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

ERG Master’s Project

Mark Stout

1

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

ERG Master’s Project

Mark Stout

2

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

ERG Master’s Project

Mark Stout

3

which will be superseded to a great extent by the details of AB 1890. 1995 Decision with the California legislative process resulting in AB 1890.Introduction On September 23. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. 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. 1996.3 According to the Environmental Defense Fund. This paper develops a comparison of which stakeholder groups got what they wanted. with varying success.org/programs/Energy/green_power/a_better.edf. there will probably be significant winners and losers as a result of this legislation. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. which sets in motion a process of electric utility deregulation beginning in 1998. 1996 California Energy Commission. 1995 3 Flavin and Lenssen. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1994 4 WWW page: http://www. a product with well documented environmental impacts including local air pollution.html ERG Master’s Project Mark Stout 4 . 1995 Electric Restructuring Decision. and why. selling 250 billion kWh of electricity per year2. Various stakeholder groups.4 Given the stakes involved with this industry. contrasting the results of CPUC process resulting in their December. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. acid rain and climate change. 1 2 CPUC RD&D Working Group. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).S.

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

ERG Master’s Project

Mark Stout

5

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.

ERG Master’s Project

Mark Stout

6

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

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

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

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

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

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

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

met to iron out differences between them and draft their own industry restructuring proposal. California Large Energy Consumers Association. a group of seemingly influential special interests. it is a hybrid of the two proposals. Bids for generation into the pool would be processed by a Power Exchange (PX). and Independent Energy Producers. California Manufacturers Association. 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. In structure.3% of total utility revenue requirements as of January 1. Southern California Edison Company (one of three regulated. who is responsible for maintaining transmission system reliability. 1995.25 In response to the Commissioner proposals. Full stranded cost recovery is agreed to for Edison. low-income ratepayer assistance would be funded at an uncapped. funding levels for energy efficiency. the only IOU signing the MOU. know as the “Memorandum of Understanding” (MOU). as well as a central. renewables. Prices would be determined either through bilateral contracts between direct access customers and generators. No central entity would schedule power generation. including bilateral contracts for direct access customers. and low-income weatherization would be funded at 25 CPUC Direct Access Proposal ERG Master’s Project Mark Stout 15 . or through the creation of optional pools which could manage bids in a manner similar to the PoolCo proposal. wholesale pool. although generators would submit projections to an independent system operator (OPCO). as-needed basis.Commissioner Knight’s alternate proposal is based on direct access contracts between generators and customers. investor owned utilities in California). Out of this surcharge. at the prompting of California Governor Pete Wilson. The MOU also proposed a nonbypassable charge to fund public policy programs. and R&D were not to exceed 3.

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

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

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

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

the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. In March of 1997.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.40 On May 6. 1997. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. and 15% consumer-side incentives. 1997. 1997 42 Weisman. 10% emerging technologies.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. would be eligible for direct access January 1.41 There are currently several electric utility restructuring bills in Congress. “If the bill had failed. The overall levels are: 45 % existing technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 30% new technologies. including residential and small commercial consumers. 1998. including a prominent one authored by Representative Dan Schaefer (R-CO). As Carter and Cavanagh have noted. chair of the House Energy and Power Subcommittee. It divides up this amount into four accounts that vary over four years of funding. 1997 41 Marshall. 1996 CEC.

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

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

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

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

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

.”62 a form of integrated resource planning know as the BRPU. New York. 1997. Colorado. and Wisconsin. according to Jeff Dassovich. Maine. 24. “Retail wheeling.”. were the key retail wheeling champions within the CPUC.has noted. an analyst with CPUC’s Division of Strategic Planning. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU).. ERG Master’s Project Mark Stout 26 . “Discretionary Evolution. Calls for bids have often been oversubscribed by a wide margin. Commissioner Knight. In 1994. Michigan initiated a five year retail wheeling experiment involving two utilities. “DOE Restructuring Bill” Stevenson. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Connecticut. though it urges states to consider retail competition. 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. 1995.63 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.. 355-356.. both appointees of Governor Pete Wilson. “the DOE bill does not mandate retail markets by any date certain. 62 Asmus. Massachusetts. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. the same year that California’s Blue Book proposal was released.61 California Public Utility Commissioners Jesse Knight and Norm Shumway.”. 60 61 Levison.

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

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

small electricity consumers.. municipal electric utilities. as well as independent producers. based on 26 stakeholder interviews [see Appendix B]. as well as considering those used in a status report from the CPUC to the Legislature. since such a broad analysis would be outside of the scope of this project. and the final AB 1890 language.67 As I extended my analysis with a summary of campaign contributions from stakeholders to the conference committee members. 69 CPUC. CPUC. 1995 CPUC Decision. talking with at least one prominent representative from a number of categories: investor-owned electric utilities. Status Report. I first review what the different stakeholder groups wanted and got in both policy outcomes.. Overview of What the Stakeholders Wanted and What They Got Before analyzing who got what they wanted. and a state institutions. ERG Master’s Project Mark Stout 29 . their comments on restructuring filed with the CPUC69. large electricity consumers... the December. 1995.68 I have broken oil and natural gas companies out as a separate category in the tabulations of campaign contributions. Status Report. utility labor unions. environmental advocates. 1995. 1995. independent producers. 67 68 CPUC.. 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. Selection of Stakeholder Groups In selecting stakeholder groups to focus on.. I tried to cover as wide a range of participants as possible.exercise of power from Lukes’ most “radical” view. Status Report.

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

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

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

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

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

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

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

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. When combined with comments filed by that organization early in the restructuring process at the CPUC. as well as the majority of large electricity consumers. nearly half of the representatives say that their organization got most of what it wanted from the December Decision. a slightly smaller number of representatives report a mixed or unclear outcome. As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . Figure 2 shows that all of the investor-owned utilities and independent producers. and the remaining minority claim that their organization got rather little. 1995 Decision. this provides a baseline to determine if they got what they wanted.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding.

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

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

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

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

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

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

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

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

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

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

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

agricultural consumers. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. The August 15 language from a coalition of powerful interests.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. less than two weeks before the Bill would be reported out of committee. renewables with an incremental cost estimate from the BRPU. “We reached a consensus on.. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. EDF.. CLECA. and energy efficiency. funding for public purpose programs: low income. a perusal of legislative language that was proposed during the long.” However.72 At this point late in the game. including IEP. 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. During the Conference Committee hearings. TURN was one of several public interest organizations who opposed the change. As a Sierra Club California legislative chair recounts on meetings between CMA.. Industrial Users.3% of utility revenues. 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 . The 3% [it was actually a cap of 3. 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. RD&D. These got translated into dollars. and the Sierra Club.. reduced funding to an average of 2.1% of IOU revenues.

As he explains.for a static amount of renewables capacity. if they pursue antibusiness policies. 1996 ERG Master’s Project Mark Stout 50 . section 381. They may be allowed to participate in the policymaking process. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. “. subdivision (e) 75 Dryzek. one Senator’s Chief of Staff revealed. To the extent that public policy remains under the sway of state imperatives. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value. then they are punished by “capital strike”. 1996 Conference Committee on Electric Restructuring AB 1890.74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. falling tax revenues... . “Large businesses articulated the issues..” 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. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses.73 However. but outcomes will be systematically skewed against them.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. recession.. As noted earlier.influential players relied on a “fairness and competition” argument. 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.. This had 73 74 California Senate TV video of August 10. States simply must provide the conditions that facilitate capitalist investment and economic growth.. and unpopularity in the eyes of the public.. receiving “symbolic rewards only”. 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. There was no significant opposition to this point during the hearing. public interest organizations have been “co-opted or bought off cheaply”..

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

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

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

500 $78.157 $0 $188.101 $495 $10.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.239 $0 N/A $0 $89. (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 $59.952 $1.745 $68.000 $62.995 $596.496 $8.675 $736.000 N/A $0 $18.308 $516.102 $0 $73.419 $13. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.149 $3.964 $0 $40.125 $0 $4.835 $1.000 $480.405 $0 $722.758 $2.819 $0 $323.752 $0 $51.075 $4.079 $13.500 $190.500 $263.592 $846 $0 ERG Master's Project Mark Stout 54 .675 $384.092 $3.000 $0 $70.479 $2.203.163 $0 $25.516.470 $10.096 $971. 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 $225.166 $5.818 $0 $65.416 $5.112 $3.630 $300 N/A $0 $5.181 $0 $160.031.180 $0 $209.500 $1.079 $950 $14.608 $3.374 $1.000 $681.272 $0 $64.000 $634.S.588 $500 $32.370 $648 N/A $0 $208.500 $533.000 $1.000 $562.595 $0 $21.981 $1.741 $21.110 $34.153 $750 N/A $8.559 $0 $246.

596.081 $1.519 $11.203 $5.291 $3.000 $20.401 $1.362.947 $500 $281. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.319 $0 $10.600 N/A $5.716 $39. (gasoline refining and marketing) Tower Energy Group (oil.000 $524.230.055 $0 $151.000 $526.675 $0 $1.492 $0 $66.167 $500 $25.326 $0 $100.495 $1. natural gas.083 $0 $20. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.099 $12.400 $100 $79.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.003.000 $0 $6.723 $0 $38.665 $0 $262.850 $1.701 $0 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .207 $5.938 $0 $118.000 $0 $15.600 $32.250 $0 $30.271 $0 $12.000 $383.145 $5.203 $0 $30. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.495 $27.551 $12.000 $0 $171.000 $37.197 $500 N/A $2.

500 N/A $0 $211.605 $250 N/A $1.750 $267.000 $35. McQuat.195 $401.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.250 $148.250 N/A $100 N/A $2.626 $0 $8.819 $921.147 $500 $739.331 $0 $97.845 $452.400 $1.229 $100 N/A $1.000 $209. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.286 $3. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.543 $29.750 $418.179 $0 $3.748 $32.450 $566.589 $26.S.917 $300 $5. producers.782 $981.025.060 $6.862 $21.281 $1.611 $1.000 $50.750 $1.032 $0 $172.600 $276.200 $837.717 $500 not applicable $0 $138.000 $33.460 $50.240 $0 $178.000 $85.) 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.159 $3.100 $144. and Hamrin. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.724 $500 not applicable $500 $57. 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.571 $500 N/A $200 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .100 $0 $500 N/A $100 $0 $500 N/A $2. Dist. 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.000 N/A $100 N/A $7.882 $15. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.118 $0 $144. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.017 $1.590 $5. (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) $145.454 $3.500 $29.000 NA $500 $0 $2.905 $30.

natural gas.407 $200 $61.500 $277.721 $748.250 $34.417 $9.885 $300 $207. (gasoline refining and marketing) Tower Energy Group (oil.000 $76.573 $2.500 $251.750 $23.712 $100 N/A $200 $16.500 $47.661.761 $0 $73.177 $300 N/A $0 $29.900 $1.334 $498 $1.950 $3. diesel) Unocal (CMA member) Victory Oil Co.050 N/A $0 $214.989 N/A $9.900 $0 $21.521 $1.511 $1.050 $949.650 $3.532 $4.209.181 $1. Texaco Tidelands Oil Tosco Corp. (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.800 not tracked $3.438 $500 N/A $0 $1.000 $22.000 $65. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.000 $500 $456.995 N/A $100 N/A $0 $3.754 $4.643 $1.622 $67.705 $19.521 $14.245 $335. (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.072 $918.636 $0 $103.960 $2.495 $22.384 $2.878 $12.296 $800 $25.780 ERG Master's Project Mark Stout 57 .137 $550 N/A $5.689 $2.750 $37.000 $233.016 $1.090 $749 $38.478.1996 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.138 $1.521 $0 N/A $50 $87.347 $9.861 $1.925 $0 $44.958 $2.

250 $21. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1. of California.000 $2.066 $500 N/A $250 N/A $22.462 $500 $14.585 $33.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .068 $14.000 $700 $117.448 $424.462 $208.790 $100 $14.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $15.066 $500 $21.438 $4.

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

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

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
Anderson, Douglas D., Regulatory Politics and Electric Utilities: A Case Study in Political Economy, Boston: Auburn House Publishing Company, c1981. Asmus, Peter. “Money, Politics and California Electric Restructuring”, August, 1996. Asmus, Peter. “Retail wheeling : California plans a grand experiment in electricity reform, but will it mean that clean power is scrapped for dirty?”, California Journal, Vol. 26, no. 4 (Apr. 1995). Asmus, Peter. “Who are the De-Regulation Advocates? Profiles of California’s Largest Electricity Consumers”, 1995. Asmus, Peter; Ed Smeloff. Reinventing Electric Utilities, Covelo, California: Island Press, c 1997. Blackwell, Savannah. “The Shame of San Francisco”, San Francisco Bay Guardian, January 29, 1997, 14-18. Boot, Max, “California’s Governor Isn’t Plugged Into Deregulation Debate”, Wall Street Journal, September 5, 1995, A15(West). Borenstein, Severin; Bushnell, James; Kahn, Edward; Stoft, Steven, Market Power in California Electricity Markets, Program on Workable Energy Regulation, December, 1995. Bryner, Gary C., Blue Skies, Green Politics: the Clean Air Act of 1990, Washington: CQ Press, c1993. California Energy Commission, “RD+D and Electric Utility Restructuring”, Draft Energy Development Volume I, Part II. California Energy Commission, California Historical Energy Statistics, P300-95-020, December 1995. California Energy Commission, Policy Report on AB 1890 Renewables Funding, P500-97-002, March 1997.

ERG Master’s Project

Mark Stout

61

California Governor’s Office, “Wilson Signs Historic Legislation Restructuring Electric Industry”, Governor’s Office Press Release, September 23, 1996. California Municipal Utilities Association, Highlights of Restructuring California’s Electric Utility Industry, Knowledge Mapping Systems, Sacramento, CA. California Public Utilities Commission, Division of Strategic Planning, California’s Electric Services Industry: Perspectives on the Past Strategies for the Future, filed February 3, 1993, referred to as the “Yellow Book”. California Public Utilities Commission, Consumer Choice Through Direct Access: Charting A Sustainable Course To A Competitive Electric Services Industry, filed May 24, 1995, referred to as the “Direct Access Proposal”. California Public Utilities Commission, Electric Restructuring Decision, D.95-12-063, filed December 20, 1995. California Public Utilities Commission, “Governor Signs Assembly Bill 1890, Restructuring California’s Electric Industry”, CPUC Press Release, September 23, 1996. California Public Utilities Commission, Majority Proposal, filed May 24, 1995, referred to as the “PoolCo Proposal”. California Public Utilities Commission, Order Instituting Rulemaking and Order Instituting Investigation: on the Commission’s Proposed Policies Governing Restructuring California’s Electric Services Industry and Reforming Regulation, R. 94-04-031 and l. 94-04-032, filed April 20, 1994, referred to as the “Blue Book”. California Public Utilities Commission, Roadmap Decision - Procedural Plan to Implement the December 20, 1995 decision, D. 96-030-022, filed March, 1996. California Public Utilities Commission, Status Report on Restructuring California’s Electric Services Industry and Reforming Regulation, Prepared in Response to Assembly Concurrent Resolution No. 143, Volumes 1 & 2, January 24, 1995. California Public Utilities Commission RD&D Working Group, “Working Group Report on Public Interest RD&D Activities”, filed September 6, 1996. California Public Utilities Commission Renewables Working Group, “Renewables Working Group Report to the CPUC”, August, 1996. California Secretary of State, Lobbying Expenditures and the Top 100 Lobbying Firms, March, 1997. California State Legislature, Assembly Bill 1890, passed by Legislature August 31, 1996, approved by Governor September 23, 1996, filed with Secretary of State September 24, 1996. Carter, Sheryl; Cavanagh, Ralph, memo: “California Restructuring Legislation”, Natural Resources Defense Council, September 19, 1996. Cavanagh, Ralph. “Energy-Efficiency Solutions: What Commodity Prices Can’t Deliver”, Annual Review of Energy. 1995., c1995. Cavanagh, Ralph. “Global Warming and Least-Cost Energy Planning”, Annual Review of Energy. 1989., c1989. Cavanagh, Ralph. “Don't be shocked: we're for competition.” Wall Street Journal (Fri, March 31, 1995):A13(W), A13(E).

ERG Master’s Project

Mark Stout

62

Cavanagh, Ralph. “Electricity shopping can be a bad deal.” New York Times v143, sec3 (Sun, June 12, 1994):F11(N), F11(L). Cavanaugh, Herbert A. “The IRP puzzle: Do the pieces fit in a competitive environment?”, v208, n9 (Sep 1994):23-27. Cook, James. “Camel in the tent.”, Forbes v147, n6 (March 18, 1991)78-79. Davis, David Howard, Energy Politics, 4th ed., New York: St. Martin’s Press, c1993. Dryzek, J. S. “Political Inclusion and the Dynamics of Democratization”, American Political Science Review, 90(1), September, 1996. Ferguson, Tim F., “California Toys with Live Wires”, Wall Street Journal (Tue, March 21, 1995):A15(W). Flavin, Christopher, and Lenssen, Nicholas. “Reshaping the Power Industry”, State of the World 1994, New York: W.W. Norton & Company, c1994. Framework Parties, “Joint Motion for Consideration of Framework for Restructuring in the Public Interest and for Further Public Process; Joint Response to Memorandum of Understanding, submitted to CPUC 10/95. Gilbert, Richard J.; Henly, John E.; “The Value of Rate Reform in a Competitive Electric Power Market”, Regulatory Choices : A Perspective on Developments in Energy Policy, edited by Richard J. Gilbert. Berkeley : University of California Press, c1991. Glaser, Barney G. Theoretical Sensitivity, Mill Valley, California: The Sociology Press, 1978. Glaser, Barney G.; Strauss, Anselm L. The Discovery of Grounded Theory, Chicago: Aldine Publishing Company, 1967. Gordon, Richard L. “Perspectives on Reforming the Electric Utility Industry”, Electric Power: Deregulation and the Public Interest, Edited by John C. Moorehouse, San Francisco: Pacific Research Institute for Public Policy, c1986. Goventa, John. Power and Powerlessness, Urbana, Illinois: University of Illinois Press, 1980. Haddad, Brent M. “Federal Regulation Overview”, for the ER 251 Seminar, Nov. 1992. Hempling, Scott. “Electric Utility Holding Companies: The New Regulatory Challenges”, Land Economics v71, n3 (August, 1995):354. Hoffman, Matthew C. “The Future of Electricity Provision”, Regulation, 1994, no 3. Hogan, William H. Comments on Electric Industry Restructuring, before Pennsylvania House of Representatives Consumer Affairs Committee, July 11, 1994. Kansas, Dave. “For electrical utilities, the future is less than bright; emboldened, some users push for rate cuts, others for 'retail wheeling'.” Wall Street Journal (Thu, Feb 10, 1994):B4(W), B3(E). Kozloff, Keith Lee, Dower, Roger C., A New Power Base: Renewable Energy Policies for the Nineties and Beyond, World Resources Institute, c1993. Lau, Edie. “Full speed ahead on electricity free-for-all”, Sacramento Bee, May 7, 1997. Electrical World

ERG Master’s Project

Mark Stout

63

April 21. A1. Parrish. New York Times. London: Macmillan. Matthew. POWER Working Group on Electric Industry Restructuring and Regulatory Reform. Dennis J. “DOE Restructuring Bill”. “Discretionary evolution: restructuring the electric utility industry. S. Boston: Kluwer Academic Publishers. 1995.A. 1. ORNL/CON-383. A Reader’s Guide to the Blue Book: Issues in California’s Electric Industry Restructuring and Regulatory Reform. UC-350. Levison. Savage. JE. Lukes. 1997. September 20. Eric. Scheuer. Jonathan.” Los Angeles Times v112 (Thu. San Francisco Chronicle. Energy Efficiency. Smith. August 1996. memo: “Summary of California's Electric Restructuring Bill”. et al. LBL-35376. Penn. California Journal.. “Electricity Monopoly Ends Jan. 1992):19.. Mydans. Market Failures and Government Policy. 1974. September 11. Lee. 1996. MOU Parties. “California Nears Competition Among Electricity Providers”. Memorandum of Understanding. Marshall. Critical Mass Energy Project elec-list email list. 1995. Levine. Oak Ridge. Land Economics v71. Sirard. 1995):354. 1997. June. Starting next year. The Center for Energy Efficiency and Renewable Technologies. Koomey. Lara. Electric utility competition. May 7. 1997. Seth.Lau. Edie. 1996. Power: A Radical View. Critical Mass Energy Project elec-list email list. Lara. Thomas C. “Restructuring Hearings on the Road”. American Wind Energy Association. 1993):D2. v24. n3 (August. “Uncertain road ahead for utilities”. “Leadership on energy policy isn't found in Washington. c1993. A9. March 31. E. you can pick your provider. Natural Resources Defense Council 197--1995”. Denver: National Conference of State Legislatures.. Feb 25. A Report From the California Regulatory Research Project. 1993): 33. n12 (December. “Twenty-Five Years Defending the Environment. Michael. Levison. Gorak. Natural Resources Defense Council. Oct 18. Regulating Power: The Economics of Electricity in the Information Age. 1994. Sikkema. A1. AH.” Los Angeles Times v109 (Thu. Ray. MD. PUC rules”. Oct 7. Customer Driven Markets for Renewably Generated Electricity. 1995. James H. 1990):A1. Kari J. Stevenson. Sacramento Bee. TN: Oak Ridge National Lab. Pechman.. ERG Master’s Project Mark Stout 64 . Brown. “Law generates push for gas-fired power plants”. Rader. n62 (Tue.”. “Deregulation Derby”. David W. Hirst. 1994. Rodney E. Sacramento Bee.” Christian Science Monitor v84. Nancy.. October 20. JG. Program on Workable Energy Regulation. Sanstad. “Edison wins PUC approval for $90-million pilot program. McMahon. J. “State unveils renewable energy plan. Patrick. Carl. March 1994. January 22. Jack.

S.” Wall Street Journal (Mon. 1994):C6(L). 1992):B6E(E). “A new mantra from utility companies: use more electricity. vol. Wagner. May 20. 1993):D2. consumers join utilities against retail ‘wheeling’. Jonathan.” New York Times v142. Congress. David C. Ralph.” Los Angeles Times v113 (Wed.. One Hundred Fourth Congress. F11(L). Wiser. 1997. September. July 8. Journal of Economic Issues v28. Washington : U.Stevenson. California Renewable Energy Policy and Implementation Issues -An Overview of Recent Regulatory and Legislative Action. Steve. “PSE&G is cleared to spend $100 million on conservation plan. February 15. Committee on Energy and Natural Resources. ERG Master’s Project Mark Stout 65 . David.” New York Times v141 (Wed. Matthew L. Wald. Nucleus. 1990):25(L). Jan 3.” Wall Street Journal (Thu. Charles. num. Ernest Orlando Lawrence Berkeley National Laboratory. UC-1321. C17(E). 1995. Congressional Quarterly. March 11. 17. “Congress Looks West for Lesson In Utility Deregulation” February 15. 1992):3. 1994):D2. Wooley. April 7. Matthew L. “Environmentalist Defends His Stance” Congressional Quarterly.” New York Times v139. Pickle. “The cooperative way to save energy. United States. May 19. Goldman. May 10. n2 (June. Matthew L. Weisman. March 9. “Power authority to offer energy-saving plan. first session . Wald.” New York Times v142 (Sat. Weisman. n119 (Thu. 2. col 2. Jonathan. 1993):F11(N). LBNL-39247. 1994):403. Rewriting the Rules. “Primed for Congressional Battle” Congressional Quarterly.O. conservation efforts pay. Ryan. Wald. sec1 (Sun. 416. Oct 19. D3(L). Wald. Rodney E. Oct 17. 1997. Cavanagh. 418. summer 1995. “Labor. Walters.. United States Senate. July 1. “Edison launches strategy to commercialize solar energy.” New York Times v143 (Thu. 1993):A5(E). Senate. Janet S. “Social Goals and Partial Deregulation of the Electric Utility Industry”. 412-419.” Los Angeles Times v112 (Thu. Jonathan. Weisman. “Utilities go to the source for efficient refrigerator. 1992):25(N).P. G.000 utilities in US. 1996. “For 2. sec3 (Sun. 1997.” Wall Street Journal (Wed. 1993):C18(W). FERC electric utility restructure : hearing before the Committee on Energy and Natural Resources. “Firm seeks standard tariff for transmitting electricity.. Matthew L. “PSE&G's energy-saving plan.” Christian Science Monitor v84. 1992):A1(N). “Utilities offer $30 million for a better refrigerator. 43(L). February 15. May 14.

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 .e. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i.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. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. CPUC vs.

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

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

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

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

How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. We were very opposed to the BRPU. if you are a broker. and got it struck down. 1995 Decision? The PUC was on the right track. so we would have to buy energy or credits. but are not viable with competition. with the exception of the legislation’s mechanism for a rate reduction. except for electricity purchases from Mexican geothermal generators.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. 1996. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. When Tom Page came in as CEO in 1981. we had the highest rates in the nation. We went to FERC. AB 1890 mirrors the Decision in many ways.84] SDG&E does not have any renewables. they did not get there by investing in high cost renewables. it would be difficult to get 5% renewables. everyone should pay. SDG&E wanted to become the lowest priced California IOU. High priced renewables are OK if you are not moving to a competitive future. 84 CPUC Renewables Working Group. SDG&E was a supporter of the PoolCo market structure along with Edison. Throughout the ‘70s. The lucky Arizona utilities went with coal. We were strongly opposed to the RPS. This would put us at a competitive disadvantage compared to PG&E and Edison. ERG Master’s Project Mark Stout 71 . [The CPUC’s proposal in the December Decision would have required roughly 10% of all retail sales to be backed up by tradable credits for renewables. Also.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

S. The overwhelming majority of our activity has been on traditional rate cases. electricity92] mentioned retail wheeling to the CPUC.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We sought retail wheeling. Much of that related to the MOU. The December Decision had aspects which gave us pause... this sent the Commissioners scurrying. 1995. resulting in the PG&E rate restructuring settlement. 1995 Decision? Quite a lot in terms of basic concepts. The draft Decisions [May. Retail wheeling served as a muted backdrop. This was a new element which brought a new dimension: a rate freeze with a well- 92 Asmus. In 1986 when ELCON [the Electricity Consumers Resource Council.” ERG Master’s Project Mark Stout 99 . with Direct Access pushed out on the horizon and tied to a range of contingencies. The work between May and September was critical. representing 24 companies that consume over 4% of U. there was no forum in which to advocate for it. but in general was a step forward. 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 development of an option that would permit industrial customers to look somewhere else than the UDC for electricity generation. “Retail wheeling:. 1995 CPUC proposals] were a major disappointment because of the dominance of PoolCo. This was not perceived as realistic before the Yellow Book. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The element at the core of AB 1890 came about as the result of informal negotiations between the December Decision and AB 1890. Between May of 1995 and the Decision. the parties were involved in many conversations.

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

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

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

1995 Decision? The institutions in the Decision were designed with enough flexibility to give the opportunity for lower rates. We also wanted the separation of the ISO and PX. given the PoolCo structure in the May. or over time? CLECA’s positions were consistent. but wanted multiple ways to purchase electricity. even over time.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. ERG Master’s Project Mark Stout 103 . but we came closer. On this question. but would trade off short term for long term gains. I suggest you speak with Barbara Barkovich. there was not as much coordination or compromise amongst stakeholders. The MOU set the tone for that. The defining of industry structure for competition to drive prices down was important. Prior to this proceeding. 1995 CPUC majority proposal. we met directly with Commissioners. I am unsure of whether it will happen. Barbara Barkovich also took part on numerous full panel hearings before the Commissioners. 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. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? With regards to market structure. They were based on a consistent thread of how to organize a market. We did not have the expectation that it would happen tomorrow. There was a lot of compromise. CLECA did not want a single market. It used to be that the IOUs were driving everything. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. nothing changed significantly from the CPUC Decision.

CLECA wanted to make sure unbundling and stranded cost recovery were done with no cost shifting. as early as our comments on the Yellow Book in the Fall of 1993. Rates are very high in California. 1995 Decision? Competition was there. I spoke with Barbara to build on the base of insights into CLECA’s positions that Dianne Hawk provided. It seemed premature before then.Interview #2 Barbara Barkovich is an Energy and Utility Regulatory Consultant with Barkovich and Yap. We did not want customers to pay any more than they had been. extending them to include more of the AB 1890 process. based on the concern that stranded cost recovery would be shifted onto industrial customers. which is why the MOU happened. but no detail. Inc.California Large Energy Consumers Association . This was a big objective for the legislation. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? CLECA was one of the first parties to advocate retail wheeling. and we see competition as the only way to bring them down. Our members are used to multiple suppliers for everything else. it was very much influenced by the MOU. We had experienced with the regulatory proceedings in the past. they are seeking the same for electricity. avoiding cost shifting. The May CPUC Proposal was lacking. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. There was some language about ERG Master’s Project Mark Stout 104 . representing CLECA throughout California’s electric utility restructuring process..

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

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

ERG Master’s Project

Mark Stout

107

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

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

93

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

ERG Master’s Project

Mark Stout

108

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

ERG Master’s Project

Mark Stout

109

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

orderly development of energy conservation and clean power resources. and UCS. The environmental groups and consumer groups such as TURN worked well together. to practice and promote the responsible use of the earth’s ecosystems and resources. “a non- profit public education organization dedicated to the sustained. not turning it into a media tank battle. the Sierra Club. as well as members of the energy efficiency and renewable energy industries. stating that although there were some divergences between the Sierra Club and CEERT positions. we could have killed it. Critical stakeholders who could have derailed did not. 97 Sierra Magazine. We were in constant contact. these positions are substantially similar to those of CEERT. NRDC. It was strong going in and going out of the process. May/June 1997.became more supportive. 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. one on one. Campaign contributions were meaningless. It was a consensus-based process. ERG Master’s Project Mark Stout 127 . enjoy.”97 CEERT is. to educate and enlist humanity to protect and restore the quality of the natural and human environments. “To explore. If environmental groups collectively walked.” CEERT’s members include EDF. and protect the wild places of the earth. Rich spoke as a representative of Sierra Clubs positions. The Sierra Club is a national. page 4. During our interview. non-profit organization chartered. NRDC’s relationship with the IOUs was important.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 Coalition of California Utility Employees .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 Natural Resources Defense Council .Interview #1 California Large Energy Consumers 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 #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 #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #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 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .

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

000 $0 $0 ERG Master’s Project Mark Stout 162 .500 $22.000 $495 $950 $696 $2.000 $7. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $3.000 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.500 $1.000 $1.191 $2.495 $10.000 $500 $1.000 $3.495 $7.995 $300 $12.000 $2.995 $21.000 $4.000 $2.800 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.429 $498 $1.896 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.495 $1.

995 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.995 $1.990 $1.460 $200 $500 $750 $2.000 $2.495 $4.Table 2: Assemblymember Jim Brulte. (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.017 $749 $750 $3.000 $1.500 $800 $498 $200 $9. 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 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .750 $4.500 $1.000 $3.250 $2.500 $1.500 $6.000 $1.000 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.500 $47.511 $3.000 $10.995 $14.000 $8.

Table 3: Senator Steve Peace. totaling $101.000 $2.750 $2. CFEE is a “non-profit. Sweden. and Privatization” visiting London.000 $3.500 $1. as well as an event.750 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. 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. Chevron treated Brulte to two meals. Conservation.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. From 3/28/96 to 4/8/96.750 $750 $1. Mobil treated Brulte to a $60 event in 1996. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Paling in comparison. and Budapest. by the California Foundation on the Environment and the Economy.000 $2.000 $1. Not to be outdone. 1996. 4 ERG Master’s Project Mark Stout 164 .490 “Travel project to Europe on Electric Restructuring.000 $750 $0 $0 103 Asmus.250 $500 $1. Brulte was taken on a $7.000 $1.

815 $750 $6.572 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.100 $2.500 $8.500 $3.250 $7. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $1.050 $3.000 $6.115 $18.000 $750 $750 $750 $1.000 $4.250 $2.500 $16.450 $7.000 $300 $1.Table 4: Senator Steve Peace.250 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $750 $500 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $2.072 $2.000 $500 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.

1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. while Edison treated him to five meals and a sports event. In 1996. as well as chair of the Senate Energy and Utilities Committee. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. 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. In 1995.000 $5.100 $2. SDG&E had Peace out to six meals. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.450 166 ELECTRIC/GAS $6. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1.000 Table 6: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Southern California Edison was granted a high level of access. Table 5: Senator Byron Sher. taking Steve to 11 meals. IEP made a gift of $241 for his speech at a conference.900 .

Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . Brotherhood of Electrical Workers (various $9.000 $500 $500 $9.000 locals) Southern California Pipe Trades United Assoc.500 Int.882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.482 $100 $1. (geothermal) Colmac Energy Inc. and Hamrin.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. McQuat. (biomass) Edson + Modisette (lobbyist for indep.600 $13. EVs) Hansen.000 $100 producers. $2. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.100 $500 $2.000 $500 $1.

000 Large Energy Consumers $3.500 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 $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 (tire $1.000 $100 $100 $500 $1.

462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . (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.585 $100 $500 $2. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.Tosco Corp. of California.000 $300 $300 $22.448 $14.000 $700 $4.

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. Exxon. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. NARUC treated Sher to a two day trip to DC for another meeting.300 $500 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 . and GE.400 $750 $150 $1. Mobil.000 in each of Amoco.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. totaling $758. Sher received no other gifts that year from energy utility stakeholders. totaling $2608. In 1996. Table 7: Senator Bill Leonard. Sher holds over $100.000 $1.500 $300 $0 $0 $2.

extending his stay from 12/8/96 to 12/13/96.000 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. saving up for a $77 dinner with head lobbyist Bob Foster. SCE treated Leonard to dinner and lodging for Legislative Ski Day. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. 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.080 $10.650 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.Table 8: Senator Bill Leonard.500 $500 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $5.650 $500 $1.000 $500 $500 $4.000 $2. Edison again ERG Master’s Project Mark Stout 171 .730 $2. for a paltry $20.500 $150 $500 $3. While the Senator was there. The Pacific Rim Conference of Seattle.000 $1. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.

) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .000 $1.600 $1. for the modest tab of $56.250 $1.000 $1. including lunch with Bob Foster. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. ARCO treated Leonard to a $19 meal at a reception.000 $750 $750 $650 $150 $500 $3. PG&E took Leonard out to a Kings game. Table 9: Assemblymember Mickey Conroy. paying $44 for two meals and lodging.600 $750 $750 $500 $1. They also had Leonard out for two meals in Sacramento.had Senator Leonard out for Legislative Ski Day.750 $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 California State Pipe Trades Council PAC Int. $7.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $500 $750 $250 $500 $2.Table 10: Assemblymember Mickey Conroy.600 $500 $1. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. 1996.000 $500 $2.500 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $3. and Inner Mongolia.000 $5. 4 ERG Master’s Project Mark Stout 173 .700 $500 $300 $550 $2. CFEE is a “non-profit. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.700 $750 $450 $250 $250 $1.050 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. two meals for $44. PG&E treated him to a basketball game with $51 tickets. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $2.600 $3. and to 104 Asmus.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. Shanghai.

ERG Master’s Project Mark Stout 174 . $10 in candy.make sure Conroy kept a sweet spot in his heart for them. and Westinghouse Electrical. and less than 10.000 each in Edison. Chevron took Conroy out for two business meals. Kansas City Power & Light. General Electric. Pacificorp. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. four rounds of “refreshments” for $30. In terms of investment. After such a busy social calendar in 1995. Edison wined and dined the Assemblymember with four meals at $134. and $25 of cookies and candy. costing $99.000 in Orange & Rockland Utilities. SDG&E. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. with investments of greater than $10.

Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.250 $1.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .675 $2.000 $1.750 $1.750 $2.750 $4.000 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.000 $1.175 $500 $1.750 $1.Table 11: Assemblymember Diane Martinez.

(geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $5.Table 12: Assemblymember Diane Martinez.000 $500 $500 $5. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.500 $500 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $7. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. Dist.750 $1.500 $1.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $1.000 $500 $1.500 $6.000 $4.000 $1.000 $4.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $500 $3.250 $1.500 $1.000 $1.

600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.208 $0 $0 $1.000 $500 $500 $1.100 $100 $1.850 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.467 trip to Northwestern University to discuss the deregulation of public utilities.500 $1.600 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.058 $500 $500 $1.000 $8. the Illinois Energy Association flew Martinez out for a $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.500 $1.Table 13: Assemblymember Steve Kuykendall. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1. natural gas. ERG Master’s Project Mark Stout 177 . 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.900 $3.

ERG Master’s Project Mark Stout 178 . Conservation. and Budapest. and Privatization” visiting London.500 $1.000 $500 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. diesel) Unocal (CMA member) Victory Oil Co.250 $100 $500 $35. Kuykendall was taken on a $7. However.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.374 $500 $2.000 $2.254 $200 $500 $4.350 $500 $1.443 $6.000 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.374 $4. From 3/28/96 to 4/8/96.000 $19.490 “Travel project to Europe on Electric Restructuring.000 $1.500 $0 $1. natural gas. Kuykendall’s social calendar was destined to pick up in 1996. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $1. Sweden.Table 14: Assemblymember Steve Kuykendall.

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

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

1995. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Chevron. Brussels. Conlon was taken on a $7. was very interested in California moving to the UK-style. and Paris. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. utility and General Electric stock. He does own less than $10. wholesale PoolCo model. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference.000 in each of Montana Power Company and Exxon stock. Unocal. and Schlumberger oilfield services stock. PG&E had him out to three meals for $71.167 junket visiting London. and environmental groups to discuss the British experience with deregulation of electricity. to meet with CEOs of the electricity industry.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94.000 in each of Central & Southwest Corp. regulators. and less than $10. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. one of CFEE’s funders. He left office on February 23. ERG Master’s Project Mark Stout 181 . by the California Foundation on the Environment and the Economy. Edison. Jr. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. government ministers. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. spending $258. In 1995. He does own more than $10. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.

Sign up to vote on this title
UsefulNot useful