Energy and Resources Group Master’s Project

Mark Stout 5/25/1997

Comparative Power Analysis of the California Electric Utility Industry Deregulation Process

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

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

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

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

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Various stakeholder groups. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. there will probably be significant winners and losers as a result of this legislation. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. This paper develops a comparison of which stakeholder groups got what they wanted. a product with well documented environmental impacts including local air pollution. and why. 1995 3 Flavin and Lenssen.org/programs/Energy/green_power/a_better. 1995 Electric Restructuring Decision. 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. with varying success. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. which will be superseded to a great extent by the details of AB 1890. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes. 1 2 CPUC RD&D Working Group.4 Given the stakes involved with this industry.edf. 1996 California Energy Commission. 1996. 1994 4 WWW page: http://www.html ERG Master’s Project Mark Stout 4 .S. 1995 Decision with the California legislative process resulting in AB 1890.3 According to the Environmental Defense Fund. which sets in motion a process of electric utility deregulation beginning in 1998.Introduction On September 23. contrasting the results of CPUC process resulting in their December. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). selling 250 billion kWh of electricity per year2. acid rain and climate change.

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

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

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

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

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

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

Status Report.20 Many stakeholders. the CPUC proposed. Blue Book. Wagner. This process tempered the CPUC’s frenetic timetable. which requires the CPUC to engage in a series of public hearings. including private and public-interest organizations. which had been dubbed the MegaNOPR. For instance. where CPUC President Fessler and Commissioner Knight testified on their proposal. and asserted that. “a vibrant market exists for energy efficiency services”. The first issue addressed open access to the transmission system 19 20 CPUC. 1. 21 CPUC.19 Since the release of the Blue Book proposal. 1994. 1995. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. such as “green pricing”. and documentation resulting in a report back to the Governor and Legislature by January 31. 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. 1994. 1994.21 This stakeholder response. were concerned about the content and timetable of this proposal. FERC released a dual-issue Notice of Proposed Rulemaking. where customers voluntarily pay more to promote renewables. 1995. Blue Book. ERG Master’s Project Mark Stout 13 .22 FERC MegaNOPR In March of 1995. This led to the passage of Assembly Concurrent Resolution 143. coupled with a lack of prior coordination with the state Legislature. numerous other states have also proposed electric utility deregulation. pushing back their goal for a policy decision until September of 1995.scheduled to be issued by the CPUC in August of 1994. evidentiary hearings. In their place. “alternative frameworks based on ‘let the market decide’”.

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

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

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

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

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

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

1998. It divides up this amount into four accounts that vary over four years of funding. would be eligible for direct access January 1.40 On May 6.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. As Carter and Cavanagh have noted. chair of the House Energy and Power Subcommittee. including residential and small commercial consumers. 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. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . 30% new technologies. 10% emerging technologies. In March of 1997. including a prominent one authored by Representative Dan Schaefer (R-CO). the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1997 41 Marshall.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. The overall levels are: 45 % existing technologies. 1996 CEC. 1997.41 There are currently several electric utility restructuring bills in Congress.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. and 15% consumer-side incentives. 1997 42 Weisman. 1997. “If the bill had failed. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation.

these concerns are represented by the California Large Energy Consumers Association (CLECA). and future expansion. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation. if a company wants more revenue it must invest more capital. It has an incentive to build a new plant even if it is not really needed. “Discretionary Evolution. 355. The state commissions typically calculate a company’s profits as a return on investment..requirement".”46 In California. “Restructuring Hearings on the Road” Levison. the companies have no incentive to be efficient. 1997.44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation. too conservative. 1997. Retail wheeling sits at the top of the agenda of this coalition of steel. Many forces have come together to create the push for electric utility deregulation in California.”. and one of the largest gold mining firms in the world. “DOE Restructuring Bill” 45 Stevenson.43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. Because the PUCs determine the rates. cement.” Barbara Barkovich. and overcapitalized due to state regulation. Davis explains their reasoning: “the electric companies are inefficient. Therefore. “12 companies--most foreign-owned--that really soak up the juice..45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition. a consultant representing CLECA explains their 43 44 Levison. ERG Master’s Project Mark Stout 21 . services. There is literally no profit in it for them.

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

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

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

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

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. Connecticut.61 California Public Utility Commissioners Jesse Knight and Norm Shumway.has noted. 62 Asmus. 1995. ERG Master’s Project Mark Stout 26 . In 1994. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). both appointees of Governor Pete Wilson. “DOE Restructuring Bill” Stevenson. 1997. the same year that California’s Blue Book proposal was released.. though it urges states to consider retail competition. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. 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. 60 61 Levison. “Retail wheeling. “Discretionary Evolution. New York..”.. were the key retail wheeling champions within the CPUC. an analyst with CPUC’s Division of Strategic Planning.”. Calls for bids have often been oversubscribed by a wide margin. 355-356. according to Jeff Dassovich.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Commissioner Knight. Maine. Michigan initiated a five year retail wheeling experiment involving two utilities. 24.. and Wisconsin. Massachusetts.”62 a form of integrated resource planning know as the BRPU. Colorado.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

. Senator Peace’s response to this policy mechanism was along the lines of. then. 1996 ERG Master’s Project Mark Stout 51 . I read accounts of public hearings chaired by Peace. But if there are no instrumental benefits.”. where he bullied advocates for the Renewables Portfolio Standard. According to an NRDC analyst who was interviewed.. who deal daily with issues of economic development.. they may lose out altogether. During my experience representing an environmental stakeholder organization in this process. 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. it will not inure to your benefit for those differences to still exist on Monday. bought at the expense of relatively unrestricted democratic interplay in the oppositional public sphere. Inclusion in the life of the state is. “It was very clear that if everyone did not work together. be justified by the instrumental benefits thereby achieved. the loss is harder to justify.validity for Committee Members. the RPS is a “non-starter” because San Diego Gas and Electric (SDG&E) does not like it”. “quit beating a dead horse.. under the threat of retribution. 1996 meeting. “For those of you who have intra-familial differences. The democratic loss experienced by entry into the state can.” As Peace said himself during the Conference Committee’s August 10. 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. Peace was threatening to handle renewable energy policy himself. The Governor has the same goal: empower people for economic development.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. We will 76 Dryzek. and Senator Peace represents a district in the San Diego area.

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

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

110 $34.496 $8.500 $1.419 $13.000 $225.096 $971.516.981 $1.995 $596.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $533.608 $3.479 $2.819 $0 $323.000 $562.000 $0 $70. 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.952 $1.153 $750 N/A $8.031.308 $516.075 $4.102 $0 $73.181 $0 $160.964 $0 $40.588 $500 $32.000 $62.592 $846 $0 ERG Master's Project Mark Stout 54 . (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 $59.500 $190.559 $0 $246.000 $681.370 $648 N/A $0 $208.S.470 $10.741 $21.157 $0 $188.079 $950 $14.079 $13.000 $480.272 $0 $64.818 $0 $65.675 $736.000 $1.500 $78.000 $634.203.752 $0 $51.416 $5.149 $3.374 $1.163 $0 $25.745 $68.166 $5.180 $0 $209.112 $3.092 $3.500 $263.595 $0 $21.405 $0 $722.630 $300 N/A $0 $5.758 $2.239 $0 N/A $0 $89.000 N/A $0 $18.101 $495 $10.675 $384. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.835 $1.125 $0 $4.

938 $0 $118.000 $0 $6.000 $524.362.203 $0 $30.600 N/A $5.003.701 $0 $5.947 $500 $281.596.326 $0 $100.675 $0 $1.081 $1.000 $20.055 $0 $151. natural gas.250 $0 $30.207 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.600 $32.000 $383.203 $5. (gasoline refining and marketing) Tower Energy Group (oil.000 $0 $171.400 $100 $79.197 $500 N/A $2.230.401 $1.145 $5.723 $0 $38.167 $500 $25.495 $27.519 $11.551 $12. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.500 $0 $0 ERG Master's Project Mark Stout 55 .850 $1.099 $12. (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.000 $37.083 $0 $20. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.492 $0 $66.495 $1.000 $0 $15.000 $526.271 $0 $12.319 $0 $10.665 $0 $262.716 $39.291 $3.

147 $500 $739.862 $21.) 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.331 $0 $97.845 $452.500 $29.100 $144.450 $566.782 $981.750 $418.000 NA $500 $0 $2. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.032 $0 $172.118 $0 $144.000 $50. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.400 $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.605 $250 N/A $1.250 N/A $100 N/A $2.229 $100 N/A $1.250 $148. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.626 $0 $8.611 $1.454 $3.000 $35.179 $0 $3.286 $3.100 $0 $500 N/A $100 $0 $500 N/A $2.060 $6.S.571 $500 N/A $200 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .589 $26.240 $0 $178. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.017 $1.025.281 $1.000 $209.917 $300 $5. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145. producers.460 $50. Dist.600 $276.819 $921. 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.717 $500 not applicable $0 $138.590 $5.724 $500 not applicable $500 $57.000 $33. McQuat. and Hamrin.200 $837.159 $3. Inc (consultants) Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Windpower Sithe Energies Co.750 $1.750 $267.882 $15.748 $32.195 $401.500 N/A $0 $211.000 N/A $100 N/A $7.543 $29.905 $30.000 $85. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.

754 $4.643 $1.721 $748. diesel) Unocal (CMA member) Victory Oil Co.138 $1.622 $67.072 $918.800 not tracked $3.407 $200 $61.209.960 $2.050 N/A $0 $214.1996 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.177 $300 N/A $0 $29. (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.438 $500 N/A $0 $1.878 $12.705 $19.181 $1.958 $2.090 $749 $38.521 $14.000 $500 $456.761 $0 $73.050 $949.000 $76.495 $22.347 $9.521 $1.245 $335.532 $4.636 $0 $103.750 $23.780 ERG Master's Project Mark Stout 57 .478.573 $2. (gasoline refining and marketing) Tower Energy Group (oil.137 $550 N/A $5.650 $3. (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.384 $2.296 $800 $25.500 $277.511 $1.250 $34.989 N/A $9.000 $233.900 $0 $21.750 $37.712 $100 N/A $200 $16. 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) $41.925 $0 $44.500 $47.995 N/A $100 N/A $0 $3.417 $9.334 $498 $1.500 $251.521 $0 N/A $50 $87. Texaco Tidelands Oil Tosco Corp.016 $1.000 $22.950 $3.900 $1. natural gas.861 $1.885 $300 $207.661.689 $2.000 $65.

790 $100 $14.438 $4.000 $700 $117.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .000 $2.068 $14.378 $100 $21.250 $21.448 $424.066 $500 N/A $250 N/A $22.066 $500 $21.585 $33. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.462 $500 $14. of California.462 $208.000 $15.

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

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

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.. CPUC vs.e. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 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. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.

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

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

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

while holding on to what they really wanted. the parent company of Southern California Gas Company83. E. Sirard. Jack.” Organizations had to be able to make decisions right on the spot to shape the outcome. SDG&E provides service to 1.”82 Enova Corporation has announced a merger with Pacific Enterprises.” according to Kathy. a gas utility which serves a territory largely overlapping with Southern California Edison’s.15 million electric customers in San Diego and southern Orange Counties. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. App. SDG&E. “People who influenced the outcome were present. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. ERG Master’s Project Mark Stout 70 . and willing to be straightforward on what they can give on.reasonableness check. 82 83 CPUC Renewables Working Group. 1996. “a subsidiary of Enova Corporation. and gas service to 0. 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. is a California Investor Owned Utility Company founded in 1881. 1996.7 million customers in San Diego County. It allows an organization to get buy-in from other parties in advance.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We also had a strategy based on financial market leverage. The political leverage of agricultural votes was critical. Brand. It is amazing how much time the CEOs of IOUs spend on Wall Street. AECA participated with a customer coalition. We then made sure that anything negative about the utilities made it out to the analysts. 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. Steve Peace kept saying it would go with a unanimous Committee vote or it was not going to go at all. but stayed out of the MOU. 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.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. This was too complex a bill for a split conference committee. an organization that was formed in the late 1970s to represent industrial natural gas and electricity users. traditionally most active with CPUC proceedings. IOUs care more than anything about their stock price. which has evolved into an electricity-oriented group. Seymour & Rowher is Counsel for CIU. sending press releases to Wall Street analysts. but managed to get its language in thanks to Curt Pringle. ERG Master’s Project Mark Stout 98 . The irrigation district CTC exemptions was one of the last amendments added. We had an irrigation district bill which the utilities had previously killed. California Industrial Users Phil Stohr of Downey.

1995 CPUC proposals] were a major disappointment because of the dominance of PoolCo.. The work between May and September was critical. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. This was a new element which brought a new dimension: a rate freeze with a well- 92 Asmus. representing 24 companies that consume over 4% of U. 1995 Decision? Quite a lot in terms of basic concepts. Between May of 1995 and the Decision. The December Decision had aspects which gave us pause.. Much of that related to the MOU. This was not perceived as realistic before the Yellow Book. In 1986 when ELCON [the Electricity Consumers Resource Council. resulting in the PG&E rate restructuring settlement. but in general was a step forward.S. “Retail wheeling:. this sent the Commissioners scurrying. with Direct Access pushed out on the horizon and tied to a range of contingencies. The overwhelming majority of our activity has been on traditional rate cases. 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. the development of an option that would permit industrial customers to look somewhere else than the UDC for electricity generation. 1995. The draft Decisions [May. there was no forum in which to advocate for it.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We sought retail wheeling. electricity92] mentioned retail wheeling to the CPUC. the parties were involved in many conversations. Retail wheeling served as a muted backdrop.” ERG Master’s Project Mark Stout 99 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency.000 sponsors nationwide. The level of renewables support included in the BRPU served as a target for UCS. Integrated Resource Planning (IRP). Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. UCS was also opposed to 100% “stranded cost” recovery for utilities. manifest in California as the Biennial Resource Plan Update (BRPU). a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. 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. Deregulation of the electricity industry threatened to tear this house of cards down. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. Byron Sher was fine. E-3.000 in California”. ERG Master’s Project Mark Stout 133 . As the deregulation process unfolded at the CPUC. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. Peace was the idea person. As long as the Sierra Club and other groups were happy. was just beginning to be used as a policy option in several states. UCS has 100. including 13.John White were the front folks.

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

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

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

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

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

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

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

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

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

Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D. We had a presence. 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. The University has a counsel on the PUC service lists. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. and their was a steady chatter amongst parties. We filed comments. supplemented by several support staff. allowing for inertia. myself and another University employee were there off and on. In practice. The Governor can appoint one Commissioner a year. but they permitted some very big cuts in R&D funding in late 1994.interested in technology and became a CIEE board member. They have been favorable in principle the whole way through. For the conference committee we had an attorney representing the University. but nobody dedicated to the PUC proceedings. they have usually been good. but not an overwhelming one. and commented publicly at the Conference Committee. and spoke at one public hearing. about five people in the meileu. The office has two advocates. The University is represented by a legislative affairs office. ERG Master’s Project Mark Stout 143 . who handle all University issues. We had informal contacts with the CPUC staff.

historic levels [combined SCE. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. University of California representatives and I advocated for higher. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. After seven hours of negotiation. The IOUs wanted to use post-Blue Book. pre-Blue Book. They probably thought that this funding level included regulated transmission and distribution RD&D. They proposed to me funding at current RD&D budget levels. current levels for moving to a future restructured market. The renewables could have fared much better if they stuck together as a coalition. After they finally recognized the problem ERG Master’s Project Mark Stout 144 .Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. the renewables community cam back in. For example. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low. The municipal utilities angered Peace so much that he asked. 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. 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.

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

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

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

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

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

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

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

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

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

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

There was a lot of play between SMUD and the large customers. The IOUs were clear that they wanted full recovery. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Getting the help of the Governor’s office. However. 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. Labor wanted to protect their employees. while the large customers got the ability to go first on direct access. Bill Leonard said that if you want to charge an exit fee. Once the Governor’s office was behind the MOU. and look for ways to get around paying the CTC. Bill Leonard did not historically support ratepayer funding for renewables. SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. you must play. The ability to fund politicians helped. ERG Master’s Project Mark Stout 155 . 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. The IOUs got complete stranded cost recovery. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. He walked out at one point to force the munis to make up their mind. It looks most likely that it will be adopted. causing chaos. it was all over. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. such as irrigation districts and economic development rates.

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

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

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

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

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

1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 162 .429 $498 $1.000 $495 $950 $696 $2.000 $2.495 $1.495 $10.500 $1.000 $3.000 $3.495 $7.500 $22.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $4.000 $500 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.800 $1.995 $21.000 $7.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $2.896 $3.995 $300 $12.000 $1.191 $2.

000 $1.500 $800 $498 $200 $9.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.511 $3.000 $1.Table 2: Assemblymember Jim Brulte.750 $4.500 $47.500 $1.995 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $2.000 $2.500 $6. 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. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.017 $749 $750 $3.000 $10.995 $1.990 $1.500 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 . (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.460 $200 $500 $750 $2.250 $2.995 $14.000 $3.495 $4.000 $8.

750 $2.750 $3.000 $1. Chevron treated Brulte to two meals.500 $1.000 $2. totaling $101. and Budapest. Conservation.250 $500 $1.000 $3. 4 ERG Master’s Project Mark Stout 164 . and Privatization” visiting London. Paling in comparison. Not to be outdone.750 $750 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.490 “Travel project to Europe on Electric Restructuring. by the California Foundation on the Environment and the Economy. From 3/28/96 to 4/8/96.000 $1.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Mobil treated Brulte to a $60 event in 1996.000 $750 $0 $0 103 Asmus. Brulte was taken on a $7. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. CFEE is a “non-profit. (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. Sweden.000 $2. Table 3: Senator Steve Peace. 1996.000 $1. as well as an event. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.

(geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $0 $0 ERG Master’s Project Mark Stout 165 .572 $1.000 $1.100 $2.115 $18.250 $1.250 $7.000 $4.600 $2.000 $6.815 $750 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $2.450 $7.500 $16.500 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.072 $2.Table 4: Senator Steve Peace.000 $500 $2.000 $750 $750 $750 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.050 $3.500 $8.250 $750 $500 $1.000 $300 $1.

450 166 ELECTRIC/GAS $6.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. Peace was treated to a $52 sports event by Mobil Oil. In 1995. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. 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. IEP made a gift of $241 for his speech at a conference. Southern California Edison was granted a high level of access. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.100 $2.000 $5. while Edison treated him to five meals and a sports event. as well as chair of the Senate Energy and Utilities Committee.000 Table 6: Senator Byron Sher.900 . SDG&E had Peace out to six meals. Table 5: Senator Byron Sher. taking Steve to 11 meals. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1. In 1996.

$2. EVs) Hansen. and Hamrin.000 $500 $1.500 Int.100 $500 $2. (biomass) Edson + Modisette (lobbyist for indep. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 locals) Southern California Pipe Trades United Assoc. McQuat.000 $100 producers. (geothermal) Colmac Energy Inc. Brotherhood of Electrical Workers (various $9.000 $500 $500 $9. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.482 $100 $1.882 $100 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .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 $1.600 $13.

000 $100 $100 $500 $1.000 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 Large Energy Consumers $3.000 $100 $1.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 (tire $1.500 COMPANIES $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $1.

448 $14.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .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. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. of California.000 $700 $4.000 $300 $300 $22.Tosco Corp.

totaling $2608. In 1996. 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.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Sher received no other gifts that year from energy utility stakeholders.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher holds over $100. and GE.000 in each of Amoco. Exxon. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.000 $1.500 $300 $0 $0 $2. totaling $758.400 $750 $150 $1. 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. Mobil. NARUC treated Sher to a two day trip to DC for another meeting.300 $500 $1. Table 7: Senator Bill Leonard.

000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. 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. The Pacific Rim Conference of Seattle.500 $150 $500 $3. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.080 $10. Edison again ERG Master’s Project Mark Stout 171 .Table 8: Senator Bill Leonard. (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 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $500 $500 $4.650 $500 $1. saving up for a $77 dinner with head lobbyist Bob Foster.000 $1.650 $2.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.730 $2. WA paid $734 for Leonard to moderate a conference session on utility deregulation. While the Senator was there.000 $2. for a paltry $20. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. extending his stay from 12/8/96 to 12/13/96. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.500 $500 $1.000 $5.000 $1.

paying $44 for two meals and lodging. Table 9: Assemblymember Mickey Conroy.600 $750 $750 $500 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . for the modest tab of $56. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $750 $750 $650 $150 $500 $3. PG&E took Leonard out to a Kings game.000 $1.000 $1. They also had Leonard out for two meals in Sacramento.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.250 $1.had Senator Leonard out for Legislative Ski Day.750 $1.600 $1. including lunch with Bob Foster. ARCO treated Leonard to a $19 meal at a reception.

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. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $500 $2. and to 104 Asmus.Table 10: Assemblymember Mickey Conroy.000 $500 $750 $250 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day.500 $2.600 $3.700 $750 $450 $250 $250 $1.000 $2. 1996. two meals for $44. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.700 $500 $300 $550 $2. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.600 $500 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. $7. Shanghai.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.300 junket to talk with Chinese central government and provincial leaders in Beijing. and Inner Mongolia.000 $3.050 $1. PG&E treated him to a basketball game with $51 tickets.000 $5. 4 ERG Master’s Project Mark Stout 173 .

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

) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 11: Assemblymember Diane Martinez.250 $1.250 $1.750 $4.175 $500 $1.675 $2.750 $1.000 $1.000 $1.000 $1.750 $2.750 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.

Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.000 $0 $0 ERG Master’s Project Mark Stout 176 .750 $1.000 $500 $500 $5.000 $1.000 $4.000 $5. Dist.500 $1.500 $1.000 $1.500 $500 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.000 $500 $1.000 $500 $500 $500 $500 $500 $3.000 $1.000 $500 $3. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $7.000 $4. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.Table 12: Assemblymember Diane Martinez.

The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. natural gas. ERG Master’s Project Mark Stout 177 .000 $8.208 $0 $0 $1.900 $3.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.850 $1.500 $1.000 $500 $500 $1.Table 13: Assemblymember Steve Kuykendall.000 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.100 $100 $1.058 $500 $500 $1.600 $1.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. the Illinois Energy Association flew Martinez out for a $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. 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. diesel) Unocal (CMA member) Victory Oil Co. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.374 $4. Kuykendall was taken on a $7.000 $2. and Budapest. natural gas. Conservation. From 3/28/96 to 4/8/96.490 “Travel project to Europe on Electric Restructuring.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 178 . Kuykendall’s social calendar was destined to pick up in 1996.374 $500 $2.443 $6.000 $500 $2. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.Table 14: Assemblymember Steve Kuykendall.000 $1.500 $0 $1.350 $500 $1.254 $200 $500 $4.000 $19.000 $1. Sweden.500 $1. However.250 $100 $500 $35. and Privatization” visiting London.500 $1.000 $1.

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

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

government ministers. was very interested in California moving to the UK-style.000 in each of Montana Power Company and Exxon stock. utility and General Electric stock. spending $258. and environmental groups to discuss the British experience with deregulation of electricity.167 junket visiting London. He does own less than $10. He does own more than $10.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. 1995. to meet with CEOs of the electricity industry. He left office on February 23. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. In 1995.000 in each of Central & Southwest Corp. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. PG&E had him out to three meals for $71. Jr. one of CFEE’s funders. regulators. Conlon was taken on a $7. Unocal. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Chevron. and Paris. and less than $10. by the California Foundation on the Environment and the Economy. Brussels. wholesale PoolCo model. Edison. ERG Master’s Project Mark Stout 181 . and Schlumberger oilfield services stock.

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