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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

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

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

the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 18 Mydans. In April of 1994. 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. 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. with large. and 3) rate changes to encourage efficiency and distribution of power. A more definitive policy statement was 16 17 Haddad. sending “a shockwave through the electric industry”. 55. The Blue Book laid out an aggressive. Hoffman. 6. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 2002. customer class-staged schedule for direct access implementation. 1996.18 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.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. ERG Master’s Project Mark Stout 12 . and if successful. 1999.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. 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.

coupled with a lack of prior coordination with the state Legislature.22 FERC MegaNOPR In March of 1995. 1995. including private and public-interest organizations. 1994. The first issue addressed open access to the transmission system 19 20 CPUC. 1995.21 This stakeholder response. “a vibrant market exists for energy efficiency services”. This led to the passage of Assembly Concurrent Resolution 143. 1994. pushing back their goal for a policy decision until September of 1995. 21 CPUC. which had been dubbed the MegaNOPR. This process tempered the CPUC’s frenetic timetable. 1. and asserted that. Wagner. 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. Blue Book. and documentation resulting in a report back to the Governor and Legislature by January 31.19 Since the release of the Blue Book proposal. which requires the CPUC to engage in a series of public hearings. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. Blue Book. 1994. numerous other states have also proposed electric utility deregulation. In their place. where CPUC President Fessler and Commissioner Knight testified on their proposal. where customers voluntarily pay more to promote renewables. evidentiary hearings. were concerned about the content and timetable of this proposal. the CPUC proposed.scheduled to be issued by the CPUC in August of 1994. For instance. Status Report.20 Many stakeholders. FERC released a dual-issue Notice of Proposed Rulemaking. ERG Master’s Project Mark Stout 13 . such as “green pricing”. “alternative frameworks based on ‘let the market decide’”.

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

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

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

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

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

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

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

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

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

but now had to pay higher rates. 52 Gilbert. 1993. basing their arguments on welfare economics as applied to the changing electric utility landscape. ERG Master’s Project Mark Stout 23 . Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.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. greatly increasing opportunities for bulk power sales.”. 1994. 51 Stevenson. “Discretionary Evolution.. who in the past had enjoyed privileged status with cheap rates.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. Gordon. 447-475. 50 Flavin and Lenssen. 84-108. enabling increased competition. 195. This reduction in scale has brought down the capital requirements of entering the electricity generation industry..intense pressure from large industrial customers. Davis. 356-357. 1993. 150.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. Hoffman 55-62.

“Discretionary Evolution. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power.S. generating capacity has been supplied by alternative. 357.”. and it was only 53 54 Stevenson.”. 1994.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway. There is significant competition in the wholesale electric generation market. competition takes on several forms in this market.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology.. 55 Flavin and Lenssen.. Many electrical applications have substitutable fuels. as well as those on the border of service districts.54 Since 1992. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. Stevenson. “Discretionary Evolution.53 allowing a policy trend that emphasizes markets rather than social welfare. “With this act. over half of new U. the camel of competition forced its nose under the monopoly tent. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. such as natural gas for space heating. non-utility providers.. ERG Master’s Project Mark Stout 24 . 355-356.. Utilities compete for industrial customers who are relocating.

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

. 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.. both appointees of Governor Pete Wilson. Calls for bids have often been oversubscribed by a wide margin.. In 1994.”. though it urges states to consider retail competition.has noted. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). an analyst with CPUC’s Division of Strategic Planning. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. according to Jeff Dassovich. Massachusetts. Connecticut. Commissioner Knight.”. New York. “Retail wheeling. 24. the same year that California’s Blue Book proposal was released. Colorado. and Wisconsin. “Discretionary Evolution. Michigan initiated a five year retail wheeling experiment involving two utilities.. ERG Master’s Project Mark Stout 26 .”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. 1995. “the DOE bill does not mandate retail markets by any date certain.”62 a form of integrated resource planning know as the BRPU. “DOE Restructuring Bill” Stevenson. 355-356.63 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. 62 Asmus. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. 1997.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. were the key retail wheeling champions within the CPUC. Maine. 60 61 Levison.

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

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

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

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

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

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

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

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

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

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

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

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. ERG Master’s Project Mark Stout 38 . say that their organizations got most of what they wanted from AB 1890. The small consumer and environmental organization representatives appear to have taken a step backwards in terms of getting what they wanted compared to the CPUC December Decision policy outcome. The utility labor unions and municipal utilities representatives reported receiving relatively little from this 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. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890. As Figures 3 indicates.from the December Decision.

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

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

The following are excerpts from the full interview transcripts in Appendix C.. was personally engaged. The MOU process was very important because fighting parties came to an agreement. CLECA.who were staff for members of the legislative Conference Committee during the 1996 legislative session. CMA’s energy committee got parties together. 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. were the focus of this staffer from Senator Peace’s office. Large businesses articulated the issues.. Stan Skinner.” • Large industrial customers. who was also the President of CMA at one time.. A connection is made with obtaining the Governor’s buy-in.. It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe. who then initiated the “very important” MOU process.. resulting in the most influential stakeholders being granted the most access. Coalitions were very important. mostly focusing on market structure. 1995... Lobbying access is only as good as a Commissioner’s willingness to meet. 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. Large customers were less influential. The Memorandum of Understanding was a major event that brought together two worlds. WSPA made an effort to politically educate officeholders. they were able to then get retailers and agricultural groups on board. resulting in a partial phase in of Direct Access.. There was a lot of lobbying. IOUs and large customers. and Edison set the ERG Master’s Project Mark Stout 41 . CMA.. The preferential access to Commissioners also stands out: IOUs were most influential. networking with utilities.. particularly by negotiating a deal between them.. 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. As a member of CMA’s energy group ($10 thousand membership fee). so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. PG&E’s President... 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.

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

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

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

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

there was not enough time. faced an un-level playing field all along. most of the environmental organizations did not expend much effort in using their grassroots activists to challenge the large customer groups and IOUs. Things were changing too fast. and Why: A pattern consisting of three stakeholder groups who may not have received what they wanted emerges from the staff interview data. The clean power advocates. 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. in large part due to the free-market ideology of Governor Wilson’s office which has been passed down to the CPUC Commissioners over years of appointments. mice stay away’. but we have learned ‘when elephants dance. but were able to recover when pressured by Steve Peace.Synthesis of Stakeholder & Staff Comments on Who Got Rolled. We didn’t do grassroots letters. First. and were relegated to complaining after the deal was done. Some public interest (small consumer/environmentalist) advocates were not in the game at all. 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.” ERG Master’s Project Mark Stout 46 . minimizing this group’s losses.. 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.. “insider” strategy: • A volunteer on the Sierra Club California Legislative Committee noted. along with small consumer advocates. The municipal utilities had trouble articulating proposed solutions to their concerns in the AB 1890 Conference Committee. but depended on a consensus-based.

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

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

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

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

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

Senator Peace implored all of the parties to become “enthusiastic advocates” for the package. Candidate. everybody should suffer except for us. The other thing is. in order to move forward with a product. and my rule is when we are forced to unilaterally resolve issues. Our largest problem area. in terms of complicated problem area. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts.. 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 . and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division. OK?. obviously there is going to be many political philosophies on that issue. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10.77 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. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. Where data is available. The following campaign contribution summary tables were compiled from Officeholder..start unilaterally resolving issues.. no attempt has been made at determining total annual contributions from all sources to each officeholder..” That same hearing session. A full breakdown of contributions for each legislator is included in Appendix E. is clearly renewable folks. if there is something you can bring to the table. So for those of you who have been working on other issues I encourage you all to be helpful in that area if you can. Jim Brulte (R-Ontario). even though there some parts they might hate.

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

272 $0 $64. 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.630 $300 N/A $0 $5.374 $1.500 $78.149 $3.818 $0 $65.125 $0 $4.000 $634.405 $0 $722.S.752 $0 $51.592 $846 $0 ERG Master's Project Mark Stout 54 .595 $0 $21.500 $533.166 $5.981 $1.835 $1.239 $0 N/A $0 $89.181 $0 $160.102 $0 $73.675 $384.819 $0 $323.079 $950 $14.370 $648 N/A $0 $208.588 $500 $32.500 $1.157 $0 $188.419 $13.203.500 $190.516.758 $2.000 $562.741 $21.416 $5.180 $0 $209.031.000 $1.500 $263.964 $0 $40.075 $4.112 $3.000 $0 $70.153 $750 N/A $8.675 $736.101 $495 $10.745 $68.000 $62.163 $0 $25.470 $10.000 $225.479 $2.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U. (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 $59.079 $13.092 $3.559 $0 $246.110 $34.000 N/A $0 $18. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.952 $1.000 $480.308 $516.000 $681.496 $8.995 $596.096 $971.608 $3.

600 $32. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.495 $1.167 $500 $25.495 $27.291 $3.003.250 $0 $30.000 $0 $6.203 $5.551 $12.000 $37.701 $0 $5.000 $526.145 $5.850 $1.500 $0 $0 ERG Master's Project Mark Stout 55 .326 $0 $100.400 $100 $79.000 $383.600 N/A $5.596.319 $0 $10.099 $12.271 $0 $12.492 $0 $66.000 $524.938 $0 $118.519 $11.203 $0 $30.665 $0 $262.055 $0 $151.675 $0 $1.723 $0 $38.947 $500 $281.716 $39.000 $0 $15.000 $20.081 $1.401 $1.362. 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 $4.083 $0 $20. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.197 $500 N/A $2. natural gas.230.207 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. (gasoline refining and marketing) Tower Energy Group (oil.000 $0 $171.

and Hamrin.S.882 $15.845 $452.) 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.281 $1.229 $100 N/A $1.032 $0 $172.454 $3.905 $30. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.450 $566. McQuat.118 $0 $144.100 $144. (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) $145.000 $50.060 $6.000 $209.750 $418.000 N/A $100 N/A $7.147 $500 $739.460 $50. 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.400 $1.611 $1.500 $29.590 $5.331 $0 $97.240 $0 $178. Dist.724 $500 not applicable $500 $57.195 $401.500 N/A ERG Master's Project Mark Stout 56 .200 $837.025.000 $33.500 N/A $0 $211.100 $0 $500 N/A $100 $0 $500 N/A $2.748 $32.179 $0 $3.605 $250 N/A $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.750 $267.600 $276.717 $500 not applicable $0 $138.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.862 $21.250 N/A $100 N/A $2.286 $3.250 $148. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.589 $26.543 $29.000 $85. 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.782 $981.571 $500 N/A $200 N/A $1.000 $35. producers.819 $921.626 $0 $8. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.017 $1.000 NA $500 $0 $2.917 $300 $5.159 $3.750 $1. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.

521 $1.750 $37.016 $1.511 $1.209.573 $2.500 $277.661.800 not tracked $3.347 $9.712 $100 N/A $200 $16. Texaco Tidelands Oil Tosco Corp.622 $67.636 $0 $103.521 $0 N/A $50 $87.650 $3. (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.250 $34.000 $65.861 $1.000 $76.750 $23.090 $749 $38.950 $3.407 $200 $61.780 ERG Master's Project Mark Stout 57 .878 $12.885 $300 $207.478.960 $2.643 $1.500 $251.754 $4.500 $47.181 $1.900 $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.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.761 $0 $73. (gasoline refining and marketing) Tower Energy Group (oil.000 $500 $456.705 $19.521 $14.989 N/A $9.532 $4.296 $800 $25.495 $22. diesel) Unocal (CMA member) Victory Oil Co.050 N/A $0 $214.072 $918.438 $500 N/A $0 $1.721 $748.177 $300 N/A $0 $29.138 $1.689 $2.245 $335.995 N/A $100 N/A $0 $3.417 $9.050 $949.000 $22.384 $2. 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 $233.925 $0 $44.334 $498 $1.137 $550 N/A $5.900 $0 $21.958 $2. natural gas.

000 $15. 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.066 $500 N/A $250 N/A $22.1996 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.000 $700 $117.066 $500 $21.585 $33.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .250 $21.448 $424.068 $14.462 $500 $14.438 $4.000 $2.462 $208.790 $100 $14.

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

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

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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. 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. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.e. 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 .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. 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.

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

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

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

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

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

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

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

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

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

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

[IOUs have made arguments about unfair competition from municipal utilities. The direct access reciprocity requirements were expected. 1995. 1995 Decision? CMUA had no clear objective at the CPUC. The Legislature did not need to mandate this. we will end up playing defense. 3.87] CMUA also sought the option of long CTC recovery periods for its members. We wanted to avoid mandates or language on an “un-level playing field”. in order to get the legislative authority for CTC recovery. public benefits programs. What 87 CPUC. we avoided “level playing field” language on tax exempt financing. and an outline of flexible. other than not wanting deregulation to happen. Federal power. Also. We came up with a proposal to prepare for the December Decision.. referring to access to tax-exempt bonds and inexpensive. as well as a longer transition period for direct access. 2000. ERG Master’s Project Mark Stout 77 ... 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. Status Report on Restructuring. Our proposal included voluntary participation in the PoolCo. an argument which CMUA refutes. a quid pro quo for CTC protection. CMUA decided that if we do not take a more proactive approach. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. AB 1890 also includes a requirement for our munis to begin direct access by January 1. We had to stay at the table in order to ensure that our concerns were addressed.could be used to disallow CTC collection. App. This forced the munis to support full stranded cost recovery in the IOU CTC. AB 1890 has good stranded cost recovery language which includes physical bypass.

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

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

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

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

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

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

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

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

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

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

that was one of the basis for AB 1890. CUE also took part in a coalition. ERG Master’s Project Mark Stout 88 . spending all of August working hard.Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. wind energy industry since 1974. but did some personal lobbying before the December Decision. with three or four representatives in Sacramento much of the time. We participated fully in the public process at every opportunity. We participated fully in the Committee hearings and drafting of language. We have had no trouble with consistency. Independent Producers American Wind Energy Association Nancy Rader is the West Coast Representative for the American Wind Energy Association. Earlier in the summer. AWEA. 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. AB 3153 providing employee transition cost. 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. that featured a rate freeze in exchange for a finite CTC collection period. including PG&E. This collaborative effort resulted in the June ‘96 PG&E rate restructuring settlement. CLECA. that held together.S. All comments we filed had yellow covers to stand out in stacks. and AB 2610 dealing with generation reliability. “has represented all facets of the U. and the oil companies. CMA. we sponsored two bills.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1995 CPUC majority proposal. nothing changed significantly from the CPUC Decision. There was a lot of compromise. They were based on a consistent thread of how to organize a market. 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. I suggest you speak with Barbara Barkovich. On this question. but wanted multiple ways to purchase electricity. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. We did not have the expectation that it would happen tomorrow. 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. there was not as much coordination or compromise amongst stakeholders. ERG Master’s Project Mark Stout 103 . but would trade off short term for long term gains. but we came closer. we met directly with Commissioners. CLECA did not want a single market. It used to be that the IOUs were driving everything. 1995 Decision? The institutions in the Decision were designed with enough flexibility to give the opportunity for lower rates. [See interview with Barbara] 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 (or represented) in the California Public Utility Commission’s December 20. I am unsure of whether it will happen. or over time? CLECA’s positions were consistent. The MOU set the tone for that. given the PoolCo structure in the May. The defining of industry structure for competition to drive prices down was important. even over time. Prior to this proceeding.

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

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

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

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

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

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

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

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

So we were stuck with a bill that we hated. We had suggested that community access provide an out for people that did not want in. we did not oppose or support AB 1890. AB 1890)? Why? At the end of the process. It turns out that independent generation plants are run with much less staff. but a narrow set of projects. ERG Master’s Project Mark Stout 116 . TURN felt it had turned AB 1890. there were some self-generation projects in the pipeline. PG&E gets a $0. 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. very bad bill. we decided not to oppose.e.5 billion increase. but Edison successfully created this barrier under the guise of anti-slamming language. it limited CTC recovery to a shorter period of time. CPUC vs. Since we felt that it was incrementally better than the December Decision. On the good side. signed document with independent verification that a customer wants to be included in an aggregation. In the end. requiring a written. Also. Some customers got away with no CTC.. and offered a good commitment to low income programs. Is your organization more comfortable with one policy decision over the other (i. divested power plants must come with a contract for the original staff for the first two years. We had the option of opposing it and jeopardizing the concessions in it. Unions got a huge bone by having the cost of retraining and severance included in the CTC. firmed up the nonbypassability of the CTC. a very. but had to be in the debate. This raises a substantial barrier for municipalities to aggregate their residents’ loads. so he was amenable to this. leading to a heated internal debate. Edison gets coal cost increases. Peace’s residence had gotten slammed a couple times. into a very bad bill.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The University is represented by a legislative affairs office. For the conference committee we had an attorney representing the University. and commented publicly at the Conference Committee. The Governor can appoint one Commissioner a year. ERG Master’s Project Mark Stout 143 . We had a presence. they have usually been good. They have been favorable in principle the whole way through. but they permitted some very big cuts in R&D funding in late 1994. and their was a steady chatter amongst parties. who handle all University issues. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. allowing for inertia. but not an overwhelming one. We filed comments. We had informal contacts with the CPUC staff.interested in technology and became a CIEE board member. and spoke at one public hearing. 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. myself and another University employee were there off and on. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. In practice. about five people in the meileu. The office has two advocates. supplemented by several support staff. but nobody dedicated to the PUC proceedings. The University has a counsel on the PUC service lists.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #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 California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

495 $10.500 $1.000 $4.000 $3.000 $7.000 $3.800 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $2.495 $1.191 $2.000 $495 $950 $696 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $2.495 $7. 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.995 $21.000 $3.995 $300 $12.500 $22.429 $498 $1.896 $3.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $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 UTILITY LABOR UNIONS Int.495 $4.460 $200 $500 $750 $2.000 $3.500 $1.995 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.511 $3.000 $1.995 $2.000 $1.250 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $1.000 $10.500 $800 $498 $200 $9.Table 2: Assemblymember Jim Brulte.995 $14.000 $2.017 $749 $750 $3.500 $1. (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.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $2.750 $4.990 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.500 $6.000 $8.500 $47.

and Budapest.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Conservation. 1996. Sweden. Paling in comparison.750 $750 $1. CFEE is a “non-profit. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.750 $3. Mobil treated Brulte to a $60 event in 1996. as well as an event.000 $750 $0 $0 103 Asmus. Chevron treated Brulte to two meals.750 $2. From 3/28/96 to 4/8/96. by the California Foundation on the Environment and the Economy.000 $3. 4 ERG Master’s Project Mark Stout 164 . Brulte was taken on a $7.490 “Travel project to Europe on Electric Restructuring. Table 3: Senator Steve Peace. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $2.000 $2.000 $1.500 $1.000 $1.250 $500 $1. totaling $101. and Privatization” visiting London. Not to be outdone. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.

000 $6.000 $750 $750 $750 $1.000 $300 $1.250 $7.572 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .500 $3.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $4.500 $8.000 $1.100 $2.Table 4: Senator Steve Peace.500 $16.050 $3.600 $2.250 $750 $500 $1.250 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.450 $7. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.815 $750 $6. (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 $500 $2.072 $2.250 $1.115 $18.

900 . SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. In 1995. Southern California Edison was granted a high level of access. SDG&E had Peace out to six meals.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. IEP made a gift of $241 for his speech at a conference. In 1996. Table 5: Senator Byron Sher. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.450 166 ELECTRIC/GAS $6. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. Peace was treated to a $52 sports event by Mobil Oil.000 Table 6: Senator Byron Sher. as well as chair of the Senate Energy and Utilities Committee. 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 $5.100 $2. while Edison treated him to five meals and a sports event. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. taking Steve to 11 meals.000 $5.

000 $500 $500 $9.600 $13.000 $500 $1.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. $2. (geothermal) Colmac Energy Inc.500 Int. McQuat.100 $500 $2. (biomass) Edson + Modisette (lobbyist for indep.882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 locals) Southern California Pipe Trades United Assoc. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . EVs) Hansen. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin. Brotherhood of Electrical Workers (various $9.000 $100 producers.482 $100 $1.

000 $100 $100 $500 $1.500 COMPANIES $1.000 $100 $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 $1.000 $1.000 (tire $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .

Tosco Corp.585 $100 $500 $2. of California. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $700 $4.448 $14.000 $300 $300 $22.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.

the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.500 $300 $0 $0 $2.000 $1. totaling $2608. 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. Sher holds over $100. Sher received no other gifts that year from energy utility stakeholders. Mobil. and GE. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. In 1996.000 in each of Amoco.300 $500 $1.400 $750 $150 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. NARUC treated Sher to a two day trip to DC for another meeting.500 $0 $0 ERG Master’s Project Mark Stout 170 . totaling $758. Exxon.

SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $500 $500 $4. Edison again ERG Master’s Project Mark Stout 171 .000 $2.000 $5.080 $10.650 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.730 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.500 $150 $500 $3.000 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $1. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. extending his stay from 12/8/96 to 12/13/96. for a paltry $20. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. While the Senator was there. 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. The Pacific Rim Conference of Seattle.650 $500 $1. saving up for a $77 dinner with head lobbyist Bob Foster. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.Table 8: Senator Bill Leonard. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.500 $500 $1.000 $2.

including lunch with Bob Foster. They also had Leonard out for two meals in Sacramento. 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 $750 $750 $650 $150 $500 $3. ARCO treated Leonard to a $19 meal at a reception. Table 9: Assemblymember Mickey Conroy. paying $44 for two meals and lodging. PG&E took Leonard out to a Kings game.had Senator Leonard out for Legislative Ski Day. for the modest tab of $56.600 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .250 $1.000 $1.000 $1.750 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1.600 $750 $750 $500 $1.

700 $500 $300 $550 $2. 4 ERG Master’s Project Mark Stout 173 .000 $3. PG&E treated him to a basketball game with $51 tickets.500 $2.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. two meals for $44. the California Foundation on the Environment and the Economy took Conroy on an 11 day.600 $500 $1.000 $2. CFEE is a “non-profit.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.Table 10: Assemblymember Mickey Conroy. 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.000 $500 $2.600 $3.000 $500 $750 $250 $500 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing. and Inner Mongolia. and to 104 Asmus. Shanghai. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.700 $750 $450 $250 $250 $1.000 $5. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.050 $1. 1996. $7.

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

750 $4. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.750 $1.000 $1.250 $1.000 $1.175 $500 $1.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $2.675 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.Table 11: Assemblymember Diane Martinez.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $2.

500 $1.000 $5.000 $500 $1.250 $1.000 $4.000 $7. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $500 $500 $5.500 $1.000 $500 $500 $500 $500 $500 $3.000 $500 $3. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $4.750 $1.500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $1.000 $1.500 $500 $500 $1. Dist. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.Table 12: Assemblymember Diane Martinez.000 $1.000 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. natural gas.900 $3.500 $1.058 $500 $500 $1.850 $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.000 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. the Illinois Energy Association flew Martinez out for a $1.000 $8.467 trip to Northwestern University to discuss the deregulation of public utilities. ERG Master’s Project Mark Stout 177 .600 $1.000 $500 $500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.500 $1.Table 13: Assemblymember Steve Kuykendall.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.208 $0 $0 $1.100 $100 $1.

However.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.500 $1.500 $1.000 $1.000 $19.250 $100 $500 $35.) 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. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. and Budapest.000 $500 $2.374 $4.000 $1. From 3/28/96 to 4/8/96.000 $1.443 $6. Sweden.254 $200 $500 $4.350 $500 $1. ERG Master’s Project Mark Stout 178 .500 $0 $1. Kuykendall was taken on a $7. diesel) Unocal (CMA member) Victory Oil Co. Kuykendall’s social calendar was destined to pick up in 1996.374 $500 $2.Table 14: Assemblymember Steve Kuykendall. natural gas.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. Conservation. and Privatization” visiting London.000 $2.

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

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

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

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