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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1996 California Energy Commission. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). This paper develops a comparison of which stakeholder groups got what they wanted.edf. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. Various stakeholder groups. 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. and why. 1995 3 Flavin and Lenssen. 1996. there will probably be significant winners and losers as a result of this legislation. with varying success. 1 2 CPUC RD&D Working Group. which sets in motion a process of electric utility deregulation beginning in 1998. a product with well documented environmental impacts including local air pollution.3 According to the Environmental Defense Fund. 1995 Electric Restructuring Decision.Introduction On September 23.4 Given the stakes involved with this industry. acid rain and climate change.org/programs/Energy/green_power/a_better. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. selling 250 billion kWh of electricity per year2. 1995 Decision with the California legislative process resulting in AB 1890. which will be superseded to a great extent by the details of AB 1890. California electric utilities have a combined annual revenue of roughly $23 billion dollars1.html ERG Master’s Project Mark Stout 4 .S. contrasting the results of CPUC process resulting in their December. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1994 4 WWW page: http://www.

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

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

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

Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. 166-167.11 Energy Policy Act of 1992 EPAct continued the Federal trend. which is critical for wholesale competition. In capacity constrained systems.investment options of utilities so that each was confined in scope to an “integrated public-utility system. towards more competition in electricity generation. 10 Davis. ERG Master’s Project Mark Stout 10 . started by PURPA. Hempling. PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. was charged with writing the rules required to implement this legislation. The Federal Energy Regulatory Commission (FERC). This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan. this was the marginal cost associated with procuring new generation capacity. recent successor to the FPC. 11 Pechman. 17. It also created new 8 9 Pechman. PURPA was very significant in creating a market for non-traditional generators. 343. 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. 16.

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

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

ERG Master’s Project Mark Stout 13 . prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. The first issue addressed open access to the transmission system 19 20 CPUC. 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. FERC released a dual-issue Notice of Proposed Rulemaking.19 Since the release of the Blue Book proposal. where customers voluntarily pay more to promote renewables. coupled with a lack of prior coordination with the state Legislature. 21 CPUC. 1994. Status Report. which had been dubbed the MegaNOPR. which requires the CPUC to engage in a series of public hearings. 1.21 This stakeholder response.20 Many stakeholders. pushing back their goal for a policy decision until September of 1995. the CPUC proposed. This process tempered the CPUC’s frenetic timetable. such as “green pricing”. “alternative frameworks based on ‘let the market decide’”. including private and public-interest organizations. 1994. Blue Book. For instance. evidentiary hearings. In their place. 1994. numerous other states have also proposed electric utility deregulation. This led to the passage of Assembly Concurrent Resolution 143. and asserted that.22 FERC MegaNOPR In March of 1995. 1995. Wagner. and documentation resulting in a report back to the Governor and Legislature by January 31. were concerned about the content and timetable of this proposal. Blue Book.scheduled to be issued by the CPUC in August of 1994. “a vibrant market exists for energy efficiency services”. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1995.

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

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

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

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

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

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

1997 41 Marshall. would be eligible for direct access January 1.40 On May 6. In March of 1997. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 1997. 1997. It divides up this amount into four accounts that vary over four years of funding.41 There are currently several electric utility restructuring bills in Congress. chair of the House Energy and Power Subcommittee.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1996 CEC. 30% new technologies. including residential and small commercial consumers.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. As Carter and Cavanagh have noted. and 15% consumer-side incentives. 1998. 1997 42 Weisman. 10% emerging technologies. “If the bill had failed. The overall levels are: 45 % existing technologies. including a prominent one authored by Representative Dan Schaefer (R-CO). “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation.”39 Recent State and Federal Activity Since the signing of AB 1890 into law.

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

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

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

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

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

though it urges states to consider retail competition.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. New York. both appointees of Governor Pete Wilson. “the DOE bill does not mandate retail markets by any date certain. “Discretionary Evolution.has noted. 1995. according to Jeff Dassovich... One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). ERG Master’s Project Mark Stout 26 . a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. Michigan initiated a five year retail wheeling experiment involving two utilities. and Wisconsin. 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.”. Colorado. 62 Asmus. 355-356. the same year that California’s Blue Book proposal was released... 24. Maine. Massachusetts.”. 60 61 Levison. an analyst with CPUC’s Division of Strategic Planning.”62 a form of integrated resource planning know as the BRPU. Calls for bids have often been oversubscribed by a wide margin. In 1994. Commissioner Knight. were the key retail wheeling champions within the CPUC. 1997.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. “DOE Restructuring Bill” Stevenson. “Retail wheeling.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Connecticut. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process.

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

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

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

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

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

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

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

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

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

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

1995 Decision. a slightly smaller number of representatives report a mixed or unclear outcome.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. and the remaining minority claim that their organization got rather little. 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 . 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. Figure 2 shows that all of the investor-owned utilities and independent producers. 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. as well as the majority of large electricity consumers.

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. as well as the majority of large electricity consumers. a similar number of representatives report a mixed or unclear outcome. and the remaining minority claim that their organization got rather little. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. ERG Master’s Project Mark Stout 38 . The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. As Figures 3 indicates. 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. 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.from the December Decision.

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

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

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

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

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

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

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

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

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

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

less than two weeks before the Bill would be reported out of committee. funding for public purpose programs: low income. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. TURN was one of several public interest organizations who opposed the change.. The August 15 language from a coalition of powerful interests. Industrial Users.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. and energy efficiency.3% of utility revenues. and the Sierra Club. 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. These got translated into dollars. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. During the Conference Committee hearings.” However. As a Sierra Club California legislative chair recounts on meetings between CMA.. reduced funding to an average of 2. 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. including IEP.1% of IOU revenues. “We reached a consensus on. renewables with an incremental cost estimate from the BRPU.. agricultural consumers. RD&D.72 At this point late in the game. a perusal of legislative language that was proposed during the long. CLECA. EDF.. The 3% [it was actually a cap of 3. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. 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 .

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

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

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

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

075 $4.079 $950 $14.110 $34.000 $480.500 $1. (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 $59.031.000 N/A $0 $18.745 $68.470 $10.419 $13.675 $384. 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.239 $0 N/A $0 $89.000 $1.149 $3.000 $62.496 $8.630 $300 N/A $0 $5.752 $0 $51.595 $0 $21.157 $0 $188.500 $263.272 $0 $64.000 $634.102 $0 $73.818 $0 $65.S.981 $1.416 $5.592 $846 $0 ERG Master's Project Mark Stout 54 .092 $3.079 $13.000 $681.180 $0 $209.500 $533.000 $0 $70.000 $562.995 $596.125 $0 $4.819 $0 $323.758 $2.964 $0 $40.308 $516.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.675 $736.952 $1.559 $0 $246.835 $1.516.374 $1.741 $21.112 $3.101 $495 $10.370 $648 N/A $0 $208.000 $225.500 $190.096 $971.405 $0 $722.588 $500 $32. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.608 $3.479 $2.163 $0 $25.181 $0 $160.203.153 $750 N/A $8.166 $5.500 $78.

081 $1.083 $0 $20.000 $20.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $0 $6.495 $27.203 $5.723 $0 $38. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.600 $32.551 $12.000 $0 $15.203 $0 $30.145 $5.250 $0 $30. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.003.055 $0 $151.500 $0 $0 ERG Master's Project Mark Stout 55 .230.271 $0 $12.492 $0 $66.665 $0 $262.000 $524.519 $11.716 $39.000 $526.197 $500 N/A $2.938 $0 $118.400 $100 $79.291 $3.099 $12.401 $1.207 $5.000 $383.495 $1. (gasoline refining and marketing) Tower Energy Group (oil.947 $500 $281. natural gas.319 $0 $10.167 $500 $25.000 $37.326 $0 $100.000 $0 $171.675 $0 $1.850 $1.362.701 $0 $5.596.600 N/A $5.

862 $21. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.000 $209.589 $26.147 $500 $739. 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.) 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.750 $1.000 $85.000 $50.000 N/A $100 N/A $7.159 $3.118 $0 $144.750 $418.331 $0 $97.000 NA $500 $0 $2.917 $300 $5.286 $3. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.460 $50.500 N/A $0 $211. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.400 $1.590 $5.195 $401.543 $29. (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) $145.179 $0 $3.500 $29.100 $144.025.229 $100 N/A $1.000 $35. McQuat.454 $3. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.611 $1. and Hamrin.281 $1.748 $32.782 $981.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U. producers.500 N/A ERG Master's Project Mark Stout 56 .240 $0 $178.571 $500 N/A $200 N/A $1.626 $0 $8. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.100 $0 $500 N/A $100 $0 $500 N/A $2. 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.605 $250 N/A $1.250 N/A $100 N/A $2. Dist.750 $267. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.717 $500 not applicable $0 $138.882 $15.905 $30.200 $837.250 $148.724 $500 not applicable $500 $57.450 $566.000 $33.S.845 $452.032 $0 $172.060 $6.819 $921.600 $276.017 $1.

573 $2.712 $100 N/A $200 $16.861 $1.750 $23.989 N/A $9.090 $749 $38.689 $2.250 $34. natural gas.878 $12.500 $251.721 $748.761 $0 $73.245 $335.636 $0 $103.800 not tracked $3.500 $277.958 $2. diesel) Unocal (CMA member) Victory Oil Co.995 N/A $100 N/A $0 $3.050 N/A $0 $214.511 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.532 $4.000 $22.705 $19.960 $2. Texaco Tidelands Oil Tosco Corp.521 $0 N/A $50 $87.650 $3.016 $1.384 $2.334 $498 $1.072 $918. (gasoline refining and marketing) Tower Energy Group (oil.478.500 $47.438 $500 N/A $0 $1.407 $200 $61.661.000 $500 $456.000 $65. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.050 $949.754 $4.750 $37.925 $0 $44.900 $1. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.000 $76.780 ERG Master's Project Mark Stout 57 .417 $9.495 $22.000 $233.643 $1.950 $3.347 $9.521 $14.900 $0 $21.622 $67.1996 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.177 $300 N/A $0 $29.137 $550 N/A $5.296 $800 $25.521 $1.209.138 $1.181 $1.885 $300 $207.

066 $500 $21.000 $2.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .585 $33.1996 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.250 $21.000 $15.438 $4.790 $100 $14.068 $14.000 $700 $117.462 $500 $14.462 $208.378 $100 $21.448 $424.066 $500 N/A $250 N/A $22. 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.

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

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

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

Bibliography
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AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 .e. 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. 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.

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

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

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

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

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

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

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

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

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

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

as well as a longer transition period for direct access. Also.87] CMUA also sought the option of long CTC recovery periods for its members. CMUA decided that if we do not take a more proactive approach. The Legislature did not need to mandate this. What 87 CPUC. 3. We wanted to avoid mandates or language on an “un-level playing field”.. a quid pro quo for CTC protection. in order to get the legislative authority for CTC recovery. App. Status Report on Restructuring. 1995 Decision? CMUA had no clear objective at the CPUC.. [IOUs have made arguments about unfair competition from municipal utilities. Our proposal included voluntary participation in the PoolCo. The direct access reciprocity requirements were expected. 2000. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. We had to stay at the table in order to ensure that our concerns were addressed. we will end up playing defense. ERG Master’s Project Mark Stout 77 . referring to access to tax-exempt bonds and inexpensive. AB 1890 also includes a requirement for our munis to begin direct access by January 1. We came up with a proposal to prepare for the December Decision.. Federal power. an argument which CMUA refutes. and an outline of flexible. 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. our customers would have insisted on direct access because of competitiveness concerns. other than not wanting deregulation to happen. public benefits programs. This forced the munis to support full stranded cost recovery in the IOU CTC.could be used to disallow CTC collection. we avoided “level playing field” language on tax exempt financing. AB 1890 has good stranded cost recovery language which includes physical bypass. 1995.

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

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

created in 1946.88 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 prepared to oppose the bill if it did not include local control for municipal utilities. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. ERG Master’s Project Mark Stout 80 . Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. 1997. volunteering to do public purpose programs in exchange for other concessions. 1993. SMUD is a Publicly Owned Utility for the Sacramento region. It was difficult to imagine how the Legislature would perceive a muni’s need. CMUA did not have the army of people Edison did. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. We were called in by the Committee. We maintained flexibility. but were concerned that legislation would handicap our ability to recover them. and sent out to negotiate. beat up. in other words we wanted to be able to recover our stranded costs. CMUA had two lobbyists. SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies. see interviews]. Stuart Wilson and me. We never questioned that there would be stranded assets. Reinventing Electric Utilities.legislation passed. and regulated by an elected district board which sets policy and rates for this electric utility. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. 88 Asmus & Smeloff.

SMUD’s territory is a small island surrounded by PG&E. what equity or fairness issues were raised by them being in the marketplace. Since our rates were 25% below PG&E’s. he does not see a role for munis in a deregulated world. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained.clean energy. This is a classic question of public versus private decision making. Assemblyman Steve Kuykendall was direct in his comments. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. It created an environment of uncertainty. SMUD responded. It is difficult to maintain public purpose programs if everyone else abandons them. this made the question go away. philosophical debate. Even though municipal utilities have the authority to recover costs. energy efficiency -. SMUD will finish recovering our CTC by 2002. The munis are in a foreign land with the PUC. By constructing a brave new world for IOUs. this impacts munis. if any. Some would argue that the SMUD customer did not decide to open Rancho Seco. it is planned that PG&E will drop their rates below SMUDs by 2002. We are a consumer elected entity. there was a questioning of what role. there was a question of whether we would get 100% stranded cost recovery. that some other source should pay. we have to resolve this by 2002. SMUD is very committed to renewables. should a public agency have in a restructured environment.Going into the process. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . This was the bottom line. In the June. 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. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. it seemed obvious that these principles were a gimme. ‘96 Rate Restructuring Settlement. But in reality.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

or over time? CLECA’s positions were consistent. 1995 Decision? The institutions in the Decision were designed with enough flexibility to give the opportunity for lower rates. ERG Master’s Project Mark Stout 103 . On this question. There was a lot of compromise. but we came closer. The MOU set the tone for that. They were based on a consistent thread of how to organize a market. We did not have the expectation that it would happen tomorrow. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. but would trade off short term for long term gains. nothing changed significantly from the CPUC Decision. there was not as much coordination or compromise amongst stakeholders. we met directly with Commissioners. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. The defining of industry structure for competition to drive prices down was important. even over time. 1995 CPUC majority proposal. It used to be that the IOUs were driving everything. CLECA did not want a single market. Prior to this proceeding. but wanted multiple ways to purchase electricity. I am unsure of whether it will happen.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. I suggest you speak with Barbara Barkovich. given the PoolCo structure in the May. We also wanted the separation of the ISO and PX. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? With regards to market structure. 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 did not want customers to pay any more than they had been. and we see competition as the only way to bring them down. representing CLECA throughout California’s electric utility restructuring process. CLECA wanted to make sure unbundling and stranded cost recovery were done with no cost shifting. Our members are used to multiple suppliers for everything else. We had experienced with the regulatory proceedings in the past. it was very much influenced by the MOU. they are seeking the same for electricity. 1995 Decision? Competition was there. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. based on the concern that stranded cost recovery would be shifted onto industrial customers. avoiding cost shifting. as early as our comments on the Yellow Book in the Fall of 1993. There was some language about ERG Master’s Project Mark Stout 104 . Rates are very high in California.Interview #2 Barbara Barkovich is an Energy and Utility Regulatory Consultant with Barkovich and Yap. but no detail. I spoke with Barbara to build on the base of insights into CLECA’s positions that Dianne Hawk provided. 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. The May CPUC Proposal was lacking. It seemed premature before then. which is why the MOU happened.California Large Energy Consumers Association . Inc.. extending them to include more of the AB 1890 process.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

and universal access. the lower the unit cost. low income customers. “For retail restructuring to occur. Sheryl argues that it did not make sense to jump to retail competition before wholesale. Advocates of ‘retail wheeling’ systems propose a return to the days when electricity service was run on the discredited principle of ‘the more you use.” As it became clear that opposition to retail restructuring was a losing battle. the rules had to be set so that there will be no diminishment in public purpose programs. ERG Master’s Project Mark Stout 122 . RD&D. From their 25 year report. NRDC is a nonprofit organization that has made a name for itself as a public interest environmental advocate in the courts and policy arenas. as Sheryl explains. but supported the introduction of competition through wholesale restructuring. renewables.Interview #1 Sheryl Carter is a Policy Analyst in the Energy Program at the Natural Resources Defense Council. giving interested parties a chance to.’ Such systems would be a strong disincentive to utility investment in efficiency and renewable resources--and would not deliver savings to residential customers. NRDC advocated for a non-bypassable charge to cover the costs of public purpose programs in such areas as energy efficiency. 1995. “NRDC has emerged as the national leader in fighting proposals to restructure the utility industry in environmentally destructive ways. NRDC adapted with a new position. NRDC opposed the move to retail restructuring. 96 Natural Resources Defense Council.Natural Resources Defense Council . Sheryl noted that for energy efficiency and renewables. where distribution utilities buy power in a competitive wholesale environment for resale to end-use customers in their territory.” Specifically. “see how that works.”96 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? 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. although the levels for public purpose programs were not what they seeked. ERG Master’s Project Mark Stout 123 . It was not perfect. although these were down from pre-Blue Book levels. The December Decisions language on nuclear plant rate structuring did make this link. NRDC had taken the position that the Renewables Portfolio Standard and a non-bypassable systems benefits charge can work together. They supported this legislation because it set a good precedent. however. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? NRDC got most of what it wanted in terms of policy mechanisms. Funding levels were roughly the levels being spent by utilities when the bill was drafted.a non-bypassable charge mitigates for a lack of integrated resource planning excluded by retail competition. and not everything they were pushing for. with systems benefits charge funding used for the development of emerging technologies. They did not take a position on the percentage level of stranded costs recovery by utilities. which was unclear in earlier proposals. but had advocated that recovery not be linked to the continued operation of uneconomic plants. For renewable energy. NRDC can live with AB 1890. the included systems benefits charge was a re-affirmation of public purpose programs. and not as high as merited. 1995 Decision? NRDC got most of it: a reaffirmation of the need to continue public programs funded through ratepayers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the renewables community cam back in. and a representative told Peace that the group still had not come to an agreement on who would present the proposal that they still had not negotiated. pre-Blue Book. They proposed to me funding at current RD&D budget levels. University of California representatives and I advocated for higher. They probably thought that this funding level included regulated transmission and distribution RD&D. The renewables could have fared much better if they stuck together as a coalition. The IOUs wanted to use post-Blue Book. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. current levels for moving to a future restructured market. historic levels [combined SCE. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. 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. After seven hours of negotiation. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . For example. The municipal utilities angered Peace so much that he asked.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .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 .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 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .

Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .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 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council . 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 #1 Coalition of California Utility Employees .

Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Natural Resources Defense Council .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 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #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 .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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .

000 $2.800 $1.000 $1.896 $3.000 $500 $1.500 $1.000 $2.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $1.000 $495 $950 $696 $2.495 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.995 $300 $12.000 $3.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.995 $21.495 $10.429 $498 $1.495 $7.000 $3.500 $22.000 $1.000 $3. (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 $4.191 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 . 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $7.

Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $3.995 $2.000 $10. (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 $1.017 $749 $750 $3.500 $6.000 $2.500 $1.Table 2: Assemblymember Jim Brulte.500 $800 $498 $200 $9.495 $4.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $8.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.511 $3.500 $47. 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 $2.995 $14.460 $200 $500 $750 $2.995 $1.750 $4.500 $1.000 $1.250 $2.

000 $750 $0 $0 103 Asmus. as well as an event. Brulte was taken on a $7. From 3/28/96 to 4/8/96. and Budapest. 1996.000 $1. CFEE is a “non-profit. Sweden.750 $750 $1.000 $2.250 $500 $1. Table 3: Senator Steve Peace. by the California Foundation on the Environment and the Economy. Paling in comparison.000 $2. Conservation.750 $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. 4 ERG Master’s Project Mark Stout 164 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. and Privatization” visiting London.000 $1.490 “Travel project to Europe on Electric Restructuring. totaling $101. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.750 $2.500 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Not to be outdone. Mobil treated Brulte to a $60 event in 1996.000 $3. Chevron treated Brulte to two meals. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.

450 $7.750 $0 $0 ERG Master’s Project Mark Stout 165 . Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (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.000 $4.250 $750 $500 $1.572 $1.Table 4: Senator Steve Peace.000 $300 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $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.500 $8.115 $18.072 $2.250 $7.250 $1.250 $2.000 $750 $750 $750 $1.000 $500 $2.815 $750 $6.500 $16.100 $2.600 $2.050 $3.000 $6.500 $3.

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. while Edison treated him to five meals and a sports event. In 1996.900 . In 1995. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals.000 Table 6: Senator Byron Sher. Peace was treated to a $52 sports event by Mobil Oil. IEP made a gift of $241 for his speech at a conference. 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. taking Steve to 11 meals.000 $5.100 $2. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Table 5: Senator Byron Sher. as well as chair of the Senate Energy and Utilities Committee.450 166 ELECTRIC/GAS $6. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Southern California Edison was granted a high level of access.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.

000 $500 $1. and Hamrin.882 $100 $1.500 Int. McQuat. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 locals) Southern California Pipe Trades United Assoc.000 $500 $500 $9. $2.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. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.600 $13. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . EVs) Hansen.100 $500 $2. (biomass) Edson + Modisette (lobbyist for indep.482 $100 $1. (geothermal) Colmac Energy Inc.000 $100 producers. Brotherhood of Electrical Workers (various $9.

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

of California.000 $300 $300 $22.585 $100 $500 $2. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .448 $14.Tosco Corp.000 $700 $4.

but his Statement of Economic Interest reveals large holding of oil and electricity stocks. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 in each of Amoco. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. Mobil.300 $500 $1. totaling $758. and GE. Sher holds over $100.400 $750 $150 $1. In 1996.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher received no other gifts that year from energy utility stakeholders.000 $1.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. NARUC treated Sher to a two day trip to DC for another meeting. Table 7: Senator Bill Leonard.500 $300 $0 $0 $2. Exxon. totaling $2608.

080 $10.500 $150 $500 $3. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. extending his stay from 12/8/96 to 12/13/96. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $2.730 $2.Table 8: Senator Bill Leonard. 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. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.650 $2.000 $2. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. saving up for a $77 dinner with head lobbyist Bob Foster. Edison again ERG Master’s Project Mark Stout 171 . for a paltry $20. The Pacific Rim Conference of Seattle.000 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day. While the Senator was there. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. WA paid $734 for Leonard to moderate a conference session on utility deregulation.500 $500 $1.000 $1.650 $500 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $5.000 $500 $500 $4.000 $2.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.

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.000 $1.000 $1. They also had Leonard out for two meals in Sacramento.000 $750 $750 $650 $150 $500 $3. including lunch with Bob Foster.had Senator Leonard out for Legislative Ski Day.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. ARCO treated Leonard to a $19 meal at a reception. for the modest tab of $56. paying $44 for two meals and lodging.000 $1. PG&E took Leonard out to a Kings game.250 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .600 $1. Table 9: Assemblymember Mickey Conroy.750 $1.600 $750 $750 $500 $1.

000 $2. two meals for $44.500 $2. and to 104 Asmus. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $3. and Inner Mongolia. CFEE is a “non-profit. 1996.000 $5. Shanghai.000 $500 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.050 $1.600 $3. 4 ERG Master’s Project Mark Stout 173 .300 junket to talk with Chinese central government and provincial leaders in Beijing. the California Foundation on the Environment and the Economy took Conroy on an 11 day.700 $500 $300 $550 $2.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.Table 10: Assemblymember Mickey Conroy.000 $500 $750 $250 $500 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.700 $750 $450 $250 $250 $1. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. PG&E treated him to a basketball game with $51 tickets.600 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. $7.

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

000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .175 $500 $1.000 $1.675 $2.750 $2.750 $2.250 $1.250 $1.750 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.750 $4. 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.Table 11: Assemblymember Diane Martinez.

(CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.500 $500 $500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $1.000 $500 $3.500 $1.000 $4.500 $6.Table 12: Assemblymember Diane Martinez. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $500 $500 $500 $500 $500 $3.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $4.500 $1. Dist.000 $500 $500 $5.000 $7.500 $1.000 $500 $1.000 $1.000 $1.250 $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.

058 $500 $500 $1.500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $500 $500 $1.900 $3.500 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.Table 13: Assemblymember Steve Kuykendall.600 $1.850 $1. the Illinois Energy Association flew Martinez out for a $1.000 $8.208 $0 $0 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. ERG Master’s Project Mark Stout 177 . (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.100 $100 $1. natural gas.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

Kuykendall was taken on a $7. However. From 3/28/96 to 4/8/96. Conservation.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. Sweden.500 $1. Kuykendall’s social calendar was destined to pick up in 1996. and Privatization” visiting London.490 “Travel project to Europe on Electric Restructuring. 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.000 $1. natural gas.350 $500 $1.000 $1.374 $4. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $500 $2. and Budapest.000 $1. ERG Master’s Project Mark Stout 178 .374 $500 $2.443 $6.Table 14: Assemblymember Steve Kuykendall.500 $0 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.254 $200 $500 $4.000 $2.000 $19.500 $1.250 $100 $500 $35. diesel) Unocal (CMA member) Victory Oil Co.

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

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

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

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