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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider.” 407... “1) implementing Integrated Resource Planning (IRP)..” 356-357. inadequate information available to customers.and demand-side options systematically when seeking least-cost energy 12 13 Stevenson. Stevenson.classes of IPPs including Exempt Wholesale Generators.. One prominent utility regulator remarked on the situation that had developed in the 1980s: “In the current scheme of regulation. allowing larger generation plants to be exempt from traditional regulation.13 and the transient nature of short term building owners and renters... “Energy Efficiency Solutions.”. which compares supply.” 521. 14 Cavanagh.. “Discretionary Evolution. 15 Cavanagh. 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. “Global Warming and Least-Cost. They likewise lose money when the encourage customers to engage in conservation. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options. “Social Goals. utilities make money in only one way--selling [units of energy]. 356.12 While encouraging wholesale competition. ERG Master’s Project Mark Stout 11 . Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions. 14 Also. regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold.. This money-losing proposition is not significantly improved by any of the conservation cost recovery or incentive mechanisms now in use. Utilities lose money when customers engage in conservation.

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

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

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

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

with utility shareholders accepting some of the burden for past. As in the MOU. the Framework demands that each individual utility customer. uneconomic investments. but spells out a set of public interest concerns that should be addressed by any industry restructuring including mitigation of market power. The Framework calls for less than 100% stranded cost recovery. 1995. including residential and small commercial consumers. to decouple utility profits from sales volume. but with increased funding levels to restore energy efficiency and R&D spending at pre-Blue Book levels. (PBR). UCS. 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. Utilities Consumer Action Network. The Framework. By combining this with effective Performance Based Ratemaking. small customer equity. To enhance energy efficiency efforts. 26 27 MOU Parties. should see short and long term rate reductions. and at the level of attention given to the MOU. a coalition of public interest groups and renewable energy advocates. in the spirit of the existing Electric Revenue Adjustment Mechanism (ERAM). continuation of low income programs. A minimum level of renewables is proposed for each IOU supply portfolio to return the states resource diversity to 1993 levels. including NRDC. and Towards Utility Rate Normalization (TURN) submitted a “Framework for Restructuring in the Public Interest” to the CPUC. ERG Master’s Project Mark Stout 16 .1995 levels.27 Outraged that they had been left out of the MOU negotiating process. Framework Parties. 1995. a new mechanism is to be developed. a non-bypassable systems benefits charge is proposed. and continued progress for energy efficiency and renewable resources. EDF. as a response to the MOU. The Framework calls for equitable opportunities for small consumer participation in any move to allow direct access.

“be based on need”. the CPUC released a policy decision on December 20. the Decision does not define any public program funding levels. 1995 which laid out a more defined vision of a deregulated ut ility environment. so that input can be made to the Legislature. 1996 levels. ERG Master’s Project Mark Stout 17 . with financial incentives tied to the level of divestiture. A legislative conference 28 Framework Parties. while the state Legislature took up the issue of electric utility deregulation on their own terms. Aside from funding levels for low-income rate discounts. as well as a “minimum renewables purchase requirement”. The Decision called for 100% stranded cost recovery by IOUs over a five year period. through a Competitive Transition Charge (CTC).expand renewables development above 1993 levels while commercializing new renewable energy technologies. the Decision proposed a nonbypassable “public goods charge” (PGC). requesting input from stakeholder working groups. PG&E (Pacific Gas and Electric) and SCE. and allow for uncapped low-income programs. 1995. based on a wholesale Power Exchange.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. with several key implementation areas to be hammered out by stakeholder working groups. and an Independent System Operator centrally controlling California’s transmission system. coupled with an IOU rate cap at January 1.29 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. direct access contracts. bilateral. 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. nor a renewables purchase requirement level. which should. For public purpose programs.

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

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

The overall levels are: 45 % existing technologies. It divides up this amount into four accounts that vary over four years of funding. 1997 42 Weisman. In March of 1997. 30% new technologies.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 10% emerging technologies.41 There are currently several electric utility restructuring bills in Congress. including residential and small commercial consumers. 1997. “If the bill had failed. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation.40 On May 6. 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. 1997. including a prominent one authored by Representative Dan Schaefer (R-CO). 1997 41 Marshall. 1998. and 15% consumer-side incentives. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1996 CEC. chair of the House Energy and Power Subcommittee. As Carter and Cavanagh have noted.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. would be eligible for direct access January 1. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 .

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

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

enabling increased competition.. 51 Stevenson. 1994. 50 Flavin and Lenssen. 150. Hoffman 55-62. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1993. 447-475.”.intense pressure from large industrial customers. “Discretionary Evolution. 195. 52 Gilbert. 84-108.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 1993. 356-357.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. greatly increasing opportunities for bulk power sales. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. ERG Master’s Project Mark Stout 23 . who in the past had enjoyed privileged status with cheap rates.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. Davis. but now had to pay higher rates. Gordon. basing their arguments on welfare economics as applied to the changing electric utility landscape.

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

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

. Connecticut. Colorado.”. both appointees of Governor Pete Wilson. and Wisconsin. 60 61 Levison. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). “Discretionary Evolution. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail.has noted.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.. 1995.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. though it urges states to consider retail competition. 62 Asmus. 355-356. according to Jeff Dassovich. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. “DOE Restructuring Bill” Stevenson. Maine. “Retail wheeling. Calls for bids have often been oversubscribed by a wide margin. Michigan initiated a five year retail wheeling experiment involving two utilities. “the DOE bill does not mandate retail markets by any date certain. Massachusetts. 24. New York.”. 1997.”62 a form of integrated resource planning know as the BRPU. ERG Master’s Project Mark Stout 26 . were the key retail wheeling champions within the CPUC. In 1994.63 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... 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. Commissioner Knight. the same year that California’s Blue Book proposal was released. an analyst with CPUC’s Division of Strategic Planning.

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

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

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

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

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

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

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

• AB 1890 outcome: As in the CPUC Decision. and have adequate customer education programs and protection from fraud put into place. They resist retail competition. 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 consumers benefited from the inclusion of language on community aggregation to allow residential customers some benefits from direct access. although more specific details were required. as well as in their opposition to 100% stranded cost recovery by the IOUs. the consumer education and protection language was well received. small consumer and low income advocates lost in their opposition to a market structure allowing direct access. want an equitable user class phase-in schedule for direct access. Language on consumer education and protection did not go far enough in addressing the needs of a deregulated market. Funding for low income programs was good. • December Decision outcome: 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. In principle. with no cap on low income rate assistance. with no cap on low income rate assistance. as well as in their opposition to 100% stranded cost recovery by the IOUs. 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.• Small Consumers: Small consumer advocates want any restructuring that occurs to have net benefits for even the least well off individual. Funding for low income programs was good. and support community aggregation for residential ratepayers to take advantage of bilateral contracts with low cost generators.

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

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

this provides a baseline to determine if they got what they wanted. a slightly smaller number of representatives report a mixed or unclear outcome. as well as the majority of large electricity consumers. nearly half of the representatives say that their organization got most of what it wanted from the December Decision. 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.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. 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. and the remaining minority claim that their organization got rather little. Figure 2 shows that all of the investor-owned utilities and independent producers. say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . 1995 Decision.

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

as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. As Figures 5 indicates. either the CPUC December Decision or 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.” Many of the other stakeholders consider AB 1890 an incremental. Natural Resources Defense Council #1. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. and to begin to build theories for why. forward Decision. and Union of Concerned Scientists interviews]. PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. as well as three subjects ERG Master’s Project Mark Stout 40 .[see American Wind Energy Association. As excerpted from the PG&E stakeholder interview. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. 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.

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

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

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

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

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

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

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

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

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

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

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

Candidate. these tables cover the years 1995 and 1996 for the author of AB 1890. OK?. 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. in terms of complicated problem area. even though there some parts they might hate. is clearly renewable folks. and my rule is when we are forced to unilaterally resolve issues.” That same hearing session. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . A full breakdown of contributions for each legislator is included in Appendix E.. Where data is available. in order to move forward with a product. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10.77 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. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts. The other thing is. Jim Brulte (R-Ontario). Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. everybody should suffer except for us.. The following campaign contribution summary tables were compiled from Officeholder. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division.start unilaterally resolving issues. Our largest problem area. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package.. I’m sure there are lots of votes in the legislature that would just as soon do electric restructuring without a renewables component. no attempt has been made at determining total annual contributions from all sources to each officeholder. obviously there is going to be many political philosophies on that issue.. if there is something you can bring to the table.

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

630 $300 N/A $0 $5.500 $78.419 $13.092 $3.153 $750 N/A $8.110 $34.370 $648 N/A $0 $208.981 $1.079 $13.166 $5.000 $225.741 $21.163 $0 $25.112 $3.079 $950 $14.745 $68.592 $846 $0 ERG Master's Project Mark Stout 54 .675 $384.101 $495 $10.818 $0 $65. 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.203.758 $2.496 $8.964 $0 $40.000 $634.752 $0 $51.835 $1.588 $500 $32.000 $681.416 $5.608 $3.181 $0 $160.559 $0 $246.374 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.096 $971.500 $190.500 $263.272 $0 $64.516.149 $3.000 N/A $0 $18.075 $4.819 $0 $323.S.031.000 $0 $70.595 $0 $21.308 $516.000 $562.157 $0 $188.470 $10.102 $0 $73.000 $1.675 $736.239 $0 N/A $0 $89.125 $0 $4.000 $480.500 $533.000 $62.995 $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. (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 $59.479 $2.952 $1.405 $0 $722.500 $1.180 $0 $209.

665 $0 $262.495 $1.850 $1.083 $0 $20. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.492 $0 $66.081 $1.000 $524. 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 $4.099 $12.326 $0 $100.230.207 $5.701 $0 $5. (gasoline refining and marketing) Tower Energy Group (oil.000 $20.716 $39.003.145 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .319 $0 $10.596.600 $32.723 $0 $38.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $0 $15.000 $0 $6.000 $526.291 $3.000 $0 $171.495 $27. (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.401 $1.000 $37.551 $12. natural gas.675 $0 $1.271 $0 $12.203 $5.938 $0 $118.203 $0 $30.197 $500 N/A $2.947 $500 $281.167 $500 $25.250 $0 $30.055 $0 $151.600 N/A $5.000 $383.362.519 $11.400 $100 $79.

producers.543 $29.331 $0 $97.750 $267.590 $5.000 NA $500 $0 $2. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.032 $0 $172.748 $32.882 $15.017 $1.240 $0 $178. Dist.782 $981.000 $50.1996 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. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.500 N/A $0 $211.159 $3.845 $452.862 $21.500 N/A ERG Master's Project Mark Stout 56 .000 $209. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. (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) $145.750 $418.500 $29.100 $144.281 $1.000 $33.819 $921. 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.589 $26.460 $50.724 $500 not applicable $500 $57.100 $0 $500 N/A $100 $0 $500 N/A $2.611 $1.147 $500 $739.060 $6. McQuat.000 $35.600 $276.000 $85.917 $300 $5.750 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.229 $100 N/A $1. and Hamrin.450 $566.195 $401.250 $148.118 $0 $144.250 N/A $100 N/A $2.454 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn.S.000 N/A $100 N/A $7.) 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.179 $0 $3.400 $1.200 $837.626 $0 $8.717 $500 not applicable $0 $138.571 $500 N/A $200 N/A $1.905 $30.025.286 $3. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.

622 $67.925 $0 $44.181 $1.384 $2.050 $949.177 $300 N/A $0 $29.800 not tracked $3.050 N/A $0 $214.438 $500 N/A $0 $1.521 $0 N/A $50 $87.250 $34.478.780 ERG Master's Project Mark Stout 57 .000 $233.960 $2. 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) $41.500 $277.245 $335.417 $9.885 $300 $207.521 $1.705 $19. (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.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.958 $2.072 $918.000 $76.995 N/A $100 N/A $0 $3.090 $749 $38.000 $22.209.347 $9.500 $251.754 $4.761 $0 $73.500 $47.532 $4.750 $37.989 N/A $9. Texaco Tidelands Oil Tosco Corp.000 $65. natural gas.712 $100 N/A $200 $16.878 $12.407 $200 $61.950 $3.661. (gasoline refining and marketing) Tower Energy Group (oil.334 $498 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.900 $0 $21.016 $1.296 $800 $25.521 $14.650 $3.750 $23.689 $2.573 $2.636 $0 $103.511 $1.495 $22. diesel) Unocal (CMA member) Victory Oil Co.721 $748.000 $500 $456.900 $1.643 $1.861 $1.137 $550 N/A $5.138 $1.

000 $700 $117.462 $208.378 $100 $21.000 $2.462 $500 $14.000 $15.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 N/A $250 N/A $22.585 $33.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1. of California.068 $14.438 $4.790 $100 $14.448 $424.066 $500 $21.250 $21.

as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. were able to far outspend environmental organizations (who were usually spread thin over many issues). According to investigative writer Peter Asmus. including oil and natural gas companies. an Edison lobbyist was added to the international travel party at the last minute. Shanghai. and environmental groups to discuss the British experience with deregulation of electricity. 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. CFEE is a “non-profit. Conservation. for $7. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. to meet with CEOs of the electricity industry. Brussels.”80 In April of 1995. 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. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London.79 From 3/16/94 to 3/27/94.800 each. 4 ERG Master’s Project Mark Stout 59 . regulators. 4 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. paying up to $7.As one would imagine. their “Travel project to Europe on Electric Restructuring. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. and small consumer groups.167 per guest. alternative energy producers. 1996. and Paris. From 3/28/96 to 4/8/96. government ministers. and Inner Mongolia. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). 1996. the lobbying summary tables above.

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

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

Bibliography
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and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.e. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i.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.

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

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

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

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

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

We have one 85 Enova Corporation 1996 annual report. AB 1890)? Why? We supported the December Decision. Energy Pacific85]. Is your organization more comfortable with one policy decision over the other (i. the goals of an unregulated affiliate may be different than a utilities. but we stepped all over each other internally.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. Whether this happens is up to SDG&E’s operation. ERG Master’s Project Mark Stout 72 . We tried to participate in the process. CPUC vs. we have started a non-regulated business At times. The PUC had fallen into low esteem with the Legislature. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.. Enova [Enova Energy. which has formed a joint venture with Pacific Enterprises. SDG&E took part in a series of hearings. tried to talk with everybody as much as possible. 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.e. The PUC was not the right forum for this. and AB 1890 extended it. These differences were worked out internally with our affiliate. If the Legislature had not done what it did to reconcile competing interests. Had there been more coordination between the PUC and the Legislature. the process would have been smoother. or over time? In getting ready for competition. the Commissioners have no authority over municipal utilities. there would have been litigation or more 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? We stuck to our two goals as the most important priorities. I will not be surprised if they push for new legislation in 2001. all of the delegates have signed on. If it could not be resolved yet. because of the different characteristics of different states. Peace would. supported by regulatory attorneys and experts brought in when needed. A delegation has taken AB 1890 to DC. try to resolve it. Have sold it that AB 1890 is not a model for the nation. nobody knew where it was going. Peace became an advocate for resource diversity. Jim Brulte and Bill Leonard wanted to bail on them.or two full time staff in San Francisco. This was an exercise that none of us want to do soon. We have a $1/4 billion to invest in the ISO. The Conference Committee provided a forum for stakeholders to solve their problems in a collaborative approach. If they did not solve them. because of the BRPU experience. and nobody would like the outcome. in that their money goes away in 2002. The renewables community has a problem. Steve Peace would pick an issue. We are asking Congress to leave California alone. As AB 1890 started. and need to hit the 1/1/98 deadline. The Republicans did not want any renewables funding. but Byron Sher needed appeasement. ERG Master’s Project Mark Stout 73 . Over time. with three officers who had good control over what we were doing. SDG&E had eight people involved in the process. at which time they must get competitive. Peace created a mood that we could get the package done. He was adamant against the RPS. he created momentum with no recess. he would move on.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

but a narrow set of projects. but had to be in the debate. leading to a heated internal debate. a very. In the end. its anti-slamming [slamming is a practice of switching a customers utility provider without their consent] language is really anti-community access language. and offered a good commitment to low income programs. divested power plants must come with a contract for the original staff for the first two years. ERG Master’s Project Mark Stout 116 . It turns out that independent generation plants are run with much less staff. On the good side. We had the option of opposing it and jeopardizing the concessions in it. TURN felt it had turned AB 1890.5 billion increase. Is your organization more comfortable with one policy decision over the other (i. but Edison successfully created this barrier under the guise of anti-slamming language. signed document with independent verification that a customer wants to be included in an aggregation. into a very bad bill.. This raises a substantial barrier for municipalities to aggregate their residents’ loads. Edison gets coal cost increases. we decided not to oppose. CPUC vs. AB 1890)? Why? At the end of the process. Unions got a huge bone by having the cost of retraining and severance included in the CTC. On the bad side. requiring a written. Since we felt that it was incrementally better than the December Decision. we did not oppose or support AB 1890. Some customers got away with no CTC. We had suggested that community access provide an out for people that did not want in. Peace’s residence had gotten slammed a couple times. it limited CTC recovery to a shorter period of time. PG&E gets a $0.So we were stuck with a bill that we hated. very bad bill. so he was amenable to this. there were some self-generation projects in the pipeline. Also.e. firmed up the nonbypassability of the CTC.

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

TURN tried to marshal support with kindred groups UCAN [Utilities Consumers’ Action Network. with a troika of large customers. utilities. unions. TURN contracted with Lenny Goldberg. taking care of small consumers would have led to compromise. like an armadillo in the middle of the road. and IPPs [Independent Power Producers]. the whole thing would fall apart with parties leaving the table. Several times people did leave the negotiations. issue specific attorneys with support staff. supported by the appropriate staff. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? TURN hoped that if you knocked out enough of the gifts. making it very easy for the Republican Commissioners to adopt. creating a huge advantage to have a fresh mind. utilities. There were waves of utility employees. Lenny was in the Conference Committee every day. ERG Master’s Project Mark Stout 118 . I went up three or four times. IPPs. Public purpose concerns become peripheral. they just loaded up the plate. another small consumer advocacy group] and Greenlining Institute/Latino Issues Forum [low income and minority community advocates]. big customers. it was all over.for the meetings leading up to the MOU. So much of the deal had been cut in advance by large powerful interests. What was eye opening about working with the Framework Parties [Framework for Restructuring in the Public Interest] was the divergent positions of the environmental groups. it is tough to stop the momentum. nobody gave everything up. Hearings were going on till two or three AM. Critical consumer interests were not present. The “consensus process” was just everybody taking. If you can get all of the big dogs to reach consensus. Once Edison was on board for Direct Access.

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

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

but time will tell on the legislative response. being difficult to influence the outcome. I took part in as many full panel hearings as I could get on to. I am liking the CEC report [California Energy Commission. ERG Master’s Project Mark Stout 121 . It was the threat of a gun that got AB 1890 done. 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. 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]. Most direct contact was after the Decision. 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. from the beginning.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. This helped to keep a warm spot with free market ideologues. CEERT is a diverse organization. The outcome was a compromise that nobody liked much. or over time? Yes. there was not enough activity. Policy Report on AB 1890 Renewables Funding]. EDF stated that we were for competition. The process was like watching a movie. making it difficult to get agreement. and were sincere about it. The selection of the RPS in the Decision gave comfort to people who had a worse uphill climb. I am surprised that AB 1890 came out as well as it did.

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

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

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

they may lose out altogether. there would be no chance of consensus on a compromise. This got the municipal utilities signed onto the systems benefits charge. energy efficiency funding levels dropped as soon as renewable energy was placed into the mix of public purpose programs. and increased Edison from $50 million to $90 million per year. Natural Resources Defense Council . 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. When Steve Peace said no to the RPS. as well as testifying in legislative committee hearings. and nobody would have been happy. The total funding level for public purpose programs increased $600 million ERG Master’s Project Mark Stout 125 . I selected him as a second interview subject for this organization because. 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. as I spoke with other stakeholders. During the debate.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. NRDC also talked one on one with legislators and aids. 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. respectively]. During the drafting of Byron Sher’s Assembly Bill 1123. it created problems. It was very clear that if everyone did not work together. Ralph Cavanagh was important in pulling parties together.Interview #2 Ralph Cavanagh is NRDC’s Energy Program Director.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

‘97 Decision on public purpose programs. AB 1890)? Why? I would see them as an appropriate sequence of decisions. What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? We invited the Commissioners and public interest groups to briefings. most public interest RD&D money was allocated to the CEC: $61. Whether or not the Legislature intended this was a point of contention. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Also. Steve Peace and Byron Sher recently sent a letter to the PUC. Duque was very ERG Master’s Project Mark Stout 142 . we did not change our stance. compared to just 0. but it was a reasonable outcome. ‘95 decision. More money could have been spent on public interest RD&D. briefings to the IOUs were a standard part of the communication. Is your organization more comfortable with one policy decision over the other (i.7 per year to the utilities. There is an agreement that the PUC could continue funding after 4 years. the Legislature or PUC could modify. and this comes through in our briefings.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890. We have good people involved in research. not end this authority after four years. or over time? I think so. CPUC vs. In the February 14.8 million per year. working well together. Fessler attended one earlier.. The funding for public interest RD&D will be reviewed after three years. Conlon attended a briefing a few years back. Neeper did after the December. very committed.e. realizing the dollars available for public purpose programs were limited. stating that their intent was that the PUC retain authority for energy efficiency funding.

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

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

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

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

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

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

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

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

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

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

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

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

The IOUs got complete stranded cost recovery. The IOUs were clear that they wanted full recovery. The ability to fund politicians helped. He walked out at one point to force the munis to make up their mind. causing chaos. Political clout can be bought with lobbying and campaign contributions. It looks most likely that it will be adopted. Once the Governor’s office was behind the MOU. it was all over. Bill Leonard did not historically support ratepayer funding for renewables. Bill Leonard said that if you want to charge an exit fee. However. and look for ways to get around paying the CTC.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. such as irrigation districts and economic development rates. SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. you must play. 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. Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. There was a lot of play between SMUD and the large customers. Labor wanted to protect their employees. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. ERG Master’s Project Mark Stout 155 . while the large customers got the ability to go first on direct access. Was it always clear what outcomes each stakeholder group wanted from the process? Yes.

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

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

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

Interview #1 Coalition of California Utility Employees .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Natural Resources Defense Council .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 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .

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

Interview #1 Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Large Energy Consumers 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 . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #1 California Municipal Utilities Association .Interview #1 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 .

000 $495 $950 $696 $2.000 $1.000 $2.495 $1.191 $2.500 $22.995 $300 $12.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.896 $3.000 $1.000 $3.000 $7.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.800 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.495 $7.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $4.000 $2.000 $500 $1.429 $498 $1. 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.495 $10.500 $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.995 $21.000 $3.

000 $1.Table 2: Assemblymember Jim Brulte. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $10.500 $1. (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.495 $4.000 $1.750 $4.000 $8.995 $2.000 $2.500 $47.995 $14.511 $3.250 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.460 $200 $500 $750 $2.500 $6.017 $749 $750 $3.500 $1.995 $1.500 $800 $498 $200 $9.000 $3.000 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 . 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.990 $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.

and Privatization” visiting London.490 “Travel project to Europe on Electric Restructuring.000 $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 Int.750 $3.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Sweden. and Budapest. as well as an event.000 $1. totaling $101. From 3/28/96 to 4/8/96. Not to be outdone.750 $750 $1. Table 3: Senator Steve Peace. Chevron treated Brulte to two meals. 1996. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Brulte was taken on a $7.000 $3.250 $500 $1. Mobil treated Brulte to a $60 event in 1996.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Paling in comparison.000 $1.000 $750 $0 $0 103 Asmus. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.500 $1. 4 ERG Master’s Project Mark Stout 164 . CFEE is a “non-profit.750 $2. by the California Foundation on the Environment and the Economy.000 $1. Conservation.

000 $300 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.250 $7.050 $3.100 $2.450 $7.250 $750 $500 $1.000 $4.115 $18.815 $750 $6.600 $2.000 $500 $2.250 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $16.072 $2.000 $1.572 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $6.Table 4: Senator Steve Peace.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $2.500 $8.000 $750 $750 $750 $1.500 $3.

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 $1.900 .100 $2.000 $5. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. In 1995. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Table 5: Senator Byron Sher. In 1996.450 166 ELECTRIC/GAS $6. Southern California Edison was granted a high level of access.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.000 Table 6: Senator Byron Sher. SDG&E had Peace out to six meals. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5. IEP made a gift of $241 for his speech at a conference. while Edison treated him to five meals and a sports event. Peace was treated to a $52 sports event by Mobil Oil. taking Steve to 11 meals. as well as chair of the Senate Energy and Utilities Committee.

San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1.000 $500 $500 $9. (geothermal) Colmac Energy Inc.000 $500 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.500 Int. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .600 $13. $2. McQuat.482 $100 $1.882 $100 $1. (biomass) Edson + Modisette (lobbyist for indep. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.100 $500 $2. and Hamrin. Brotherhood of Electrical Workers (various $9.000 $100 producers. EVs) Hansen.000 locals) Southern California Pipe Trades United Assoc.

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

of California.585 $100 $500 $2.Tosco Corp.448 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $700 $4.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $300 $300 $22. (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.

400 $750 $150 $1.000 $1.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.300 $500 $1. Table 7: Senator Bill Leonard. Mobil. 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 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 in each of Amoco.500 $300 $0 $0 $2. NARUC treated Sher to a two day trip to DC for another meeting. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.500 $0 $0 ERG Master’s Project Mark Stout 170 . Exxon. In 1996. totaling $758. Sher holds over $100. Sher received no other gifts that year from energy utility stakeholders. totaling $2608. and GE.

SCE treated Leonard to dinner and lodging for Legislative Ski Day.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.650 $500 $1.000 $500 $500 $4.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. The Pacific Rim Conference of Seattle.080 $10. for a paltry $20. 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.500 $500 $1. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $5.000 $1.000 $2.730 $2. While the Senator was there.000 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation.Table 8: Senator Bill Leonard.500 $150 $500 $3. Edison again ERG Master’s Project Mark Stout 171 .000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. extending his stay from 12/8/96 to 12/13/96.650 $2. saving up for a $77 dinner with head lobbyist Bob Foster. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.

including lunch with Bob Foster.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. paying $44 for two meals and lodging. They also had Leonard out for two meals in Sacramento.250 $1.had Senator Leonard out for Legislative Ski Day.000 $1.000 $1. PG&E took Leonard out to a Kings game. ARCO treated Leonard to a $19 meal at a reception.000 $1.600 $750 $750 $500 $1.600 $1.750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Table 9: Assemblymember Mickey Conroy.000 $750 $750 $650 $150 $500 $3. for the modest tab of $56.

$7.600 $3.050 $1.000 $3. CFEE is a “non-profit.700 $750 $450 $250 $250 $1.600 $500 $1.000 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. PG&E treated him to a basketball game with $51 tickets. Shanghai. two meals for $44.700 $500 $300 $550 $2.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. and Inner Mongolia. 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.Table 10: Assemblymember Mickey Conroy. 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. the California Foundation on the Environment and the Economy took Conroy on an 11 day. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1996.500 $2.000 $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.000 $500 $2.000 $500 $750 $250 $500 $2. 4 ERG Master’s Project Mark Stout 173 . and to 104 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $5.

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

(geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. 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 $1.000 $1.750 $1.Table 11: Assemblymember Diane Martinez.175 $500 $1.250 $1.250 $1.750 $2.750 $2.675 $2.750 $4.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .

) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. Dist.250 $1.000 $7.000 $500 $500 $5.750 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.Table 12: Assemblymember Diane Martinez.500 $1.000 $500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $500 $500 $1.000 $500 $3.000 $1.500 $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 MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $4.000 $4.000 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 . (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $500 $500 $500 $500 $500 $3. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.500 $1.000 $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. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. natural gas. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. ERG Master’s Project Mark Stout 177 .467 trip to Northwestern University to discuss the deregulation of public utilities.500 $1.500 $1.900 $3.100 $100 $1.000 $1.208 $0 $0 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.058 $500 $500 $1.600 $1.000 $500 $500 $1.850 $1.000 $8. the Illinois Energy Association flew Martinez out for a $1.Table 13: Assemblymember Steve Kuykendall.

natural gas.250 $100 $500 $35. However. and Privatization” visiting London.) 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 .000 $1.000 $500 $2.500 $1.374 $4. Kuykendall’s social calendar was destined to pick up in 1996.Table 14: Assemblymember Steve Kuykendall. and Budapest. Sweden.000 $1.500 $1.000 $2.374 $500 $2. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.490 “Travel project to Europe on Electric Restructuring. From 3/28/96 to 4/8/96.254 $200 $500 $4.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. Kuykendall was taken on a $7. diesel) Unocal (CMA member) Victory Oil Co.000 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.000 $19. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $0 $1. Conservation.350 $500 $1.443 $6.

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

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

1995. to meet with CEOs of the electricity industry. regulators. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. Brussels. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. In 1995. and environmental groups to discuss the British experience with deregulation of electricity. one of CFEE’s funders. PG&E had him out to three meals for $71. and less than $10. He left office on February 23.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. He does own more than $10.000 in each of Chevron. Unocal. and Paris. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Jr. by the California Foundation on the Environment and the Economy. utility and General Electric stock.167 junket visiting London. spending $258. wholesale PoolCo model. government ministers. He does own less than $10.000 in each of Montana Power Company and Exxon stock. ERG Master’s Project Mark Stout 181 .000 in each of Central & Southwest Corp. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and Schlumberger oilfield services stock. Conlon was taken on a $7. Edison.

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