Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

“The Electric utility is changing. But unlike the evolution of species, conscious collective choice can influence the evolutionary drift of the industry.” Rodney E. Stevenson and David W. Penn (1995)

Table of Contents
INTRODUCTION................................................................................................................................................ 4 OBJECTIVES ...................................................................................................................................................... 5 METHODOLOGY .............................................................................................................................................. 5 HISTORY OF ELECTRIC UTILITY INDUSTRY REGULATION................................................................. 8 THE BIRTH OF STATE PUBLIC UTILITY COMMISSIONS................................................................................................ 8 FEDERAL POWER ACT OF 1935................................................................................................................................. 9 PUBLIC UTILITY HOLDING COMPANY ACT OF 1935................................................................................................... 9 PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 ............................................................................................ 10 ENERGY POLICY ACT OF 1992 ............................................................................................................................... 10 CPUC “BLUE BOOK” PROPOSAL............................................................................................................................ 12 FERC MEGANOPR .............................................................................................................................................. 13 CPUC MAY 1995 DRAFT PROPOSALS AND STAKEHOLDER RESPONSES .................................................................... 14 CPUC DECEMBER 1995 DECISION AND CALIFORNIA ASSEMBLY BILL 1890............................................................. 17 RECENT STATE AND FEDERAL ACTIVITY ................................................................................................................ 20 FACTORS BEHIND THE DRIVE FOR DEREGULATION........................................................................... 21 LARGE CONSUMER PRESSURE ................................................................................................................................ 21 TECHNOLOGY ....................................................................................................................................................... 23 ECONOMIC RENT ................................................................................................................................................... 23 ACADEMICS & IDEOLOGUES .................................................................................................................................. 23 EXISTING COMPETITIVE FORCES ............................................................................................................................ 24 OTHER INDUSTRIES AND COUNTRIES ...................................................................................................................... 24 FEDERAL REGULATORY POLICY ............................................................................................................................. 24 STATE REGULATORY POLICY ................................................................................................................................. 26 ANALYSIS ......................................................................................................................................................... 27 SELECTION OF STAKEHOLDER GROUPS ................................................................................................................... 29 OVERVIEW OF WHAT THE STAKEHOLDERS WANTED AND WHAT THEY GOT ............................................................. 29 STAKEHOLDER INTERVIEWS CLUSTER ANALYSIS .................................................................................................... 36 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 40 Officeholder Staff Comments on Who Got What They Wanted and Why:.......................................................... 41 Synthesis of Stakeholder & Staff Comments on Who Prevailed, and Why:........................................................ 43

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Officeholder Staff Comments on Who Got Rolled Over, and Why: ................................................................... 44 Synthesis of Stakeholder & Staff Comments on Who Got Rolled, and Why:...................................................... 46 RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS ........................................................... 52 CONCLUSION................................................................................................................................................... 60 BIBLIOGRAPHY .............................................................................................................................................. 61 APPENDIX A: SEMI-STRUCTURED INTERVIEW QUESTIONS............................................................... 66 STAKEHOLDER INTERVIEWS ................................................................................................................................... 66 OFFICEHOLDER STAFF INTERVIEWS ........................................................................................................................ 66 APPENDIX B: STAKEHOLDER INTERVIEWS............................................................................................ 67 INVESTOR-OWNED ELECTRIC UTILITIES ................................................................................................................. 67 Pacific Gas & Electric..................................................................................................................................... 67 San Diego Gas and Electric ............................................................................................................................ 70 Southern California Edison ............................................................................................................................. 74 MUNICIPAL ELECTRIC UTILITIES ............................................................................................................................ 76 California Municipal Utilities Association - Interview #1 ................................................................................ 76 California Municipal Utilities Association - Interview #2 ................................................................................ 79 Sacramento Municipal Utility District ............................................................................................................. 80 UTILITY LABOR UNIONS ........................................................................................................................................ 85 Coalition of California Utility Employees - Interview #1 ................................................................................. 85 Coalition of California Utility Employees - Interview #2 ................................................................................. 86 INDEPENDENT PRODUCERS .................................................................................................................................... 88 American Wind Energy Association................................................................................................................. 88 Independent Energy Producers........................................................................................................................ 92 LARGE ELECTRICITY CONSUMERS .......................................................................................................................... 96 Agricultural Energy Consumers Association.................................................................................................... 96 California Industrial Users.............................................................................................................................. 98 California Large Energy Consumers Association - Interview #1 .................................................................... 102 California Large Energy Consumers Association - Interview #2 .................................................................... 104 California Manufacturers Association ........................................................................................................... 107 SMALL ELECTRICITY CONSUMERS........................................................................................................................ 111 Latino Issues Forum ...................................................................................................................................... 111 The Utility Reform Network ........................................................................................................................... 114 ENVIRONMENTAL ADVOCATES ............................................................................................................................ 119 Environmental Defense Fund ........................................................................................................................ 119 Natural Resources Defense Council - Interview #1 ........................................................................................ 122 Natural Resources Defense Council - Interview #2 ........................................................................................ 125 Sierra Club/Center for Energy Efficiency and Renewable Technologies ........................................................ 127 Union of Concerned Scientists....................................................................................................................... 133 STATE INSTITUTIONS ........................................................................................................................................... 137 California Energy Commission...................................................................................................................... 137 University of California, California Institute for Energy Efficiency ............................................................... 141 ANONYMOUS STAKEHOLDER COMMENTS ............................................................................................................. 144 Anonymous Comments #1: Parties who could have improved their performance ........................................... 144 Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D............................................... 144 APPENDIX C: OFFICEHOLDER STAFF INTERVIEWS ........................................................................... 146 California Public Utilities Commission ......................................................................................................... 146 Legislative Conference Committee, Office of Senator Steve Peace ................................................................ 148 Legislative Conference Committee, Office of Senator Byron Sher.................................................................. 152 Legislative Conference Committee, Office of Senator Bill Leonard ............................................................... 153

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Anonymous Officeholder Staff Interview #1 ................................................................................................... 155 Anonymous Officeholder Staff Interview #2 ................................................................................................... 156 APPENDIX D: CLUSTER ANALYSIS OF STAKEHOLDER INTERVIEW DATA................................... 159 APPENDIX E: RESTRUCTURING STAKEHOLDER CAMPAIGN CONTRIBUTION/GIFT ANALYSIS DETAIL............................................................................................................................................................ 162 Table 1: Assemblymember Jim Brulte, 1995 Campaign Contributions........................................................... 162 Table 2: Assemblymember Jim Brulte, 1996 Campaign Contributions........................................................... 163 1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte ..................................................... 164 Table 3: Senator Steve Peace, 1995 Campaign Contributions ....................................................................... 164 Table 4: Senator Steve Peace, 1996 Campaign Contributions ....................................................................... 165 1995/1996 Stakeholder Gift Information for Senator Steve Peace.................................................................. 166 Table 5: Senator Byron Sher, 1995 Campaign Contributions......................................................................... 166 Table 6: Senator Byron Sher, 1996 Campaign Contributions......................................................................... 166 1995/1996 Stakeholder Gift Information for Senator Byron Sher................................................................... 170 Table 7: Senator Bill Leonard, 1995 Campaign Contributions ...................................................................... 170 Table 8: Senator Bill Leonard, 1996 Campaign Contributions ...................................................................... 171 1995/1996 Stakeholder Gift Information for Senator Bill Leonard................................................................. 171 Table 9: Assemblymember Mickey Conroy, 1995 Campaign Contributions.................................................... 172 Table 10: Assemblymember Mickey Conroy, 1996 Campaign Contributions.................................................. 173 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy.............................................. 173 Table 11: Assemblymember Diane Martinez, 1995 Campaign Contributions ................................................. 175 Table 12: Assemblymember Diane Martinez, 1996 Campaign Contributions ................................................. 176 Table 13: Assemblymember Steve Kuykendall, 1995 Campaign Contributions............................................... 177 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez ............................................. 177 Table 14: Assemblymember Steve Kuykendall, 1996 Campaign Contributions............................................... 178 1995/1996 Stakeholder Gift Information for Assemblymember Steve Kuykendall........................................... 178 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler................................................ 179 1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon ................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight, Jr. ................................................ 181 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway .................................................. 181 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper .................................................... 181 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque ..................................................... 181

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

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

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

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

Status Report. “alternative frameworks based on ‘let the market decide’”. which had been dubbed the MegaNOPR. which requires the CPUC to engage in a series of public hearings. 1994.scheduled to be issued by the CPUC in August of 1994. were concerned about the content and timetable of this proposal. FERC released a dual-issue Notice of Proposed Rulemaking.19 Since the release of the Blue Book proposal. numerous other states have also proposed electric utility deregulation. 1995. 1. In their place.20 Many stakeholders. The first issue addressed open access to the transmission system 19 20 CPUC. and asserted that. 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. This led to the passage of Assembly Concurrent Resolution 143.21 This stakeholder response. 1994. ERG Master’s Project Mark Stout 13 . where CPUC President Fessler and Commissioner Knight testified on their proposal. and documentation resulting in a report back to the Governor and Legislature by January 31. evidentiary hearings. coupled with a lack of prior coordination with the state Legislature. pushing back their goal for a policy decision until September of 1995. “a vibrant market exists for energy efficiency services”.22 FERC MegaNOPR In March of 1995. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. For instance. including private and public-interest organizations. Blue Book. This process tempered the CPUC’s frenetic timetable. Blue Book. the CPUC proposed. 21 CPUC. 1995. 1994. such as “green pricing”. where customers voluntarily pay more to promote renewables. Wagner.

1995. 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. Status Report. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . scheduled and dispatched by an independent system operator (ISO). which is usually considered state jurisdiction. the California Commissioners released two draft proposals for pursuing rate deregulation in California.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. The majority proposal known as PoolCo. Asmus and Smeloff. Retail contracts with a particular generator could be handled with separate “contracts for differences”. favored by CPUC President Fessler and two other Commissioners. is based on a common wholesale power pool. 1997. in May of 1995.for wholesale transactions.24 22 23 CPUC. 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. 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. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. meaning the utilities could not discriminate against other electricity suppliers.

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

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

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

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

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

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

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

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

. Gordon.”. but now had to pay higher rates. 356-357. Hoffman 55-62. 150. 1994. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. ERG Master’s Project Mark Stout 23 . 51 Stevenson. 52 Gilbert. enabling increased competition.intense pressure from large industrial customers. greatly increasing opportunities for bulk power sales. 50 Flavin and Lenssen. who in the past had enjoyed privileged status with cheap rates.. 1993. basing their arguments on welfare economics as applied to the changing electric utility landscape.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 447-475. 1993. “Discretionary Evolution. 195. 84-108.50 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. Davis.

Many electrical applications have substitutable fuels... over half of new U.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. “Discretionary Evolution. the camel of competition forced its nose under the monopoly tent.S. and it was only 53 54 Stevenson. 1994.53 allowing a policy trend that emphasizes markets rather than social welfare..56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. generating capacity has been supplied by alternative. competition takes on several forms in this market. as well as those on the border of service districts. There is significant competition in the wholesale electric generation market. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. 357.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway.”. 355-356. such as natural gas for space heating. Utilities compete for industrial customers who are relocating. Stevenson. “With this act.”.54 Since 1992. ERG Master’s Project Mark Stout 24 .. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. 55 Flavin and Lenssen. “Discretionary Evolution. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. non-utility providers.

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

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

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

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

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

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

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

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

SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. They support granting the IOUs less than 100% stranded cost recovery. Some argue that the level of funding is too low to maintain the current state renewables base and will end in 2002. • AB 1890 outcome: Many renewables generators were disappointed with the replacement of a policy mechanism that had known outcomes. resulting in an industry shakeout. However. and AB 1890 does provide a significant amount of money to existing renewables developers to help mitigate any downsizing in the industry. large customers won on the inclusion of direct access. renewables funding through a systems benefits charge. As in the December Decision. • Large Industrial & Agricultural Customers: The large consumers want the most efficient. • AB 1890 outcome: Again. direct access contracts. IOUs still have the opportunity to collect 100% of their stranded costs. ERG Master’s Project Mark Stout 33 . with one that had known costs. allowing bilateral. which could extend until 2005.25 years greatly increased large electricity consumers’ satisfaction with the deal. the RPS. • December Decision outcome: Large customers did get the market structure they desired. and want a choice of their electricity supplier. this industries financial woes are not solely because of deregulation. 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. competitive market possible to drive down rates. making them the strongest proponents of direct access.independent producers. but limiting the competitive transition charge (CTC) cost recovery to 4. They lost out on rather generous terms for collection of stranded costs by the IOUs.

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

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

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

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

The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. As Figures 3 indicates. 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. and the remaining minority claim that their organization got rather little. The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890. a similar number of representatives report a mixed or unclear outcome. 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.from the December Decision. 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. ERG Master’s Project Mark Stout 38 . say that their organizations got most of what they wanted from AB 1890.

It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. either the CPUC December Decision or AB 1890. 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. 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 . As Figures 5 indicates.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization.

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

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

Mark Timmerman [CMA]. This had to be shaped by pressures on the Legislature. anywhere. Once again. the IOUs are pointed out for their influence in shaping the agenda. It would not have happened without DJ Smith [CLECA].. and Bob Foster [Edison]. They were a guiding light.. based on the free market-driven ideologues on the Commission. This put everything on the table. The momentum created by the Governor’s office initiating the MOU process is noted once again: ERG Master’s Project Mark Stout 42 . A lot of their lawyers did technical language work in coalition with the legislative counsel. The utilities established early on the full reimbursement for stranded costs. as well as an acceleration of recovery. They also were able to offer a lot of help with technical drafting. they had the manpower to make sure their positions were taken care of. and access to the Governor’s office: The IOUs were able to pull people together. says this anonymous staffer. • The IOUs’ were able to get what they want. but this time they are joined by clean power interests. according to this staffer from then-Senator Bill Leonard’s office. Linking up with the Governor’s office was critical. and staff time to network anytime. encouraging other people to accept the process who otherwise would not have. because of their financial resources can buy three things: lobbying of politicians.tone.. When the PUC December Decision came out. Renewables and energy efficiency were also guaranteed protection. a long-time defender of environmental interests. 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. The Decision by the PUC was going to be implemented unless the Legislature was able to deliver a package.. campaign contributions. This was the greatest expression of coalition building. • The large customers and IOUs were able to get what they want again. who were afforded protection by Senator Sher. through networking resources. IOUs very quickly were able to get 100% stranded cost recovery firmed up. legal expertise. • A staffer from Senator Byron Sher’s office highlights the ideological CPUC appointments by Governor Pete Wilson as drivers for the process.

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

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

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

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

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

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

hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.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. The August 15 language from a coalition of powerful interests. RD&D..72 At this point late in the game. Industrial Users. During the Conference Committee hearings. and the Sierra Club. “We reached a consensus on. CLECA.3% of utility revenues. agricultural consumers. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. As a Sierra Club California legislative chair recounts on meetings between CMA. including IEP. These got translated into dollars. reduced funding to an average of 2. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced.” However. EDF. TURN was one of several public interest organizations who opposed the change. renewables with an incremental cost estimate from the BRPU. less than two weeks before the Bill would be reported out of committee. the public interest groups did not have much leverage to oppose the dissolution of this consensus since they did not have an engaged constituency of activists to back them up... The 3% [it was actually a cap of 3.. and energy efficiency. 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 . roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.1% of IOU revenues. funding for public purpose programs: low income. a perusal of legislative language that was proposed during the long.

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

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

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

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

000 $634.000 $62.819 $0 $323.000 N/A $0 $18.181 $0 $160.595 $0 $21.079 $13. (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 $59.741 $21.964 $0 $40.470 $10.S.149 $3.835 $1.952 $1.101 $495 $10.166 $5.981 $1.995 $596.125 $0 $4.153 $750 N/A $8.180 $0 $209.102 $0 $73.157 $0 $188. 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.592 $846 $0 ERG Master's Project Mark Stout 54 .079 $950 $14.675 $736.500 $263.374 $1.745 $68.500 $533.752 $0 $51.588 $500 $32.000 $681.096 $971.405 $0 $722.000 $480.500 $190.559 $0 $246.516.608 $3.1995 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 $89.000 $0 $70. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.163 $0 $25.416 $5.000 $225.496 $8.758 $2.110 $34.500 $78.500 $1.675 $384.031.370 $648 N/A $0 $208.818 $0 $65.112 $3.479 $2.075 $4.308 $516.092 $3.272 $0 $64.419 $13.630 $300 N/A $0 $5.203.000 $1.000 $562.

081 $1.495 $27.675 $0 $1.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. 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 $4.938 $0 $118.197 $500 N/A $2. (gasoline refining and marketing) Tower Energy Group (oil.000 $0 $171.850 $1. natural gas.203 $0 $30.000 $383.000 $0 $6. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.600 N/A $5.551 $12.947 $500 $281.203 $5. (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.145 $5.000 $37.401 $1.701 $0 $5.000 $524.000 $0 $15.271 $0 $12.167 $500 $25.055 $0 $151.291 $3.083 $0 $20.207 $5.596.099 $12.362.665 $0 $262.716 $39.326 $0 $100.519 $11.400 $100 $79.495 $1.500 $0 $0 ERG Master's Project Mark Stout 55 .492 $0 $66.600 $32.319 $0 $10.000 $526.723 $0 $38.000 $20.230.250 $0 $30.003.

500 N/A $0 $211.250 N/A $100 N/A $2.000 $85. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.000 $33. 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.748 $32.590 $5.750 $1.159 $3.750 $267.543 $29.450 $566.905 $30.060 $6. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. and Hamrin.862 $21. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.032 $0 $172.000 N/A $100 N/A $7.400 $1.819 $921.250 $148.229 $100 N/A $1.571 $500 N/A $200 N/A $1.118 $0 $144.) 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.611 $1.100 $0 $500 N/A $100 $0 $500 N/A $2.882 $15.605 $250 N/A $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.S.286 $3.917 $300 $5.600 $276. McQuat. Dist.000 $50.000 $209.025.460 $50.147 $500 $739.281 $1.626 $0 $8. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.017 $1.331 $0 $97.717 $500 not applicable $0 $138.000 NA $500 $0 $2.200 $837.179 $0 $3.000 $35.195 $401.500 N/A ERG Master's Project Mark Stout 56 .1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.724 $500 not applicable $500 $57.500 $29.100 $144.240 $0 $178.454 $3. 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.782 $981.845 $452.750 $418. producers.589 $26.

721 $748.573 $2.181 $1.000 $65.780 ERG Master's Project Mark Stout 57 .500 $251.960 $2.050 $949.000 $22.137 $550 N/A $5.138 $1.989 N/A $9.689 $2.995 N/A $100 N/A $0 $3.712 $100 N/A $200 $16.407 $200 $61. natural gas.438 $500 N/A $0 $1.090 $749 $38.500 $277.750 $23.925 $0 $44.636 $0 $103.347 $9.495 $22.878 $12. (gasoline refining and marketing) Tower Energy Group (oil.334 $498 $1.705 $19.521 $14.861 $1.500 $47.900 $0 $21.521 $0 N/A $50 $87. 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) $41.050 N/A $0 $214.000 $500 $456.478. Texaco Tidelands Oil Tosco Corp.885 $300 $207.177 $300 N/A $0 $29.750 $37.622 $67.000 $233.511 $1.950 $3. diesel) Unocal (CMA member) Victory Oil Co.209.1996 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.016 $1.643 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.532 $4.250 $34.754 $4. (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 $3.417 $9.958 $2.761 $0 $73.650 $3.072 $918.521 $1.661.900 $1.296 $800 $25.000 $76.245 $335.384 $2.

585 $33.438 $4.000 $700 $117.000 $2.790 $100 $14.068 $14.448 $424.250 $21.378 $100 $21.066 $500 N/A $250 N/A $22. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. of California.462 $208.066 $500 $21.000 $15.462 $500 $14.

4 ERG Master’s Project Mark Stout 59 . including oil and natural gas companies. CFEE is a “non-profit. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. regulators. for $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. According to investigative writer Peter Asmus. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. paying up to $7. and Paris.As one would imagine. Shanghai.”80 In April of 1995. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. Brussels. From 3/28/96 to 4/8/96.800 each. and environmental groups to discuss the British experience with deregulation of electricity. and small consumer groups. 1996. alternative energy producers. were able to far outspend environmental organizations (who were usually spread thin over many issues). an Edison lobbyist was added to the international travel party at the last minute.167 per guest. their “Travel project to Europe on Electric Restructuring. to meet with CEOs of the electricity industry.79 From 3/16/94 to 3/27/94. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. Conservation. 4 Asmus. 1996. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. One example of the type of access to officeholders that money can buy is the junkets run by the California Foundation on the Environment and the Economy. and Inner Mongolia. the lobbying summary tables above. government ministers. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU).

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

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

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Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.. 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. CPUC vs. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.e.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

but arguably gives standing to third parties to contest SMUD’s approach to restructuring. As I mentioned. A lot of AB 1890 is not crisp. not to say that we can’t operate as business as usual. If the IOUs do not respect the munis. For us. This is not a problem for SMUD. someone can accuse us of having rates too high. ERG Master’s Project Mark Stout 82 . This is arguably a meaningless statement. this is not onerous or burdensome. we can point to the legislation. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? It’s not like we were asking for a whole lot. AB 1890 has language written that denies a muni’s ability to impose a CTC unless they allow direct access. this gives us political standing. and conditions on 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. a cloud that we do not need. This is a profound shift in how munis and IOUs relate to FERC. but got more than we asked for. If we do not go to direct access. The state’s regulation of Investor Owned Utilities differs from a muni’s ability to decide how to serve.public purpose programs. I do not know. it would not have put this in. We did not get everything we wanted. SMUD did get something more than we asked for also. enhancing our stature at the federal level. AB 1890 states that filings to FERC would be jointly between the municipal utilities and the IOUs. But this language could burden us with litigation. This is an infringement on municipal autonomy. If the Legislature had respect for the municipal affairs doctrine. Going in. It would have been difficult for the IOUs to keep up with us on these programs and bring down rates. but it might be for others. AB 1890 also set time limits on the duration of CTC recovery.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We thought there would not be comprehensive legislation that year. but TURN did not like the allocation of CTC costs to different classes. based on geographical region. everyone except for small consumers. but the incentives were weak. TURN also did not like it because we got a rate freeze. as opposed to the rate cap in the PUC December Decision. 1995 Decision? There was good language on the non-bypassability of the CTC. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. Regulated entities can achieve their own version of the truth by repetition. The PUC was vague on aggregation. The Decision made a good commitment to maintaining public purpose programs. and its inclusion of giveaways to large customer groups. Some commercial customers had wanted aggregation for different locations. We had advocated a community access model. but did include language describing it. It also included a recognition of the importance of market power. ERG Master’s Project Mark Stout 115 .to Supreme Court decisions allowing a “reasonable chance of recovery”. TURN was able to knock out an earlier Brulte bill. it was clear that the Legislature would be moving forward. although by July. it was OK for regulators to deny full recovery. Under these decisions they cite. including low income. with incentives for divestiture of utility generation. for aggregation of small customers to take advantage of direct access. in concert with oil companies. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. TURN applauded the focus. 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 turns out that independent generation plants are run with much less staff. there were some self-generation projects in the pipeline. Peace’s residence had gotten slammed a couple times. Since we felt that it was incrementally better than the December Decision. PG&E gets a $0. ERG Master’s Project Mark Stout 116 . Unions got a huge bone by having the cost of retraining and severance included in the CTC.e. a very. divested power plants must come with a contract for the original staff for the first two years. Some customers got away with no CTC. Edison gets coal cost increases. its anti-slamming [slamming is a practice of switching a customers utility provider without their consent] language is really anti-community access language. In the end. firmed up the nonbypassability of the CTC.5 billion increase. TURN felt it had turned AB 1890. it limited CTC recovery to a shorter period of time. CPUC vs. leading to a heated internal debate. but a narrow set of projects. AB 1890)? Why? At the end of the process. into a very bad bill. This raises a substantial barrier for municipalities to aggregate their residents’ loads. signed document with independent verification that a customer wants to be included in an aggregation. On the bad side. but Edison successfully created this barrier under the guise of anti-slamming language. We had suggested that community access provide an out for people that did not want in. and offered a good commitment to low income programs. We had the option of opposing it and jeopardizing the concessions in it. very bad bill.. but had to be in the debate. we did not oppose or support AB 1890. we decided not to oppose. so he was amenable to this. requiring a written. On the good side.So we were stuck with a bill that we hated. Is your organization more comfortable with one policy decision over the other (i. Also.

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

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

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

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

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

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

NRDC had taken the position that the Renewables Portfolio Standard and a non-bypassable systems benefits charge can work together. although the levels for public purpose programs were not what they seeked. NRDC can live with AB 1890. For renewable energy. but had advocated that recovery not be linked to the continued operation of uneconomic plants. the included systems benefits charge was a re-affirmation of public purpose programs. The December Decisions language on nuclear plant rate structuring did make this link. although these were down from pre-Blue Book levels. They supported this legislation because it set a good precedent. and not everything they were pushing for. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. It was not perfect. ERG Master’s Project Mark Stout 123 . which was unclear in earlier proposals. however. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? NRDC got most of what it wanted in terms of policy mechanisms. with systems benefits charge funding used for the development of emerging technologies. and not as high as merited. They did not take a position on the percentage level of stranded costs recovery by utilities.a non-bypassable charge mitigates for a lack of integrated resource planning excluded by retail competition. 1995 Decision? NRDC got most of it: a reaffirmation of the need to continue public programs funded through ratepayers. Funding levels were roughly the levels being spent by utilities when the bill was drafted.

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

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

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

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

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

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

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

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

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

including 13.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. ERG Master’s Project Mark Stout 133 . manifest in California as the Biennial Resource Plan Update (BRPU). As long as the Sierra Club and other groups were happy. Integrated Resource Planning (IRP). 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. Byron Sher was fine. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. UCS has 100. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role.000 in California”. E-3.John White were the front folks. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. UCS was also opposed to 100% “stranded cost” recovery for utilities.000 sponsors nationwide. As the deregulation process unfolded at the CPUC. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. was just beginning to be used as a policy option in several states. 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. Peace was the idea person. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. The level of renewables support included in the BRPU served as a target for UCS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IOUs very quickly were able to get 100% stranded cost recovery firmed up. a small generation developer. was a one-man machine. Groups that opposed the bill without participating also were ineffective. A lot of their lawyers did technical language work in coalition with the legislative counsel. He represented himself well in the hearings and actually helped to draft language that made it into the bill. To contrast this. they had the manpower to make sure their positions were taken care of. If they were there and could contribute. and why? When the PUC December Decision came out. as well as an acceleration of recovery. They needed to get their nukes off of the books. could not go to a competitive market with a debt hindrance. NEVs. otherwise blew it up. Which stakeholder groups do you think were best able to set the terms of the debate. Wayne Rafesberger. This was the greatest expression of coalition building. and how could they have improved their approach? Power marketers such as Enron.Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? The IOUs were able to pull people together. This put everything on the table. The full recovery of their stranded assets was very important to them. The Committee Members took some things from the Decision. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . and Working Assets were just not there when their issues came up. anyone could have influence. such as CalPIRG and one of Ralph Nader’s organizations. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Linking up with the Governor’s office was critical. no one was happy. They also were able to offer a lot of help with technical drafting.

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

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

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

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

Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS 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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . 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 .

0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #1 California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #1 California Large Energy Consumers Association .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees .

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

500 $22.800 $1.500 $1.995 $21.495 $10.000 $1.000 $3.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $2.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $1.000 $3.000 $2.495 $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.995 $300 $12.896 $3.495 $1.191 $2.000 $495 $950 $696 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.429 $498 $1.000 $1.000 $500 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $7.000 $4.

995 $1.000 $1.750 $4.995 $14. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $800 $498 $200 $9.Table 2: Assemblymember Jim Brulte.017 $749 $750 $3.000 $8.495 $4.500 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $6.995 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $1.000 $10.460 $200 $500 $750 $2.000 $2.511 $3.990 $1.500 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $47.250 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $2.000 $1.

1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. and Privatization” visiting London. Conservation.750 $3. Table 3: Senator Steve Peace.000 $1.000 $2. CFEE is a “non-profit.500 $1.000 $1. Not to be outdone. Paling in comparison.000 $750 $0 $0 103 Asmus.000 $3. by the California Foundation on the Environment and the Economy. 4 ERG Master’s Project Mark Stout 164 . (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. From 3/28/96 to 4/8/96. 1996. totaling $101.250 $500 $1.750 $2. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. as well as an event. Sweden.490 “Travel project to Europe on Electric Restructuring.750 $750 $1. and Budapest. Mobil treated Brulte to a $60 event in 1996.000 $2. Brulte was taken on a $7. Chevron treated Brulte to two meals.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.

Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $8.072 $2.500 $16.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $1.450 $7.050 $3.250 $7.250 $750 $500 $1.000 $300 $1.250 $1.115 $18.000 $4.600 $2.000 $500 $2.100 $2.Table 4: Senator Steve Peace. 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. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $2.000 $750 $750 $750 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.815 $750 $6.500 $3.000 $6.572 $1.

SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Table 5: Senator Byron Sher. SDG&E had Peace out to six meals. as well as chair of the Senate Energy and Utilities Committee. IEP made a gift of $241 for his speech at a conference. Southern California Edison was granted a high level of access.100 $2. In 1995.900 .000 $5. taking Steve to 11 meals. 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. In 1996.000 Table 6: Senator Byron Sher.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.450 166 ELECTRIC/GAS $6. Peace was treated to a $52 sports event by Mobil Oil. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. while Edison treated him to five meals and a sports event. 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. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.

000 $500 $1. McQuat.000 $100 producers.000 locals) Southern California Pipe Trades United Assoc.482 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.600 $13.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. EVs) Hansen.000 $500 $500 $9.100 $500 $2.500 Int. Brotherhood of Electrical Workers (various $9. (biomass) Edson + Modisette (lobbyist for indep. and Hamrin. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (geothermal) Colmac Energy Inc. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. $2.882 $100 $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 Large Energy Consumers $3.000 $1.000 $1.000 $100 $100 $500 $1.500 COMPANIES $1.000 (tire $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .

000 $700 $4.000 $300 $300 $22.448 $14. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.585 $100 $500 $2. of California.Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .

Sher received no other gifts that year from energy utility stakeholders. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 $1. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.500 $300 $0 $0 $2. Sher holds over $100. totaling $758.000 in each of Amoco.400 $750 $150 $1. and GE. Exxon. In 1996. NARUC treated Sher to a two day trip to DC for another meeting.500 $0 $0 ERG Master’s Project Mark Stout 170 . Mobil.300 $500 $1. totaling $2608.

Edison again ERG Master’s Project Mark Stout 171 .000 $500 $500 $4. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. saving up for a $77 dinner with head lobbyist Bob Foster.000 $2. 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. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.650 $500 $1.000 $2.000 $1. While the Senator was there. SCE treated Leonard to dinner and lodging for Legislative Ski Day.500 $150 $500 $3. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. for a paltry $20.730 $2. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $1. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.080 $10.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.650 $2. extending his stay from 12/8/96 to 12/13/96.000 $5.Table 8: Senator Bill Leonard. The Pacific Rim Conference of Seattle.000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.500 $500 $1. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.

PG&E took Leonard out to a Kings game. Table 9: Assemblymember Mickey Conroy.000 $1. paying $44 for two meals and lodging. ARCO treated Leonard to a $19 meal at a reception.600 $1. 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.600 $750 $750 $500 $1.had Senator Leonard out for Legislative Ski Day. for the modest tab of $56. including lunch with Bob Foster.250 $1.000 $750 $750 $650 $150 $500 $3. They also had Leonard out for two meals in Sacramento.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .000 $1.750 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1.

Shanghai.700 $500 $300 $550 $2.000 $500 $750 $250 $500 $2.500 $2.600 $500 $1. and to 104 Asmus. PG&E treated him to a basketball game with $51 tickets.000 $3. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. and Inner Mongolia.300 junket to talk with Chinese central government and provincial leaders in Beijing. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 10: Assemblymember Mickey Conroy.600 $3.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.000 $5.050 $1.000 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.700 $750 $450 $250 $250 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. $7. 4 ERG Master’s Project Mark Stout 173 . 1996. CFEE is a “non-profit.000 $2. two meals for $44.

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

175 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.750 $1.675 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.750 $2.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.750 $4.250 $1.250 $1.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.Table 11: Assemblymember Diane Martinez.

500 $500 $500 $1.000 $7. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $500 $500 $500 $500 $500 $3.000 $500 $500 $5.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $4.500 $1.000 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $500 $3.000 $500 $1.250 $1.000 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $1.000 $4.500 $1.000 $1.000 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. Dist. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.Table 12: Assemblymember Diane Martinez.750 $1.

000 $1.000 $500 $500 $1.900 $3.600 $1.Table 13: Assemblymember Steve Kuykendall.850 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 .500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $8.500 $1.208 $0 $0 $1.058 $500 $500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. the Illinois Energy Association flew Martinez out for a $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. natural gas.467 trip to Northwestern University to discuss the deregulation of public utilities.100 $100 $1.

254 $200 $500 $4.500 $1.000 $500 $2.490 “Travel project to Europe on Electric Restructuring.374 $4. Conservation. natural gas. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS 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. Kuykendall’s social calendar was destined to pick up in 1996.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1.000 $1.000 $2. diesel) Unocal (CMA member) Victory Oil Co. However.350 $500 $1. Sweden.374 $500 $2.500 $0 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $1. and Budapest.Table 14: Assemblymember Steve Kuykendall. and Privatization” visiting London. From 3/28/96 to 4/8/96.250 $100 $500 $35. ERG Master’s Project Mark Stout 178 . SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.443 $6.000 $19. Kuykendall was taken on a $7.

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

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

He does own less than $10. by the California Foundation on the Environment and the Economy. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. spending $258. Unocal. PG&E had him out to three meals for $71.000 in each of Central & Southwest Corp. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1995. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. to meet with CEOs of the electricity industry. Jr. and Schlumberger oilfield services stock. wholesale PoolCo model. utility and General Electric stock. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. In 1995. and environmental groups to discuss the British experience with deregulation of electricity. and Paris. and less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. He left office on February 23. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Chevron. Conlon was taken on a $7. regulators.000 in each of Montana Power Company and Exxon stock. government ministers. Edison.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. was very interested in California moving to the UK-style. ERG Master’s Project Mark Stout 181 .167 junket visiting London. Brussels. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. one of CFEE’s funders. He does own more than $10.

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