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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

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

22 FERC MegaNOPR In March of 1995. Status Report. Blue Book. 1994.20 Many stakeholders. numerous other states have also proposed electric utility deregulation. and documentation resulting in a report back to the Governor and Legislature by January 31. 1995. 1994. the CPUC proposed. coupled with a lack of prior coordination with the state Legislature. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. Wagner. ERG Master’s Project Mark Stout 13 . which requires the CPUC to engage in a series of public hearings. For instance. This process tempered the CPUC’s frenetic timetable. which had been dubbed the MegaNOPR. “a vibrant market exists for energy efficiency services”. pushing back their goal for a policy decision until September of 1995. including private and public-interest organizations. Blue Book.scheduled to be issued by the CPUC in August of 1994.21 This stakeholder response.19 Since the release of the Blue Book proposal. where customers voluntarily pay more to promote renewables. 1995. FERC released a dual-issue Notice of Proposed Rulemaking. 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. 1. and asserted that. The first issue addressed open access to the transmission system 19 20 CPUC. 21 CPUC. were concerned about the content and timetable of this proposal. This led to the passage of Assembly Concurrent Resolution 143. “alternative frameworks based on ‘let the market decide’”. evidentiary hearings. where CPUC President Fessler and Commissioner Knight testified on their proposal. In their place. 1994. such as “green pricing”.

Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition. Retail contracts with a particular generator could be handled with separate “contracts for differences”. A common price for all electricity in the state would then be set by the market clearing price based on the bids. meaning the utilities could not discriminate against other electricity suppliers. 1997.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. Asmus and Smeloff. scheduled and dispatched by an independent system operator (ISO). 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . Status Report. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. is based on a common wholesale power pool. Generators are scheduled into the pool based on time-based bids submitted to the ISO. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. in May of 1995. which is usually considered state jurisdiction. favored by CPUC President Fessler and two other Commissioners. The majority proposal known as PoolCo. All power purchases would be made through the pool.24 22 23 CPUC. 1995.for wholesale transactions. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. the California Commissioners released two draft proposals for pursuing rate deregulation in California.

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

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

The December Decision mirrored the market structure defined in the MOU. based on a wholesale Power Exchange. the CPUC released a policy decision on December 20. through a Competitive Transition Charge (CTC). and allow for uncapped low-income programs. bilateral. “be based on need”. coupled with an IOU rate cap at January 1. nor a renewables purchase requirement level. Aside from funding levels for low-income rate discounts. direct access contracts. For public purpose programs. with financial incentives tied to the level of divestiture. as well as a “minimum renewables purchase requirement”. ERG Master’s Project Mark Stout 17 . which should. 1995 which laid out a more defined vision of a deregulated ut ility environment. the Decision does not define any public program funding levels. and an Independent System Operator centrally controlling California’s transmission system. 1996 levels. requesting input from stakeholder working groups. A legislative conference 28 Framework Parties. the Decision proposed a nonbypassable “public goods charge” (PGC). so that input can be made to the Legislature.expand renewables development above 1993 levels while commercializing new renewable energy technologies.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. The Decision called for 100% stranded cost recovery by IOUs over a five year period. The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. 1995. PG&E (Pacific Gas and Electric) and SCE. with several key implementation areas to be hammered out by stakeholder working groups. while the state Legislature took up the issue of electric utility deregulation on their own terms.

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

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

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

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

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

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

Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway. as well as those on the border of service districts. generating capacity has been supplied by alternative.. competition takes on several forms in this market. the camel of competition forced its nose under the monopoly tent. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. 355-356.54 Since 1992. and it was only 53 54 Stevenson.53 allowing a policy trend that emphasizes markets rather than social welfare. 357.S.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. Stevenson. non-utility providers.. Many electrical applications have substitutable fuels.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. over half of new U.. There is significant competition in the wholesale electric generation market.. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK.”. “Discretionary Evolution. Utilities compete for industrial customers who are relocating. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. 1994. 55 Flavin and Lenssen. “Discretionary Evolution.”. “With this act. such as natural gas for space heating.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. ERG Master’s Project Mark Stout 24 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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. ERG Master’s Project Mark Stout 38 . 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. 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.from the December Decision. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. As Figures 3 indicates. say that their organizations got most of what they wanted from AB 1890. a similar number of representatives report a mixed or unclear outcome.

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

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

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

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

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

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

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

The clean power community (renewables industry and environmentalists) were held back by a lack of unity in the face of more monolithic stakeholders. 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.. along with small consumer advocates. The American Wind Energy Association and Environmental Defense Fund interview transcripts provide ample evidence of a rift in the community. but we have learned ‘when elephants dance.. First. 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. mice stay away’. Things were changing too fast.” ERG Master’s Project Mark Stout 46 . 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. minimizing this group’s losses. and were relegated to complaining after the deal was done. This pattern of stakeholder groups is consistent with the results of the stakeholder cluster analysis. faced an un-level playing field all along. “Some volunteer leaders wanted to be more vocal on stranded costs. We didn’t do grassroots letters. 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. “insider” strategy: • A volunteer on the Sierra Club California Legislative Committee noted. there was not enough time. but were able to recover when pressured by Steve Peace.Synthesis of Stakeholder & Staff Comments on Who Got Rolled. The clean power advocates. but depended on a consensus-based. leaving it up to the lobbyists and insiders to cut a deal.

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

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

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

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

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

The following campaign contribution summary tables were compiled from Officeholder. Jim Brulte (R-Ontario). these tables cover the years 1995 and 1996 for the author of AB 1890.77 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. no attempt has been made at determining total annual contributions from all sources to each officeholder.. is clearly renewable folks. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10. everybody should suffer except for us. obviously there is going to be many political philosophies on that issue. even though there some parts they might hate.. A full breakdown of contributions for each legislator is included in Appendix E. in order to move forward with a product. Candidate.start unilaterally resolving issues.. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts.” That same hearing session. if there is something you can bring to the table. in terms of complicated problem area. OK?. So for those of you who have been working on other issues I encourage you all to be helpful in that area if you can. The other thing is. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component. and my rule is when we are forced to unilaterally resolve issues. Our largest problem area. Where data is available. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . Senator Peace implored all of the parties to become “enthusiastic advocates” for the package.. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission.

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

835 $1.079 $950 $14.096 $971.163 $0 $25.374 $1.000 $1.405 $0 $722.500 $533.741 $21.153 $750 N/A $8.819 $0 $323.031.000 N/A $0 $18.000 $634.500 $263.995 $596.500 $1.588 $500 $32.180 $0 $209.496 $8.952 $1.675 $384. (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 $59.157 $0 $188. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.630 $300 N/A $0 $5.110 $34.500 $190.981 $1.595 $0 $21.000 $62.101 $495 $10.079 $13.000 $225.000 $0 $70.608 $3. 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.675 $736.416 $5.308 $516.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.470 $10.758 $2.203.745 $68.479 $2.112 $3.149 $3.239 $0 N/A $0 $89.102 $0 $73.000 $681.000 $480.S.125 $0 $4.181 $0 $160.559 $0 $246.419 $13.075 $4.500 $78.166 $5.752 $0 $51.370 $648 N/A $0 $208.818 $0 $65.964 $0 $40.092 $3.000 $562.272 $0 $64.592 $846 $0 ERG Master's Project Mark Stout 54 .516.

319 $0 $10.250 $0 $30.000 $20.326 $0 $100.500 $0 $0 ERG Master's Project Mark Stout 55 .947 $500 $281.495 $27.197 $500 N/A $2.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $526.551 $12. (gasoline refining and marketing) Tower Energy Group (oil.400 $100 $79.000 $524.083 $0 $20.600 $32.055 $0 $151.596.600 N/A $5.675 $0 $1.081 $1.938 $0 $118.495 $1.203 $0 $30.145 $5.230.723 $0 $38.401 $1.099 $12.701 $0 $5.203 $5.665 $0 $262. (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.492 $0 $66.000 $0 $15. natural gas.207 $5.000 $37.000 $0 $6.271 $0 $12. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.716 $39.003.167 $500 $25.519 $11.850 $1.291 $3. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.000 $383.000 $0 $171.362.

200 $837. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.917 $300 $5.750 $267.032 $0 $172. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.286 $3.748 $32.100 $0 $500 N/A $100 $0 $500 N/A $2.060 $6. producers.905 $30.400 $1.229 $100 N/A $1.025.460 $50.179 $0 $3.000 $35.000 $209.240 $0 $178. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.450 $566.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.147 $500 $739.611 $1.159 $3.250 $148.589 $26.590 $5.017 $1.605 $250 N/A $1.331 $0 $97.000 $85. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.195 $401.100 $144.281 $1. (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.S. 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.500 N/A ERG Master's Project Mark Stout 56 .819 $921.500 N/A $0 $211.500 $29.250 N/A $100 N/A $2.750 $1.000 NA $500 $0 $2.000 $50.750 $418.118 $0 $144.543 $29. McQuat.000 $33.626 $0 $8.862 $21.571 $500 N/A $200 N/A $1. and Hamrin.724 $500 not applicable $500 $57.717 $500 not applicable $0 $138. 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. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.782 $981.454 $3.882 $15.) 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.845 $452.600 $276. Dist.000 N/A $100 N/A $7.

573 $2.643 $1.000 $233.650 $3.712 $100 N/A $200 $16.000 $22.761 $0 $73.900 $0 $21.072 $918.137 $550 N/A $5. 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. (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.958 $2.407 $200 $61.705 $19.960 $2.950 $3.000 $76. (gasoline refining and marketing) Tower Energy Group (oil.478.1996 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. diesel) Unocal (CMA member) Victory Oil Co.900 $1.000 $500 $456.622 $67.250 $34.495 $22.296 $800 $25.521 $0 N/A $50 $87.878 $12.689 $2.925 $0 $44.636 $0 $103.861 $1.417 $9.532 $4.138 $1.000 $65. natural gas.500 $251.661.750 $37.245 $335.721 $748.347 $9.384 $2.989 N/A $9.334 $498 $1.500 $47.181 $1.050 N/A $0 $214.090 $749 $38.754 $4.750 $23.780 ERG Master's Project Mark Stout 57 . (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.800 not tracked $3.438 $500 N/A $0 $1.885 $300 $207.511 $1.521 $14.016 $1.209.521 $1.050 $949.995 N/A $100 N/A $0 $3.500 $277.177 $300 N/A $0 $29. Texaco Tidelands Oil Tosco Corp.

462 $208. 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. of California.438 $4.000 $15.585 $33.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .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 $14.250 $21.790 $100 $14.066 $500 N/A $250 N/A $22.000 $2.448 $424.000 $700 $117.378 $100 $21.066 $500 $21.462 $500 $14.

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

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

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

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

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

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

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

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

Throughout the ‘70s. if you are a broker.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. ERG Master’s Project Mark Stout 71 . 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. with the exception of the legislation’s mechanism for a rate reduction. We were strongly opposed to the RPS. they did not get there by investing in high cost renewables. except for electricity purchases from Mexican geothermal generators. This would put us at a competitive disadvantage compared to PG&E and Edison. The lucky Arizona utilities went with coal. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. 1995 Decision? The PUC was on the right track. so we would have to buy energy or credits. High priced renewables are OK if you are not moving to a competitive future. 84 CPUC Renewables Working Group. When Tom Page came in as CEO in 1981. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. we had the highest rates in the nation. everyone should pay. AB 1890 mirrors the Decision in many ways. Also. 1996. SDG&E wanted to become the lowest priced California IOU.84] SDG&E does not have any renewables. We were very opposed to the BRPU. it would be difficult to get 5% renewables. We went to FERC. but are not viable with competition. and got it struck down.

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

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

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

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

excluding electric co-operatives.that everybody was giving up something. supported by policy.Interview #1 Stuart Wilson is the Assistant Executive Director for CMUA. we have a small. a lobbying organization representing all but three of the municipal utilities in California. This is why we were so successful in helping resolve issues. There were two areas of concern: physical bypass. We also involved people at the highest levels. on-site staff. The Sacramento. 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. For both the Commission and Sacramento. Edison strived to keep it simple. Municipal Electric Utilities California Municipal Utilities Association . and DC offices also have weekly meetings to coordinate strategy. which ERG Master’s Project Mark Stout 76 . for instance with the MOU partners. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In the political arena. regulatory. San Francisco. working with broad-based coalitions. with customers removing themselves from our distribution service. CMUA members had a debate at the beginning of 1996 as to whether to pursue our own legislation. On average. stranded costs are a bigger issue for municipal utilities than for the IOUs. and a Proposition 13 clause stating that local governments can not charge more than the cost of service for utility customers. even now we have weekly meetings with corporate officers to discuss implementation. and legal expertise from the corporate offices. not getting all they wanted. We put in legislation to prevent customers from avoiding CTC payment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and had no 800 numbers. This may come under attack in the future. After a meeting with the Consumer Services Division of the PUC. The utilities were hoping that they could administer CARE and low income weatherization. we found out that the staffing for PUC complaints was utterly inadequate. We are also a member of the Greenlining Institute [a non-profit organization representing low-income communities of color]. a possible profit source for them. We also had small consumers mail in postcards to the Commissioners on rate issues. had short hours. and spoke to the press on critical issues. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Latino Issues Forum depended on Ralph Cavanagh to articulate positions there. We also participated with the Commissioners in community briefings to inform the public of upcoming changes. only part time. but because of a lack of resources. we interacted with the Legislature. mono-lingual english only. This Division was actually using AT&T language translation. Our letter to the Commissioners sparked modification and an investment of resources as part of the PUC’s internal restructuring plan. It caused some embarrassment because of the total inadequacy. Some of this year’s cleanup legislation will exclude municipalities from the anti-slamming ERG Master’s Project Mark Stout 113 . a very expensive service. At times. We also wrote letter to Commissioners that have been influential. and testified whenever we had the opportunity. which has partnership agreements with PG&E and Edison that they will represent some of Greenlining’s issues. have historically focused on the PUC. They were understaffed.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We filed dozens of briefs in the last few years.

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

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

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

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

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

and 4) incentives for uneconomic sales promotion minimized.”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. we are in favor of competition. “a leading non-profit organization. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. EDF supports the earliest possible implementation of direct access for all classes of customers. economically viable solutions to today’s environmental problems. E-1. and law to create innovative. ERG Master’s Project Mark Stout 119 . If focusing 94 CPUC Renewables Working Group. As stated in EDF’s first round comments on the Blue Book. yes. depending on interpretation.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. EDF links science. if restructuring is implemented properly: 1) energy efficiency investments should continue. The Decision was vague. more than 55. 1995 Decision? Almost nothing. “There is no reason to proffer the benefits of competition first to only selected classes of customers.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. EDF has participated in California energy policy issues since 1975.000 of whom live in California. [which] represents 300. It gave us nothing until the Legislature tells us otherwise.000 members nationwide. Assuming these problems are resolved. economics. 2) an Integrated Resource Planning process should exist for energy efficiency. and punted on the details to the Legislature.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

about five people in the meileu. We filed comments. We had informal contacts with the CPUC staff. but nobody dedicated to the PUC proceedings. but not an overwhelming one. We had a presence. who handle all University issues. and commented publicly at the Conference Committee. and spoke at one public hearing. but they permitted some very big cuts in R&D funding in late 1994. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. ERG Master’s Project Mark Stout 143 . supplemented by several support staff. myself and another University employee were there off and on. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. they have usually been good. allowing for inertia. The University is represented by a legislative affairs office. The Governor can appoint one Commissioner a year. They have been favorable in principle the whole way through. and their was a steady chatter amongst parties. For the conference committee we had an attorney representing the University.interested in technology and became a CIEE board member. In practice. Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D. The University has a counsel on the PUC service lists. The office has two advocates.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .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 .Interview #1 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 .Interview #1 Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .

500 $1.495 $1.000 $3.000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.500 $22.000 $3.495 $7.000 $500 $1.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.000 $4.191 $2.000 $7.000 $3.896 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.995 $300 $12.000 $495 $950 $696 $2.800 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.995 $21.000 $0 $0 ERG Master’s Project Mark Stout 162 .429 $498 $1.000 $1.495 $10.

250 $2.995 $1.000 $1.990 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $10.995 $14.000 $8.000 $2.500 $6.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $3. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $1.Table 2: Assemblymember Jim Brulte. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.511 $3.460 $200 $500 $750 $2.995 $2.750 $4.500 $1.500 $800 $498 $200 $9.000 $2.500 $47.495 $4.017 $749 $750 $3.

Brulte was taken on a $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Conservation.000 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. CFEE is a “non-profit. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.750 $2. and Budapest. Table 3: Senator Steve Peace. Mobil treated Brulte to a $60 event in 1996. Paling in comparison. 4 ERG Master’s Project Mark Stout 164 .000 $1. totaling $101.000 $2. 1996. 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.750 $750 $1. From 3/28/96 to 4/8/96. by the California Foundation on the Environment and the Economy.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Not to be outdone.490 “Travel project to Europe on Electric Restructuring.000 $1. and Privatization” visiting London.750 $3.000 $2.250 $500 $1.000 $1. Chevron treated Brulte to two meals.500 $1. as well as an event. Sweden. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $750 $0 $0 103 Asmus.

250 $7.500 $3.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $300 $1.Table 4: Senator Steve Peace.115 $18.600 $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.072 $2.450 $7.000 $4.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.500 $16.000 $750 $750 $750 $1.100 $2.250 $2.815 $750 $6.050 $3.572 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $8.250 $1.000 $6.000 $500 $2.250 $750 $500 $1.

Table 5: Senator Byron Sher.000 $5. SDG&E had Peace out to six meals.450 166 ELECTRIC/GAS $6. Peace was treated to a $52 sports event by Mobil Oil. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. IEP made a gift of $241 for his speech at a conference. taking Steve to 11 meals. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. In 1995. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.900 . 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. 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. as well as chair of the Senate Energy and Utilities Committee.100 $2. Southern California Edison was granted a high level of access.000 Table 6: Senator Byron Sher. while Edison treated him to five meals and a sports event. In 1996.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.

482 $100 $1.882 $100 $1.100 $500 $2. EVs) Hansen. (biomass) Edson + Modisette (lobbyist for indep.500 Int. (geothermal) Colmac Energy Inc. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 $500 $500 $9. $2.600 $13.000 $100 producers.000 $500 $1. Brotherhood of Electrical Workers (various $9. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . and Hamrin.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. McQuat. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 locals) Southern California Pipe Trades United Assoc.

500 COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 $100 $1.000 Large Energy Consumers $3.000 $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 $1.000 $1.

462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . of California.000 $300 $300 $22.448 $14. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.585 $100 $500 $2.Tosco Corp.000 $700 $4.

400 $750 $150 $1.500 $300 $0 $0 $2.300 $500 $1. Sher received no other gifts that year from energy utility stakeholders. 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. totaling $758. Exxon.000 in each of Amoco.000 $1. In 1996. NARUC treated Sher to a two day trip to DC for another meeting. Table 7: Senator Bill Leonard. and GE.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.500 $0 $0 ERG Master’s Project Mark Stout 170 . totaling $2608. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Sher holds over $100. 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. Mobil.

000 $2. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $1.000 $5.500 $150 $500 $3. saving up for a $77 dinner with head lobbyist Bob Foster. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $500 $500 $4. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.730 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.500 $500 $1. extending his stay from 12/8/96 to 12/13/96. While the Senator was there. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. The Pacific Rim Conference of Seattle.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. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $2.650 $2. Edison again ERG Master’s Project Mark Stout 171 . SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. for a paltry $20.080 $10.Table 8: Senator Bill Leonard.

750 $1.000 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1. including lunch with Bob Foster. PG&E took Leonard out to a Kings game.000 $1.had Senator Leonard out for Legislative Ski Day. ARCO treated Leonard to a $19 meal at a reception. for the modest tab of $56.000 $750 $750 $650 $150 $500 $3. They also had Leonard out for two meals in Sacramento. Table 9: Assemblymember Mickey Conroy. 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.250 $1. paying $44 for two meals and lodging.600 $750 $750 $500 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .600 $1.

600 $500 $1. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.700 $500 $300 $550 $2. PG&E treated him to a basketball game with $51 tickets.050 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. CFEE is a “non-profit. $7.000 $5. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. Shanghai.000 $3. and to 104 Asmus. the California Foundation on the Environment and the Economy took Conroy on an 11 day.300 junket to talk with Chinese central government and provincial leaders in Beijing. 1996.700 $750 $450 $250 $250 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.000 $500 $2.000 $2.000 $500 $750 $250 $500 $2. two meals for $44. 4 ERG Master’s Project Mark Stout 173 . and Inner Mongolia.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.500 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.600 $3.Table 10: Assemblymember Mickey Conroy.

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

000 $1.250 $1.Table 11: Assemblymember Diane Martinez.000 $1.675 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.250 $1.750 $4.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.175 $500 $1.750 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $1.

1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.750 $1.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $500 $3.500 $6.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $500 $500 $1.000 $500 $1.000 $500 $500 $500 $500 $500 $3. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.250 $1.000 $7.500 $1.000 $1.000 $500 $500 $5.000 $4.000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $1.Table 12: Assemblymember Diane Martinez. (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. Dist.000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.500 $1.000 $5.

600 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 13: Assemblymember Steve Kuykendall.100 $100 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.900 $3.850 $1.500 $1.000 $8.467 trip to Northwestern University to discuss the deregulation of public utilities. natural gas. ERG Master’s Project Mark Stout 177 . (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. the Illinois Energy Association flew Martinez out for a $1.000 $500 $500 $1.500 $1.208 $0 $0 $1.058 $500 $500 $1.

) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. However.500 $0 $1.000 $1. diesel) Unocal (CMA member) Victory Oil Co.490 “Travel project to Europe on Electric Restructuring. From 3/28/96 to 4/8/96. natural gas.000 $2.Table 14: Assemblymember Steve Kuykendall.374 $4.000 $1. Kuykendall’s social calendar was destined to pick up in 1996. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.350 $500 $1.000 $500 $2. Sweden. ERG Master’s Project Mark Stout 178 .250 $100 $500 $35. and Privatization” visiting London.000 $1. and Budapest.374 $500 $2.500 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Conservation. Kuykendall was taken on a $7. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.443 $6.500 $1.254 $200 $500 $4.000 $19.

government ministers.”105 The Consolidated Edison IOU spent $1. an Edison lobbyist was added to the international travel party at the last minute.051 to fly the President out to New York City for a ConEdison Management Conference. A trade association. and environmental groups to discuss the British experience with deregulation of electricity. CO.by the California Foundation on the Environment and the Economy. wholesale PoolCo model. The Large Public Power Council. to meet with CEOs of the electricity industry. Fessler was taken on a $7. paid $1.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The Aspen Institute. in Aspen. According to investigative writer Peter Asmus. SC to address their membership. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. by the California Foundation on the Environment and the Economy. Another non-profit organization. known as the Council of States Government . spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. was very interested in California moving to the UK-style. Chevron treated Kuykendall to two dinners for $131.WEST. 4 ERG Master’s Project Mark Stout 179 .167 junket visiting London. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. one of CFEE’s funders. spent $1402 to fly Fessler to Charleston. Brussels. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. 1996. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and Paris. The California 105 Asmus. a trade association for publicly owned utilities. for $610. Edison. regulators. The California Mining Association took him out for an evening of recreation and dinner costing $89.

The Cato Institute. a utility association. had Fessler speak at their conference in Washington. NJ to speak at the 1994 DSM Implementation Conference. spent $249 to fly him to their annual meeting in Las Vegas. The Western States Coordinating Council. for $61. spending $1006.000 in Ohio Edison stock. EEI is a trade association representing investor owned utilities. in Fort Collins. Utah to speak at the “Utility Restructuring. ERG Master’s Project Mark Stout 180 . and Inner Mongolia. The Rocky Mountain Electrical League. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. spending $291. DC. spent $314 to bring him to speak at their Spring Conference. for $323. PG&E had him out for two lunches. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. ZEV’s and Rethinking the Environment Conference. Shanghai. for $467 airfare. On the investment side. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. Synergics Resources Corporation had Fessler out to Princeton. a libertarian think-tank. In April of 1995. Finally. the Center for Resource Management flew him to Midway. CO. Fessler holds over $10. Finally. DC. $7. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. a utility planning association.802 junket to talk with Chinese central government and provincial leaders in Beijing. the California Foundation on the Environment and the Economy took Fessler on an 11 day.

and environmental groups to discuss the British experience with deregulation of electricity.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. regulators. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. He does own less than $10. government ministers. Jr. one of CFEE’s funders.000 in each of Chevron. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and Paris. to meet with CEOs of the electricity industry. utility and General Electric stock. Edison.000 in each of Central & Southwest Corp. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference.000 in each of Montana Power Company and Exxon stock. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight 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. PG&E had him out to three meals for $71. He does own more than $10. In 1995. Brussels. and less than $10. 1995. wholesale PoolCo model. He left office on February 23.167 junket visiting London. Conlon was taken on a $7. and Schlumberger oilfield services stock. spending $258. was very interested in California moving to the UK-style. by the California Foundation on the Environment and the Economy. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. ERG Master’s Project Mark Stout 181 . The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. Unocal.

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