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which will be superseded to a great extent by the details of AB 1890.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

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

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

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

10 Davis. In capacity constrained systems. PURPA was very significant in creating a market for non-traditional generators.investment options of utilities so that each was confined in scope to an “integrated public-utility system. 11 Pechman. ERG Master’s Project Mark Stout 10 . It also created new 8 9 Pechman. recent successor to the FPC. 16. Hempling. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates. started by PURPA. this was the marginal cost associated with procuring new generation capacity. was charged with writing the rules required to implement this legislation.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan. It also opened the door for more widespread wholesale competition by requiring that regulated utilities purchase power from Independent Power Producers (IPPs) classified as Qualifying Facilities (QFs) at avoided cost. The Federal Energy Regulatory Commission (FERC). towards more competition in electricity generation. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. 17. 166-167. 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. 343.11 Energy Policy Act of 1992 EPAct continued the Federal trend.

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

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

including private and public-interest organizations. 1994. “a vibrant market exists for energy efficiency services”. and asserted that. For instance.20 Many stakeholders.22 FERC MegaNOPR In March of 1995.scheduled to be issued by the CPUC in August of 1994. evidentiary hearings. were concerned about the content and timetable of this proposal. coupled with a lack of prior coordination with the state Legislature. 1. numerous other states have also proposed electric utility deregulation. Blue Book. where customers voluntarily pay more to promote renewables. the CPUC proposed. FERC released a dual-issue Notice of Proposed Rulemaking. 1994. such as “green pricing”. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. and documentation resulting in a report back to the Governor and Legislature by January 31. This process tempered the CPUC’s frenetic timetable. Status Report. which had been dubbed the MegaNOPR. 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. ERG Master’s Project Mark Stout 13 . 1995.19 Since the release of the Blue Book proposal. The first issue addressed open access to the transmission system 19 20 CPUC. 1994. Blue Book. which requires the CPUC to engage in a series of public hearings. 21 CPUC. Wagner. pushing back their goal for a policy decision until September of 1995. This led to the passage of Assembly Concurrent Resolution 143. “alternative frameworks based on ‘let the market decide’”. In their place. where CPUC President Fessler and Commissioner Knight testified on their proposal. 1995.21 This stakeholder response.

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

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

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

1996 levels. as well as a “minimum renewables purchase requirement”. Aside from funding levels for low-income rate discounts. The December Decision mirrored the market structure defined in the MOU. nor a renewables purchase requirement level. requesting input from stakeholder working groups.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. 1995 which laid out a more defined vision of a deregulated ut ility environment. PG&E (Pacific Gas and Electric) and SCE. and an Independent System Operator centrally controlling California’s transmission system. the Decision proposed a nonbypassable “public goods charge” (PGC). For public purpose programs. the CPUC released a policy decision on December 20. direct access contracts. The Decision called for 100% stranded cost recovery by IOUs over a five year period. with financial incentives tied to the level of divestiture. bilateral. through a Competitive Transition Charge (CTC). The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. with several key implementation areas to be hammered out by stakeholder working groups. A legislative conference 28 Framework Parties. coupled with an IOU rate cap at January 1.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. and allow for uncapped low-income programs. based on a wholesale Power Exchange. the Decision does not define any public program funding levels. while the state Legislature took up the issue of electric utility deregulation on their own terms. so that input can be made to the Legislature. which should. “be based on need”. ERG Master’s Project Mark Stout 17 . 1995.expand renewables development above 1993 levels while commercializing new renewable energy technologies.

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

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

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

if a company wants more revenue it must invest more capital. the companies have no incentive to be efficient. “DOE Restructuring Bill” 45 Stevenson. cement.43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. Retail wheeling sits at the top of the agenda of this coalition of steel. and future expansion. “Discretionary Evolution. The state commissions typically calculate a company’s profits as a return on investment.requirement". 355.45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition. 1997.”. Because the PUCs determine the rates. 1997. and overcapitalized due to state regulation. It has an incentive to build a new plant even if it is not really needed.”46 In California. Therefore. There is literally no profit in it for them. Davis explains their reasoning: “the electric companies are inefficient. these concerns are represented by the California Large Energy Consumers Association (CLECA).44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation. Many forces have come together to create the push for electric utility deregulation in California..” Barbara Barkovich. “12 companies--most foreign-owned--that really soak up the juice. ERG Master’s Project Mark Stout 21 . services. a consultant representing CLECA explains their 43 44 Levison.. “Restructuring Hearings on the Road” Levison. and one of the largest gold mining firms in the world. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation. too conservative.

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

Hoffman 55-62.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. 1993. This reduction in scale has brought down the capital requirements of entering the electricity generation industry.. 356-357. 1994. 1993.. Gordon. 52 Gilbert. Davis.”.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. greatly increasing opportunities for bulk power sales. 51 Stevenson. 50 Flavin and Lenssen.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. ERG Master’s Project Mark Stout 23 . “Discretionary Evolution.intense pressure from large industrial customers. 150. who in the past had enjoyed privileged status with cheap rates. 84-108. but now had to pay higher rates. 447-475. basing their arguments on welfare economics as applied to the changing electric utility landscape. 195. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. enabling increased competition.

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

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

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

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

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

68 I have broken oil and natural gas companies out as a separate category in the tabulations of campaign contributions.. talking with at least one prominent representative from a number of categories: investor-owned electric utilities. 1995.67 As I extended my analysis with a summary of campaign contributions from stakeholders to the conference committee members. I first review what the different stakeholder groups wanted and got in both policy outcomes. I tried to cover as wide a range of participants as possible. Status Report. 69 CPUC. municipal electric utilities. 1995. the December.. as well as considering those used in a status report from the CPUC to the Legislature. based on 26 stakeholder interviews [see Appendix B]. and a state institutions. environmental advocates.exercise of power from Lukes’ most “radical” view. CPUC. Selection of Stakeholder Groups In selecting stakeholder groups to focus on. Overview of What the Stakeholders Wanted and What They Got Before analyzing who got what they wanted. large electricity consumers. since such a broad analysis would be outside of the scope of this project. ERG Master’s Project Mark Stout 29 ... small electricity consumers.. 1995 CPUC Decision. 67 68 CPUC.. as well as independent producers. 1995. Status Report. Status Report. and the final AB 1890 language. utility labor unions. one important subcategory emerged because of its dominance: Oil and natural gas companies are often both large energy consumers. I chose these categories based on personal experience representing a stakeholder organization in the process. independent producers. their comments on restructuring filed with the CPUC69.

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

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

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

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

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

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

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

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

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

as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . As Figures 5 indicates.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. 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. 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.

I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision.” Many of the other stakeholders consider AB 1890 an incremental. 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. as well as three subjects ERG Master’s Project Mark Stout 40 . forward Decision.[see American Wind Energy Association. PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. As excerpted from the PG&E stakeholder interview. and Union of Concerned Scientists interviews]. 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. 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. Natural Resources Defense Council #1.

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

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

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

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

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

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

but relied on their name instead. AWEA endorsed the bill reported out of the conference committee.” • Cavanagh offers a different perspective on NRDC’s substantial media work. “Environmentalist Defends His Stance” ERG Master’s Project Mark Stout 47 .70 [also see numerous comments in interview transcripts] An American Wind Energy Association representative was disheartened that Cavanagh would not pull NRDC’s endorsement for AB 1890. Critical stakeholders who could have derailed did not. made no attempt to build clout. 1997. NRDC had no media strategy. not grassroots activists: “It was a consensus-based process. We were in constant contact. there was not enough activity.” 70 Weisman. because he.” Later in my interview with Ralph.• A senior analyst for the Environmental Defense Fund comments on their participation in the CPUC process. San Francisco Examiner. “Past EDF’s filing comments.” • Ralph Cavanagh has served as a lightning rod for praise and criticism of the environmental community’s focus on an insider strategy. didn’t want to ruffle any strategies. we could have killed it. “wanted a win. “NRDC did press work through editorial boards including the San Jose Mercury News. one on one. it did become clear that NRDC’s strategy was based on coalitions of insiders. In the end. We were on separate tracks with industrial customers to ensure no cost shifting occurred. not turning it into a media tank battle. the San Francisco Chronicle. largely because no public interest group was willing to oppose the bill. It was strong going in and going out of the process. If environmental groups collectively walked. and the Sacramento Bee focusing on public purpose programs. The environmental groups and consumer groups such as TURN worked well together. NRDC’s relationship with the IOUs was important.

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

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

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

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

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

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

102 $0 $73. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.S.000 $681.092 $3.000 N/A $0 $18.835 $1.153 $750 N/A $8.370 $648 N/A $0 $208.000 $1.479 $2.419 $13.075 $4.752 $0 $51.180 $0 $209.819 $0 $323.592 $846 $0 ERG Master's Project Mark Stout 54 .952 $1.818 $0 $65.559 $0 $246.239 $0 N/A $0 $89.112 $3.500 $78.470 $10.964 $0 $40.203.500 $190.374 $1.000 $562.163 $0 $25.101 $495 $10.000 $634.149 $3.741 $21.500 $533.675 $736.110 $34.608 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.000 $62.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.405 $0 $722.031.157 $0 $188.125 $0 $4.079 $950 $14.079 $13.096 $971.496 $8.630 $300 N/A $0 $5.758 $2.166 $5. (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 $59.000 $0 $70.516.595 $0 $21.588 $500 $32.500 $1.745 $68.981 $1.675 $384.995 $596.308 $516.416 $5.000 $225.500 $263.000 $480.272 $0 $64.181 $0 $160.

1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.701 $0 $5.600 N/A $5.551 $12.723 $0 $38. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.947 $500 $281.000 $0 $171.000 $524. natural gas.492 $0 $66.401 $1.716 $39.099 $12.083 $0 $20.938 $0 $118.675 $0 $1.519 $11.207 $5.000 $383.400 $100 $79.167 $500 $25.081 $1. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.000 $0 $6.000 $20.271 $0 $12.145 $5.250 $0 $30.291 $3. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.055 $0 $151.000 $526.230.596.319 $0 $10. (gasoline refining and marketing) Tower Energy Group (oil.203 $5.850 $1.326 $0 $100.600 $32.495 $27.003.000 $0 $15.665 $0 $262.000 $37.500 $0 $0 ERG Master's Project Mark Stout 55 .362.203 $0 $30.495 $1.197 $500 N/A $2.

331 $0 $97.250 N/A $100 N/A $2.917 $300 $5.281 $1.229 $100 N/A $1.025.717 $500 not applicable $0 $138.240 $0 $178.845 $452.100 $144. Dist. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.195 $401. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.S.589 $26.750 $267.605 $250 N/A $1.017 $1.590 $5.000 $33.750 $1.147 $500 $739.543 $29. 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. producers.250 $148. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.724 $500 not applicable $500 $57.600 $276.862 $21.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.571 $500 N/A $200 N/A $1.500 N/A $0 $211. (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 $209.500 N/A ERG Master's Project Mark Stout 56 .626 $0 $8.611 $1.400 $1.118 $0 $144.179 $0 $3.060 $6.460 $50.000 N/A $100 N/A $7.454 $3.) 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. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.100 $0 $500 N/A $100 $0 $500 N/A $2.000 $50.905 $30. McQuat. and Hamrin. 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.882 $15.200 $837.000 $35.750 $418.748 $32.450 $566.782 $981.159 $3.286 $3.000 NA $500 $0 $2.500 $29.819 $921. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.000 $85. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.032 $0 $172.

636 $0 $103.000 $233.721 $748.958 $2.500 $277.750 $23.643 $1.000 $65.177 $300 N/A $0 $29.622 $67.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.925 $0 $44. (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.960 $2.296 $800 $25.138 $1.050 $949.250 $34.861 $1.650 $3.689 $2.878 $12.800 not tracked $3.950 $3.900 $1.090 $749 $38. Texaco Tidelands Oil Tosco Corp. diesel) Unocal (CMA member) Victory Oil Co.384 $2.000 $22.000 $500 $456.573 $2.016 $1.209.181 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.347 $9.761 $0 $73.995 N/A $100 N/A $0 $3.072 $918.661. 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) $41.532 $4.885 $300 $207.245 $335.780 ERG Master's Project Mark Stout 57 . (gasoline refining and marketing) Tower Energy Group (oil.500 $47.521 $0 N/A $50 $87.417 $9.705 $19.712 $100 N/A $200 $16.521 $14.989 N/A $9.407 $200 $61.511 $1.050 N/A $0 $214.137 $550 N/A $5. natural gas.750 $37.495 $22.000 $76.900 $0 $21.334 $498 $1.438 $500 N/A $0 $1.521 $1.754 $4.478.500 $251.

000 $700 $117.066 $500 $21.462 $500 $14.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 N/A $250 N/A $22.585 $33.068 $14.790 $100 $14.378 $100 $21.000 $15.462 $208.000 $2.438 $4.250 $21.448 $424. 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) $1.1996 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. of California.

paying up to $7. Brussels. Conservation. CFEE is a “non-profit. including oil and natural gas companies. government ministers. From 3/28/96 to 4/8/96. their “Travel project to Europe on Electric Restructuring.As one would imagine. alternative energy producers. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus.79 From 3/16/94 to 3/27/94. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. 1996. 4 Asmus. 1996. the lobbying summary tables above. 4 ERG Master’s Project Mark Stout 59 . were able to far outspend environmental organizations (who were usually spread thin over many issues).167 per guest. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. and small consumer groups. and Paris. “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. According to investigative writer Peter Asmus. for $7. Shanghai. 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.”80 In April of 1995. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. an Edison lobbyist was added to the international travel party at the last minute. and Inner Mongolia. to meet with CEOs of the electricity industry. regulators.800 each. a clean power auction the CPUC repeatedly postponed upon the urging of the utility.

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

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

Bibliography
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Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. 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.e.. 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. 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 . 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. CPUC vs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. There were major egos on the Conference Committee with pre-formed opinions. Chairman Peace. and people were not listening to arguments. “Knight was sold on the RPS concept because he is a believer in markets. Nancy said she.” What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. Nancy remembers that the conference committee meetings were occurring in an. In retrospect. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. but Peace killed it again. The new CPUC President Conlon tried to put the RPS back on the table for discussion. resulting in very little control for AWEA.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. had killed the RPS before any discussion began. Peace threw all of the stakeholders out of the room and told them to come back in one hour with their deals already ERG Master’s Project Mark Stout 91 .” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged. with many issues being ironed out at once.Nancy feels that. Steve Peace. “incredible time crunch. and it worked. Nancy continued to describe the process: “Time was too short.” She was also invited to participate in a full panel hearing on public purpose programs. At one point towards the end of the Conference Committee process. “trusted in the process. By melting down the proposed language. AWEA lobbyist Joe Caves was able to get John White’s customer rebate proposal pulled from the draft language.” The Committee Chairman.

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

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

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

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

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

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

Seymour & Rowher is Counsel for CIU. It is amazing how much time the CEOs of IOUs spend on Wall Street. ERG Master’s Project Mark Stout 98 . but managed to get its language in thanks to Curt Pringle. California Industrial Users Phil Stohr of Downey. We also had a strategy based on financial market leverage. but stayed out of the MOU. we could have pulled a lot of agricultural votes on the floor otherwise. This was too complex a bill for a split conference committee. We were one of the last groups hanging on the outside. A couple of the Conference Committee members did not have a clue what was in the bill. A friendly analyst provided us with a fax list for Wall Street. We then made sure that anything negative about the utilities made it out to the analysts. AECA participated with a customer coalition. traditionally most active with CPUC proceedings. We had an irrigation district bill which the utilities had previously killed. Brand. sending press releases to Wall Street analysts. Steve Peace kept saying it would go with a unanimous Committee vote or it was not going to go at all. an organization that was formed in the late 1970s to represent industrial natural gas and electricity users. The irrigation district CTC exemptions was one of the last amendments added. IOUs care more than anything about their stock price. which has evolved into an electricity-oriented group. The political leverage of agricultural votes was critical.What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? The legislative debate was different.

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

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

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

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

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

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

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

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

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

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

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

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

How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? We fought AB 1890 because of its putting in place items from the PUC’s December Decision that we hated. TURN applauded the focus. but did include language describing it. and its inclusion of giveaways to large customer groups. it was OK for regulators to deny full recovery. We had advocated a community access model. but TURN did not like the allocation of CTC costs to different classes. Some commercial customers had wanted aggregation for different locations. TURN was able to knock out an earlier Brulte bill.to Supreme Court decisions allowing a “reasonable chance of recovery”. It also included a recognition of the importance of market power. for aggregation of small customers to take advantage of direct access. in concert with oil companies. as opposed to the rate cap in the PUC December Decision. including low income. Under these decisions they cite. The Decision made a good commitment to maintaining public purpose programs. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. We thought there would not be comprehensive legislation that year. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. it was clear that the Legislature would be moving forward. based on geographical region. but the incentives were weak. 1995 Decision? There was good language on the non-bypassability of the CTC. although by July. ERG Master’s Project Mark Stout 115 . with incentives for divestiture of utility generation. everyone except for small consumers. TURN also did not like it because we got a rate freeze. Regulated entities can achieve their own version of the truth by repetition. The PUC was vague on aggregation.

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

large customers attacked the pool. get attention. or over time? The terms of the debate changed.” The result is that the most favored groups. the process was difficult to track. leading to an evolution of positions.In hindsight. Unfortunately. The Commissioners were appointed with a viewpoint: “Do what’s right for business. but just have more refined positions. everybody at TURN wishes we had opposed this bill kicking and screaming. When Wilson got wind of the CMA [California Manufacturers Association] fighting Edison. We would still agree with our Yellow Book and Blue Book comments. 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. Edison and SDG&E asked for a wholesale pool with transition to direct access. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. when the PUC proposals were released. These positions were locked until May. while the utilities where up at the PUC everyday. Fessler’s PoolCo was what Edison wanted. utilities and large industrials. PG&E requested direct access for large customers immediately. trickling down to smaller customers. 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. 1995. and you’ll do what’s right for California. people were getting handed new language instantaneously for discussion. with an Edison nuke settlement going on at the time. We also appeared at full panel hearings. This led to the small customer groups scrambling to get things covered. In their first round comments to the Blue Book. he arranged ERG Master’s Project Mark Stout 117 . Nobody gave enough reason for TURN to change its position.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

UCS worked closely with AWEA at a June 1996 Senate Utility Committee hearing with both lobbyist Joe Caves and myself advocating for the Renewables Portfolio Standard and AB 1202. She went on to say that if the whole environmental community was working under a unified strategy. a legislative education and lobbying event in early August. While Joe continued to lobby Senators. counting only those copied to UCS.California in April. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . 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. the legislative outcome would have been different. I worked for UCS coordinating our participation in Clean Power Day. as included in Assembly Bill 1202. Jane believes that Clean Power Day was the one unifying experience for environmental and renewable energy organizations throughout an otherwise splintered legislative lobbying process. 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”. Because of splintering and infighting within the public interest community. at the very least they could have stopped AB 1890 from passing unanimously. gathering dozens of hand written letters from California residents to their state legislators. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard. which had passed the Assembly the previous year. resulting in over two hundred letters to Sacramento.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Once the Governor’s office was behind the MOU. it was all over. causing chaos. you must play. such as irrigation districts and economic development rates. Bill Leonard said that if you want to charge an exit fee. while the large customers got the ability to go first on direct access. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. The IOUs were clear that they wanted full recovery. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Getting the help of the Governor’s office. It looks most likely that it will be adopted. There was a lot of play between SMUD and the large customers. The IOUs got complete stranded cost recovery. He walked out at one point to force the munis to make up their mind. The ability to fund politicians helped. and look for ways to get around paying the CTC. Was it always clear what outcomes each stakeholder group wanted from the process? Yes.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. 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. 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. ERG Master’s Project Mark Stout 155 . However. Labor wanted to protect their employees. Political clout can be bought with lobbying and campaign contributions.

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

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

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

Interview #1 Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #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 .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column 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 .

How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 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 .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 California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #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 .

800 $1.000 $500 $1.500 $1.000 $2. (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 $3.000 $495 $950 $696 $2.191 $2. 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. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.896 $3.000 $1.995 $21.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $10.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $1.000 $1.000 $4.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $7.000 $3.000 $2.495 $7.495 $1.995 $300 $12.000 $3.500 $22.429 $498 $1.

995 $1.500 $47.500 $1.511 $3.500 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.995 $0 $0 ERG Master’s Project Mark Stout 163 .Table 2: Assemblymember Jim Brulte.017 $749 $750 $3.995 $2.000 $3.500 $6.500 $800 $498 $200 $9. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.495 $4.750 $4.000 $1.990 $1.000 $10.460 $200 $500 $750 $2.995 $14.000 $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.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $8.000 $2.250 $2.

750 $3.000 $1.000 $1. as well as an event. Conservation. and Privatization” visiting London.000 $2.000 $2. Mobil treated Brulte to a $60 event in 1996.750 $750 $1. Table 3: Senator Steve Peace. Brulte was taken on a $7. 1996.000 $3.250 $500 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Chevron treated Brulte to two meals. 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.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.490 “Travel project to Europe on Electric Restructuring. Sweden. Paling in comparison. CFEE is a “non-profit. 4 ERG Master’s Project Mark Stout 164 . AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. and Budapest.000 $750 $0 $0 103 Asmus.750 $2. by the California Foundation on the Environment and the Economy. Not to be outdone. totaling $101. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. From 3/28/96 to 4/8/96.

450 $7.000 $6.000 $300 $1.000 $750 $750 $750 $1.Table 4: Senator Steve Peace.000 $1.000 $4. (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.750 $0 $0 ERG Master’s Project Mark Stout 165 .500 $16.600 $2.500 $8. 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.072 $2.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.572 $1.815 $750 $6.250 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $7.115 $18.500 $3.100 $2.250 $750 $500 $1.050 $3.250 $1.000 $500 $2.

900 .000 Table 6: Senator Byron Sher. IEP made a gift of $241 for his speech at a conference. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5. Peace was treated to a $52 sports event by Mobil Oil. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. while Edison treated him to five meals and a sports event.100 $2. Table 5: Senator Byron Sher. as well as chair of the Senate Energy and Utilities Committee. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. In 1995. taking Steve to 11 meals. SDG&E had Peace out to six meals. Southern California Edison was granted a high level of access.000 $5.450 166 ELECTRIC/GAS $6. In 1996. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.

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 $1.482 $100 $1.600 $13. $2. McQuat.000 locals) Southern California Pipe Trades United Assoc.000 $500 $1. Brotherhood of Electrical Workers (various $9.882 $100 $1. and Hamrin. (geothermal) Colmac Energy Inc.000 $100 producers. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .100 $500 $2. EVs) Hansen. (biomass) Edson + Modisette (lobbyist for indep. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.500 Int.000 $500 $500 $9. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.

000 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 $1.000 $100 $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 (tire $1.000 $100 $100 $500 $1.500 COMPANIES $1.000 Large Energy Consumers $3.

585 $100 $500 $2.Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . 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. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.448 $14.000 $300 $300 $22.000 $700 $4.

000 $1. Exxon.300 $500 $1. Sher received no other gifts that year from energy utility stakeholders.400 $750 $150 $1. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. In 1996. totaling $2608.500 $300 $0 $0 $2. NARUC treated Sher to a two day trip to DC for another meeting. Table 7: Senator Bill Leonard. Mobil.000 in each of Amoco. totaling $758.500 $0 $0 ERG Master’s Project Mark Stout 170 . but his Statement of Economic Interest reveals large holding of oil and electricity stocks.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. and GE. Sher holds over $100. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.

Senator Leonard was courted a little more heavily by energy stakeholders in 1996. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. WA paid $734 for Leonard to moderate a conference session on utility deregulation.Table 8: Senator Bill Leonard.000 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $500 $500 $4.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.080 $10.650 $2.500 $500 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. extending his stay from 12/8/96 to 12/13/96.650 $500 $1.000 $2.000 $2.730 $2.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. The Pacific Rim Conference of Seattle.500 $150 $500 $3.000 $5. for a paltry $20. Edison again ERG Master’s Project Mark Stout 171 . SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. 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. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. While the Senator was there.000 $1.

750 $1. ARCO treated Leonard to a $19 meal at a reception. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.600 $750 $750 $500 $1. including lunch with Bob Foster. paying $44 for two meals and lodging. for the modest tab of $56.000 $1.600 $1.had Senator Leonard out for Legislative Ski Day.000 $750 $750 $650 $150 $500 $3.250 $1.000 $1. They also had Leonard out for two meals in Sacramento. PG&E took Leonard out to a Kings game. Table 9: Assemblymember Mickey Conroy.000 $1.

700 $500 $300 $550 $2. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. and to 104 Asmus. two meals for $44. 1996. Shanghai. CFEE is a “non-profit. and Inner Mongolia. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $500 $2. 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.600 $500 $1.000 $2.050 $1.000 $5.Table 10: Assemblymember Mickey Conroy. 4 ERG Master’s Project Mark Stout 173 . $7.700 $750 $450 $250 $250 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.300 junket to talk with Chinese central government and provincial leaders in Beijing. PG&E treated him to a basketball game with $51 tickets.500 $2. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $750 $250 $500 $2.000 $3.600 $3.

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

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.175 $500 $1.750 $4.Table 11: Assemblymember Diane Martinez.000 $1.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $1.000 $1.675 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .000 $1.750 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.250 $1.250 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.

Table 12: Assemblymember Diane Martinez.000 $5.500 $1.000 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.000 $500 $1.000 $500 $500 $500 $500 $500 $3.000 $7. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. Dist.000 $1.000 $4.500 $1.000 $1.000 $500 $500 $5.500 $500 $500 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.750 $1.500 $1.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.250 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $0 $0 ERG Master’s Project Mark Stout 176 . 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $500 $3.000 $4.

) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. ERG Master’s Project Mark Stout 177 . natural gas. 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.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $1.850 $1.208 $0 $0 $1.500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.100 $100 $1.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.000 $8.058 $500 $500 $1.000 $500 $500 $1. the Illinois Energy Association flew Martinez out for a $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $1.900 $3.Table 13: Assemblymember Steve Kuykendall.

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. and Privatization” visiting London. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Conservation.000 $19. Kuykendall’s social calendar was destined to pick up in 1996. diesel) Unocal (CMA member) Victory Oil Co. Sweden.500 $1.000 $1.Table 14: Assemblymember Steve Kuykendall.000 $1.374 $4.490 “Travel project to Europe on Electric Restructuring.250 $100 $500 $35.443 $6. ERG Master’s Project Mark Stout 178 . and Budapest.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.254 $200 $500 $4.500 $1. However. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. natural gas. Kuykendall was taken on a $7.374 $500 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1. From 3/28/96 to 4/8/96.500 $0 $1.350 $500 $1.000 $2.000 $500 $2.

Chevron treated Kuykendall to two dinners for $131. The California Mining Association took him out for an evening of recreation and dinner costing $89. Fessler was taken on a $7.167 junket visiting London. and Paris. for $610. SC to address their membership. regulators.051 to fly the President out to New York City for a ConEdison Management Conference. 1996. known as the Council of States Government . wholesale PoolCo model. CO. spent $1402 to fly Fessler to Charleston.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. in Aspen. 4 ERG Master’s Project Mark Stout 179 . paid $1. The Aspen Institute. and environmental groups to discuss the British experience with deregulation of electricity. was very interested in California moving to the UK-style.”105 The Consolidated Edison IOU spent $1. government ministers. A trade association. According to investigative writer Peter Asmus. to meet with CEOs of the electricity industry. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). by the California Foundation on the Environment and the Economy. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. a trade association for publicly owned utilities. Brussels. one of CFEE’s funders. The California 105 Asmus.WEST. Edison. Another non-profit organization. The Large Public Power Council. a clean power auction the CPUC repeatedly postponed upon the urging of the utility.by the California Foundation on the Environment and the Economy. an Edison lobbyist was added to the international travel party at the last minute.

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

Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. and Schlumberger oilfield services stock. government ministers. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He does own less than $10. regulators. Unocal. by the California Foundation on the Environment and the Economy. Brussels. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. In 1995. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1995.000 in each of Chevron. to meet with CEOs of the electricity industry.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. wholesale PoolCo model. ERG Master’s Project Mark Stout 181 .167 junket visiting London. Jr. PG&E had him out to three meals for $71. Edison. utility and General Electric stock. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. was very interested in California moving to the UK-style. spending $258.000 in each of Central & Southwest Corp. He does own more than $10. and less than $10. one of CFEE’s funders. He left office on February 23. and Paris. Conlon was taken on a $7. and environmental groups to discuss the British experience with deregulation of electricity.000 in each of Montana Power Company and Exxon stock.

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