Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

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

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

ERG Master’s Project

Mark Stout

1

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

ERG Master’s Project

Mark Stout

2

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

ERG Master’s Project

Mark Stout

3

This paper develops a comparison of which stakeholder groups got what they wanted. 1995 Electric Restructuring Decision.S. acid rain and climate change. there will probably be significant winners and losers as a result of this legislation.html ERG Master’s Project Mark Stout 4 . which will be superseded to a great extent by the details of AB 1890.4 Given the stakes involved with this industry.edf. 1995 Decision with the California legislative process resulting in AB 1890. and why. 1 2 CPUC RD&D Working Group. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. with varying success.Introduction On September 23. 1995 3 Flavin and Lenssen. 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. Various stakeholder groups.3 According to the Environmental Defense Fund. selling 250 billion kWh of electricity per year2. 1996 California Energy Commission. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1994 4 WWW page: http://www. a product with well documented environmental impacts including local air pollution. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. contrasting the results of CPUC process resulting in their December.org/programs/Energy/green_power/a_better. 1996. which sets in motion a process of electric utility deregulation beginning in 1998.

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

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

ERG Master’s Project

Mark Stout

5

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

ERG Master’s Project

Mark Stout

6

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

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

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

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

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

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

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

This led to the passage of Assembly Concurrent Resolution 143. In their place. 1. and documentation resulting in a report back to the Governor and Legislature by January 31. were concerned about the content and timetable of this proposal. coupled with a lack of prior coordination with the state Legislature. 1995. 1994. “a vibrant market exists for energy efficiency services”. 1995. evidentiary hearings. For instance. pushing back their goal for a policy decision until September of 1995. such as “green pricing”.20 Many stakeholders. 1994.19 Since the release of the Blue Book proposal.21 This stakeholder response. Status Report. numerous other states have also proposed electric utility deregulation. 1994. Blue Book. and asserted that. which requires the CPUC to engage in a series of public hearings. FERC released a dual-issue Notice of Proposed Rulemaking. where CPUC President Fessler and Commissioner Knight testified on their proposal. the CPUC proposed.22 FERC MegaNOPR In March of 1995. Wagner. ERG Master’s Project Mark Stout 13 . 21 CPUC. This process tempered the CPUC’s frenetic timetable. which had been dubbed the MegaNOPR. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. The first issue addressed open access to the transmission system 19 20 CPUC. Blue Book. including private and public-interest organizations.scheduled to be issued by the CPUC in August of 1994. where customers voluntarily pay more to promote renewables. 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. “alternative frameworks based on ‘let the market decide’”.

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

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

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

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

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

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

“If the bill had failed. would be eligible for direct access January 1. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . including residential and small commercial consumers. As Carter and Cavanagh have noted. chair of the House Energy and Power Subcommittee. 1997. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.40 On May 6. In March of 1997. The overall levels are: 45 % existing technologies.”39 Recent State and Federal Activity Since the signing of AB 1890 into law.41 There are currently several electric utility restructuring bills in Congress. 1997 42 Weisman. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 10% emerging technologies. 1997 41 Marshall. 1996 CEC. including a prominent one authored by Representative Dan Schaefer (R-CO). 1997. 1998. It divides up this amount into four accounts that vary over four years of funding. 30% new technologies. and 15% consumer-side incentives.

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

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

. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 84-108. 52 Gilbert.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. 356-357. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. greatly increasing opportunities for bulk power sales. 1993. 51 Stevenson. 1994. Gordon. basing their arguments on welfare economics as applied to the changing electric utility landscape. Hoffman 55-62.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. enabling increased competition. 447-475. 150. who in the past had enjoyed privileged status with cheap rates. 50 Flavin and Lenssen. ERG Master’s Project Mark Stout 23 . 1993. 195.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. Davis. “Discretionary Evolution.”. but now had to pay higher rates..intense pressure from large industrial customers. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.

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

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

though it urges states to consider retail competition.”62 a form of integrated resource planning know as the BRPU. “Discretionary Evolution.”. “the DOE bill does not mandate retail markets by any date certain. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). were the key retail wheeling champions within the CPUC. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. 62 Asmus. In 1994.61 California Public Utility Commissioners Jesse Knight and Norm Shumway.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.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Commissioner Knight. Colorado. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. Massachusetts. 60 61 Levison. 24. 1997. Maine. “Retail wheeling. ERG Master’s Project Mark Stout 26 . Michigan initiated a five year retail wheeling experiment involving two utilities. both appointees of Governor Pete Wilson. New York. “DOE Restructuring Bill” Stevenson. an analyst with CPUC’s Division of Strategic Planning... according to Jeff Dassovich. the same year that California’s Blue Book proposal was released. Dassovich explained that they were frustrated with the “myriad of complex and controversial balancing accounts and rate adjustment mechanisms they had to contend with every 12 months” as part of the rate-making process. 355-356. Connecticut..”. and Wisconsin. Calls for bids have often been oversubscribed by a wide margin. 1995.has noted..

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

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

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

• Investor Owned Utilities: The IOUs want to protect shareholders by maintaining their stock price and maximizing profits. who are also their “shareholders”. except for on the subject of reciprocity for allowing direct access. • December Decision outcome: The CPUC Decision did not address municipal utilities. A five year phase-in to direct access may have been a little too fast for Edison. • AB 1890 outcome: The legislation codified the utilities opportunity to recover 100% of stranded costs. 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. Most resist retail competition. 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. while ensuring their financial solvency. 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. they are comforted by a negotiated settlement that was reached to avoid future litigation. • Municipal Utilities: The munis want to retain their autonomy in making their own policy decisions. which was the strongest proponent of starting with a wholesale-only PoolCo proposal. and pursue 100% stranded cost recovery from ratepayers. • December Decision outcome: The IOUs did get the ability to recover 100% of stranded costs. Most resist retail competition and pursue the ability to recover 100% of stranded costs from ratepayers. While recovery period is limited to four years may limit their ability to achieve the full 100% cost recovery. ERG Master’s Project Mark Stout 30 .

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

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

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

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

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

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

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

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

As Figures 5 indicates. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .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. 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. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

500 $533.752 $0 $51.031.102 $0 $73.000 $1.157 $0 $188.479 $2.000 $62.516.101 $495 $10.981 $1.559 $0 $246.374 $1.745 $68.000 $634.758 $2.000 $562.588 $500 $32.819 $0 $323. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.112 $3.500 $190.835 $1.000 N/A $0 $18.000 $225.416 $5.272 $0 $64.075 $4.595 $0 $21.079 $950 $14.496 $8.110 $34.405 $0 $722.079 $13.000 $0 $70.181 $0 $160.096 $971.952 $1.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.675 $384.500 $1.500 $263. 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.370 $648 N/A $0 $208.308 $516.S.675 $736.125 $0 $4.608 $3.166 $5.239 $0 N/A $0 $89.995 $596.180 $0 $209.203.092 $3.153 $750 N/A $8.000 $480.149 $3.500 $78.741 $21. (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 $59.470 $10.419 $13.163 $0 $25.964 $0 $40.592 $846 $0 ERG Master's Project Mark Stout 54 .818 $0 $65.630 $300 N/A $0 $5.000 $681.

000 $383.081 $1.167 $500 $25.723 $0 $38. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.271 $0 $12. 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 $4.362.000 $0 $15. (gasoline refining and marketing) Tower Energy Group (oil.675 $0 $1.319 $0 $10.400 $100 $79.665 $0 $262.947 $500 $281. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.716 $39.145 $5.600 N/A $5.000 $0 $6.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. natural gas.000 $524.203 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .291 $3.519 $11.701 $0 $5.000 $20.850 $1.492 $0 $66.197 $500 N/A $2.203 $0 $30.003.551 $12.250 $0 $30.207 $5.495 $1.230.938 $0 $118.596.000 $526.055 $0 $151.326 $0 $100.401 $1.000 $37.099 $12.600 $32.083 $0 $20.000 $0 $171.495 $27.

331 $0 $97.571 $500 N/A $200 N/A $1. 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.100 $0 $500 N/A $100 $0 $500 N/A $2.118 $0 $144.025. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.611 $1.000 $50.250 $148.819 $921.000 $33. producers. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.000 $209.250 N/A $100 N/A $2.179 $0 $3.717 $500 not applicable $0 $138.905 $30.032 $0 $172. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.400 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.626 $0 $8.750 $267.450 $566. Inc (consultants) Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Windpower Sithe Energies Co.882 $15.454 $3.605 $250 N/A $1. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.200 $837. McQuat.500 N/A $0 $211.845 $452.748 $32.500 N/A ERG Master's Project Mark Stout 56 .017 $1.195 $401.000 N/A $100 N/A $7.460 $50.000 NA $500 $0 $2.589 $26. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.000 $35. Dist.543 $29.286 $3.240 $0 $178.917 $300 $5.159 $3.229 $100 N/A $1.500 $29.S.100 $144.000 $85.060 $6.782 $981.862 $21.600 $276.281 $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.147 $500 $739.750 $418. and Hamrin.590 $5.724 $500 not applicable $500 $57. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.750 $1.) 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.

000 $76.878 $12.181 $1.989 N/A $9.209.016 $1. Texaco Tidelands Oil Tosco Corp.334 $498 $1.885 $300 $207.780 ERG Master's Project Mark Stout 57 .750 $37.521 $14.296 $800 $25.250 $34.138 $1.137 $550 N/A $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 Mobil Southern Counties Oil Co. diesel) Unocal (CMA member) Victory Oil Co.712 $100 N/A $200 $16.689 $2. natural gas.900 $0 $21.407 $200 $61.000 $65.245 $335.521 $0 N/A $50 $87.495 $22.950 $3.511 $1.090 $749 $38.960 $2.958 $2.622 $67. (gasoline refining and marketing) Tower Energy Group (oil. 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) $41.478.721 $748.000 $500 $456.384 $2.661.521 $1.995 N/A $100 N/A $0 $3.650 $3.438 $500 N/A $0 $1.050 $949.643 $1.050 N/A $0 $214.500 $277.532 $4.705 $19.1996 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.861 $1.072 $918.573 $2.750 $23.925 $0 $44.636 $0 $103. (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.761 $0 $73.800 not tracked $3.754 $4.347 $9.000 $22.000 $233.500 $47.417 $9.900 $1.177 $300 N/A $0 $29.500 $251.

068 $14.066 $500 N/A $250 N/A $22.462 $208.000 $15. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.000 $700 $117.790 $100 $14.438 $4.448 $424.585 $33.066 $500 $21.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .462 $500 $14.250 $21.000 $2.1996 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.

and Inner Mongolia.79 From 3/16/94 to 3/27/94.As one would imagine. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. and Paris. paying up to $7. regulators. for $7. were able to far outspend environmental organizations (who were usually spread thin over many issues). CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. including oil and natural gas companies. Shanghai. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. and small consumer groups.167 per guest. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). According to investigative writer Peter Asmus. an Edison lobbyist was added to the international travel party at the last minute. and environmental groups to discuss the British experience with deregulation of electricity. their “Travel project to Europe on Electric Restructuring. 1996. CFEE is a “non-profit. 4 ERG Master’s Project Mark Stout 59 . to meet with CEOs of the electricity industry. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. 1996.800 each. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. alternative energy producers. Brussels. the lobbying summary tables above. Conservation. 4 Asmus.”80 In April of 1995. government ministers. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. 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. From 3/28/96 to 4/8/96.

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

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

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

ERG Master’s Project

Mark Stout

61

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

ERG Master’s Project

Mark Stout

62

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

ERG Master’s Project

Mark Stout

63

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

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

and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 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. 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.. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . CPUC vs.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.e.

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

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

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

while holding on to what they really wanted.15 million electric customers in San Diego and southern Orange Counties. SDG&E provides service to 1. the parent company of Southern California Gas Company83. a gas utility which serves a territory largely overlapping with Southern California Edison’s. “a subsidiary of Enova Corporation.”82 Enova Corporation has announced a merger with Pacific Enterprises. Jack. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. and willing to be straightforward on what they can give on. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. 1996. “People who influenced the outcome were present. It allows an organization to get buy-in from other parties in advance.” Organizations had to be able to make decisions right on the spot to shape the outcome. E. App. and gas service to 0. is a California Investor Owned Utility Company founded in 1881.7 million customers in San Diego County.” according to Kathy.reasonableness check. 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. 1996. 82 83 CPUC Renewables Working Group. SDG&E. ERG Master’s Project Mark Stout 70 .

The lucky Arizona utilities went with coal. ERG Master’s Project Mark Stout 71 . they did not get there by investing in high cost renewables. Also. SDG&E was a supporter of the PoolCo market structure along with Edison. SDG&E wanted to become the lowest priced California IOU. When Tom Page came in as CEO in 1981. We went to FERC. everyone should pay. except for electricity purchases from Mexican geothermal generators. but are not viable with competition. [The CPUC’s proposal in the December Decision would have required roughly 10% of all retail sales to be backed up by tradable credits for renewables. we had the highest rates in the nation. 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. Throughout the ‘70s. High priced renewables are OK if you are not moving to a competitive future.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Our main goals were stranded assets recovery and the creation of a new marketplace where we could compete. so we would have to buy energy or credits. with the exception of the legislation’s mechanism for a rate reduction. if you are a broker. We were very opposed to the BRPU. 1996. it would be difficult to get 5% renewables. 84 CPUC Renewables Working Group. AB 1890 mirrors the Decision in many ways. We were strongly opposed to the RPS. This would put us at a competitive disadvantage compared to PG&E and Edison. 1995 Decision? The PUC was on the right track. and got it struck down.84] SDG&E does not have any renewables.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ERG Master’s Project

Mark Stout

107

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

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

93

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

ERG Master’s Project

Mark Stout

108

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

ERG Master’s Project

Mark Stout

109

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

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

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

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

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

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

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

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

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

3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers.000 of whom live in California. ERG Master’s Project Mark Stout 119 . we are in favor of competition. more than 55. Assuming these problems are resolved. if restructuring is implemented properly: 1) energy efficiency investments should continue. 2) an Integrated Resource Planning process should exist for energy efficiency. As stated in EDF’s first round comments on the Blue Book. and punted on the details to the Legislature. and 4) incentives for uneconomic sales promotion minimized. It gave us nothing until the Legislature tells us otherwise. If focusing 94 CPUC Renewables Working Group. economically viable solutions to today’s environmental problems. “a leading non-profit organization. yes.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. economics. 1995 Decision? Almost nothing. and law to create innovative.”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 20.000 members nationwide. E-1. EDF links science. The Decision was vague. “There is no reason to proffer the benefits of competition first to only selected classes of customers. [which] represents 300. depending on interpretation. EDF supports the earliest possible implementation of direct access for all classes of customers.”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. EDF has participated in California energy policy issues since 1975.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They also killed the state agency renewable purchase requirement. 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. A few people. however. our Public Affairs Director. The legislative language has multiple categories that should be included on the power exchange and ISO boards. or distribution companies. a simple majority is to be unaffiliated with generation. were called up to testify on specific issues as an information source only. There was little. if any other forum we took part in. including Assistant Chief Counsel John Chandley. transmission. This would have required state agencies to ERG Master’s Project Mark Stout 140 . They weighed in against the minimum renewables purchase requirement. our Executive Director. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were technically relevant in the process. and I. some members perceived it as a tack-on. outside of a disinterested role in hearings and filings. For the ISO. Edison and PG&E made arguments on takings [with regards to less than 100% stranded cost recovery] and coerced divestiture. put in by the renewables community. The legislators were in a vacuum trying to figure out how the allocation of public program funding got made. These board members will not certainly be disinterested. We also made testimony and participated in CPUC hearings as an examiner. The Governor’s office’s participation was punctuated. some of which would be “interested”.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.

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

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

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

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

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

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

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

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

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

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

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

and Bill Leonard were the masterminds. A lot of PR and press consultants got rich from this. Groups participated in coalition building. Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? None were terribly effective. getting a place at the table. The IOUs spent millions on astroturf such as “Shareholders for Equity”. and accountants. establishing a level playing field. The template was in large part formed by the CPUC’s December ‘95 Decision. then your voice was heard. There were also “grassroots” astroturf groups based on utility shareholders. 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. Senator Peace established a process that was a model of openness. Steve Peace. and why? The PUC laid out the framework for restructuring in the Blue Book. Because of the genius of the legislators. due to the egalitarian nature of the structure. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 .Legislative Conference Committee. Senators Byron Sher. If your case fit into the unfolding structure. Which stakeholder groups do you think were best able to set the terms of the debate. Some groups also used press conferences. based on the free market-driven ideologues on the Commission. lawyers. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. all of the outside lobbying did not matter. but it mainly was a waste of money. One strategy was to get bills established early on in the session. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee.

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

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

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

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

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

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

Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #1 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 .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 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .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 California Energy Commission University of California.

Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #1 Natural Resources Defense Council . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .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 Natural Resources Defense Council .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 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 #1 California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California. California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 California Large Energy Consumers Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .

000 $3.000 $500 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $495 $950 $696 $2.995 $300 $12.495 $10.000 $7.500 $22. 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 $3.800 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.896 $3.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .191 $2.000 $1.000 $2.000 $2.995 $21. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.429 $498 $1.000 $4.495 $7.500 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.495 $1.

250 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.495 $4.000 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $800 $498 $200 $9.750 $4. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.017 $749 $750 $3.500 $1.000 $8.000 $10.000 $3.500 $6.000 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .460 $200 $500 $750 $2.995 $2.500 $1.990 $1.995 $14.000 $1.Table 2: Assemblymember Jim Brulte. 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.995 $1.000 $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 $1.511 $3.500 $47.

AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. Chevron treated Brulte to two meals. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.250 $500 $1. From 3/28/96 to 4/8/96. 1996.750 $750 $1. Sweden. 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. CFEE is a “non-profit. and Budapest.490 “Travel project to Europe on Electric Restructuring. Not to be outdone. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1. totaling $101. 4 ERG Master’s Project Mark Stout 164 . Mobil treated Brulte to a $60 event in 1996. Paling in comparison. and Privatization” visiting London.750 $3.000 $750 $0 $0 103 Asmus.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.000 $1.750 $2. by the California Foundation on the Environment and the Economy. Conservation.000 $3.000 $2.500 $1. Table 3: Senator Steve Peace.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Brulte was taken on a $7.000 $2. as well as an event.

072 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.100 $2.000 $750 $750 $750 $1.572 $1.000 $6. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.450 $7.250 $7.250 $750 $500 $1.815 $750 $6.000 $4. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $8.Table 4: Senator Steve Peace.250 $2.000 $300 $1.000 $1.500 $3.600 $2.500 $16.050 $3.250 $1.000 $500 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .115 $18.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.

SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. IEP made a gift of $241 for his speech at a conference.000 Table 6: Senator Byron Sher.900 . In 1996.450 166 ELECTRIC/GAS $6. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. 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. Table 5: Senator Byron Sher. SDG&E had Peace out to six meals. as well as chair of the Senate Energy and Utilities Committee.000 $5. Peace was treated to a $52 sports event by Mobil Oil. Southern California Edison was granted a high level of access. In 1995.100 $2. while Edison treated him to five meals and a sports event. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.

100 $500 $2. and Hamrin.000 $100 producers. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. McQuat.000 locals) Southern California Pipe Trades United Assoc.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. (geothermal) Colmac Energy Inc.882 $100 $1. EVs) Hansen. (biomass) Edson + Modisette (lobbyist for indep. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .000 $500 $500 $9.500 Int.482 $100 $1. Brotherhood of Electrical Workers (various $9. $2.000 $500 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.600 $13.

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

Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .448 $14. of California.000 $300 $300 $22.000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.585 $100 $500 $2.

totaling $758.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.500 $0 $0 ERG Master’s Project Mark Stout 170 . Exxon. Sher received no other gifts that year from energy utility stakeholders.000 in each of Amoco. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.500 $300 $0 $0 $2. In 1996. Table 7: Senator Bill Leonard. Sher holds over $100. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. and GE.000 $1.300 $500 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. totaling $2608. Mobil. NARUC treated Sher to a two day trip to DC for another meeting.400 $750 $150 $1.

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.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. for a paltry $20.000 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation.650 $500 $1. saving up for a $77 dinner with head lobbyist Bob Foster.650 $2. Edison again ERG Master’s Project Mark Stout 171 .Table 8: Senator Bill Leonard.000 $500 $500 $4. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. While the Senator was there.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. extending his stay from 12/8/96 to 12/13/96. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $5.000 $2.730 $2. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $2. The Pacific Rim Conference of Seattle.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.080 $10.500 $500 $1.500 $150 $500 $3. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.

750 $1.000 $1.000 $750 $750 $650 $150 $500 $3. ARCO treated Leonard to a $19 meal at a reception.000 $1. including lunch with Bob Foster. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.250 $1. They also had Leonard out for two meals in Sacramento.600 $750 $750 $500 $1. Table 9: Assemblymember Mickey Conroy. PG&E took Leonard out to a Kings game.had Senator Leonard out for Legislative Ski Day. paying $44 for two meals and lodging.600 $1.000 $1. for the modest tab of $56.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .

050 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co.000 $500 $750 $250 $500 $2.Table 10: Assemblymember Mickey Conroy.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.300 junket to talk with Chinese central government and provincial leaders in Beijing. and to 104 Asmus. two meals for $44.000 $500 $2. 4 ERG Master’s Project Mark Stout 173 .500 $2. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. $7. 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. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $2.700 $750 $450 $250 $250 $1. 1996.000 $5. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. CFEE is a “non-profit. PG&E treated him to a basketball game with $51 tickets. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.700 $500 $300 $550 $2. Shanghai.600 $3.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. and Inner Mongolia.000 $3.600 $500 $1.

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

000 $1.000 $1.750 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.175 $500 $1.750 $2.Table 11: Assemblymember Diane Martinez. 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.675 $2.250 $1.250 $1.750 $4.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

000 $4.250 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $5.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.000 $500 $3.000 $500 $500 $5.750 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $1.500 $1.000 $7. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $500 $1.500 $1.000 $500 $500 $500 $500 $500 $3.500 $500 $500 $1. Dist.Table 12: Assemblymember Diane Martinez.000 $1.000 $4. (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.

the Illinois Energy Association flew Martinez out for a $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.058 $500 $500 $1.000 $1.000 $8. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $500 $500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.850 $1.600 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. ERG Master’s Project Mark Stout 177 .500 $1.500 $1.Table 13: Assemblymember Steve Kuykendall.208 $0 $0 $1.900 $3.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.467 trip to Northwestern University to discuss the deregulation of public utilities. natural gas.100 $100 $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.

SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $100 $500 $35.Table 14: Assemblymember Steve Kuykendall.500 $1. However.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $19. From 3/28/96 to 4/8/96.490 “Travel project to Europe on Electric Restructuring.350 $500 $1.000 $500 $2.500 $1. Sweden. Conservation. 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. natural gas. and Budapest. ERG Master’s Project Mark Stout 178 . Kuykendall was taken on a $7.500 $0 $1. and Privatization” visiting London.254 $200 $500 $4.443 $6.000 $2.000 $1.000 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $1.374 $500 $2.374 $4. diesel) Unocal (CMA member) Victory Oil Co.

4 ERG Master’s Project Mark Stout 179 .051 to fly the President out to New York City for a ConEdison Management Conference. CO. The California 105 Asmus. government ministers. a clean power auction the CPUC repeatedly postponed upon the urging of the utility.”105 The Consolidated Edison IOU spent $1. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94.167 junket visiting London. Brussels. for $610. Chevron treated Kuykendall to two dinners for $131. According to investigative writer Peter Asmus. Another non-profit organization. and environmental groups to discuss the British experience with deregulation of electricity. Edison. known as the Council of States Government . The Large Public Power Council.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. paid $1. The California Mining Association took him out for an evening of recreation and dinner costing $89. Fessler was taken on a $7. a trade association for publicly owned utilities. to meet with CEOs of the electricity industry. SC to address their membership. an Edison lobbyist was added to the international travel party at the last minute. and Paris. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). in Aspen. by the California Foundation on the Environment and the Economy.by the California Foundation on the Environment and the Economy. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. was very interested in California moving to the UK-style. regulators.WEST. 1996. one of CFEE’s funders. A trade association. spent $1402 to fly Fessler to Charleston. The Aspen Institute. wholesale PoolCo model.

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

Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. ERG Master’s Project Mark Stout 181 . one of CFEE’s funders. Conlon was taken on a $7. In 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94.000 in each of Central & Southwest Corp. Brussels. and Schlumberger oilfield services stock. and Paris. was very interested in California moving to the UK-style. regulators. Jr. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. and environmental groups to discuss the British experience with deregulation of electricity. Unocal. Edison. 1995. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. government ministers. by the California Foundation on the Environment and the Economy. He does own less than $10. spending $258.000 in each of Montana Power Company and Exxon stock. utility and General Electric stock. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Chevron. and less than $10. PG&E had him out to three meals for $71. to meet with CEOs of the electricity industry.167 junket visiting London. He does own more than $10. He left office on February 23. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. wholesale PoolCo model.

Sign up to vote on this title
UsefulNot useful