250 N/A $22.790 $100 $14.462 $208.068 $14.462 $500 $14.585 $33.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .438 $4.

to meet with CEOs of the electricity industry. and Inner Mongolia. government ministers. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. 4 ERG Master’s Project Mark Stout 59 . “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. According to investigative writer Peter Asmus. Shanghai. regulators. and environmental groups to discuss the British experience with deregulation of electricity. and Paris. 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. paying up to $7. and small consumer groups.167 per guest. CFEE is a “non-profit. alternative energy producers.As one would imagine. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. Brussels. Conservation. an Edison lobbyist was added to the international travel party at the last minute. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus.”80 In April of 1995. 1996. From 3/28/96 to 4/8/96.800 each. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. for $7. 4 Asmus. including oil and natural gas companies. 1996. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. were able to far outspend environmental organizations (who were usually spread thin over many issues). the lobbying summary tables above.79 From 3/16/94 to 3/27/94. their “Travel project to Europe on Electric Restructuring.

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

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

Bibliography
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and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 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 .e. CPUC vs. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. 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.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 had two main goals from the California deregulation process: 1) an orderly transition to a restructured generation environment. they want to be able to shape the outcome more effectively according to Kathy. PG&E’s experience with the restructuring of the gas industry provided valuable insight that shaped this approach. eventually giving in to it while creating tensions with some parties. Secondly. E-1. PG&E initially said no to gas deregulation. PG&E provides gas and electric service to more than 13 million people in northern and central California. PG&E wants to avoid the stranding of deals that were made in an era of an intact regulatory compact. 81 CPUC Renewables Working Group. ERG Master’s Project Mark Stout 67 . For one. PG&E does not want to have to automatically take the blame when reliability issues arise.”81 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Kathy. Now that PG&E has realized electric utility deregulation is inevitable. “Pacific Gas & Electric is a California Investor Owned Utility Company. and 2) coverage for utility stranded costs and obligations.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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nancy feels that.” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged.” The Committee Chairman. but Peace killed it again. “trusted in the process. with many issues being ironed out at once. and people were not listening to arguments. Chairman Peace.” She was also invited to participate in a full panel hearing on public purpose programs. Nancy said she. resulting in very little control for AWEA. The new CPUC President Conlon tried to put the RPS back on the table for discussion.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. “incredible time crunch.” What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. had killed the RPS before any discussion began. Nancy continued to describe the process: “Time was too short. By melting down the proposed language. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. 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. 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. In retrospect. Steve Peace. 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. At one point towards the end of the Conference Committee process. There were major egos on the Conference Committee with pre-formed opinions. Nancy remembers that the conference committee meetings were occurring in an.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

e. and offered a good commitment to low income programs. In the end. so he was amenable to this. it limited CTC recovery to a shorter period of time. Since we felt that it was incrementally better than the December Decision. leading to a heated internal debate. but had to be in the debate. divested power plants must come with a contract for the original staff for the first two years. Peace’s residence had gotten slammed a couple times. We had suggested that community access provide an out for people that did not want in. This raises a substantial barrier for municipalities to aggregate their residents’ loads. CPUC vs. Also. firmed up the nonbypassability of the CTC. We had the option of opposing it and jeopardizing the concessions in it. On the bad side. a very. PG&E gets a $0.5 billion increase. but Edison successfully created this barrier under the guise of anti-slamming language. 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. ERG Master’s Project Mark Stout 116 . very bad bill. into a very bad bill. On the good side. TURN felt it had turned AB 1890. AB 1890)? Why? At the end of the process. It turns out that independent generation plants are run with much less staff.So we were stuck with a bill that we hated. there were some self-generation projects in the pipeline. Unions got a huge bone by having the cost of retraining and severance included in the CTC. we did not oppose or support AB 1890. signed document with independent verification that a customer wants to be included in an aggregation. Some customers got away with no CTC. we decided not to oppose. Edison gets coal cost increases.. Is your organization more comfortable with one policy decision over the other (i. but a narrow set of projects.

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

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

economics. and law to create innovative. “a leading non-profit organization.000 of whom live in California. Assuming these problems are resolved. [which] represents 300. and punted on the details to the Legislature. 2) an Integrated Resource Planning process should exist for energy efficiency. If focusing 94 CPUC Renewables Working Group. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. if restructuring is implemented properly: 1) energy efficiency investments should continue. It gave us nothing until the Legislature tells us otherwise. 1995 Decision? Almost nothing. we are in favor of competition. As stated in EDF’s first round comments on the Blue Book.”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. EDF supports the earliest possible implementation of direct access for all classes of customers. “There is no reason to proffer the benefits of competition first to only selected classes of customers.”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. EDF has participated in California energy policy issues since 1975.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. economically viable solutions to today’s environmental problems. and 4) incentives for uneconomic sales promotion minimized. EDF links science. depending on interpretation. The Decision was vague. yes. E-1. ERG Master’s Project Mark Stout 119 . more than 55.000 members nationwide.

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

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

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

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

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

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

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

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

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

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

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

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

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

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’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. Peace was the idea person. As long as the Sierra Club and other groups were happy. UCS has 100. was just beginning to be used as a policy option in several states.000 in California”. As the deregulation process unfolded at the CPUC.John White were the front folks. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. ERG Master’s Project Mark Stout 133 . The level of renewables support included in the BRPU served as a target for UCS. UCS was also opposed to 100% “stranded cost” recovery for utilities.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. Byron Sher was fine. E-3.000 sponsors nationwide. manifest in California as the Biennial Resource Plan Update (BRPU). Integrated Resource Planning (IRP). including 13. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. UCS’s initial position after the release of the CPUC Blue Book Proposal was that the deregulatory roadmap laid out in this proposal was too hasty. Deregulation of the electricity industry threatened to tear this house of cards down. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role.

AB 1890 was not a victory” for environmental goals. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. 1995 Decision? UCS was pleased that the CPUC’s December Decision called for a minimum renewables purchase requirement. She also noted that no stakeholders seemed to resist the lack of a cap on surcharge collection for low income programs. The Greenlining Institute. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? UCS was not at all pleased with the poor support for renewable energy and energy efficiency codified in AB 1890. and Latino Issues Forum. and no guaranteed market for renewable energy.101 To Jane. Jane indicated that. “thrown a bone” with the moderate level of public-interest research.bailout for poor investments in nuclear power generation. development. As for renewable energy.. “did not set public policy so much as doling out money in the transition period. “one of a few good pieces UCS was in a position to defend”.” She said the whole battle for continuing renewables support will need to be refought in a few years. Jane said that environmental organizations were. so UCS also supported low income program protection as defined by coalition partners. “despite other interpretations. with no support for commercialization over a longer duration. and demonstration (RD&D) funding. based on the Renewables Portfolio Standard devised by UCS’s coalition partner Nancy Rader of the American Wind Energy Association. 101 Weisman. working in progressive coalitions was important for UCS. “Environmentalist Defends.” ERG Master’s Project Mark Stout 134 . an allocation that was “responsible public policy”. the legislation.. Jane said the inclusion of the renewables purchase requirement was.

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

000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. as well as generating a large number of letters to the CPUC. as well as staff people for Commissioners Knight and Conlon. 143 adopted. UCS took part in a mailing to 60. resulting in over 2. as well as meetings arranged jointly by Jane and AWEA’s Nancy Rader to lobby for the Renewables Portfolio Standard with then-current CPUC President Fessler. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 .What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? UCS used a dual approach outsider/insider strategy to influence policy formulation at the CPUC. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position. asking them to respond to the CPUC through a Western Union automated fax number.000 environmentalists in California. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS. By helping to get Assembly Concurrent Resolution No. To compliment this public participation strategy.

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

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

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

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

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

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

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

the renewables community cam back in. After they finally recognized the problem ERG Master’s Project Mark Stout 144 .Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. They proposed to me funding at current RD&D budget levels. 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. current levels for moving to a future restructured market. For example. The renewables could have fared much better if they stuck together as a coalition. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. “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 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. They probably thought that this funding level included regulated transmission and distribution RD&D. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. historic levels [combined SCE. pre-Blue Book. After seven hours of negotiation. The municipal utilities angered Peace so much that he asked. and a representative told Peace that the group still had not come to an agreement on who would present the proposal that they still had not negotiated.

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

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

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

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

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

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

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

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

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

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

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

As it was too esoteric a topic. IOUs got 100% stranded cost recovery. At first. It had too many purists that need to learn the art of compromise. If you had the resources to be there. This dissipated their effectiveness. so there was not enough press coverage. Also. They needed to realize the process was happening. The environmental and consumer advocates did not have a clear idea of what they wanted. As customers learned more about what was going on. they did respond with thousands of cards and letters. and pay attention to it then. and how could they have improved their approach? The renewables community fractured itself as far as coming together behind a proposal.Which stakeholder groups do you think were best able to set the terms of the debate. 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? No. they did not know what seat they wanted to sit in. When the train was leaving the station. and why? Again. There was not enough education or public involvement. it is too late to change. influencing the CEC’s report to the Legislature. in the coffee shops at three AM. the large customers and utilities. which did not help. Once something like AB 1890 is done. ERG Master’s Project Mark Stout 156 . they were all against restructuring. not after the fact. small customers and the people who serve small customers. while large customers got to move forward with direct access. you can be part of the decision making process. Anonymous Officeholder Staff Interview #2 Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? IOUs and large consumers got everything they wanted.

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

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

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

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

Interview #1 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #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 .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .

000 $1.495 $7.000 $3.500 $1.800 $1.000 $2.000 $2.500 $22.000 $7.495 $1.191 $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 $500 $1.995 $21. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $1.896 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $4.495 $10.000 $3.995 $300 $12.429 $498 $1.000 $3.000 $495 $950 $696 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $3.500 $1.995 $1.995 $14.995 $2.511 $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 Int. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.500 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.460 $200 $500 $750 $2.000 $1.000 $1.750 $4.990 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $8.000 $10.500 $47.000 $2.500 $6.000 $2.495 $4.017 $749 $750 $3.250 $2.000 $1.500 $800 $498 $200 $9.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.Table 2: Assemblymember Jim Brulte.

000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1. 4 ERG Master’s Project Mark Stout 164 . 1996.000 $750 $0 $0 103 Asmus.000 $2.250 $500 $1. Chevron treated Brulte to two meals.000 $3. Conservation.000 $1. as well as an event. CFEE is a “non-profit.490 “Travel project to Europe on Electric Restructuring.000 $1. Not to be outdone. Paling in comparison.750 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. Brulte was taken on a $7. and Privatization” visiting London. Sweden. by the California Foundation on the Environment and the Economy. Table 3: Senator Steve Peace.750 $2. totaling $101.750 $750 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. and Budapest.500 $1. Mobil treated Brulte to a $60 event in 1996. From 3/28/96 to 4/8/96. 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.

000 $750 $750 $750 $1.000 $300 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $0 $0 ERG Master’s Project Mark Stout 165 .572 $1.500 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy 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 Int.072 $2.600 $2.500 $16.100 $2.Table 4: Senator Steve Peace.250 $750 $500 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $500 $2.815 $750 $6.450 $7.250 $1.250 $7.250 $2.000 $6.115 $18.050 $3.500 $8.000 $4.000 $1.

1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. In 1995.000 Table 6: Senator Byron Sher. as well as chair of the Senate Energy and Utilities Committee. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. SDG&E had Peace out to six meals.000 $5.900 .450 166 ELECTRIC/GAS $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. 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. Table 5: Senator Byron Sher. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. taking Steve to 11 meals. IEP made a gift of $241 for his speech at a conference.100 $2. Southern California Edison was granted a high level of access. Peace was treated to a $52 sports event by Mobil Oil. In 1996. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. while Edison treated him to five meals and a sports event.

600 $13.100 $500 $2. $2.000 $100 producers. EVs) Hansen. Brotherhood of Electrical Workers (various $9. McQuat.000 $500 $500 $9. (biomass) Edson + Modisette (lobbyist for indep.882 $100 $1. (geothermal) Colmac Energy Inc.482 $100 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 locals) Southern California Pipe Trades United Assoc.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . and Hamrin.500 Int. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $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 $1.500 COMPANIES $1.000 $1.000 $100 $100 $500 $1.000 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.000 Large Energy Consumers $3.

000 $300 $300 $22.Tosco Corp. (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. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $700 $4.448 $14.585 $100 $500 $2. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .

400 $750 $150 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 .000 in each of Amoco.000 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Mobil. and GE. totaling $758.300 $500 $1.500 $300 $0 $0 $2. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Sher holds over $100. Sher received no other gifts that year from energy utility stakeholders. 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. Exxon. totaling $2608. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. In 1996. NARUC treated Sher to a two day trip to DC for another meeting.

extending his stay from 12/8/96 to 12/13/96.500 $500 $1.000 $2. The Pacific Rim Conference of Seattle.500 $150 $500 $3. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.650 $2.000 $1.Table 8: Senator Bill Leonard. While the Senator was there. Edison again ERG Master’s Project Mark Stout 171 .000 $500 $500 $4. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. saving up for a $77 dinner with head lobbyist Bob Foster. WA paid $734 for Leonard to moderate a conference session on utility deregulation.650 $500 $1. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $5.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.730 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2. for a paltry $20.080 $10.000 $1.

250 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. ARCO treated Leonard to a $19 meal at a reception. Table 9: Assemblymember Mickey Conroy.600 $750 $750 $500 $1.600 $1.000 $1. paying $44 for two meals and lodging.000 $1. They also had Leonard out for two meals in Sacramento.000 $750 $750 $650 $150 $500 $3.750 $1. including lunch with Bob Foster.000 $1. PG&E took Leonard out to a Kings game.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . for the modest tab of $56.had Senator Leonard out for Legislative Ski Day.

050 $1. CFEE is a “non-profit. and to 104 Asmus.000 $5.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. PG&E treated him to a basketball game with $51 tickets. and Inner Mongolia. $7.600 $500 $1. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $2. Shanghai.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.600 $3.700 $500 $300 $550 $2.Table 10: Assemblymember Mickey Conroy. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. the California Foundation on the Environment and the Economy took Conroy on an 11 day.700 $750 $450 $250 $250 $1.000 $3. 4 ERG Master’s Project Mark Stout 173 . 1996. 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 $2.000 $500 $750 $250 $500 $2. two meals for $44.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.

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

675 $2.750 $2.750 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.750 $1.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.000 $1.750 $4.750 $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.250 $1.250 $1.175 $500 $1.Table 11: Assemblymember Diane Martinez. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

Table 12: Assemblymember Diane Martinez. 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.250 $1.750 $1.500 $6.000 $4.000 $500 $3. Dist.000 $500 $500 $5.000 $1.500 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.000 $7.500 $1.500 $1.000 $4. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $500 $1.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 . (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $5.500 $1.000 $1.500 $500 $500 $1.

ERG Master’s Project Mark Stout 177 . diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.850 $1.000 $1. the Illinois Energy Association flew Martinez out for a $1.500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.208 $0 $0 $1.500 $1.058 $500 $500 $1.000 $500 $500 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.100 $100 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.600 $1.Table 13: Assemblymember Steve Kuykendall. natural gas. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.900 $3.000 $8.

Table 14: Assemblymember Steve Kuykendall.374 $500 $2.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.500 $0 $1.000 $500 $2.000 $1.443 $6. Kuykendall’s social calendar was destined to pick up in 1996. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1. ERG Master’s Project Mark Stout 178 . diesel) Unocal (CMA member) Victory Oil Co.000 $19.350 $500 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.250 $100 $500 $35.000 $1.000 $2. and Privatization” visiting London.500 $1. natural gas.254 $200 $500 $4. From 3/28/96 to 4/8/96. Sweden.000 $1. Conservation.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. However.490 “Travel project to Europe on Electric Restructuring. and Budapest.374 $4. Kuykendall was taken on a $7.

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

Utah to speak at the “Utility Restructuring. a libertarian think-tank. Finally. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. Synergics Resources Corporation had Fessler out to Princeton. spent $314 to bring him to speak at their Spring Conference. Shanghai. ZEV’s and Rethinking the Environment Conference. PG&E had him out for two lunches.000 in Ohio Edison stock. CO. ERG Master’s Project Mark Stout 180 . for $61. a utility planning association. The Western States Coordinating Council. the California Foundation on the Environment and the Economy took Fessler on an 11 day. The Cato Institute. for $323.802 junket to talk with Chinese central government and provincial leaders in Beijing. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. $7. In April of 1995. in Fort Collins. a utility association. NJ to speak at the 1994 DSM Implementation Conference. EEI is a trade association representing investor owned utilities. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. Finally. for $467 airfare. had Fessler speak at their conference in Washington. DC.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. spending $291. spending $1006. The Rocky Mountain Electrical League. the Center for Resource Management flew him to Midway. Fessler holds over $10. DC. On the investment side. and Inner Mongolia. spent $249 to fly him to their annual meeting in Las Vegas.

In 1995. Edison. 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. was very interested in California moving to the UK-style. ERG Master’s Project Mark Stout 181 . and Schlumberger oilfield services stock. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Chevron. He left office on February 23. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. one of CFEE’s funders. utility and General Electric stock. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. He does own less than $10. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton.000 in each of Central & Southwest Corp. government ministers. Unocal. PG&E had him out to three meals for $71. and environmental groups to discuss the British experience with deregulation of electricity.167 junket visiting London. Conlon was taken on a $7. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. spending $258. and Paris. Brussels. wholesale PoolCo model.000 in each of Montana Power Company and Exxon stock. and less than $10. regulators. to meet with CEOs of the electricity industry. He does own more than $10. by the California Foundation on the Environment and the Economy.

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