Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

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

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

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

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

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

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

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

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

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. 2002. Hoffman. In April of 1994.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. and 3) rate changes to encourage efficiency and distribution of power. with large. A more definitive policy statement was 16 17 Haddad. all commercial customers eligible January 1.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. 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.supplies. sending “a shockwave through the electric industry”. customer class-staged schedule for direct access implementation. The Blue Book laid out an aggressive. 55. industrial customers taking power at the transmission level eligible on January 1. ERG Master’s Project Mark Stout 12 . 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. 1999. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. and if successful. 6. 18 Mydans. all residential consumers eligible on January 1. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures.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. 1996.

1995. “alternative frameworks based on ‘let the market decide’”. Status Report. numerous other states have also proposed electric utility deregulation. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. which had been dubbed the MegaNOPR. This led to the passage of Assembly Concurrent Resolution 143.21 This stakeholder response. 1994. The first issue addressed open access to the transmission system 19 20 CPUC. In their place. and documentation resulting in a report back to the Governor and Legislature by January 31. and asserted that. Blue Book. including private and public-interest organizations. the CPUC proposed. such as “green pricing”.22 FERC MegaNOPR In March of 1995. 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. where CPUC President Fessler and Commissioner Knight testified on their proposal.20 Many stakeholders. This process tempered the CPUC’s frenetic timetable.scheduled to be issued by the CPUC in August of 1994. 1994. For instance. 1995. 21 CPUC. coupled with a lack of prior coordination with the state Legislature. FERC released a dual-issue Notice of Proposed Rulemaking. ERG Master’s Project Mark Stout 13 . were concerned about the content and timetable of this proposal. which requires the CPUC to engage in a series of public hearings. evidentiary hearings. Blue Book. “a vibrant market exists for energy efficiency services”. 1. where customers voluntarily pay more to promote renewables. 1994. Wagner. pushing back their goal for a policy decision until September of 1995.19 Since the release of the Blue Book proposal.

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

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

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

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

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

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

As Carter and Cavanagh have noted. 1997. 1998. 30% new technologies. 1997.40 On May 6. It divides up this amount into four accounts that vary over four years of funding. 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 and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1997 42 Weisman. In March of 1997. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. including residential and small commercial consumers. including a prominent one authored by Representative Dan Schaefer (R-CO).41 There are currently several electric utility restructuring bills in Congress. chair of the House Energy and Power Subcommittee.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. The overall levels are: 45 % existing technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . “If the bill had failed. and 15% consumer-side incentives. 10% emerging technologies. 1996 CEC. would be eligible for direct access January 1. 1997 41 Marshall.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.

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

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

Gordon. Davis. 50 Flavin and Lenssen.intense pressure from large industrial customers. but now had to pay higher rates. 195. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.”. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 447-475. enabling increased competition. 51 Stevenson. 356-357.. 84-108. ERG Master’s Project Mark Stout 23 . 52 Gilbert. “Discretionary Evolution.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area.. greatly increasing opportunities for bulk power sales.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 1993. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 150. Hoffman 55-62. 1993.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. basing their arguments on welfare economics as applied to the changing electric utility landscape. who in the past had enjoyed privileged status with cheap rates. 1994.

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

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

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

as well as the staff of the officeholders they were trying to influence.in a fit of political posturing. Jesse J. As a staffperson for a prominent officeholder noted during our interview. 32.” [see Anonymous Officeholder Staff Interview #1] Because of this stakeholder-representative orientation. As it was too esoteric a topic. so there was not enough press coverage. “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). including authorizations for legislative and regulatory study committees as well as direct access for certain customers to alternative generators. nineteen state legislatures have reviewed bills in response to the potential for greater competition in the electric utility industry. I decided it would be insightful to interview people who represented stakeholder organizations that were active in the process. letter to the editor.”64 As of October. October 9. ERG Master’s Project Mark Stout 27 . Wall Street Journal. as well as interviews for this analysis. 1995. Based on my experience as a representative for an environmental organization.. in that not all interest groups who might be impacted by the process participated in the 63 64 CPUC Blue Book. There are limits to this approach. it was clear that the general public was not very involved in the process. Knight. 1995.65 Analysis The California electric utility deregulation experience has often been described as a stakeholder-driven process. writes. “There was not enough education or public involvement. Many of the outcomes of the deregulation policy formulation were a result of negotiations between organizations representing different stakeholder groups.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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..3% of utility revenues. funding for public purpose programs: low income. The 3% [it was actually a cap of 3. EDF. renewables with an incremental cost estimate from the BRPU. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. and the Sierra Club. Industrial Users. not simply subsidizing other consumers or increasing IOU shareholder profits 72 Confidential binder of proposed language and other stakeholder notes ERG Master’s Project Mark Stout 49 .A 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.. “We reached a consensus on.72 At this point late in the game.” However. reduced funding to an average of 2. During the Conference Committee hearings.. and energy efficiency. CLECA. agricultural consumers. TURN was one of several public interest organizations who opposed the change. less than two weeks before the Bill would be reported out of committee. a perusal of legislative language that was proposed during the long.1% of IOU revenues. The August 15 language from a coalition of powerful interests. the public interest groups did not have much leverage to oppose the dissolution of this consensus since they did not have an engaged constituency of activists to back them up.. RD&D. These got translated into dollars. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. As a Sierra Club California legislative chair recounts on meetings between CMA. including IEP. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus.

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

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

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

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

630 $300 N/A $0 $5.000 $1.819 $0 $323.000 $562.470 $10.559 $0 $246.405 $0 $722. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.981 $1.500 $78.308 $516.952 $1.000 $62.153 $750 N/A $8.416 $5.835 $1.079 $950 $14.675 $736.675 $384.163 $0 $25.608 $3.112 $3.166 $5.000 $681.500 $263.079 $13.370 $648 N/A $0 $208.758 $2.419 $13.516.592 $846 $0 ERG Master's Project Mark Stout 54 .101 $495 $10. (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 $59.181 $0 $160.149 $3.595 $0 $21.500 $533.S.000 $0 $70.000 $634.000 $480.075 $4.745 $68.092 $3.752 $0 $51.000 $225.096 $971.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.180 $0 $209.125 $0 $4.588 $500 $32.374 $1.110 $34.496 $8.479 $2.272 $0 $64.818 $0 $65.031.239 $0 N/A $0 $89.995 $596.157 $0 $188.203.102 $0 $73.000 N/A $0 $18.741 $21.500 $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 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.964 $0 $40.500 $190.

319 $0 $10.000 $383.519 $11.947 $500 $281.167 $500 $25.362.000 $0 $15.675 $0 $1.665 $0 $262.938 $0 $118.600 N/A $5.081 $1.003.099 $12.492 $0 $66.000 $0 $6.083 $0 $20. (gasoline refining and marketing) Tower Energy Group (oil. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.230.271 $0 $12.000 $37.207 $5.291 $3. (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.850 $1.400 $100 $79.203 $5.716 $39.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.000 $0 $171.197 $500 N/A $2.203 $0 $30.055 $0 $151.551 $12.600 $32.701 $0 $5.723 $0 $38.500 $0 $0 ERG Master's Project Mark Stout 55 .596.401 $1.000 $20.000 $526.145 $5. natural gas.250 $0 $30.000 $524.326 $0 $100.495 $27.495 $1.

590 $5.750 $267.025.250 N/A $100 N/A $2.147 $500 $739.S.500 $29.250 $148.000 $50.917 $300 $5.882 $15. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 N/A $100 N/A $7.905 $30.000 NA $500 $0 $2.240 $0 $178.750 $418.100 $144. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.819 $921.500 N/A $0 $211.060 $6.179 $0 $3.331 $0 $97. Dist.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.605 $250 N/A $1. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.454 $3.862 $21.589 $26.000 $85.600 $276.460 $50.782 $981.450 $566.017 $1.611 $1. and Hamrin.500 N/A ERG Master's Project Mark Stout 56 .000 $209.000 $35.195 $401.159 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn. (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. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.200 $837.000 $33. producers.626 $0 $8.750 $1. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.281 $1. McQuat.118 $0 $144.286 $3.229 $100 N/A $1.724 $500 not applicable $500 $57.032 $0 $172.543 $29.845 $452. 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. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.717 $500 not applicable $0 $138.748 $32.) 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.400 $1.571 $500 N/A $200 N/A $1.100 $0 $500 N/A $100 $0 $500 N/A $2.

925 $0 $44.137 $550 N/A $5.878 $12.750 $37.521 $14.521 $0 N/A $50 $87.900 $0 $21. (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.296 $800 $25.334 $498 $1.500 $277.000 $76.1996 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.689 $2.511 $1.177 $300 N/A $0 $29.000 $22. natural gas.989 N/A $9.384 $2.800 not tracked $3.478. 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) $41.643 $1.754 $4.138 $1. Texaco Tidelands Oil Tosco Corp.521 $1.712 $100 N/A $200 $16.000 $500 $456.050 N/A $0 $214.209.500 $47.885 $300 $207.016 $1. (gasoline refining and marketing) Tower Energy Group (oil.438 $500 N/A $0 $1.661.622 $67.072 $918.407 $200 $61.000 $65. (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.245 $335.958 $2.636 $0 $103.347 $9.721 $748.000 $233.750 $23. diesel) Unocal (CMA member) Victory Oil Co.090 $749 $38.500 $251.181 $1.532 $4.250 $34.960 $2.495 $22.861 $1.995 N/A $100 N/A $0 $3.417 $9.705 $19.650 $3.950 $3.780 ERG Master's Project Mark Stout 57 .573 $2.050 $949.900 $1.761 $0 $73.

000 $15.585 $33. of California.066 $500 N/A $250 N/A $22.000 $700 $117.462 $208.438 $4.000 $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. 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) $1.250 $21.066 $500 $21.068 $14.790 $100 $14.462 $500 $14.448 $424.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .

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

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

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

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Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i. and 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 . AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. CPUC vs.e.. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dan Fessler was a proponent of the PoolCo. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. which was not supported by IEP or customer groups who feared that we would wind up with a market structure which would cause unraveling. We also made a myriad of filings. the amount paid to QFs such as many IEP members under PURPA law]. Is your organization more comfortable with one policy decision over the other (i. or over time? Yes.. 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. The municipal utility issue also needed to be dealt with. It was necessary to provide an underpinning.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Much of the same applies to AB 1890. some members do not agree with this. leading to an almost unanimous understanding of the need for legislation. For example.e. ERG Master’s Project Mark Stout 94 . 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. The legislation also includes language on a method for calculating SRAC [short run avoided cost. as well as support for resource diversity. on the issue of full stranded cost recovery. Overall we did well in terms of direct access to customers. we had historically tried to take the high road on public policy issues. CPUC vs. There continues to be opportunities to take potshots over a lack of consistency.

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

but lost everything else. We also desired that the IOUs share in some of the burden of their stranded costs. 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.“Law generates push for gas-fired power plants”]. Finally. the nukes were not. a lobbing group representing all farm groups in California except for those represented by the Farm Bureau. Then there is the announcement by SCE that they will be divesting 100% of their generation. The IOUs were able to protect the whole concept of CTCs. non-bypassable meant something. three have. This is based on input from growers. ERG Master’s Project Mark Stout 96 . Giving choices to folks will lower rates. independent power developer] bought Zond [wind turbine developer] speaks of significant market potential. playing a significant role in planning and cost overruns. the fact that Enron [large. To the PUC. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? AECA was a strong advocate for direct access. This got traded away. 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. who have a choice in all of their other commodity inputs. Agriculture had been fuel switching for a number of years. 1995 Decision? AECA got direct access with a slow phase-in. which has significant power to buy. Now others are precluded by the non-bypassability of the CTC which will not allow for competition. sell. and distribute electricity. An irrigation district is a type of water district. While we recognized that contracts with QFs were forced.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

93

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

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

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

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

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

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

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

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

Some customers got away with no CTC. PG&E gets a $0.5 billion increase. TURN felt it had turned AB 1890. very bad bill. We had the option of opposing it and jeopardizing the concessions in it. On the bad side. we decided not to oppose. CPUC vs. there were some self-generation projects in the pipeline. we did not oppose or support AB 1890. divested power plants must come with a contract for the original staff for the first two years. into a very bad bill. This raises a substantial barrier for municipalities to aggregate their residents’ loads.. On the good side. so he was amenable to this. it limited CTC recovery to a shorter period of time. Is your organization more comfortable with one policy decision over the other (i. It turns out that independent generation plants are run with much less staff. In the end. leading to a heated internal debate. We had suggested that community access provide an out for people that did not want in.e. and offered a good commitment to low income programs.So we were stuck with a bill that we hated. but Edison successfully created this barrier under the guise of anti-slamming language. but a narrow set of projects. Unions got a huge bone by having the cost of retraining and severance included in the CTC. Since we felt that it was incrementally better than the December Decision. its anti-slamming [slamming is a practice of switching a customers utility provider without their consent] language is really anti-community access language. AB 1890)? Why? At the end of the process. Edison gets coal cost increases. firmed up the nonbypassability of the CTC. requiring a written. a very. ERG Master’s Project Mark Stout 116 . Also. but had to be in the debate. Peace’s residence had gotten slammed a couple times. signed document with independent verification that a customer wants to be included in an aggregation.

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

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

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

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

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

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

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

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

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

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

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

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

1995 Decision? The Renewables Portfolio Standard (RPS) was included in the Decision as a renewables policy [the Sierra Club California Legislative Committee had voted to endorse AB 1202. “set up the market. It is a hard call from a policy standpoint: Sierra Club members would love the RPS. environmental programs are seen as transitional. 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. 98 Personal communication with Sierra Club Committee members. I do not know why the PUC put it in the Decision. see interview] thought she got and what she got from the Commission. I knew the consumer groups and power marketers hated it. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. creating a tension. but you have to be a political pragmatist. Energy efficiency and RD&D funding does not sunset in AB 1890. The customer groups had the same attitude. There always was a disconnect between what Nancy Rader [West Coast Representative for AWEA. 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. while the latest CPUC Decision sunsets energy efficiency. We did not want to have to pass new legislation. ERG Master’s Project Mark Stout 129 .How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. we didn’t want it or not want it. the RPS Working Group is not reality. so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. an earlier legislative vehicle for the RPS98]. People close to Sacramento knew the RPS did not have a chance. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Because of the lack of acceptance for the RPS. and we won’t need this regulation stuff”.

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

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

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

John White were the front folks. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. was just beginning to be used as a policy option in several states. As the deregulation process unfolded at the CPUC.000 in California”. UCS has 100. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. ERG Master’s Project Mark Stout 133 . Integrated Resource Planning (IRP). pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists.000 sponsors nationwide. including 13. Deregulation of the electricity industry threatened to tear this house of cards down. E-3.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. manifest in California as the Biennial Resource Plan Update (BRPU). Byron Sher was fine. UCS was also opposed to 100% “stranded cost” recovery for utilities. Peace was the idea person. UCS’s initial position after the release of the CPUC Blue Book Proposal was that the deregulatory roadmap laid out in this proposal was too hasty. The level of renewables support included in the BRPU served as a target for UCS. As long as the Sierra Club and other groups were happy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 #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 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .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 #1 California Large Energy Consumers Association .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 Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Natural Resources Defense Council .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .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.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .

Interview #1 California Municipal Utilities Association .Interview #1 Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 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 $1.000 $3.995 $21.000 $1.000 $4.000 $7.000 $3.500 $22.500 $1.000 $2.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $7.000 $495 $950 $696 $2.000 $500 $1.800 $1.191 $2.000 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.995 $300 $12. 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.896 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.495 $10.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22. (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.495 $1.000 $3.429 $498 $1.

(CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.Table 2: Assemblymember Jim Brulte.500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $3.460 $200 $500 $750 $2.500 $47.000 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 .750 $4.995 $14.000 $1.000 $10.000 $2.250 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $1.017 $749 $750 $3.500 $6.990 $1.000 $1.995 $2.995 $1.495 $4.) 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 $9.511 $3.000 $8. (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.

by the California Foundation on the Environment and the Economy. Brulte was taken on a $7.000 $2. totaling $101. Table 3: Senator Steve Peace. Sweden.500 $1. as well as an event.750 $750 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.750 $3. 4 ERG Master’s Project Mark Stout 164 . (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1. Paling in comparison.250 $500 $1.000 $3. Conservation. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. 1996.000 $750 $0 $0 103 Asmus. From 3/28/96 to 4/8/96. Chevron treated Brulte to two meals. and Privatization” visiting London. CFEE is a “non-profit.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.750 $2. Mobil treated Brulte to a $60 event in 1996.490 “Travel project to Europe on Electric Restructuring. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $2. and Budapest. Not to be outdone.

000 $4.072 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .815 $750 $6.000 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.500 $16.572 $1.000 $6.450 $7.000 $750 $750 $750 $1.500 $3.250 $1.100 $2.500 $8. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $500 $2.000 $300 $1.115 $18.250 $2.050 $3.250 $7.Table 4: Senator Steve Peace.600 $2.250 $750 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.

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 $1.100 $2.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. taking Steve to 11 meals. IEP made a gift of $241 for his speech at a conference. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.900 .000 $5. Peace was treated to a $52 sports event by Mobil Oil.450 166 ELECTRIC/GAS $6. 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. while Edison treated him to five meals and a sports event. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.000 Table 6: Senator Byron Sher. as well as chair of the Senate Energy and Utilities Committee. SDG&E had Peace out to six meals. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Southern California Edison was granted a high level of access. Table 5: Senator Byron Sher. In 1995. In 1996.

000 $500 $500 $9. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. (geothermal) Colmac Energy Inc.882 $100 $1.000 $500 $1. McQuat.500 Int.600 $13. $2. (biomass) Edson + Modisette (lobbyist for indep.100 $500 $2.000 $100 producers. and Hamrin.482 $100 $1. EVs) Hansen. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . Brotherhood of Electrical Workers (various $9.000 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.

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 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.000 Large Energy Consumers $3.000 (tire $1.000 $1.500 COMPANIES $1.

California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .Tosco Corp.000 $300 $300 $22.585 $100 $500 $2. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $700 $4. of California.448 $14.

In 1996.000 in each of Amoco. totaling $758. Table 7: Senator Bill Leonard. Sher holds over $100.500 $300 $0 $0 $2.500 $0 $0 ERG Master’s Project Mark Stout 170 . and GE. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Mobil. totaling $2608. 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. Sher received no other gifts that year from energy utility stakeholders. NARUC treated Sher to a two day trip to DC for another meeting.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Exxon. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 $1.400 $750 $150 $1.300 $500 $1.

500 $150 $500 $3.730 $2. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. WA paid $734 for Leonard to moderate a conference session on utility deregulation. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.650 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.Table 8: Senator Bill Leonard. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $1.500 $500 $1. for a paltry $20. Edison again ERG Master’s Project Mark Stout 171 .000 $2. While the Senator was there. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. The Pacific Rim Conference of Seattle.650 $500 $1.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.080 $10.000 $5.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. extending his stay from 12/8/96 to 12/13/96. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $500 $500 $4. saving up for a $77 dinner with head lobbyist Bob Foster.000 $2.

paying $44 for two meals and lodging.000 $750 $750 $650 $150 $500 $3.600 $750 $750 $500 $1. Table 9: Assemblymember Mickey Conroy.000 $1.had Senator Leonard out for Legislative Ski Day.000 $1. for the modest tab of $56.000 $1. ARCO treated Leonard to a $19 meal at a reception. including lunch with Bob Foster. PG&E took Leonard out to a Kings game. They also had Leonard out for two meals in Sacramento.250 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .

PG&E treated him to a basketball game with $51 tickets. and Inner Mongolia. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $500 $1. $7.700 $500 $300 $550 $2.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. CFEE is a “non-profit.050 $1. and to 104 Asmus.Table 10: Assemblymember Mickey Conroy. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.500 $2. two meals for $44.000 $500 $2.000 $2.700 $750 $450 $250 $250 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. 4 ERG Master’s Project Mark Stout 173 .600 $3. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $3.000 $5. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. Shanghai. 1996. 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 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing.

with investments of greater than $10. four rounds of “refreshments” for $30.000 each in Edison. costing $99. and $25 of cookies and candy. General Electric. Edison wined and dined the Assemblymember with four meals at $134. and less than 10. In terms of investment.000 in Orange & Rockland Utilities. Kansas City Power & Light. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. SDG&E. ERG Master’s Project Mark Stout 174 . Pacificorp. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. $10 in candy.make sure Conroy kept a sweet spot in his heart for them. Chevron took Conroy out for two business meals. and Westinghouse Electrical. After such a busy social calendar in 1995.

000 $1.750 $2.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.675 $2.750 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $4.Table 11: Assemblymember Diane Martinez.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.000 $1.175 $500 $1.250 $1.250 $1.

000 $1.000 $4.000 $7.250 $1.000 $500 $3.500 $500 $500 $1.000 $5.000 $500 $500 $500 $500 $500 $3.750 $1.500 $6. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $500 $5.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.Table 12: Assemblymember Diane Martinez.000 $500 $1.500 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.500 $1.000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1.500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.000 $1. Dist.000 $0 $0 ERG Master’s Project Mark Stout 176 .

900 $3.058 $500 $500 $1.500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. 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.Table 13: Assemblymember Steve Kuykendall.100 $100 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.500 $1. the Illinois Energy Association flew Martinez out for a $1.000 $8.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $500 $500 $1.850 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.600 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.208 $0 $0 $1.000 $1. ERG Master’s Project Mark Stout 177 . natural gas.

000 $1. ERG Master’s Project Mark Stout 178 .000 $2. Sweden.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.374 $500 $2.000 $1. diesel) Unocal (CMA member) Victory Oil Co.Table 14: Assemblymember Steve Kuykendall.254 $200 $500 $4.000 $1.000 $19.490 “Travel project to Europe on Electric Restructuring.500 $1.000 $500 $2. and Budapest. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Conservation. Kuykendall’s social calendar was destined to pick up in 1996. and Privatization” visiting London.500 $1.500 $0 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. Kuykendall was taken on a $7. However. natural gas. From 3/28/96 to 4/8/96.443 $6.250 $100 $500 $35.374 $4. 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.350 $500 $1.

051 to fly the President out to New York City for a ConEdison Management Conference. The California 105 Asmus. 4 ERG Master’s Project Mark Stout 179 . SC to address their membership. 1996. CO. Chevron treated Kuykendall to two dinners for $131. Fessler was taken on a $7.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. regulators.167 junket visiting London. The Aspen Institute. a trade association for publicly owned utilities. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. Brussels. one of CFEE’s funders. an Edison lobbyist was added to the international travel party at the last minute. to meet with CEOs of the electricity industry.by the California Foundation on the Environment and the Economy. The Large Public Power Council. for $610.”105 The Consolidated Edison IOU spent $1. Edison. government ministers. The California Mining Association took him out for an evening of recreation and dinner costing $89. paid $1. and environmental groups to discuss the British experience with deregulation of electricity. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. spent $1402 to fly Fessler to Charleston. Another non-profit organization. known as the Council of States Government . According to investigative writer Peter Asmus. by the California Foundation on the Environment and the Economy. in Aspen.WEST. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. wholesale PoolCo model. and Paris. was very interested in California moving to the UK-style. A trade association. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU).

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

1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. wholesale PoolCo model. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Brussels. and Schlumberger oilfield services stock. to meet with CEOs of the electricity industry. Conlon was taken on a $7. In 1995. Jr. and Paris. Unocal.000 in each of Chevron. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. regulators. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference.000 in each of Central & Southwest Corp. and environmental groups to discuss the British experience with deregulation of electricity. PG&E had him out to three meals for $71. utility and General Electric stock. was very interested in California moving to the UK-style.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. spending $258. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.167 junket visiting London. He does own less than $10. He left office on February 23. 1995. and less than $10. Edison. one of CFEE’s funders. by the California Foundation on the Environment and the Economy. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Montana Power Company and Exxon stock. He does own more than $10. government ministers. ERG Master’s Project Mark Stout 181 .

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