Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

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

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

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

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

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1995 Electric Restructuring Decision. Various stakeholder groups.S. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1995 3 Flavin and Lenssen.3 According to the Environmental Defense Fund.org/programs/Energy/green_power/a_better. 1996 California Energy Commission. which will be superseded to a great extent by the details of AB 1890.4 Given the stakes involved with this industry. there will probably be significant winners and losers as a result of this legislation. with varying success. This paper develops a comparison of which stakeholder groups got what they wanted.Introduction On September 23. contrasting the results of CPUC process resulting in their December. 1 2 CPUC RD&D Working Group. 1996. and why.html ERG Master’s Project Mark Stout 4 . 1994 4 WWW page: http://www. acid rain and climate change. which sets in motion a process of electric utility deregulation beginning in 1998. The vision of electric utility deregulation legislated in AB 1890 is significantly different from that contained in the California Public Utility Commission’s (CPUC) December. 1995 Decision with the California legislative process resulting in AB 1890. a product with well documented environmental impacts including local air pollution.edf. selling 250 billion kWh of electricity per year2.

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

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

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

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

. 15 Cavanagh. Utilities lose money when customers engage in conservation. Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions. They likewise lose money when the encourage customers to engage in conservation. 356.13 and the transient nature of short term building owners and renters. One prominent utility regulator remarked on the situation that had developed in the 1980s: “In the current scheme of regulation..classes of IPPs including Exempt Wholesale Generators. 14 Cavanagh.” 356-357. “Discretionary Evolution.”.. which compares supply.. Stevenson. 14 Also.. ERG Master’s Project Mark Stout 11 . “1) implementing Integrated Resource Planning (IRP). utilities make money in only one way--selling [units of energy].. regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold. “Energy Efficiency Solutions.and demand-side options systematically when seeking least-cost energy 12 13 Stevenson.12 While encouraging wholesale competition. inadequate information available to customers. “Social Goals.. allowing larger generation plants to be exempt from traditional regulation.” 407.. 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.”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider. This money-losing proposition is not significantly improved by any of the conservation cost recovery or incentive mechanisms now in use. “Global Warming and Least-Cost. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options.” 521.

Hoffman. 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. all commercial customers eligible January 1. and if successful. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. ERG Master’s Project Mark Stout 12 . This utility restructuring involves the divestiture of utility electricity generation facilities into separate companies from the original utility which would still be responsible for transmission and perhaps distribution. sending “a shockwave through the electric industry”. 1999. 1996.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. industrial customers taking power at the transmission level eligible on January 1. The Blue Book laid out an aggressive. and 3) rate changes to encourage efficiency and distribution of power. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 18 Mydans.supplies. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations. all residential consumers eligible on January 1. 55.18 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. with large. In April of 1994. A more definitive policy statement was 16 17 Haddad. customer class-staged schedule for direct access implementation.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. 2002. 6.

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

1995.24 22 23 CPUC. Status Report. is based on a common wholesale power pool.for wholesale transactions. the California Commissioners released two draft proposals for pursuing rate deregulation in California. A common price for all electricity in the state would then be set by the market clearing price based on the bids. Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition. The majority proposal known as PoolCo. Generators are scheduled into the pool based on time-based bids submitted to the ISO. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . in May of 1995. Retail contracts with a particular generator could be handled with separate “contracts for differences”. favored by CPUC President Fessler and two other Commissioners. meaning the utilities could not discriminate against other electricity suppliers. which is usually considered state jurisdiction. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. 1997. All power purchases would be made through the pool. scheduled and dispatched by an independent system operator (ISO). The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. Asmus and Smeloff.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal.

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

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

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

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

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

It divides up this amount into four accounts that vary over four years of funding.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1997 41 Marshall. 1998.41 There are currently several electric utility restructuring bills in Congress. including residential and small commercial consumers. 1996 CEC. 10% emerging technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . “If the bill had failed. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1997.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. 30% new technologies. including a prominent one authored by Representative Dan Schaefer (R-CO). would be eligible for direct access January 1. In March of 1997.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. 1997. The overall levels are: 45 % existing technologies. and 15% consumer-side incentives. chair of the House Energy and Power Subcommittee. As Carter and Cavanagh have noted.40 On May 6. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1997 42 Weisman.

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

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

but now had to pay higher rates. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. ERG Master’s Project Mark Stout 23 . 52 Gilbert. 51 Stevenson. who in the past had enjoyed privileged status with cheap rates. greatly increasing opportunities for bulk power sales. “Discretionary Evolution. 447-475. 1993. Hoffman 55-62. 50 Flavin and Lenssen. 150. 1993.intense pressure from large industrial customers. Gordon. 356-357. 195. 84-108. Davis.. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1994.50 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.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.”. basing their arguments on welfare economics as applied to the changing electric utility landscape.. enabling increased competition. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.

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

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

Calls for bids have often been oversubscribed by a wide margin. New York. were the key retail wheeling champions within the CPUC. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process..”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. both appointees of Governor Pete Wilson. “Retail wheeling.. ERG Master’s Project Mark Stout 26 . “Discretionary Evolution.has noted. “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. Maine. the same year that California’s Blue Book proposal was released. 1995. 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. an analyst with CPUC’s Division of Strategic Planning.”62 a form of integrated resource planning know as the BRPU. 62 Asmus.. Massachusetts. Connecticut. “the DOE bill does not mandate retail markets by any date certain.”. though it urges states to consider retail competition. In 1994. according to Jeff Dassovich. 60 61 Levison.. 24.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. Colorado. Commissioner Knight. 355-356. and Wisconsin. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU).”. Michigan initiated a five year retail wheeling experiment involving two utilities. 1997. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail.

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

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

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

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

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

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

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

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

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

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

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. this provides a baseline to determine if they got what they wanted. Figure 2 shows that all of the investor-owned utilities and independent producers.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 INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. When combined with comments filed by that organization early in the restructuring process at the CPUC. as well as the majority of large electricity consumers. 1995 Decision. nearly half of the representatives say that their organization got most of what it wanted from the December Decision. and the remaining minority claim that their organization got rather little. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 .

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

most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. As Figures 5 indicates. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . 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. either the CPUC December Decision or AB 1890.

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

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

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

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

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

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

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

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

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

“We reached a consensus on. Industrial Users. a perusal of legislative language that was proposed during the long. EDF. agricultural consumers.. The August 15 language from a coalition of powerful interests. renewables with an incremental cost estimate from the BRPU. reduced funding to an average of 2. less than two weeks before the Bill would be reported out of committee. CLECA.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. and the Sierra Club. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.. 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. As a Sierra Club California legislative chair recounts on meetings between CMA.72 At this point late in the game. 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 . RD&D.” However.. funding for public purpose programs: low income. and energy efficiency. These got translated into dollars.3% of utility revenues.. The 3% [it was actually a cap of 3.1% of IOU revenues. 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. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. During the Conference Committee hearings. including IEP. TURN was one of several public interest organizations who opposed the change.

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

During my experience representing an environmental stakeholder organization in this process. 1996 ERG Master’s Project Mark Stout 51 .validity for Committee Members.. According to an NRDC analyst who was interviewed. The Governor has the same goal: empower people for economic development. they may lose out altogether. We will 76 Dryzek. and nobody would have been happy. bought at the expense of relatively unrestricted democratic interplay in the oppositional public sphere. the loss is harder to justify.. Inclusion in the life of the state is. under the threat of retribution. where he bullied advocates for the Renewables Portfolio Standard.” As Peace said himself during the Conference Committee’s August 10.76 Another factor that impaired the public interest groups was that Conference Committee Chair Steve Peace was able to coerce these groups into accepting compromises they would not have otherwise.. it will not inure to your benefit for those differences to still exist on Monday. “quit beating a dead horse. “It was very clear that if everyone did not work together. bottom-up manner: the group may have to develop a more hierarchical internal structure in order to produce a stable leadership which government officials will recognize and deal with. and Senator Peace represents a district in the San Diego area. who deal daily with issues of economic development. be justified by the instrumental benefits thereby achieved. the RPS is a “non-starter” because San Diego Gas and Electric (SDG&E) does not like it”. Peace was threatening to handle renewable energy policy himself. Senator Peace’s response to this policy mechanism was along the lines of..”. “For those of you who have intra-familial differences. 1996 meeting. I read accounts of public hearings chaired by Peace. then. The democratic loss experienced by entry into the state can. But if there are no instrumental benefits. Dryzek also notes the impact that this “democratization as inclusion” has had on the ability of progressive organizations to function in a democratic.

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

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

112 $3.000 $62.752 $0 $51.031.995 $596.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $533.479 $2.096 $971. (geothermal) California Solar Energy Industry Association Enron Capital & Trade Resources Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Energy Corporation (windpower) Solar Turbines Incorporated LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Conference Committee Campaign Total California Contributions Lobbying Expenses $59. 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.000 $634.981 $1.272 $0 $64.153 $750 N/A $8.308 $516.588 $500 $32. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.758 $2.110 $34.149 $3.079 $13.000 $1.181 $0 $160.000 $562.166 $5.092 $3.500 $78.470 $10.157 $0 $188.496 $8.374 $1.101 $495 $10.102 $0 $73.516.500 $190.675 $736.500 $1.952 $1.608 $3.559 $0 $246.075 $4.370 $648 N/A $0 $208.818 $0 $65.000 $480.675 $384.416 $5.819 $0 $323.079 $950 $14.500 $263.405 $0 $722.964 $0 $40.163 $0 $25.180 $0 $209.239 $0 N/A $0 $89.000 $0 $70.125 $0 $4.741 $21.000 $681.203.000 N/A $0 $18.835 $1.S.000 $225.745 $68.419 $13.592 $846 $0 ERG Master's Project Mark Stout 54 .595 $0 $21.630 $300 N/A $0 $5.

000 $0 $6.326 $0 $100.291 $3. (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. 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 $4.055 $0 $151. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.099 $12.362.000 $526.003.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.197 $500 N/A $2.500 $0 $0 ERG Master's Project Mark Stout 55 .675 $0 $1. (gasoline refining and marketing) Tower Energy Group (oil.400 $100 $79.701 $0 $5.083 $0 $20.319 $0 $10.596.938 $0 $118.000 $524.207 $5.401 $1.716 $39.600 $32.947 $500 $281.000 $20.145 $5.495 $1.203 $5.495 $27.230.850 $1.000 $37.271 $0 $12. natural gas.250 $0 $30.723 $0 $38.492 $0 $66.081 $1.167 $500 $25.000 $383.665 $0 $262.600 N/A $5.551 $12.519 $11.000 $0 $15.203 $0 $30.000 $0 $171.

McQuat.229 $100 N/A $1.605 $250 N/A $1.250 $148.500 N/A ERG Master's Project Mark Stout 56 .000 NA $500 $0 $2.543 $29.571 $500 N/A $200 N/A $1. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. 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.600 $276. (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) $145.281 $1.626 $0 $8.) Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District Turlock Irrigation District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.250 N/A $100 N/A $2.724 $500 not applicable $500 $57.017 $1.460 $50. producers.917 $300 $5.331 $0 $97. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.750 $267.454 $3. and Hamrin.590 $5.589 $26.000 $35. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.862 $21.000 $85.240 $0 $178.000 $33.060 $6.717 $500 not applicable $0 $138.000 N/A $100 N/A $7.195 $401.845 $452.286 $3.750 $1.000 $50. Dist.159 $3.032 $0 $172. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.611 $1.819 $921.748 $32.000 $209.400 $1. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.100 $0 $500 N/A $100 $0 $500 N/A $2.200 $837.782 $981.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.S.118 $0 $144.882 $15.905 $30.025. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.147 $500 $739.450 $566.100 $144.179 $0 $3.750 $418.500 N/A $0 $211.500 $29.

090 $749 $38.495 $22.705 $19.072 $918.000 $500 $456.521 $14.712 $100 N/A $200 $16.573 $2.407 $200 $61.000 $233.958 $2.780 ERG Master's Project Mark Stout 57 .138 $1.661.878 $12. natural gas.296 $800 $25.622 $67.750 $37.900 $1.761 $0 $73.000 $22.995 N/A $100 N/A $0 $3.500 $277.250 $34.925 $0 $44.1996 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.016 $1.347 $9.861 $1.050 $949.137 $550 N/A $5. diesel) Unocal (CMA member) Victory Oil Co. Texaco Tidelands Oil Tosco Corp.721 $748.500 $251.245 $335.885 $300 $207. (gasoline refining and marketing) Tower Energy Group (oil.521 $1.532 $4. (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.417 $9.750 $23.989 N/A $9.521 $0 N/A $50 $87.181 $1.438 $500 N/A $0 $1.689 $2.478.000 $76.511 $1.754 $4.209.636 $0 $103.334 $498 $1. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.950 $3.900 $0 $21.960 $2.177 $300 N/A $0 $29.384 $2.000 $65.800 not tracked $3.643 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.050 N/A $0 $214.500 $47.650 $3.

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) $1.448 $424.000 $700 $117. of California.378 $100 $21.790 $100 $14.066 $500 $21.000 $15.000 $2.438 $4.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .585 $33.250 $21.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.068 $14.462 $208.462 $500 $14.066 $500 N/A $250 N/A $22.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

93

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

Overall. 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 add needed education and protection programs in order to at least maintain the status quo for small consumers. 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. our goal was to protect as much of the old programs as possible. We realized it was not realistic to resist retail competition as TURN had tried in telecommunications. We also wanted to fund low-income weatherization programs at as high a level as possible. Jane Kelly of UCS [see interview] recommended that I talk with someone at this organization. In addition. 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 . need-based level. but as Dan Fessler was fond of saying.Small Electricity Consumers Latino Issues Forum Latino Issues Forum. 1995 Decision? In an outline form. I do not think small consumers will benefit from retail competition. We wanted to keep the CARE (California’s Alternative Rates for Energy) program funded at an uncapped. The interview subject preferred to remain anonymous. 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. but it was realistic. everything was included. In some ways this was not a very lofty goal. “the devil is in the details”.

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

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

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

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

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.So we were stuck with a bill that we hated. a very. Also. CPUC vs. it limited CTC recovery to a shorter period of time. PG&E gets a $0. leading to a heated internal debate. ERG Master’s Project Mark Stout 116 . requiring a written. In the end. AB 1890)? Why? At the end of the process. signed document with independent verification that a customer wants to be included in an aggregation. we did not oppose or support AB 1890.5 billion increase. On the bad side. so he was amenable to this. TURN felt it had turned AB 1890. Peace’s residence had gotten slammed a couple times. Some customers got away with no CTC. On the good side. very bad bill. Is your organization more comfortable with one policy decision over the other (i. It turns out that independent generation plants are run with much less staff. divested power plants must come with a contract for the original staff for the first two years. into a very bad bill. we decided not to oppose.. We had the option of opposing it and jeopardizing the concessions in it. and offered a good commitment to low income programs. but Edison successfully created this barrier under the guise of anti-slamming language. firmed up the nonbypassability of the CTC.e. Since we felt that it was incrementally better than the December Decision. but had to be in the debate. there were some self-generation projects in the pipeline. Edison gets coal cost increases. but a narrow set of projects. We had suggested that community access provide an out for people that did not want in. This raises a substantial barrier for municipalities to aggregate their residents’ loads.

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

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

000 members nationwide.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. “a leading non-profit organization. we are in favor of competition. yes. depending on interpretation.000 of whom live in California. economics. Assuming these problems are resolved. The Decision was vague. ERG Master’s Project Mark Stout 119 . 2) an Integrated Resource Planning process should exist for energy efficiency. more than 55. “There is no reason to proffer the benefits of competition first to only selected classes of customers.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. and law to create innovative. EDF links science. If focusing 94 CPUC Renewables Working Group. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. and punted on the details to the Legislature. 1995 Decision? Almost nothing. and 4) incentives for uneconomic sales promotion minimized. E-1. economically viable solutions to today’s environmental problems.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. EDF supports the earliest possible implementation of direct access for all classes of customers. EDF has participated in California energy policy issues since 1975. It gave us nothing until the Legislature tells us otherwise. if restructuring is implemented properly: 1) energy efficiency investments should continue. As stated in EDF’s first round comments on the Blue Book. [which] represents 300.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

otherwise blew it up. A lot of their lawyers did technical language work in coalition with the legislative counsel. anyone could have influence. To contrast this. and how could they have improved their approach? Power marketers such as Enron. The full recovery of their stranded assets was very important to them. such as CalPIRG and one of Ralph Nader’s organizations. The Committee Members took some things from the Decision. and why? When the PUC December Decision came out. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Linking up with the Governor’s office was critical. They also were able to offer a lot of help with technical drafting. IOUs very quickly were able to get 100% stranded cost recovery firmed up. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. a small generation developer. no one was happy. Which stakeholder groups do you think were best able to set the terms of the debate. They needed to get their nukes off of the books. This put everything on the table. Wayne Rafesberger. This was the greatest expression of coalition building. He represented himself well in the hearings and actually helped to draft language that made it into the bill. could not go to a competitive market with a debt hindrance. and Working Assets were just not there when their issues came up. NEVs.Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? The IOUs were able to pull people together. as well as an acceleration of recovery. If they were there and could contribute. they had the manpower to make sure their positions were taken care of. was a one-man machine. Groups that opposed the bill without participating also were ineffective.

There was a lot of play between SMUD and the large customers.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. The ability to fund politicians helped. It looks most likely that it will be adopted. Bill Leonard did not historically support ratepayer funding for renewables. The IOUs were clear that they wanted full recovery. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Getting the help of the Governor’s office. you must play. Political clout can be bought with lobbying and campaign contributions. Once the Governor’s office was behind the MOU. it was all over. ERG Master’s Project Mark Stout 155 . it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. and look for ways to get around paying the CTC. causing chaos. Bill Leonard said that if you want to charge an exit fee. The IOUs got complete stranded cost recovery. Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. Labor wanted to protect their employees. He walked out at one point to force the munis to make up their mind. while the large customers got the ability to go first on direct access. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. such as irrigation districts and economic development rates. SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. However.

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

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

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

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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. 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 #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 .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .

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

Interview #1 California Municipal Utilities Association .Interview #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 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 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 #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 Natural Resources Defense Council .

500 $22.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte. (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. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $495 $950 $696 $2.000 $2.000 $3.429 $498 $1.000 $500 $1.500 $1.191 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $3.495 $10.495 $7.896 $3.995 $300 $12.495 $1.995 $21.000 $3. 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.800 $1.000 $7.000 $1.000 $4.

995 $1.500 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 . 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.500 $47.000 $2.500 $800 $498 $200 $9.017 $749 $750 $3.000 $1.500 $6. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.250 $2.995 $14.495 $4.000 $3.000 $1.750 $4.000 $2.990 $1.500 $1.000 $10.511 $3.995 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $8.460 $200 $500 $750 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.Table 2: Assemblymember Jim Brulte.000 $1.

000 $1. Not to be outdone. (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. Paling in comparison. Table 3: Senator Steve Peace. From 3/28/96 to 4/8/96.000 $750 $0 $0 103 Asmus. CFEE is a “non-profit. and Privatization” visiting London.750 $2.000 $3.250 $500 $1.000 $1.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. 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. Sweden.750 $3. Chevron treated Brulte to two meals.750 $750 $1. 1996. by the California Foundation on the Environment and the Economy. totaling $101. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Conservation. as well as an event. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Mobil treated Brulte to a $60 event in 1996. Brulte was taken on a $7. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.490 “Travel project to Europe on Electric Restructuring.500 $1.000 $2. and Budapest. 4 ERG Master’s Project Mark Stout 164 .000 $2.000 $1.

000 $6.815 $750 $6.000 $750 $750 $750 $1.500 $8.250 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $16.750 $0 $0 ERG Master’s Project Mark Stout 165 . Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.050 $3.600 $2.100 $2.250 $1.250 $750 $500 $1.072 $2.250 $7.000 $4.572 $1.000 $300 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.450 $7.500 $3.115 $18.000 $500 $2.000 $1.Table 4: Senator Steve Peace.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.

taking Steve to 11 meals. Peace was treated to a $52 sports event by Mobil Oil.100 $2.450 166 ELECTRIC/GAS $6. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals.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 $1.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. Southern California Edison was granted a high level of access.000 Table 6: Senator Byron Sher.000 $5. Table 5: Senator Byron Sher. IEP made a gift of $241 for his speech at a conference. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. 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. In 1996. In 1995. as well as chair of the Senate Energy and Utilities Committee. while Edison treated him to five meals and a sports event. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.

(biomass) Edson + Modisette (lobbyist for indep.000 locals) Southern California Pipe Trades United Assoc. and Hamrin. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $100 producers. EVs) Hansen. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. McQuat.600 $13.882 $100 $1.500 Int.000 $500 $1.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (geothermal) Colmac Energy Inc. $2.482 $100 $1. Brotherhood of Electrical Workers (various $9.100 $500 $2.000 $500 $500 $9.

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

585 $100 $500 $2.Tosco Corp. of California.000 $300 $300 $22. (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 $1.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .448 $14.000 $700 $4.

Exxon.000 $1. In 1996. 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.000 in each of Amoco. totaling $758. Sher holds over $100.500 $300 $0 $0 $2.300 $500 $1.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.400 $750 $150 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher received no other gifts that year from energy utility stakeholders. NARUC treated Sher to a two day trip to DC for another meeting. 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. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. totaling $2608. Table 7: Senator Bill Leonard. Mobil. and GE.

The Pacific Rim Conference of Seattle.000 $2. Edison again ERG Master’s Project Mark Stout 171 . (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 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. extending his stay from 12/8/96 to 12/13/96. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.650 $2.080 $10. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.500 $150 $500 $3.730 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation. SCE treated Leonard to dinner and lodging for Legislative Ski Day. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $2.000 $500 $500 $4.000 $5. While the Senator was there.000 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. for a paltry $20. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $1. saving up for a $77 dinner with head lobbyist Bob Foster.Table 8: Senator Bill Leonard.000 $1.500 $500 $1.650 $500 $1.

250 $1.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . paying $44 for two meals and lodging.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $750 $750 $650 $150 $500 $3. including lunch with Bob Foster.600 $750 $750 $500 $1.600 $1.had Senator Leonard out for Legislative Ski Day.000 $1. Table 9: Assemblymember Mickey Conroy.000 $1.750 $1. for the modest tab of $56. They also had Leonard out for two meals in Sacramento. PG&E took Leonard out to a Kings game. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. ARCO treated Leonard to a $19 meal at a reception.

300 junket to talk with Chinese central government and provincial leaders in Beijing.700 $500 $300 $550 $2. 1996.050 $1. PG&E treated him to a basketball game with $51 tickets. CFEE is a “non-profit.500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $500 $1. two meals for $44. 4 ERG Master’s Project Mark Stout 173 . charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.000 $5. and to 104 Asmus.700 $750 $450 $250 $250 $1.000 $3.Table 10: Assemblymember Mickey Conroy.600 $3.000 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. Shanghai. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co.000 $500 $2.000 $500 $750 $250 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. and Inner Mongolia. $7.

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

) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.250 $1.675 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 11: Assemblymember Diane Martinez.250 $1.750 $2.000 $1.750 $2.175 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.750 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.750 $4.

500 $1.500 $1.500 $1.000 $7. Dist. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $500 $500 $1.000 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $4.000 $500 $500 $500 $500 $500 $3.750 $1.500 $6.500 $1.250 $1.000 $5.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $500 $500 $5.000 $4.000 $500 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $3.000 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 12: Assemblymember Diane Martinez.

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.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.500 $1.100 $100 $1. ERG Master’s Project Mark Stout 177 .467 trip to Northwestern University to discuss the deregulation of public utilities.500 $1.Table 13: Assemblymember Steve Kuykendall. natural gas.900 $3. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.000 $1.058 $500 $500 $1.850 $1.600 $1.208 $0 $0 $1.000 $500 $500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. the Illinois Energy Association flew Martinez out for a $1.000 $8. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

natural gas. diesel) Unocal (CMA member) Victory Oil Co.000 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.350 $500 $1.000 $19.374 $500 $2. Kuykendall’s social calendar was destined to pick up in 1996.000 $1. and Privatization” visiting London.Table 14: Assemblymember Steve Kuykendall.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. Conservation. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $1. ERG Master’s Project Mark Stout 178 .500 $0 $1.443 $6. However. Sweden.500 $1. From 3/28/96 to 4/8/96.490 “Travel project to Europe on Electric Restructuring.000 $500 $2.000 $2. and Budapest. 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. Kuykendall was taken on a $7.250 $100 $500 $35.254 $200 $500 $4.374 $4.000 $1.

for $610. and Paris.051 to fly the President out to New York City for a ConEdison Management Conference. The California 105 Asmus. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. A trade association. Fessler was taken on a $7. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. by the California Foundation on the Environment and the Economy. paid $1. was very interested in California moving to the UK-style. The Large Public Power Council. 1996.167 junket visiting London. Brussels. a clean power auction the CPUC repeatedly postponed upon the urging of the utility.by the California Foundation on the Environment and the Economy. and environmental groups to discuss the British experience with deregulation of electricity. wholesale PoolCo model.WEST. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. SC to address their membership. government ministers. Chevron treated Kuykendall to two dinners for $131. 4 ERG Master’s Project Mark Stout 179 . The California Mining Association took him out for an evening of recreation and dinner costing $89.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The Aspen Institute. Another non-profit organization. an Edison lobbyist was added to the international travel party at the last minute. regulators. one of CFEE’s funders. According to investigative writer Peter Asmus. in Aspen. known as the Council of States Government . to meet with CEOs of the electricity industry. Edison. CO. spent $1402 to fly Fessler to Charleston. a trade association for publicly owned utilities.”105 The Consolidated Edison IOU spent $1.

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

Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. utility and General Electric stock. In 1995.000 in each of Central & Southwest Corp. PG&E had him out to three meals for $71. Edison. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. government ministers.000 in each of Montana Power Company and Exxon stock. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. to meet with CEOs of the electricity industry.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. regulators. spending $258. and environmental groups to discuss the British experience with deregulation of electricity. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Unocal. by the California Foundation on the Environment and the Economy. He does own less than $10. wholesale PoolCo model. Jr.000 in each of Chevron. Brussels. 1995. and Schlumberger oilfield services stock. one of CFEE’s funders. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. Conlon was taken on a $7.167 junket visiting London. ERG Master’s Project Mark Stout 181 . and Paris. and less than $10. He does own more than $10. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He left office on February 23.

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