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documented environmental impacts including local air pollution.html ERG Master’s Project Mark Stout 4 .S. which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

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

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

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

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

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

The December Decision mirrored the market structure defined in the MOU. The Decision called for 100% stranded cost recovery by IOUs over a five year period. PG&E (Pacific Gas and Electric) and SCE. with financial incentives tied to the level of divestiture.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. coupled with an IOU rate cap at January 1. 1995 which laid out a more defined vision of a deregulated ut ility environment. while the state Legislature took up the issue of electric utility deregulation on their own terms. the Decision does not define any public program funding levels. ERG Master’s Project Mark Stout 17 . requesting input from stakeholder working groups. so that input can be made to the Legislature. A legislative conference 28 Framework Parties. which should.expand renewables development above 1993 levels while commercializing new renewable energy technologies. through a Competitive Transition Charge (CTC). Aside from funding levels for low-income rate discounts. the CPUC released a policy decision on December 20. and an Independent System Operator centrally controlling California’s transmission system. with several key implementation areas to be hammered out by stakeholder working groups. “be based on need”. and allow for uncapped low-income programs. as well as a “minimum renewables purchase requirement”. direct access contracts. For public purpose programs. bilateral. nor a renewables purchase requirement level. the Decision proposed a nonbypassable “public goods charge” (PGC). The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. 1996 levels. based on a wholesale Power Exchange.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. 1995.

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

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

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

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

”48 Davis describes the transition that has occurred in the influence of state PUCs. “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. executive director of the Center for Energy Efficiency and Renewable Technologies remarks. are now competitive. V. Asmus. they will have to gulp and swallow elsewhere. 24 companies that account of over 4% of the nation’s electricity use. If there are provisions for renewables and conservation here. There are some who are concerned about ELCON’s environmental ethics in pursuing electric utility restructuring. ERG Master’s Project Mark Stout 22 . As Davis notes. “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. and they say they know renewables. “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. “Retail wheeling..”...”47 The Clean Air Act amendments of 1990 set a precedent for Federal legislation following California’s leadership on environmental programs. “At least you can talk to CLECA.. on the other hand. 1995. has no respect for the environment.” to existing public interest programs.” CLECA’s national counterpart is the Electricity Consumers Resource Council (ELCON). “In the past the commissions had found their main constituents to be residential customers.. 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. 24-25. such as wind power..viewpoint. That’s one reason why they want to cut their own deals. ELCON. Now they found 46 47 Davis. John White. 192.

enabling increased competition. Davis. 447-475.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 52 Gilbert.intense pressure from large industrial customers. but now had to pay higher rates.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 1993. Gordon. 51 Stevenson. 50 Flavin and Lenssen.. 150. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 1993. 1994. who in the past had enjoyed privileged status with cheap rates. 195. 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. 356-357. “Discretionary Evolution.”. ERG Master’s Project Mark Stout 23 .50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. Hoffman 55-62. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. basing their arguments on welfare economics as applied to the changing electric utility landscape. 84-108.

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

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

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

” [see Anonymous Officeholder Staff Interview #1] Because of this stakeholder-representative orientation. writes. 1995.65 Analysis The California electric utility deregulation experience has often been described as a stakeholder-driven process. nineteen state legislatures have reviewed bills in response to the potential for greater competition in the electric utility industry. “There was not enough education or public involvement. Knight. so there was not enough press coverage. it was clear that the general public was not very involved in the process.”64 As of October. October 9. As a staffperson for a prominent officeholder noted during our interview. Wall Street Journal.. Jesse J. A15(Western). As it was too esoteric a topic. in that not all interest groups who might be impacted by the process participated in the 63 64 CPUC Blue Book. as well as the staff of the officeholders they were trying to influence. ERG Master’s Project Mark Stout 27 . letter to the editor. 32. I decided it would be insightful to interview people who represented stakeholder organizations that were active in the process. as well as interviews for this analysis. 1995. “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. Based on my experience as a representative for an environmental organization. including authorizations for legislative and regulatory study committees as well as direct access for certain customers to alternative generators. Many of the outcomes of the deregulation policy formulation were a result of negotiations between organizations representing different stakeholder groups. There are limits to this approach.in a fit of political posturing.

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

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

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

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

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

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

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

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

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

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

As Figures 3 indicates. 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. 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 . a similar number of representatives report a mixed or unclear outcome. as well as the majority of large electricity consumers. 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. say that their organizations got most of what they wanted from AB 1890.from the December Decision. Figure 4 shows that all of the investor-owned utilities and utility labor union Mixed/Unclear Most representatives. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome.

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. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . either the CPUC December Decision or AB 1890. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. As Figures 5 indicates.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization.

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

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

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

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

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

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

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

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

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

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

receiving “symbolic rewards only”.74 Dryzek has voiced concern that by accepting a seat at government policymaking tables.” An anonymous staffer’s comment also resonated with this state imperative. recession.for a static amount of renewables capacity.. then they are punished by “capital strike”. “. As he explains. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff. subdivision (e) 75 Dryzek. without making it at all clear if these voluntary contributions will actually decrease the amount the IOUs must contribute towards renewables support funding from their frozen revenues.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”.. . They may be allowed to participate in the policymaking process. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value.influential players relied on a “fairness and competition” argument.. States simply must provide the conditions that facilitate capitalist investment and economic growth. section 381. and unpopularity in the eyes of the public. 1996 Conference Committee on Electric Restructuring AB 1890. “Large businesses articulated the issues. To the extent that public policy remains under the sway of state imperatives.. There was no significant opposition to this point during the hearing. 1996 ERG Master’s Project Mark Stout 50 .73 However.. As noted earlier. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. but outcomes will be systematically skewed against them. falling tax revenues. if they pursue antibusiness policies. one Senator’s Chief of Staff revealed.. This had 73 74 California Senate TV video of August 10. 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.. public interest organizations have been “co-opted or bought off cheaply”..

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

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

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

102 $0 $73.588 $500 $32.752 $0 $51.096 $971.031.125 $0 $4.149 $3.981 $1.819 $0 $323.758 $2.166 $5.470 $10.416 $5.595 $0 $21.405 $0 $722. (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 $59.110 $34.157 $0 $188. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.516.496 $8.818 $0 $65.675 $384.995 $596.479 $2.500 $263.952 $1.203.272 $0 $64.163 $0 $25.745 $68.000 $225.101 $495 $10.112 $3.181 $0 $160.075 $4.374 $1.500 $190.741 $21.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $1.592 $846 $0 ERG Master's Project Mark Stout 54 .370 $648 N/A $0 $208.419 $13.000 $1.000 $480. 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.079 $13.000 $562.500 $78.000 $62.239 $0 N/A $0 $89.308 $516.500 $533.608 $3.835 $1.000 N/A $0 $18.S.675 $736.000 $634.559 $0 $246.079 $950 $14.000 $0 $70.153 $750 N/A $8.630 $300 N/A $0 $5.964 $0 $40.000 $681.180 $0 $209.092 $3.

551 $12.701 $0 $5.203 $5. (gasoline refining and marketing) Tower Energy Group (oil. 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 $4.665 $0 $262.000 $526.145 $5.492 $0 $66.947 $500 $281.250 $0 $30.495 $1.000 $0 $15.000 $383. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.319 $0 $10.099 $12.167 $500 $25.596.000 $37.003.600 N/A $5.938 $0 $118.362.495 $27.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.271 $0 $12.230.519 $11.716 $39.197 $500 N/A $2.000 $524.000 $0 $6.675 $0 $1.000 $20.000 $0 $171.326 $0 $100.083 $0 $20.055 $0 $151. natural gas.291 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.203 $0 $30.207 $5.600 $32.081 $1.723 $0 $38.400 $100 $79.850 $1.500 $0 $0 ERG Master's Project Mark Stout 55 .401 $1.

590 $5. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.782 $981.032 $0 $172.454 $3.571 $500 N/A $200 N/A $1.862 $21.195 $401.460 $50.286 $3.917 $300 $5.905 $30.017 $1. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. producers. Dist.882 $15.229 $100 N/A $1.450 $566.000 $33.543 $29.626 $0 $8. and Hamrin.750 $418.200 $837.500 N/A $0 $211.500 $29.000 N/A $100 N/A $7.400 $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.000 NA $500 $0 $2.) 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.819 $921. McQuat.240 $0 $178.605 $250 N/A $1.159 $3. (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) $145.748 $32. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $209. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.750 $267.000 $35.600 $276.025.611 $1.724 $500 not applicable $500 $57.500 N/A ERG Master's Project Mark Stout 56 .250 $148.000 $85. 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.845 $452.147 $500 $739.750 $1.281 $1.100 $144.717 $500 not applicable $0 $138.100 $0 $500 N/A $100 $0 $500 N/A $2.060 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.S.331 $0 $97. 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.118 $0 $144.250 N/A $100 N/A $2.000 $50.589 $26.179 $0 $3.

712 $100 N/A $200 $16.995 N/A $100 N/A $0 $3.721 $748.050 N/A $0 $214.754 $4.1996 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.500 $47.250 $34.407 $200 $61.000 $233.000 $76.960 $2.000 $65.500 $277.750 $37.780 ERG Master's Project Mark Stout 57 .878 $12. (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.347 $9.016 $1.334 $498 $1.650 $3.689 $2.661.384 $2.643 $1.209.177 $300 N/A $0 $29.761 $0 $73.750 $23.989 N/A $9.622 $67.438 $500 N/A $0 $1.417 $9. diesel) Unocal (CMA member) Victory Oil Co.495 $22.245 $335. (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.138 $1.072 $918.532 $4.000 $500 $456.090 $749 $38.137 $550 N/A $5.521 $0 N/A $50 $87.500 $251. (gasoline refining and marketing) Tower Energy Group (oil.050 $949.900 $1.181 $1.705 $19. 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) $41.636 $0 $103. natural gas.900 $0 $21.573 $2.521 $1.861 $1.478.950 $3.958 $2.511 $1.800 not tracked $3.000 $22.296 $800 $25.925 $0 $44.521 $14. Texaco Tidelands Oil Tosco Corp.885 $300 $207.

066 $500 N/A $250 N/A $22.000 $700 $117.585 $33.462 $500 $14.000 $2. 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) $1.378 $100 $21.250 $21.462 $208.790 $100 $14.438 $4.000 $15.066 $500 $21.448 $424.1996 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.068 $14. of California.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .

were able to far outspend environmental organizations (who were usually spread thin over many issues). CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. Brussels. 1996. and environmental groups to discuss the British experience with deregulation of electricity. and small consumer groups. 4 ERG Master’s Project Mark Stout 59 . the lobbying summary tables above. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. an Edison lobbyist was added to the international travel party at the last minute. alternative energy producers. their “Travel project to Europe on Electric Restructuring. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU).As one would imagine. for $7. 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.79 From 3/16/94 to 3/27/94. government ministers. and Inner Mongolia. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. From 3/28/96 to 4/8/96.167 per guest. CFEE is a “non-profit. to meet with CEOs of the electricity industry. According to investigative writer Peter Asmus. One example of the type of access to officeholders that money can buy is the junkets run by the California Foundation on the Environment and the Economy.”80 In April of 1995. and Paris. Conservation. regulators. Shanghai. 1996.800 each. paying up to $7. 4 Asmus. including oil and natural gas companies.

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

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

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

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

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

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

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

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

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

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

”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. not “the big guys eat first”. I would not say we got everything we wanted. equity. let’s do this the right way. We also pursued the opportunity for a return on investment. We could have been perceived as opposing direct access. large and small customers. With the encouragement of the Governor’s office. and other energy service providers. we were positioned as an anti-restructuring. and SCE investors as well as independent energy producers should have the opportunity for a return on investment. all customers should at the same time. so we decided if this was going to come into play. This is best implemented under a transition. based on number of customers. First. don’t rock the boat utility. If any customers are to benefit. with a phase-in to direct access. and return on investment. opportunity. creating a level playing field. restructuring came to be viewed as inevitable. The 109-year old investor owned utility serves more than 4. 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 nation’s second largest utility. Our three principles. 000 square mile service territory has a population of more than 11 million. we adopted a principled approach that recognized the interests of Edison.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE. and served as a basis for AB 1890.2 million customers in Central and Southern California. be we did get a principled ERG Master’s Project Mark Stout 74 . 1995 Decision? Those three principles were significant components of the December Decision. The utility’s 50. a manifestation of these mutual interests. The regulatory compacts that we entered into need to be recognized. were equity. Over time.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

including open transmission access. ERG Master’s Project Mark Stout 138 . except for voltage support to let transactions occur. There is an added cost of having two mandatory entities. I can understand the concern for the concentration of power in one entity that drove this separation. What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Well before the December Decision. as has been put into place in foreign nations as well as US regional pools. The wholesale pool is not really a buyer. 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. We were more inclined to a unified structure. and the ISO winds up making schedule changes for physical feasibility anyway. the Energy Commission had been supportive of core aspects of the proposed generation deregulation.Board which has been created as a result of AB 1890. customer direct access. but had trouble applying it to this situation. the completely distinct power exchange and ISO. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. it is really just a clearinghouse. The commission has been supportive of investments with payouts over time for energy efficiency and RD&D. and the unbundling of rates and services. The CEC is a state agency that implements state energy policy and collects data on California energy usage and generation. 1995 Decision? The commission did not like the discrete power exchange and ISO. reciprocity for direct access.

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

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

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

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

They have been favorable in principle the whole way through. but they permitted some very big cuts in R&D funding in late 1994. and spoke at one public hearing. We had a presence. allowing for inertia. about five people in the meileu. In practice.interested in technology and became a CIEE board member. and their was a steady chatter amongst parties. The University is represented by a legislative affairs office. they have usually been good. We had informal contacts with the CPUC staff. and commented publicly at the Conference Committee. For the conference committee we had an attorney representing the University. supplemented by several support staff. Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D. but nobody dedicated to the PUC proceedings. ERG Master’s Project Mark Stout 143 . who handle all University issues. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. myself and another University employee were there off and on. We filed comments. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. The University has a counsel on the PUC service lists. The Governor can appoint one Commissioner a year. but not an overwhelming one. The office has two advocates.

but they allowed me to put in definitions derived from the CPUC RD&D Working Group Report on RD&D [which distinguished between public interest and regulated T&D RD&D] and other language. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. After seven hours of negotiation. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. current levels for moving to a future restructured market. 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. the renewables community cam back in. “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. They proposed to me funding at current RD&D budget levels. They probably thought that this funding level included regulated transmission and distribution RD&D. The municipal utilities angered Peace so much that he asked. The renewables could have fared much better if they stuck together as a coalition. For example. pre-Blue Book. but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. and a representative told Peace that the group still had not come to an agreement on who would present the proposal that they still had not negotiated. The IOUs wanted to use post-Blue Book.

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

It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe.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. except for a rate cap that was set high anyway. He later acted as a project manager of support teams analyzing the drafts of AB 1890. resulting in a partial phase in of Direct Access. resulting in the most influential stakeholders being granted the most access. 1995. with no ex parte rules during the pure rule-making period before December 20. but is instead offering personal observations. This offered a substantial opportunity for access. Large customers were less influential. when ex parte rules are in effect. 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. Which stakeholder groups do you think were most effective in influencing the policy formulation process of the December 1995 Decision and what were they able to obtain from the process? IOUs were most influential. personal meetings with the Commissioners. he is not representing the position of the Commission. Lobbying access is only as good as a Commissioner’s willingness to meet. mostly focusing on market structure. In this interview. ERG Master’s Project Mark Stout 146 . There was nothing for small customers.

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

so that the [legislative] Members and Governor bought in that restructuring would be good for ERG Master’s Project Mark Stout 148 . This reduces the risk of stranded cost recovery to the IOUs. Legislative Conference Committee. utilities were fine with the rate freeze. The utilities are trying to get an untaxed ruling from the IRS on these bonds. As a sidenote. Office of Senator Steve Peace David Takashima is Senator Steve Peace’s Chief of Staff and a former Edison lobbyist. The 10% rate reduction for small customers was final packaging to sell the bill for voters. The PX/ISO’s insertion into Federal jurisdiction was arrogant. 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.shorter compared to the December Decision. CMA and CLECA jointly made utility restructuring the issue for business. but just result in rate deferrals for 10 years. 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 level of influence on AB 1890 was a function of who was in the Conference Committee hearing room. The rate reduction bonds may not yield net present value benefits. The utilities would fight this interpretation. It is tough to sell delayed gratification. Large businesses articulated the issues. CLECA. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. as rates were supposed to come down due to the QF cliffs anyway. claiming that they are linked. the current criticism of QFs ignores the real competition that they founded. the PX/ISO Oversight Board is not important. since the FERC will approve their structure. and WSPA [Western States Petroleum Association].

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

and Bob Foster. Mark Timmerman. having conversations with the Governor’s office. It would not have happened without DJ Smith. They waited until late in the process to get organized. LADWP was trying to cause trouble with restructuring. Which stakeholder groups do you think were best able to set the terms of the debate. The California Municipal Utilities Association folks lacked effectiveness also. CMA. could not address the problem of a competitive market and participation. CLECA. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. John Rozsa and I were brought on board. and Edison set the tone. The Conference Committee tried to put together legislation that made sense. and why? CLECA. DJ Smith [CLECA] and Bob Foster [Edison] wanted to make a case to ratify the MOU. Senator Peace was making a decision. and how could they have improved their approach? The environmental and renewables communities made the Committee punt. He had a conversation with Senator Lockyer to staff up the Conference Committee. He wanted people who would get engaged. Senator Peace decided on a process with long discussions. decision makers at the table. you could get four votes. These groups could not come to a resolution. we have to get everyone to sign off on the bill. encouraging other people to accept the process who otherwise would not have. Peace’s mind was made up. CMA. They were a guiding light. All of the munis were trying to figure out what to do in a restructured world that will not allow residential ERG Master’s Project Mark Stout 150 . The Committee engaged in months of hearings issue by issue. They did not want to participate. Most parties felt that with the right bill. It was unclear whether consensus among the Committee Members was going to happen. and Edison. Peace’s past experience with workman’s comp reform involved an extensive hearing process. but not all six. getting everyone engaged for buy-in.During the summer recess in July.

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

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

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

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

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

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

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

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

Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #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 .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association . 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 #1 Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .

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

Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Natural Resources Defense Council .Interview #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 #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $1.191 $2.800 $1.000 $500 $1.000 $3.500 $22.495 $7.995 $21.000 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.995 $300 $12.000 $4.000 $495 $950 $696 $2.000 $2.000 $1.000 $7.000 $1.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $1.896 $3.500 $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.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.495 $10. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $3.

495 $4.000 $2.000 $10.995 $2.500 $1.000 $1.Table 2: Assemblymember Jim Brulte.750 $4.000 $1.500 $800 $498 $200 $9.500 $6.990 $1.500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.500 $47.511 $3.460 $200 $500 $750 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. 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. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $3.000 $1.250 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 .017 $749 $750 $3.000 $8.995 $14.995 $1.

750 $3. 4 ERG Master’s Project Mark Stout 164 .750 $2.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. as well as an event. (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. Not to be outdone. Brulte was taken on a $7. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. 1996. Mobil treated Brulte to a $60 event in 1996.250 $500 $1.000 $2.000 $1.750 $750 $1. Table 3: Senator Steve Peace.000 $750 $0 $0 103 Asmus. Conservation. Sweden. From 3/28/96 to 4/8/96.500 $1. CFEE is a “non-profit. by the California Foundation on the Environment and the Economy. totaling $101. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.490 “Travel project to Europe on Electric Restructuring. Chevron treated Brulte to two meals. and Privatization” visiting London.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. and Budapest.000 $2.000 $3. Paling in comparison. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.

000 $750 $750 $750 $1.500 $16. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $750 $500 $1.250 $1.Table 4: Senator Steve Peace.000 $4.100 $2.072 $2.572 $1.250 $7.450 $7.000 $500 $2.250 $2.000 $6.500 $8.600 $2.050 $3.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $300 $1.815 $750 $6.115 $18. 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 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $1.

Southern California Edison was granted a high level of access. In 1995. SDG&E had Peace out to six meals. In 1996. Table 5: Senator Byron Sher. while Edison treated him to five meals and a sports event.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. IEP made a gift of $241 for his speech at a conference. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.000 Table 6: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.450 166 ELECTRIC/GAS $6.100 $2. taking Steve to 11 meals.900 . 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. Peace was treated to a $52 sports event by Mobil Oil. 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 $1.000 $5. as well as chair of the Senate Energy and Utilities Committee. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.

EVs) Hansen. McQuat.882 $100 $1.482 $100 $1. $2.000 $500 $500 $9. Brotherhood of Electrical Workers (various $9.000 $100 producers. (biomass) Edson + Modisette (lobbyist for indep. (geothermal) Colmac Energy Inc.500 Int. and Hamrin. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.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 $1.100 $500 $2.000 $500 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .000 locals) Southern California Pipe Trades United Assoc. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.600 $13.

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 $1.500 COMPANIES $1.000 $100 $100 $500 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $1.000 $1.000 Large Energy Consumers $3.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.000 (tire $1.

585 $100 $500 $2.000 $700 $4.000 $300 $300 $22.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .Tosco Corp. of California.448 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.

the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. totaling $2608. Table 7: Senator Bill Leonard. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.400 $750 $150 $1. Sher received no other gifts that year from energy utility stakeholders. NARUC treated Sher to a two day trip to DC for another meeting.500 $0 $0 ERG Master’s Project Mark Stout 170 .000 in each of Amoco. and GE. Exxon. Sher holds over $100. totaling $758.000 $1. Mobil. 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 $3.300 $500 $1. In 1996.500 $300 $0 $0 $2.

1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.730 $2.000 $1. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. While the Senator was there.000 $5.500 $150 $500 $3.000 $1. WA paid $734 for Leonard to moderate a conference session on utility deregulation. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.000 $2.000 $2.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. for a paltry $20.000 $2.500 $500 $1.Table 8: Senator Bill Leonard.080 $10.650 $500 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. extending his stay from 12/8/96 to 12/13/96.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $500 $500 $4. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. saving up for a $77 dinner with head lobbyist Bob Foster. Edison again ERG Master’s Project Mark Stout 171 . Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. The Pacific Rim Conference of Seattle. SCE treated Leonard to dinner and lodging for Legislative Ski Day. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.650 $2.

600 $750 $750 $500 $1. paying $44 for two meals and lodging. PG&E took Leonard out to a Kings game.250 $1.000 $1.000 $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. for the modest tab of $56.000 $1.600 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $750 $750 $650 $150 $500 $3.had Senator Leonard out for Legislative Ski Day.750 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . including lunch with Bob Foster. Table 9: Assemblymember Mickey Conroy. They also had Leonard out for two meals in Sacramento. ARCO treated Leonard to a $19 meal at a reception.

Table 10: Assemblymember Mickey Conroy. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $5.700 $750 $450 $250 $250 $1. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. two meals for $44. and Inner Mongolia.000 $500 $2.050 $1.700 $500 $300 $550 $2.600 $3.500 $2.000 $3. $7. Shanghai. CFEE is a “non-profit. 4 ERG Master’s Project Mark Stout 173 . PG&E treated him to a basketball game with $51 tickets. and to 104 Asmus. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.300 junket to talk with Chinese central government and provincial leaders in Beijing.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 1996.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $2.600 $500 $1.000 $500 $750 $250 $500 $2. 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.

SDG&E. costing $99. After such a busy social calendar in 1995. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. General Electric.make sure Conroy kept a sweet spot in his heart for them. Edison wined and dined the Assemblymember with four meals at $134.000 in Orange & Rockland Utilities. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. In terms of investment. and $25 of cookies and candy. and less than 10. Pacificorp. $10 in candy. four rounds of “refreshments” for $30. ERG Master’s Project Mark Stout 174 . Kansas City Power & Light. Chevron took Conroy out for two business meals. with investments of greater than $10.000 each in Edison. and Westinghouse Electrical.

Table 11: Assemblymember Diane Martinez.000 $1.750 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.175 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2.750 $1.250 $1.250 $1.750 $4. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.000 $1.675 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

500 $1.000 $7.000 $500 $500 $500 $500 $500 $3.000 $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.500 $500 $500 $1.000 $500 $500 $5. (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 $6.000 $4.750 $1.000 $500 $3.000 $4.500 $1.000 $1.500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $1.000 $5.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.250 $1. Brotherhood of Electrical Workers (various locals) 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 MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn. Dist.000 $1.000 $500 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.Table 12: Assemblymember Diane Martinez.500 $1.

850 $1. ERG Master’s Project Mark Stout 177 .600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.208 $0 $0 $1.000 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.500 $1. natural gas.100 $100 $1.600 $1. the Illinois Energy Association flew Martinez out for a $1.000 $500 $500 $1.900 $3.Table 13: Assemblymember Steve Kuykendall. 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. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.500 $1.000 $8.058 $500 $500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.

However.490 “Travel project to Europe on Electric Restructuring.500 $1.500 $1.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $19.443 $6.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. and Budapest.250 $100 $500 $35.000 $1. Kuykendall was taken on a $7. Sweden.374 $4.000 $500 $2. From 3/28/96 to 4/8/96. Conservation. Kuykendall’s social calendar was destined to pick up in 1996.Table 14: Assemblymember Steve Kuykendall.000 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.254 $200 $500 $4. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. diesel) Unocal (CMA member) Victory Oil Co. ERG Master’s Project Mark Stout 178 .500 $0 $1.374 $500 $2. and Privatization” visiting London. natural gas.350 $500 $1.000 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.

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

$7. The Rocky Mountain Electrical League. Finally. in Fort Collins. NJ to speak at the 1994 DSM Implementation Conference. EEI is a trade association representing investor owned utilities. On the investment side. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. DC. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. Shanghai. The Cato Institute. the Center for Resource Management flew him to Midway.000 in Ohio Edison stock. the California Foundation on the Environment and the Economy took Fessler on an 11 day. ZEV’s and Rethinking the Environment Conference. for $467 airfare. ERG Master’s Project Mark Stout 180 . spending $291. Utah to speak at the “Utility Restructuring. for $61.802 junket to talk with Chinese central government and provincial leaders in Beijing. CO. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. spending $1006.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. In April of 1995. spent $249 to fly him to their annual meeting in Las Vegas. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. Finally. for $323. and Inner Mongolia. Fessler holds over $10. The Western States Coordinating Council. a utility association. spent $314 to bring him to speak at their Spring Conference. DC. Synergics Resources Corporation had Fessler out to Princeton. PG&E had him out for two lunches. a libertarian think-tank. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. a utility planning association.

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

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