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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

This being the case the best solution seemed to be regulation by public commission.” 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. by 1922 47 states and the District of Columbia were regulating electric utilities. or were owned by. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. A number of these holding companies owned. led to the passage of the Federal Power Act. ERG Master’s Project Mark Stout 9 . with at least 20% of electricity crossing state lines in 1935.” 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. this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers. a small number of holding companies owned most utilities in the United States. Based on the Interstate Commerce Clause. Hempling explains. 166-167.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids. Beginning in 1907 with New York and Wisconsin. large nonutility companies such as electric equipment contractors. State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation.utilities as natural monopolies and hence inevitable. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA).

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

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

”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. with large. The Blue Book laid out an aggressive. 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. 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.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. and if successful. A more definitive policy statement was 16 17 Haddad.supplies. 6. industrial customers taking power at the transmission level eligible on January 1. customer class-staged schedule for direct access implementation. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. all commercial customers eligible January 1. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 2002. 1999. 1996. In April of 1994. all residential consumers eligible on January 1.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. and 3) rate changes to encourage efficiency and distribution of power. Hoffman. 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. sending “a shockwave through the electric industry”. ERG Master’s Project Mark Stout 12 . 55. 18 Mydans.

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

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

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

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

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

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

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

30% new technologies. 1997 42 Weisman. In March of 1997.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. and 15% consumer-side incentives.41 There are currently several electric utility restructuring bills in Congress.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. chair of the House Energy and Power Subcommittee. 10% emerging technologies. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. would be eligible for direct access January 1. “If the bill had failed. It divides up this amount into four accounts that vary over four years of funding. As Carter and Cavanagh have noted. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 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. 1997 41 Marshall. 1996 CEC. 1998. 1997. including residential and small commercial consumers. The overall levels are: 45 % existing technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 .40 On May 6. including a prominent one authored by Representative Dan Schaefer (R-CO). 1997.”39 Recent State and Federal Activity Since the signing of AB 1890 into law.

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

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

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

as well as those on the border of service districts. 55 Flavin and Lenssen.53 allowing a policy trend that emphasizes markets rather than social welfare. Stevenson. 1994. “Discretionary Evolution.”. and it was only 53 54 Stevenson.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. “Discretionary Evolution.. 355-356. ERG Master’s Project Mark Stout 24 . Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. competition takes on several forms in this market.. Utilities compete for industrial customers who are relocating. such as natural gas for space heating.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. over half of new U. the camel of competition forced its nose under the monopoly tent..S.”. “With this act. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway. Many electrical applications have substitutable fuels. There is significant competition in the wholesale electric generation market.. 357.54 Since 1992.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. generating capacity has been supplied by alternative. non-utility providers.

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

1995. both appointees of Governor Pete Wilson. and Wisconsin. “Discretionary Evolution. “Retail wheeling. according to Jeff Dassovich.. Massachusetts.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. 24. Maine. Connecticut. In 1994. an analyst with CPUC’s Division of Strategic Planning. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. Calls for bids have often been oversubscribed by a wide margin. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. Colorado. 60 61 Levison.”62 a form of integrated resource planning know as the BRPU.63 This move towards greater reliance on the marketplace to make supply decisions is clearly in line with the free-market ideologies of the Republican Governor.”.has noted.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.. ERG Master’s Project Mark Stout 26 . “the DOE bill does not mandate retail markets by any date certain.. 62 Asmus. Commissioner Knight. Michigan initiated a five year retail wheeling experiment involving two utilities. the same year that California’s Blue Book proposal was released.”. 355-356. “DOE Restructuring Bill” Stevenson. New York.. 1997. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). were the key retail wheeling champions within the CPUC. Dassovich explained that they were frustrated with the “myriad of complex and controversial balancing accounts and rate adjustment mechanisms they had to contend with every 12 months” as part of the rate-making process. though it urges states to consider retail competition.

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

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

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

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

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

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

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

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

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

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

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

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

Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . As Figures 5 indicates. either the CPUC December Decision or 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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. 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.

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

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

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

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

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

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

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

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

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

renewables with an incremental cost estimate from the BRPU.1% of IOU revenues. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.72 At this point late in the game. including IEP. and energy efficiency. The August 15 language from a coalition of powerful interests. RD&D. less than two weeks before the Bill would be reported out of committee.. 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. EDF. reduced funding to an average of 2. a perusal of legislative language that was proposed during the long. TURN was one of several public interest organizations who opposed the change. CLECA. funding for public purpose programs: low income.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. During the Conference Committee hearings. As a Sierra Club California legislative chair recounts on meetings between CMA.3% of utility revenues.” However. These got translated into dollars. “We reached a consensus on. and the Sierra Club. The 3% [it was actually a cap of 3. 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 .. Industrial Users. agricultural consumers. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. 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..

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

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

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.” That same hearing session. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component. Where data is available. if there is something you can bring to the table. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts. in terms of complicated problem area. is clearly renewable folks. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . obviously there is going to be many political philosophies on that issue. Candidate. in order to move forward with a product.. these tables cover the years 1995 and 1996 for the author of AB 1890.. A full breakdown of contributions for each legislator is included in Appendix E.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. everybody should suffer except for us. OK?. So for those of you who have been working on other issues I encourage you all to be helpful in that area if you can. Jim Brulte (R-Ontario)... The other thing is. The following campaign contribution summary tables were compiled from Officeholder. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division. and my rule is when we are forced to unilaterally resolve issues. Our largest problem area. even though there some parts they might hate.start unilaterally resolving issues.

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

149 $3.588 $500 $32.157 $0 $188.308 $516.370 $648 N/A $0 $208.675 $384.758 $2.470 $10.272 $0 $64.000 $62.745 $68.096 $971. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.752 $0 $51.595 $0 $21.500 $263.101 $495 $10.496 $8.835 $1.112 $3.416 $5.000 $1.819 $0 $323.741 $21.500 $533.818 $0 $65.500 $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 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 $562.675 $736.500 $78.405 $0 $722. (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 $59.608 $3.125 $0 $4.079 $13.000 N/A $0 $18.092 $3.102 $0 $73.181 $0 $160.479 $2.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.166 $5.110 $34.000 $0 $70.079 $950 $14.981 $1.075 $4.952 $1.419 $13.S.559 $0 $246.592 $846 $0 ERG Master's Project Mark Stout 54 .995 $596.239 $0 N/A $0 $89.203.000 $225.516.153 $750 N/A $8.000 $634.500 $190.000 $681.163 $0 $25.000 $480.031.374 $1.964 $0 $40.630 $300 N/A $0 $5.180 $0 $209.

596.000 $0 $171.723 $0 $38.675 $0 $1.401 $1.003.000 $383.250 $0 $30. 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 $4.319 $0 $10.600 $32.495 $1.000 $524.850 $1.055 $0 $151.000 $20.600 N/A $5.500 $0 $0 ERG Master's Project Mark Stout 55 .271 $0 $12.083 $0 $20. (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.400 $100 $79. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $526.081 $1.203 $0 $30. (gasoline refining and marketing) Tower Energy Group (oil.203 $5.947 $500 $281.495 $27.492 $0 $66.551 $12.938 $0 $118. natural gas.000 $0 $15.000 $37.197 $500 N/A $2.145 $5.665 $0 $262.207 $5.230.099 $12.701 $0 $5.167 $500 $25.362.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $0 $6.291 $3.326 $0 $100.716 $39.519 $11.

250 $148. Dist. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.626 $0 $8.179 $0 $3.331 $0 $97.748 $32.400 $1.281 $1.611 $1.118 $0 $144. producers.000 $85.100 $144.000 $35.000 $209.589 $26.240 $0 $178. 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.450 $566.590 $5.032 $0 $172.017 $1.060 $6.000 N/A $100 N/A $7.605 $250 N/A $1.862 $21.882 $15.717 $500 not applicable $0 $138.100 $0 $500 N/A $100 $0 $500 N/A $2.543 $29.724 $500 not applicable $500 $57.250 N/A $100 N/A $2.500 N/A ERG Master's Project Mark Stout 56 .000 NA $500 $0 $2. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.819 $921. (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) $145.286 $3.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.600 $276.500 N/A $0 $211.454 $3. McQuat.905 $30. 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.845 $452.200 $837.000 $33.750 $267.025.229 $100 N/A $1.750 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.917 $300 $5.195 $401.147 $500 $739.159 $3. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.000 $50.S. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin.750 $418.460 $50.571 $500 N/A $200 N/A $1.) 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.782 $981.500 $29.

072 $918.636 $0 $103.532 $4.245 $335.500 $277.177 $300 N/A $0 $29.000 $65.573 $2.661.250 $34.016 $1. (gasoline refining and marketing) Tower Energy Group (oil.521 $0 N/A $50 $87. (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.900 $0 $21.500 $251.960 $2.090 $749 $38.885 $300 $207.209.761 $0 $73.925 $0 $44.800 not tracked $3.689 $2. Texaco Tidelands Oil Tosco Corp.000 $500 $456.950 $3.995 N/A $100 N/A $0 $3.000 $76.407 $200 $61.347 $9.780 ERG Master's Project Mark Stout 57 .861 $1.384 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.000 $233. 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) $41.511 $1.521 $1.900 $1.958 $2. natural gas.643 $1.137 $550 N/A $5.712 $100 N/A $200 $16.296 $800 $25.181 $1.417 $9.878 $12.989 N/A $9.750 $23.1996 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.438 $500 N/A $0 $1.721 $748.138 $1.500 $47.754 $4. diesel) Unocal (CMA member) Victory Oil Co.622 $67.050 N/A $0 $214.650 $3.478.495 $22.050 $949.750 $37.000 $22.334 $498 $1.705 $19.521 $14.

000 $2.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .250 $21.068 $14.378 $100 $21.000 $15.000 $700 $117. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1. of California.790 $100 $14.585 $33.066 $500 N/A $250 N/A $22.448 $424.438 $4.066 $500 $21.462 $500 $14.1996 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.462 $208.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They were understaffed. This may come under attack in the future. but because of a lack of resources. had short hours. We also had small consumers mail in postcards to the Commissioners on rate issues. mono-lingual english only.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. This Division was actually using AT&T language translation. We are also a member of the Greenlining Institute [a non-profit organization representing low-income communities of color]. only part time. At times. and spoke to the press on critical issues. a very expensive service. Some of this year’s cleanup legislation will exclude municipalities from the anti-slamming ERG Master’s Project Mark Stout 113 . a possible profit source for them. It caused some embarrassment because of the total inadequacy. and had no 800 numbers. 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. which has partnership agreements with PG&E and Edison that they will represent some of Greenlining’s issues. we interacted with the Legislature. we found out that the staffing for PUC complaints was utterly inadequate. We also participated with the Commissioners in community briefings to inform the public of upcoming changes. have historically focused on the PUC. The utilities were hoping that they could administer CARE and low income weatherization. After a meeting with the Consumer Services Division of the PUC. We also wrote letter to Commissioners that have been influential. 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 could result in large customers leaving the system and smaller customers left holding the bag of higher cost resources. proposed by the Yellow Book. Currently. There is also a need to deal with the market power of utilities. 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. many annual. there are different set of simultaneous proceedings. I am concerned about fly-by-night companies. With what we see as a failure of will by the regulator. California needs better regulation. The Utility Reform Network Bob Finkelstein is a staff attorney specializing in electric utility issues for TURN. making the regulatory process impossible to track. Although we need as many consumer protections as possible. and that small customers should not suffer. But they can only point ERG Master’s Project Mark Stout 114 . 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. Our reaction to the Blue Book was that restructuring must provide competitive options for small customers. and not grant them 100% stranded cost recovery. a nonprofit organization advocating for residential and small commercial utility ratepayers. TURN has called for a single annual rate-setting. getting rid of the multiple proceedings. I think we can safely exclude municipalities.language. 100% stranded cost recovery for the IOUs does not make any sense because they already had a risk-adjusted rate of return. The utilities argument for full recovery is based on the notion of a regulatory compact with a quid pro quo of cost recovery. This would allow all customers to benefit. TURN took a firm position calling for the PUC to start regulating the utilities. These risk-based cost of capital decisions got more explicit in the ‘90s and were very explicit by ‘93 and ‘94.

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

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

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

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

It gave us nothing until the Legislature tells us otherwise. EDF has participated in California energy policy issues since 1975. 1995 Decision? Almost nothing. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. “a leading non-profit organization. we are in favor of competition. economics. ERG Master’s Project Mark Stout 119 . if restructuring is implemented properly: 1) energy efficiency investments should continue.”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 20.000 of whom live in California. and 4) incentives for uneconomic sales promotion minimized. EDF links science.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. yes.000 members nationwide. and law to create innovative. more than 55. The Decision was vague. “There is no reason to proffer the benefits of competition first to only selected classes of customers.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. and punted on the details to the Legislature. depending on interpretation. Assuming these problems are resolved. economically viable solutions to today’s environmental problems. If focusing 94 CPUC Renewables Working Group. EDF supports the earliest possible implementation of direct access for all classes of customers. As stated in EDF’s first round comments on the Blue Book. [which] represents 300. E-1. 2) an Integrated Resource Planning process should exist for energy efficiency.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome.000 environmentalists in California. UCS took part in a mailing to 60. resulting in over 2.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? UCS used a dual approach outsider/insider strategy to influence policy formulation at the CPUC. 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. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 . 143 adopted. asking them to respond to the CPUC through a Western Union automated fax number. By helping to get Assembly Concurrent Resolution No. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. To compliment this public participation strategy. as well as generating a large number of letters to the CPUC. as well as meetings arranged jointly by Jane and AWEA’s Nancy Rader to lobby for the Renewables Portfolio Standard with then-current CPUC President Fessler. as well as staff people for Commissioners Knight and Conlon. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS.

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

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

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

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

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

briefings to the IOUs were a standard part of the communication. stating that their intent was that the PUC retain authority for energy efficiency funding. we did not change our stance. Fessler attended one earlier. Neeper did after the December. Steve Peace and Byron Sher recently sent a letter to the PUC. not end this authority after four years. More money could have been spent on public interest RD&D. CPUC vs.. Also.8 million per year. working well together. ‘97 Decision on public purpose programs. compared to just 0. In the February 14. Conlon attended a briefing a few years back. Duque was very ERG Master’s Project Mark Stout 142 . 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. or over time? I think so.e. We have good people involved in research. the Legislature or PUC could modify. The funding for public interest RD&D will be reviewed after three years. There is an agreement that the PUC could continue funding after 4 years. realizing the dollars available for public purpose programs were limited. Is your organization more comfortable with one policy decision over the other (i. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. very committed. but it was a reasonable outcome. and this comes through in our briefings. most public interest RD&D money was allocated to the CEC: $61.7 per year to the utilities. AB 1890)? Why? I would see them as an appropriate sequence of decisions. Whether or not the Legislature intended this was a point of contention.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. ‘95 decision.

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

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

would be included back into the bill. I believe that this was done by the IOUs. including the $62. ERG Master’s Project Mark Stout 145 . at approximately 11:30 PM. all of the language that I had inserted earlier was removed. I went before the Conference Committee during discussion and it was explained as an error in redrafting.several nights later.5 million in public interest RD&D. 102 Chart by Carl Blumstein based on 1995 CEC and PG&E data. preserving $62.5 million per year funding level for public interest RD&D. All parties agreed that the earlier negotiated language.

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

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

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. the current criticism of QFs ignores the real competition that they founded. It is tough to sell delayed gratification. as rates were supposed to come down due to the QF cliffs anyway. As a sidenote. utilities were fine with the rate freeze. The utilities would fight this interpretation. claiming that they are linked. CLECA. The utilities are trying to get an untaxed ruling from the IRS on these bonds. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. This reduces the risk of stranded cost recovery to the IOUs. Legislative Conference Committee.shorter compared to the December Decision. Large businesses articulated the issues. the PX/ISO Oversight Board is not important. 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 10% rate reduction for small customers was final packaging to sell the bill for voters. CMA and CLECA jointly made utility restructuring the issue for business. so that the [legislative] Members and Governor bought in that restructuring would be good for ERG Master’s Project Mark Stout 148 . since the FERC will approve their structure. but just result in rate deferrals for 10 years. The rate reduction bonds may not yield net present value benefits. The level of influence on AB 1890 was a function of who was in the Conference Committee hearing room. and WSPA [Western States Petroleum Association]. The PX/ISO’s insertion into Federal jurisdiction was arrogant.

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

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

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

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

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

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

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

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

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

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

Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .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 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .

Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Natural Resources Defense Council .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 .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Municipal Utilities Association .Interview #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 . 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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS 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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #1 Natural Resources Defense Council .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .

495 $1.000 $3.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.495 $10.000 $1.800 $1.000 $3.000 $1.500 $22.896 $3.995 $21.000 $4.995 $300 $12.429 $498 $1.000 $7.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $500 $1.000 $3.495 $7.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $495 $950 $696 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22. (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 $2.000 $1.000 $2.191 $2.

(CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $4.500 $47.495 $4.500 $6.250 $2.995 $2.000 $1.511 $3. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $1.500 $800 $498 $200 $9.017 $749 $750 $3.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $10. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.995 $14.000 $1.000 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .500 $1.500 $1.000 $8.000 $2.460 $200 $500 $750 $2.995 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.990 $1.000 $2.Table 2: Assemblymember Jim Brulte.

as well as an event. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. From 3/28/96 to 4/8/96.750 $3. Mobil treated Brulte to a $60 event in 1996. Chevron treated Brulte to two meals.000 $2. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. Table 3: Senator Steve Peace.000 $3. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.490 “Travel project to Europe on Electric Restructuring.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Brulte was taken on a $7. 1996.750 $750 $1.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Not to be outdone.250 $500 $1. totaling $101. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. 4 ERG Master’s Project Mark Stout 164 . by the California Foundation on the Environment and the Economy.750 $2. and Budapest. Conservation. and Privatization” visiting London. CFEE is a “non-profit.500 $1. Sweden.000 $1. Paling in comparison.000 $750 $0 $0 103 Asmus.000 $2.

450 $7.815 $750 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $750 $500 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.050 $3.100 $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.000 $4.500 $16.000 $750 $750 $750 $1.000 $500 $2.572 $1.250 $2.500 $3.250 $7.500 $8.000 $1.000 $300 $1.072 $2.Table 4: Senator Steve Peace.600 $2.250 $1.115 $18.000 $6.750 $0 $0 ERG Master’s Project Mark Stout 165 .

1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. 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. Table 5: Senator Byron Sher.000 $5.450 166 ELECTRIC/GAS $6. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. SDG&E had Peace out to six meals. IEP made a gift of $241 for his speech at a conference. In 1995. 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. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Peace was treated to a $52 sports event by Mobil Oil.100 $2. In 1996. Southern California Edison was granted a high level of access. while Edison treated him to five meals and a sports event. taking Steve to 11 meals. as well as chair of the Senate Energy and Utilities Committee.900 .000 Table 6: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.

100 $500 $2. $2. (biomass) Edson + Modisette (lobbyist for indep.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1.000 $500 $1.000 $100 producers. (geothermal) Colmac Energy Inc. Brotherhood of Electrical Workers (various $9.000 $500 $500 $9.600 $13.482 $100 $1. McQuat.000 locals) Southern California Pipe Trades United Assoc. EVs) Hansen. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin.882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .500 Int.

000 $1.000 Large Energy Consumers $3.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 $100 $500 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .500 COMPANIES $1.000 $100 $1.000 (tire $1.000 $1.

000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .448 $14.585 $100 $500 $2.000 $300 $300 $22. of California. (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.

300 $500 $1.500 $300 $0 $0 $2. Mobil.400 $750 $150 $1. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. totaling $2608.000 $1. Sher received no other gifts that year from energy utility stakeholders. In 1996. Table 7: Senator Bill Leonard. and GE.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. NARUC treated Sher to a two day trip to DC for another meeting. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.500 $0 $0 ERG Master’s Project Mark Stout 170 . totaling $758.000 in each of Amoco. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. Exxon. Sher holds over $100.

) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. (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. WA paid $734 for Leonard to moderate a conference session on utility deregulation.Table 8: Senator Bill Leonard. extending his stay from 12/8/96 to 12/13/96. saving up for a $77 dinner with head lobbyist Bob Foster.080 $10. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $5. for a paltry $20. SCE treated Leonard to dinner and lodging for Legislative Ski Day.730 $2. Edison again ERG Master’s Project Mark Stout 171 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.650 $2.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. The Pacific Rim Conference of Seattle.500 $150 $500 $3.500 $500 $1. While the Senator was there.000 $2. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $500 $500 $4.000 $1.650 $500 $1.

750 $1. including lunch with Bob Foster.600 $1.600 $750 $750 $500 $1.000 $1.000 $750 $750 $650 $150 $500 $3. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. ARCO treated Leonard to a $19 meal at a reception.000 $1. They also had Leonard out for two meals in Sacramento. PG&E took Leonard out to a Kings game.250 $1.had Senator Leonard out for Legislative Ski Day. Table 9: Assemblymember Mickey Conroy.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1. paying $44 for two meals and lodging. for the modest tab of $56.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .

600 $500 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $500 $750 $250 $500 $2. Shanghai.000 $5. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.500 $2.000 $3.600 $3.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $2. CFEE is a “non-profit.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. PG&E treated him to a basketball game with $51 tickets. 1996. and to 104 Asmus.050 $1. two meals for $44.Table 10: Assemblymember Mickey Conroy. $7. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.700 $500 $300 $550 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. 4 ERG Master’s Project Mark Stout 173 .000 $500 $2.700 $750 $450 $250 $250 $1. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 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. and Inner Mongolia. 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.

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

000 $1.750 $2.750 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $2.175 $500 $1.000 $1.Table 11: Assemblymember Diane Martinez.750 $4.000 $1.675 $2.250 $1.250 $1.750 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .

500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $1.000 $4. Dist.500 $1.500 $500 $500 $1.500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $7.000 $500 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $5.500 $6.000 $4. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $500 $1.000 $500 $500 $5. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.Table 12: Assemblymember Diane Martinez.750 $1.000 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.500 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.

467 trip to Northwestern University to discuss the deregulation of public utilities.Table 13: Assemblymember Steve Kuykendall.000 $8.850 $1.000 $500 $500 $1.500 $1.600 $1.208 $0 $0 $1.900 $3.500 $1. ERG Master’s Project Mark Stout 177 . 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. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.000 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. natural gas. the Illinois Energy Association flew Martinez out for a $1.100 $100 $1.058 $500 $500 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

diesel) Unocal (CMA member) Victory Oil Co.Table 14: Assemblymember Steve Kuykendall.443 $6.250 $100 $500 $35.374 $500 $2.000 $2.254 $200 $500 $4.000 $500 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1. Kuykendall was taken on a $7. Conservation. ERG Master’s Project Mark Stout 178 . natural gas. From 3/28/96 to 4/8/96. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. Sweden.350 $500 $1. However.000 $1. Kuykendall’s social calendar was destined to pick up in 1996.490 “Travel project to Europe on Electric Restructuring.500 $1. and Budapest.000 $1.500 $0 $1. and Privatization” visiting London.374 $4.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.500 $1.000 $19. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. 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.

The California Mining Association took him out for an evening of recreation and dinner costing $89. for $610. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). The California 105 Asmus. Another non-profit organization. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. A trade association. 4 ERG Master’s Project Mark Stout 179 .916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”.”105 The Consolidated Edison IOU spent $1. The Aspen Institute. and Paris. in Aspen. Brussels. a trade association for publicly owned utilities. by the California Foundation on the Environment and the Economy. to meet with CEOs of the electricity industry. SC to address their membership. The Large Public Power Council. 1996. and environmental groups to discuss the British experience with deregulation of electricity. one of CFEE’s funders. CO. Fessler was taken on a $7. an Edison lobbyist was added to the international travel party at the last minute. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. spent $1402 to fly Fessler to Charleston.WEST. Chevron treated Kuykendall to two dinners for $131.167 junket visiting London. regulators. government ministers. wholesale PoolCo model. known as the Council of States Government . The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings.by the California Foundation on the Environment and the Economy. According to investigative writer Peter Asmus. Edison.051 to fly the President out to New York City for a ConEdison Management Conference. paid $1.

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

1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Jr. He left office on February 23.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. and Schlumberger oilfield services stock. He does own more than $10. Unocal. utility and General Electric stock. He does own less than $10.000 in each of Chevron. Edison. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton.000 in each of Montana Power Company and Exxon stock.167 junket visiting London. In 1995. spending $258. ERG Master’s Project Mark Stout 181 . Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. by the California Foundation on the Environment and the Economy.000 in each of Central & Southwest Corp. 1995. to meet with CEOs of the electricity industry. wholesale PoolCo model. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. Conlon was taken on a $7. and less than $10. PG&E had him out to three meals for $71. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. government ministers. regulators. and Paris. was very interested in California moving to the UK-style. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Brussels. one of CFEE’s funders. and environmental groups to discuss the British experience with deregulation of electricity.

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