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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

Proposed AB 1890 language was examined to get a flavor for who was making proposals. as Davis explains: “Prior to World War I.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. In the face of this trend local governments began to view 6 California Secretary of State. Cities would grant multiple franchises to electricity companies. History of Electric Utility Industry Regulation Before examining which stakeholder groups were able to influence the California electric utility deregulation process. they were not always viewed this way. and experience the witty banter between Senators Steve Peace and Bill Leonard. The Division’s March. 1997. Competition could keep prices down. March. 1997 report on Lobbying Expenditures and the Top 100 Lobbying Firms6 also gives a big-picture view of overall lobbying expenditures by stakeholders. 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. and how much of it was getting incorporated into the final AB 1890 language.. 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. However.. most cities believed regulation was superfluous. but many weak companies that were soon bought out by a strong one. cross-check interview impressions. thus leading to a monopoly.

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

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

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

17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. sending “a shockwave through the electric industry”. 1999. 18 Mydans. 1996. all commercial customers eligible January 1. and if successful. Hoffman.supplies. ERG Master’s Project Mark Stout 12 . the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 6. all residential consumers eligible on January 1. customer class-staged schedule for direct access implementation. with large. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations. In April of 1994.18 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. A more definitive policy statement was 16 17 Haddad. 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. 55. 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.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. and 3) rate changes to encourage efficiency and distribution of power. The Blue Book laid out an aggressive. industrial customers taking power at the transmission level eligible on January 1. 2002.

1994.19 Since the release of the Blue Book proposal. Blue Book. For instance. This led to the passage of Assembly Concurrent Resolution 143. where customers voluntarily pay more to promote renewables. pushing back their goal for a policy decision until September of 1995.20 Many stakeholders. 21 CPUC. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. In their place. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1995. were concerned about the content and timetable of this proposal. ERG Master’s Project Mark Stout 13 . Blue Book. which requires the CPUC to engage in a series of public hearings. the CPUC proposed. and documentation resulting in a report back to the Governor and Legislature by January 31. evidentiary hearings. The first issue addressed open access to the transmission system 19 20 CPUC. and asserted that. numerous other states have also proposed electric utility deregulation. Status Report. 1. This process tempered the CPUC’s frenetic timetable. such as “green pricing”. including private and public-interest organizations. Wagner. “alternative frameworks based on ‘let the market decide’”. 1995. coupled with a lack of prior coordination with the state Legislature. 1994.22 FERC MegaNOPR In March of 1995.scheduled to be issued by the CPUC in August of 1994. “a vibrant market exists for energy efficiency services”. 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. which had been dubbed the MegaNOPR.21 This stakeholder response. 1994. FERC released a dual-issue Notice of Proposed Rulemaking.

1995. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . All power purchases would be made through the pool.for wholesale transactions. Status Report. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. favored by CPUC President Fessler and two other Commissioners. in May of 1995.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. Retail contracts with a particular generator could be handled with separate “contracts for differences”. meaning the utilities could not discriminate against other electricity suppliers. A common price for all electricity in the state would then be set by the market clearing price based on the bids. The majority proposal known as PoolCo. the California Commissioners released two draft proposals for pursuing rate deregulation in California. which is usually considered state jurisdiction. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. Asmus and Smeloff. scheduled and dispatched by an independent system operator (ISO).24 22 23 CPUC. is based on a common wholesale power pool. Generators are scheduled into the pool based on time-based bids submitted to the ISO. 1997. Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition.

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

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

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

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

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

and 15% consumer-side incentives. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1996 CEC.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. 1997 41 Marshall.41 There are currently several electric utility restructuring bills in Congress. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. The overall levels are: 45 % existing technologies. In March of 1997. As Carter and Cavanagh have noted. including residential and small commercial consumers. 1998. 1997 42 Weisman. chair of the House Energy and Power Subcommittee. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority.40 On May 6. 30% new technologies. It divides up this amount into four accounts that vary over four years of funding. 1997.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. including a prominent one authored by Representative Dan Schaefer (R-CO). 10% emerging technologies. 1997. “If the bill had failed. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . would be eligible for direct access January 1.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh.

44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation. the companies have no incentive to be efficient. 1997. too conservative..43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. a consultant representing CLECA explains their 43 44 Levison. and overcapitalized due to state regulation. There is literally no profit in it for them. 1997.45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition. Davis explains their reasoning: “the electric companies are inefficient. “Restructuring Hearings on the Road” Levison. “12 companies--most foreign-owned--that really soak up the juice.”. Because the PUCs determine the rates.requirement". if a company wants more revenue it must invest more capital. cement.. services. and one of the largest gold mining firms in the world.” Barbara Barkovich. Therefore. Many forces have come together to create the push for electric utility deregulation in California.”46 In California. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation. ERG Master’s Project Mark Stout 21 . “Discretionary Evolution. and future expansion. The state commissions typically calculate a company’s profits as a return on investment. “DOE Restructuring Bill” 45 Stevenson. 355. these concerns are represented by the California Large Energy Consumers Association (CLECA). Retail wheeling sits at the top of the agenda of this coalition of steel. It has an incentive to build a new plant even if it is not really needed.

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

84-108. 356-357.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. “Discretionary Evolution. 50 Flavin and Lenssen. 1993. greatly increasing opportunities for bulk power sales. ERG Master’s Project Mark Stout 23 .”.. Gordon. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 447-475. 51 Stevenson.. 52 Gilbert.intense pressure from large industrial customers. 195. enabling increased competition. who in the past had enjoyed privileged status with cheap rates. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.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. 150. Davis. 1994. 1993. Hoffman 55-62. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. but now had to pay higher rates. basing their arguments on welfare economics as applied to the changing electric utility landscape.

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

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

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

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

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

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

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

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

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

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

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

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

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

this provides a baseline to determine if they got what they wanted. as well as the majority of large electricity consumers.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. 1995 Decision. When combined with comments filed by that organization early in the restructuring process at the CPUC. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. Figure 2 shows that all of the investor-owned utilities and independent producers. a slightly smaller number of representatives report a mixed or unclear outcome. and the remaining minority claim that their organization got rather little. Figure 1: How much of what your organization wanted was in the CPUC December Decision? Rather Little Figure 2: How much of what your organization wanted was in the December Decision? STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES Most SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most Mixed/Unclear INDEPENDENT PRODUCERS UTILITY LABOR UNIONS The stakeholder representatives MUNICIPAL ELECTRIC UTILITIES were then asked how much of what their organization wanted was included in the CPUC December. nearly half of the representatives say that their organization got most of what it wanted from the December Decision.

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

either the CPUC December Decision or AB 1890. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .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. 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 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. As Figures 5 indicates.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

818 $0 $65.125 $0 $4.000 $634.308 $516.112 $3.000 $681.592 $846 $0 ERG Master's Project Mark Stout 54 .964 $0 $40. 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. (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 $59.370 $648 N/A $0 $208.500 $533.500 $190.675 $736.470 $10.203.559 $0 $246.516.031.981 $1.000 $480.153 $750 N/A $8.101 $495 $10.500 $78.163 $0 $25.496 $8.588 $500 $32.741 $21.092 $3.166 $5.079 $950 $14.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.180 $0 $209.181 $0 $160.102 $0 $73.079 $13.819 $0 $323.758 $2.075 $4.S.000 $0 $70.835 $1.608 $3.500 $1.000 $62.952 $1.000 N/A $0 $18.500 $263.405 $0 $722.239 $0 N/A $0 $89.752 $0 $51.416 $5.675 $384.272 $0 $64.630 $300 N/A $0 $5.595 $0 $21.110 $34.479 $2.419 $13.096 $971.000 $225.745 $68.149 $3.374 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $562.995 $596.157 $0 $188.000 $1.

145 $5.400 $100 $79.495 $1.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.551 $12.850 $1.319 $0 $10.000 $524.723 $0 $38.675 $0 $1.003. (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.600 N/A $5. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp. natural gas.203 $5. (gasoline refining and marketing) Tower Energy Group (oil.000 $37.271 $0 $12.197 $500 N/A $2.099 $12.167 $500 $25.938 $0 $118.207 $5.401 $1.362.596.500 $0 $0 ERG Master's Project Mark Stout 55 .000 $0 $15.000 $20.291 $3.203 $0 $30.492 $0 $66.716 $39.081 $1.000 $383.230.947 $500 $281. 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 $4.665 $0 $262.083 $0 $20.000 $0 $6.519 $11.701 $0 $5.600 $32.000 $0 $171.250 $0 $30.055 $0 $151.326 $0 $100.495 $27.000 $526.

589 $26.590 $5.118 $0 $144. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.281 $1. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.600 $276. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.626 $0 $8.000 $85.750 $418.000 NA $500 $0 $2.454 $3.100 $0 $500 N/A $100 $0 $500 N/A $2. McQuat.S.025.400 $1.331 $0 $97.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.717 $500 not applicable $0 $138.748 $32.000 N/A $100 N/A $7.862 $21. and Hamrin.195 $401.000 $209.000 $50.147 $500 $739.782 $981.750 $1.917 $300 $5. Dist.543 $29.200 $837.882 $15.000 $35. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.250 $148. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.240 $0 $178.750 $267.500 $29.571 $500 N/A $200 N/A $1.724 $500 not applicable $500 $57.450 $566.060 $6.017 $1.500 N/A $0 $211.460 $50.605 $250 N/A $1. Inc (consultants) Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Windpower Sithe Energies Co.286 $3.179 $0 $3.250 N/A $100 N/A $2. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn.100 $144. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.819 $921.500 N/A ERG Master's Project Mark Stout 56 .905 $30. (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) $145.845 $452.159 $3.000 $33.) 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.032 $0 $172.611 $1. producers.229 $100 N/A $1.

511 $1.137 $550 N/A $5.800 not tracked $3.689 $2.1996 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.000 $22.384 $2.532 $4.500 $251.661.500 $47.521 $0 N/A $50 $87.072 $918.296 $800 $25.885 $300 $207.925 $0 $44.643 $1.750 $23.750 $37.712 $100 N/A $200 $16. (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.754 $4.705 $19.995 N/A $100 N/A $0 $3.950 $3.138 $1.780 ERG Master's Project Mark Stout 57 .521 $14.622 $67.000 $500 $456.016 $1.958 $2. (gasoline refining and marketing) Tower Energy Group (oil.650 $3. natural gas.181 $1.245 $335.177 $300 N/A $0 $29.050 $949.960 $2.050 N/A $0 $214.989 N/A $9.209. (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.000 $65. Texaco Tidelands Oil Tosco Corp.521 $1.090 $749 $38.250 $34.495 $22.878 $12.478. 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) $41.761 $0 $73.417 $9.407 $200 $61.636 $0 $103.721 $748.900 $1.900 $0 $21.347 $9.334 $498 $1.500 $277.438 $500 N/A $0 $1.861 $1. diesel) Unocal (CMA member) Victory Oil Co.000 $76.573 $2.000 $233.

California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 N/A $250 N/A $22.790 $100 $14.585 $33.448 $424.378 $100 $21.462 $208.000 $2.000 $15.250 $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.068 $14. of California.462 $500 $14.438 $4.000 $700 $117.066 $500 $21.

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

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

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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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.. 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. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. CPUC vs.e. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. 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 .

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

CPUC vs. 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. AB 1890)? Why? Although the CPUC Decision was financially easier on PG&E. compared to the four year collection period in AB 1890. Also. 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.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. increasing the risk to full stranded cost recovery. “Steve Peace forced everybody to confess what was important to them.. 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. Kathy said that it was important for the Legislature to use a process which brought disparate parties together. the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. ERG Master’s Project Mark Stout 68 . and own up to what they would let go. but had to compromise a little more than in the CPUC decision.e. what they perceive as significant funding for renewable energy support. 1995 Decision? PG&E got what it wanted on some of the more important issues in the CPUC’s Decision. PG&E largely got what it wanted. and a shortened period for CTC collection.” according to Kathy.

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

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

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

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

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

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

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

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

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

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

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

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

In the June. that some other source should pay.Going into the process. It is difficult to maintain public purpose programs if everyone else abandons them. what equity or fairness issues were raised by them being in the marketplace. this impacts munis. SMUD responded. it seemed obvious that these principles were a gimme. there was a question of whether we would get 100% stranded cost recovery. this made the question go away. The munis are in a foreign land with the PUC. ‘96 Rate Restructuring Settlement. philosophical debate. Since our rates were 25% below PG&E’s. But in reality. By constructing a brave new world for IOUs. there was a questioning of what role. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . SMUD is very committed to renewables. This is a classic question of public versus private decision making. SMUD will finish recovering our CTC by 2002. it is planned that PG&E will drop their rates below SMUDs by 2002. should a public agency have in a restructured environment. we have to resolve this by 2002. It created an environment of uncertainty. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained. Even though municipal utilities have the authority to recover costs. The Legislature did not elevate this to a well-reasoned. Some would argue that the SMUD customer did not decide to open Rancho Seco. This was the bottom line. 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. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. We are a consumer elected entity.clean energy. he does not see a role for munis in a deregulated world. Assemblyman Steve Kuykendall was direct in his comments. energy efficiency -. SMUD’s territory is a small island surrounded by PG&E. if any. 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? It’s not like we were asking for a whole lot. We did not get everything we wanted. As I mentioned. I do not know. AB 1890 also set time limits on the duration of CTC recovery. This is arguably a meaningless statement. not to say that we can’t operate as business as usual. For us. enhancing our stature at the federal level. The state’s regulation of Investor Owned Utilities differs from a muni’s ability to decide how to serve. we can point to the legislation. someone can accuse us of having rates too high. but arguably gives standing to third parties to contest SMUD’s approach to restructuring. But this language could burden us with litigation. A lot of AB 1890 is not crisp. this is not onerous or burdensome. How this is playing out. because the repayment of current debt could be viewed as a CTC. This is not a problem for SMUD. a cloud that we do not need. Going in. SMUD did get something more than we asked for also.public purpose programs. this gives us political standing. but got more than we asked for. it would not have put this in. If the IOUs do not respect the munis. and conditions on CTC recovery. but it might be for others. It would have been difficult for the IOUs to keep up with us on these programs and bring down rates. If the Legislature had respect for the municipal affairs doctrine. If we do not go to direct access. ERG Master’s Project Mark Stout 82 . This is a profound shift in how munis and IOUs relate to FERC. This is an infringement on municipal autonomy. nobody saw the munis as co-equals to the IOUs. AB 1890 states that filings to FERC would be jointly between the municipal utilities and the IOUs. AB 1890 has language written that denies a muni’s ability to impose a CTC unless they allow direct access.

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

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

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

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

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

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

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

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

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

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

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

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

which would have happened without restructuring. First. using oblique language. Three fascinating things have occurred since the issuance of AB 1890. 1995. I believe the vast majority of developers will survive the 11th year QF cliff. Tactically. The RPS lasted about seven minutes at the Legislature. there was too much fighting with the Sierra Club and EDF. there is a move away from command and control. General comments: In the December 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? A lot built on the MOU. but there will be an industry shakeout. ERG Master’s Project Mark Stout 95 . which is how the RPS was perceived. there are the three or four merchant gas plants will be built in California in the next five years [see Edie Lau. The $540 million surcharge for renewables was Plan B. even if construction of their plant started before December 20. who would still be required to pay the CTC or an exit fee. 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. Strategically. The renewables community was like a family with a rich uncle dying and no will. The Renewables Portfolio Standard was put in at the last minute. CMA and CLECA offered to carry the CTC forward [three months] in order to include renewables funding in the public goods charge. with the creation of an expanding core group of people who decided this was the right way to go. 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. and not enough talking with other market players. anybody going to self-generation would have to pay the CTC.

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

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

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

What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We sought retail wheeling. The December Decision had aspects which gave us pause. The overwhelming majority of our activity has been on traditional rate cases. The work between May and September was critical. the parties were involved in many conversations. but in general was a step forward. the development of an option that would permit industrial customers to look somewhere else than the UDC for electricity generation.” ERG Master’s Project Mark Stout 99 .S. representing 24 companies that consume over 4% of U. 1995 Decision? Quite a lot in terms of basic concepts. with Direct Access pushed out on the horizon and tied to a range of contingencies. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The element at the core of AB 1890 came about as the result of informal negotiations between the December Decision and AB 1890. this sent the Commissioners scurrying. Between May of 1995 and the Decision. there was no forum in which to advocate for it. 1995 CPUC proposals] were a major disappointment because of the dominance of PoolCo. Much of that related to the MOU. This was not perceived as realistic before the Yellow Book. The draft Decisions [May. Retail wheeling served as a muted backdrop.. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. In 1986 when ELCON [the Electricity Consumers Resource Council. This was a new element which brought a new dimension: a rate freeze with a well- 92 Asmus. “Retail wheeling:. 1995. resulting in the PG&E rate restructuring settlement. electricity92] mentioned retail wheeling to the CPUC..

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and the ISO winds up making schedule changes for physical feasibility anyway. including open transmission access. We did not share the sentiments as to the structure of the December Decision. ERG Master’s Project Mark Stout 138 . 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. 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. The wholesale pool is not really a buyer. and the unbundling of rates and services.Board which has been created as a result of AB 1890. customer direct access. We were more inclined to a unified structure. 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. it is really just a clearinghouse. 1995 Decision? The commission did not like the discrete power exchange and ISO. the completely distinct power exchange and ISO. There is an added cost of having two mandatory entities. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Well before the December Decision.

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

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

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

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

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

current levels for moving to a future restructured market. They proposed to me funding at current RD&D budget levels. historic levels [combined SCE. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . but they allowed me to put in definitions derived from the CPUC RD&D Working Group Report on RD&D [which distinguished between public interest and regulated T&D RD&D] and other language. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. The renewables could have fared much better if they stuck together as a coalition. University of California representatives and I advocated for higher.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. After seven hours of negotiation. pre-Blue Book. They probably thought that this funding level included regulated transmission and distribution RD&D. For example. The IOUs wanted to use post-Blue Book. and a representative told Peace that the group still had not come to an agreement on who would present the proposal that they still had not negotiated. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. The municipal utilities angered Peace so much that he asked. the renewables community cam back in. “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. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102].

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

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

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

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

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

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

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

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

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

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

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

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

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

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 #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 California Municipal Utilities Association .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.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 #1 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 Natural Resources Defense Council .

Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 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 . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .

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

000 $1.995 $21. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $7.000 $2.000 $1.495 $10. (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.000 $3.191 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.429 $498 $1.500 $22.896 $3.500 $1.000 $500 $1.000 $4.000 $3.995 $300 $12.800 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $1.000 $2.000 $3.000 $495 $950 $696 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $1.495 $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.

Table 2: Assemblymember Jim Brulte.995 $2.990 $1.000 $1.750 $4.500 $47.995 $14. (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 $6.000 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .250 $2.500 $800 $498 $200 $9.000 $1.000 $10.460 $200 $500 $750 $2.511 $3.000 $2.017 $749 $750 $3.500 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield 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. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $8.995 $1.495 $4.000 $2.500 $1.

000 $750 $0 $0 103 Asmus. Brulte was taken on a $7. 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 $3. Paling in comparison. 4 ERG Master’s Project Mark Stout 164 . Mobil treated Brulte to a $60 event in 1996. (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. From 3/28/96 to 4/8/96.750 $2. and Budapest. CFEE is a “non-profit. as well as an event.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.250 $500 $1. totaling $101. and Privatization” visiting London. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.750 $3.000 $2. Sweden.500 $1. Not to be outdone.000 $1.490 “Travel project to Europe on Electric Restructuring. Chevron treated Brulte to two meals. 1996.000 $2. Conservation.000 $1.750 $750 $1. Table 3: Senator Steve Peace. by the California Foundation on the Environment and the Economy.

000 $1.600 $2.000 $4.000 $750 $750 $750 $1.815 $750 $6.000 $6. 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.115 $18.000 $300 $1.500 $3.250 $750 $500 $1.450 $7.072 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .050 $3.000 $500 $2.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $2.100 $2. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.500 $8.572 $1.250 $7.Table 4: Senator Steve Peace.500 $16.

000 Table 6: Senator Byron Sher. SDG&E had Peace out to six meals. IEP made a gift of $241 for his speech at a conference. taking Steve to 11 meals. Table 5: Senator Byron Sher.100 $2. In 1996.000 $5. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. while Edison treated him to five meals and a sports event. 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 $1.450 166 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. Peace was treated to a $52 sports event by Mobil Oil. In 1995. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. as well as chair of the Senate Energy and Utilities Committee. Southern California Edison was granted a high level of access.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.900 .

of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.100 $500 $2.600 $13. and Hamrin. $2.500 Int.882 $100 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . Brotherhood of Electrical Workers (various $9. (geothermal) Colmac Energy Inc. EVs) Hansen. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $100 producers.482 $100 $1.000 $500 $1.000 locals) Southern California Pipe Trades United Assoc. McQuat. (biomass) Edson + Modisette (lobbyist for indep.000 $500 $500 $9.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1.

000 (tire $1.000 Large Energy Consumers $3.000 $1.000 $100 $1.500 COMPANIES $1.000 $100 $100 $500 $1.000 $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.

Tosco Corp.000 $300 $300 $22.585 $100 $500 $2. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. of California.000 $700 $4.448 $14.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .

totaling $2608. totaling $758. NARUC treated Sher to a two day trip to DC for another meeting. and GE.400 $750 $150 $1. In 1996. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Exxon. Sher holds over $100.500 $0 $0 ERG Master’s Project Mark Stout 170 .1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.000 $1. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. Mobil. Sher received no other gifts that year from energy utility stakeholders.500 $300 $0 $0 $2.300 $500 $1. Table 7: Senator Bill Leonard. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 in each of Amoco.

SCE treated Leonard to dinner and lodging for Legislative Ski Day. for a paltry $20.730 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $5. extending his stay from 12/8/96 to 12/13/96.650 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $1.080 $10.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.500 $500 $1. The Pacific Rim Conference of Seattle.000 $500 $500 $4. While the Senator was there. Edison again ERG Master’s Project Mark Stout 171 .Table 8: Senator Bill Leonard.650 $500 $1. 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. saving up for a $77 dinner with head lobbyist Bob Foster.000 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. WA paid $734 for Leonard to moderate a conference session on utility deregulation. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.500 $150 $500 $3.000 $2.000 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

000 $750 $750 $650 $150 $500 $3. Table 9: Assemblymember Mickey Conroy.had Senator Leonard out for Legislative Ski Day. They also had Leonard out for two meals in Sacramento.750 $1.000 $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. paying $44 for two meals and lodging.000 $1.250 $1. ARCO treated Leonard to a $19 meal at a reception.600 $750 $750 $500 $1.000 $1. including lunch with Bob Foster.600 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.

CFEE is a “non-profit.600 $3. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.500 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.050 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.300 junket to talk with Chinese central government and provincial leaders in Beijing. two meals for $44. Shanghai.000 $500 $2.Table 10: Assemblymember Mickey Conroy.000 $2. and to 104 Asmus. $7.000 $3. and Inner Mongolia. 4 ERG Master’s Project Mark Stout 173 . the California Foundation on the Environment and the Economy took Conroy on an 11 day. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.600 $500 $1.000 $500 $750 $250 $500 $2. PG&E treated him to a basketball game with $51 tickets.000 $5. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $750 $450 $250 $250 $1. 1996.700 $500 $300 $550 $2.

and $25 of cookies and candy. SDG&E. General Electric.000 each in Edison. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. After such a busy social calendar in 1995. with investments of greater than $10. In terms of investment. four rounds of “refreshments” for $30. and less than 10. Kansas City Power & Light.make sure Conroy kept a sweet spot in his heart for them. Edison wined and dined the Assemblymember with four meals at $134.000 in Orange & Rockland Utilities. Chevron took Conroy out for two business meals. and Westinghouse Electrical. $10 in candy. ERG Master’s Project Mark Stout 174 . costing $99. Pacificorp.

750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $1.250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.175 $500 $1.750 $1.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.675 $2.000 $1.250 $1.000 $1.Table 11: Assemblymember Diane Martinez.750 $4.

000 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.750 $1.000 $4.250 $1.000 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.Table 12: Assemblymember Diane Martinez.500 $1.500 $500 $500 $1. Dist.000 $500 $3.000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $1.000 $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.000 $7.500 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $4.000 $500 $500 $5.000 $500 $500 $500 $500 $500 $3.500 $6.000 $5.000 $500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.

Table 13: Assemblymember Steve Kuykendall. ERG Master’s Project Mark Stout 177 .208 $0 $0 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.850 $1.000 $8.058 $500 $500 $1.000 $500 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.600 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. natural gas. the Illinois Energy Association flew Martinez out for a $1.100 $100 $1.500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.900 $3.000 $1.

natural gas. Conservation. From 3/28/96 to 4/8/96. Kuykendall was taken on a $7.000 $1.500 $1.000 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.254 $200 $500 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. and Privatization” visiting London.374 $500 $2. diesel) Unocal (CMA member) Victory Oil Co.000 $2. However.Table 14: Assemblymember Steve Kuykendall. Sweden.500 $1.350 $500 $1.443 $6.000 $1. ERG Master’s Project Mark Stout 178 .250 $100 $500 $35.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $500 $2.000 $19. Kuykendall’s social calendar was destined to pick up in 1996. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.374 $4. and Budapest.500 $0 $1.490 “Travel project to Europe on Electric Restructuring.

1996.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. Another non-profit organization. wholesale PoolCo model. and Paris. an Edison lobbyist was added to the international travel party at the last minute. in Aspen. regulators.”105 The Consolidated Edison IOU spent $1. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. The Large Public Power Council. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. and environmental groups to discuss the British experience with deregulation of electricity. one of CFEE’s funders.051 to fly the President out to New York City for a ConEdison Management Conference. According to investigative writer Peter Asmus. The California 105 Asmus.167 junket visiting London. by the California Foundation on the Environment and the Economy. to meet with CEOs of the electricity industry. The California Mining Association took him out for an evening of recreation and dinner costing $89. spent $1402 to fly Fessler to Charleston. Fessler was taken on a $7. Edison. SC to address their membership. was very interested in California moving to the UK-style. known as the Council of States Government .by the California Foundation on the Environment and the Economy. A trade association. CO. 4 ERG Master’s Project Mark Stout 179 . paid $1. government ministers. a trade association for publicly owned utilities. for $610.WEST. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. Chevron treated Kuykendall to two dinners for $131. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. Brussels. The Aspen Institute.

Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. $7. On the investment side. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. EEI is a trade association representing investor owned utilities. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. Shanghai. The Western States Coordinating Council. The Cato Institute. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. for $61.000 in Ohio Edison stock. Finally. a utility association. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. The Rocky Mountain Electrical League. the Center for Resource Management flew him to Midway. CO. spent $314 to bring him to speak at their Spring Conference. a libertarian think-tank. In April of 1995. spending $291. spending $1006. in Fort Collins. Finally. for $467 airfare. Synergics Resources Corporation had Fessler out to Princeton. had Fessler speak at their conference in Washington. spent $249 to fly him to their annual meeting in Las Vegas. ZEV’s and Rethinking the Environment Conference. NJ to speak at the 1994 DSM Implementation Conference. Utah to speak at the “Utility Restructuring. for $323.802 junket to talk with Chinese central government and provincial leaders in Beijing. DC. Fessler holds over $10. a utility planning association. ERG Master’s Project Mark Stout 180 . Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. and Inner Mongolia. PG&E had him out for two lunches. the California Foundation on the Environment and the Economy took Fessler on an 11 day. DC.

Unocal. He does own more than $10. by the California Foundation on the Environment and the Economy. 1995. and environmental groups to discuss the British experience with deregulation of electricity. and Schlumberger oilfield services stock. one of CFEE’s funders. Conlon was taken on a $7. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. wholesale PoolCo model. PG&E had him out to three meals for $71. spending $258. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. to meet with CEOs of the electricity industry. regulators. and less than $10. Brussels. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. ERG Master’s Project Mark Stout 181 . and Paris.000 in each of Chevron. was very interested in California moving to the UK-style. Edison.167 junket visiting London. He does own less than $10.000 in each of Montana Power Company and Exxon stock. government ministers. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. He left office on February 23. utility and General Electric stock. In 1995.000 in each of Central & Southwest Corp. Jr. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference.

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