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the largest source of greenhouse gas emissions and the largest source of air pollution in the U. which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

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. with large. all commercial customers eligible January 1. A more definitive policy statement was 16 17 Haddad. industrial customers taking power at the transmission level eligible on January 1. 2002. 1999. 55.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. customer class-staged schedule for direct access implementation. ERG Master’s Project Mark Stout 12 . This utility restructuring involves the divestiture of utility electricity generation facilities into separate companies from the original utility which would still be responsible for transmission and perhaps distribution. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. all residential consumers eligible on January 1. sending “a shockwave through the electric industry”. 18 Mydans.supplies. 1996.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 6. In April of 1994. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. and 3) rate changes to encourage efficiency and distribution of power. 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. Hoffman. and if successful. The Blue Book laid out an aggressive.

21 This stakeholder response. 1994. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. 1994. “a vibrant market exists for energy efficiency services”. 1995.22 FERC MegaNOPR In March of 1995. evidentiary hearings. where CPUC President Fessler and Commissioner Knight testified on their proposal.19 Since the release of the Blue Book proposal. Blue Book. including private and public-interest organizations. ERG Master’s Project Mark Stout 13 .20 Many stakeholders. 1. 1995. This process tempered the CPUC’s frenetic timetable. and asserted that. where customers voluntarily pay more to promote renewables. which requires the CPUC to engage in a series of public hearings. FERC released a dual-issue Notice of Proposed Rulemaking. For instance. Blue Book. such as “green pricing”. the CPUC proposed. 1994. which had been dubbed the MegaNOPR. pushing back their goal for a policy decision until September of 1995. numerous other states have also proposed electric utility deregulation. This led to the passage of Assembly Concurrent Resolution 143.scheduled to be issued by the CPUC in August of 1994. 21 CPUC. coupled with a lack of prior coordination with the state Legislature. Wagner. and documentation resulting in a report back to the Governor and Legislature by January 31. “alternative frameworks based on ‘let the market decide’”. Status Report. were concerned about the content and timetable of this proposal. The first issue addressed open access to the transmission system 19 20 CPUC. In their place. 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.

which is usually considered state jurisdiction. 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. A common price for all electricity in the state would then be set by the market clearing price based on the bids.24 22 23 CPUC. Retail contracts with a particular generator could be handled with separate “contracts for differences”. Asmus and Smeloff. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. 1997. Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. the California Commissioners released two draft proposals for pursuing rate deregulation in California. Generators are scheduled into the pool based on time-based bids submitted to the ISO.for wholesale transactions. The majority proposal known as PoolCo. Status Report. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. All power purchases would be made through the pool. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. is based on a common wholesale power pool. 1995. scheduled and dispatched by an independent system operator (ISO). favored by CPUC President Fessler and two other Commissioners. 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 . in May of 1995.

renewables. or through the creation of optional pools which could manage bids in a manner similar to the PoolCo proposal. California Large Energy Consumers Association. low-income ratepayer assistance would be funded at an uncapped.25 In response to the Commissioner proposals. as-needed basis. and R&D were not to exceed 3. The MOU also proposed a nonbypassable charge to fund public policy programs. investor owned utilities in California). Out of this surcharge. Prices would be determined either through bilateral contracts between direct access customers and generators. wholesale pool. Bids for generation into the pool would be processed by a Power Exchange (PX). funding levels for energy efficiency. Full stranded cost recovery is agreed to for Edison. who is responsible for maintaining transmission system reliability. In structure. California Manufacturers Association. although generators would submit projections to an independent system operator (OPCO). met to iron out differences between them and draft their own industry restructuring proposal. Southern California Edison Company (one of three regulated. at the prompting of California Governor Pete Wilson. know as the “Memorandum of Understanding” (MOU). No central entity would schedule power generation. and Independent Energy Producers. and low-income weatherization would be funded at 25 CPUC Direct Access Proposal ERG Master’s Project Mark Stout 15 . as well as a central. 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. a group of seemingly influential special interests. 1995.3% of total utility revenue requirements as of January 1. the only IOU signing the MOU. it is a hybrid of the two proposals. including bilateral contracts for direct access customers.Commissioner Knight’s alternate proposal is based on direct access contracts between generators and customers.

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

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

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

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

1997 41 Marshall. 1997. “If the bill had failed. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. The overall levels are: 45 % existing technologies. and 15% consumer-side incentives. As Carter and Cavanagh have noted.41 There are currently several electric utility restructuring bills in Congress. 1996 CEC. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 10% emerging technologies. 30% new technologies. 1998. including residential and small commercial consumers.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. It 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. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 1997 42 Weisman.40 On May 6. chair of the House Energy and Power Subcommittee. In March of 1997. including a prominent one authored by Representative Dan Schaefer (R-CO). “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . would be eligible for direct access January 1.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. 1997.

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

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

1993. 447-475.. Gordon.. enabling increased competition. 84-108. 1993. who in the past had enjoyed privileged status with cheap rates.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 52 Gilbert. 150. Hoffman 55-62. but now had to pay higher rates. ERG Master’s Project Mark Stout 23 . Davis. basing their arguments on welfare economics as applied to the changing electric utility landscape. “Discretionary Evolution. 1994.50 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. 51 Stevenson.intense pressure from large industrial customers. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 356-357. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. greatly increasing opportunities for bulk power sales. 195. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.”. 50 Flavin and Lenssen.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. 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. as well as three subjects ERG Master’s Project Mark Stout 40 . 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. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. and Union of Concerned Scientists interviews]. Natural Resources Defense Council #1. 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.” Many of the other stakeholders consider AB 1890 an incremental. and to begin to build theories for why.

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

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

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

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

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

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

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

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

less than two weeks before the Bill would be reported out of committee.” However. As a Sierra Club California legislative chair recounts on meetings between CMA.. agricultural consumers. reduced funding to an average of 2. and energy efficiency. “We reached a consensus on. TURN was one of several public interest organizations who opposed the change.72 At this point late in the game.1% of IOU revenues.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding.. The August 15 language from a coalition of powerful interests. Industrial Users. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.. The 3% [it was actually a cap of 3. 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 . RD&D. These got translated into dollars.. including IEP. renewables with an incremental cost estimate from the BRPU. funding for public purpose programs: low income. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. 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. CLECA. During the Conference Committee hearings. 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. a perusal of legislative language that was proposed during the long. EDF. and the Sierra Club.3% of utility revenues.

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

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

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

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

096 $971.964 $0 $40.112 $3.000 N/A $0 $18.981 $1.000 $225.995 $596.419 $13.000 $480.758 $2.819 $0 $323.110 $34.079 $13.000 $681.479 $2.180 $0 $209.149 $3.000 $0 $70.500 $263. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.952 $1.818 $0 $65.370 $648 N/A $0 $208.608 $3.500 $1.496 $8.592 $846 $0 ERG Master's Project Mark Stout 54 .203.000 $62. (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 $59.630 $300 N/A $0 $5.092 $3.741 $21.675 $384.835 $1.125 $0 $4.031.272 $0 $64.000 $562.308 $516.416 $5.745 $68.500 $78.500 $190.181 $0 $160.S.079 $950 $14.595 $0 $21.239 $0 N/A $0 $89.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $533.075 $4.000 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.374 $1.000 $634.157 $0 $188.166 $5.559 $0 $246.470 $10.102 $0 $73.752 $0 $51.588 $500 $32.163 $0 $25.675 $736.153 $750 N/A $8.405 $0 $722.101 $495 $10.516.

401 $1.145 $5.000 $383.083 $0 $20.716 $39.947 $500 $281. natural gas.291 $3.167 $500 $25.203 $0 $30.055 $0 $151.495 $27.230.850 $1.000 $524.000 $526. (gasoline refining and marketing) Tower Energy Group (oil.203 $5.326 $0 $100.000 $20.675 $0 $1.596. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $37.081 $1.197 $500 N/A $2.492 $0 $66.938 $0 $118.600 N/A $5.250 $0 $30.665 $0 $262. 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 $4.400 $100 $79. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.000 $0 $6.003.000 $0 $15.701 $0 $5.600 $32.362.207 $5.495 $1.000 $0 $171.271 $0 $12.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.099 $12.319 $0 $10.551 $12.723 $0 $38.500 $0 $0 ERG Master's Project Mark Stout 55 .519 $11.

179 $0 $3.750 $267.240 $0 $178.917 $300 $5. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.331 $0 $97.118 $0 $144.626 $0 $8.590 $5. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.032 $0 $172.060 $6.250 $148.500 N/A $0 $211. 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.281 $1.400 $1.147 $500 $739.000 $33.229 $100 N/A $1.748 $32.000 N/A $100 N/A $7. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.845 $452. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.000 $35.750 $1. and Hamrin.750 $418. producers.782 $981.460 $50.286 $3. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.882 $15. 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.905 $30.250 N/A $100 N/A $2.000 NA $500 $0 $2.717 $500 not applicable $0 $138.543 $29.100 $0 $500 N/A $100 $0 $500 N/A $2.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.605 $250 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .025. Dist. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.600 $276.724 $500 not applicable $500 $57.611 $1.450 $566.000 $209.195 $401.159 $3.200 $837.454 $3.589 $26.) 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.500 $29.862 $21.017 $1. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.000 $85.819 $921.S.000 $50.571 $500 N/A $200 N/A $1. McQuat.100 $144.

750 $37.000 $76.689 $2.643 $1.511 $1.438 $500 N/A $0 $1.900 $1.347 $9.090 $749 $38.780 ERG Master's Project Mark Stout 57 .750 $23.754 $4.000 $500 $456.521 $1.209.500 $277.417 $9.712 $100 N/A $200 $16.250 $34.950 $3.521 $14.650 $3.878 $12. 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) $41.016 $1.885 $300 $207.137 $550 N/A $5.925 $0 $44.622 $67.761 $0 $73.500 $47.521 $0 N/A $50 $87.384 $2. (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.960 $2.573 $2.000 $233.334 $498 $1.478. (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.800 not tracked $3.636 $0 $103.500 $251.072 $918. Texaco Tidelands Oil Tosco Corp.138 $1.495 $22.000 $65.705 $19. natural gas.050 N/A $0 $214.050 $949.958 $2.245 $335.989 N/A $9.995 N/A $100 N/A $0 $3.661. diesel) Unocal (CMA member) Victory Oil Co.407 $200 $61.177 $300 N/A $0 $29. (gasoline refining and marketing) Tower Energy Group (oil.861 $1.532 $4.296 $800 $25.000 $22.721 $748.181 $1.1996 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.900 $0 $21.

of California.462 $500 $14.438 $4.000 $700 $117.250 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .378 $100 $21.066 $500 $21.1996 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.000 $15.066 $500 N/A $250 N/A $22. 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) $1.462 $208.790 $100 $14.068 $14.000 $2.585 $33.448 $424.

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

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

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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e.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. 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. 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. CPUC vs..

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

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

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

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

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

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

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

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. Over time. and return on investment. I would not say we got everything we wanted. and SCE investors as well as independent energy producers should have the opportunity for a return on investment. 000 square mile service territory has a population of more than 11 million. based on number of customers.”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. be we did get a principled ERG Master’s Project Mark Stout 74 . We also pursued the opportunity for a return on investment. opportunity. don’t rock the boat utility. equity. a manifestation of these mutual interests. The 109-year old investor owned utility serves more than 4.2 million customers in Central and Southern California. let’s do this the right way. not “the big guys eat first”. If any customers are to benefit. and served as a basis for AB 1890. we adopted a principled approach that recognized the interests of Edison. large and small customers. The utility’s 50. creating a level playing field. all customers should at the same time. we were positioned as an anti-restructuring. and other energy service providers. were equity. The regulatory compacts that we entered into need to be recognized.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE. With the encouragement of the Governor’s office. with a phase-in to direct access. 1995 Decision? Those three principles were significant components of the December Decision. This is best implemented under a transition. so we decided if this was going to come into play. Our three principles. restructuring came to be viewed as inevitable. “the nation’s second largest utility. First. We could have been perceived as opposing direct access.

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

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

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

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

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

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

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

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

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

including through the CMUA. Assistant General Manager.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. and those that are independent. which does not include campaign contributions. but do send attorneys to represent us. The IOUs have more resources to devote to this. If the city council needs this transfer to balance the budget. so be it. LADWP is a creature of LA. There are also hybrids that fall in between such as ERG Master’s Project Mark Stout 84 . In addition to myself. Munis can be divided into two groups: those that are creature of city governments. Comments on municipal utilities and taxation: LADWP [Los Angeles Department of Water and Power. SMUD is an independent special district that can not do that. and Director of Public Affairs. there were three other people with direct contacts: SMUD’s General Manager. more at stake. causing concern with other munis. The thing that sets people off is that LADWP transfers $100 million a year to their general fund from their utility revenues. but came in for visiting with the staff and members two or three times each. They were not camping out at the Capital. We met with legislative staff and members. I was the point person in lining up meetings that several of us would attend. California’s largest municipal utility89] is a favorite whipping boy of some of the members from Southern California. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? SMUD did the lobbying and advocacy that public agencies are allowed to do. We do not have a lobbyist at the CPUC. We also networked our position with other utilities. we have to play things straight up. putting in 1/3 to 2/3 of my time. As a public agency.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

. In 1986 when ELCON [the Electricity Consumers Resource Council. 1995 Decision? Quite a lot in terms of basic concepts. with Direct Access pushed out on the horizon and tied to a range of contingencies.” ERG Master’s Project Mark Stout 99 . but in general was a step forward. This was not perceived as realistic before the Yellow Book. 1995. 1995 CPUC proposals] were a major disappointment because of the dominance of PoolCo. the parties were involved in many conversations. This was a new element which brought a new dimension: a rate freeze with a well- 92 Asmus. The overwhelming majority of our activity has been on traditional rate cases.. there was no forum in which to advocate for it. Between May of 1995 and the Decision. Much of that related to the MOU. “Retail wheeling:. electricity92] mentioned retail wheeling to the CPUC. The draft Decisions [May. the development of an option that would permit industrial customers to look somewhere else than the UDC for electricity generation. resulting in the PG&E rate restructuring settlement. Retail wheeling served as a muted backdrop. The December Decision had aspects which gave us pause.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? We sought retail wheeling.S. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The element at the core of AB 1890 came about as the result of informal negotiations between the December Decision and AB 1890. The work between May and September was critical. representing 24 companies that consume over 4% of U. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. this sent the Commissioners scurrying.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

yes. [which] represents 300. If focusing 94 CPUC Renewables Working Group. It gave us nothing until the Legislature tells us otherwise. Assuming these problems are resolved. E-1.000 of whom live in California. depending on interpretation.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. EDF has participated in California energy policy issues since 1975. 1995 Decision? Almost nothing. EDF links science. The Decision was vague.000 members nationwide. and punted on the details to the Legislature. “There is no reason to proffer the benefits of competition first to only selected classes of customers. “a leading non-profit organization.”95 How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and 4) incentives for uneconomic sales promotion minimized. economics. more than 55. economically viable solutions to today’s environmental problems. and law to create innovative. ERG Master’s Project Mark Stout 119 . 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. if restructuring is implemented properly: 1) energy efficiency investments should continue. we are in favor of competition.”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. 2) an Integrated Resource Planning process should exist for energy efficiency. EDF supports the earliest possible implementation of direct access for all classes of customers. As stated in EDF’s first round comments on the Blue Book.

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

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

but supported the introduction of competition through wholesale restructuring. where distribution utilities buy power in a competitive wholesale environment for resale to end-use customers in their territory. NRDC opposed the move to retail restructuring.Natural Resources Defense Council . From their 25 year report. NRDC adapted with a new position. Advocates of ‘retail wheeling’ systems propose a return to the days when electricity service was run on the discredited principle of ‘the more you use. RD&D. NRDC is a nonprofit organization that has made a name for itself as a public interest environmental advocate in the courts and policy arenas.’ Such systems would be a strong disincentive to utility investment in efficiency and renewable resources--and would not deliver savings to residential customers. and universal access. “see how that works.” As it became clear that opposition to retail restructuring was a losing battle. low income customers. renewables. NRDC advocated for a non-bypassable charge to cover the costs of public purpose programs in such areas as energy efficiency. 96 Natural Resources Defense Council. the rules had to be set so that there will be no diminishment in public purpose programs. Sheryl argues that it did not make sense to jump to retail competition before wholesale. Sheryl noted that for energy efficiency and renewables.” Specifically. as Sheryl explains.”96 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Initially. giving interested parties a chance to. the lower the unit cost. 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. “For retail restructuring to occur.

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

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

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

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

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

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

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

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

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

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

UCS was also opposed to 100% “stranded cost” recovery for utilities. As long as the Sierra Club and other groups were happy. Integrated Resource Planning (IRP). UCS has 100.000 sponsors nationwide.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. Deregulation of the electricity industry threatened to tear this house of cards down. including 13. The level of renewables support included in the BRPU served as a target for UCS. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. ERG Master’s Project Mark Stout 133 . a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role.000 in California”. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency.John White were the front folks. 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. Peace was the idea person. E-3. was just beginning to be used as a policy option in several states. Byron Sher was fine. manifest in California as the Biennial Resource Plan Update (BRPU). As the deregulation process unfolded at the CPUC.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 .

Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Municipal Utilities Association .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 .

How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #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 .Interview #1 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 #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Large Energy Consumers Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .

Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #1 California Municipal Utilities Association .Interview #1 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 Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.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 .

495 $10.800 $1.000 $1.000 $3.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.495 $7.000 $2.000 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $0 $0 ERG Master’s Project Mark Stout 162 .896 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.995 $21.495 $1.000 $4.000 $500 $1.995 $300 $12.000 $7.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.429 $498 $1.191 $2.500 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $3.000 $495 $950 $696 $2.500 $22.000 $2.

460 $200 $500 $750 $2.250 $2.995 $14.995 $2.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co. 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.511 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.Table 2: Assemblymember Jim Brulte.000 $2.995 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.750 $4.000 $2.017 $749 $750 $3.000 $10.500 $6.990 $1.000 $8.500 $47.000 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.500 $1.500 $1.000 $1.500 $800 $498 $200 $9.495 $4.

Table 3: Senator Steve Peace. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. as well as an event. by the California Foundation on the Environment and the Economy. 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.000 $1.250 $500 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $3. Chevron treated Brulte to two meals. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. CFEE is a “non-profit. Sweden. Paling in comparison.750 $750 $1. 4 ERG Master’s Project Mark Stout 164 .500 $1.750 $2. Brulte was taken on a $7. Not to be outdone.490 “Travel project to Europe on Electric Restructuring.000 $750 $0 $0 103 Asmus. From 3/28/96 to 4/8/96.000 $1. 1996. and Budapest. totaling $101. Mobil treated Brulte to a $60 event in 1996. and Privatization” visiting London. Conservation.000 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.000 $1.750 $3.000 $2.

000 $300 $1.600 $2.000 $500 $2.000 $4.000 $750 $750 $750 $1.450 $7.000 $6.250 $7. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $3.072 $2.000 $1.500 $16.815 $750 $6.Table 4: Senator Steve Peace.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.500 $8.572 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .115 $18. (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 $2.250 $1.100 $2.050 $3.

In 1996. as well as chair of the Senate Energy and Utilities Committee. SDG&E had Peace out to six meals. Southern California Edison was granted a high level of access. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.1995/1996 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. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. while Edison treated him to five meals and a sports event.000 $5.450 166 ELECTRIC/GAS $6. In 1995.900 . 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. Table 5: Senator Byron Sher. 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 $5.000 Table 6: Senator Byron Sher.100 $2. taking Steve to 11 meals.

(geothermal) Colmac Energy Inc.600 $13.000 locals) Southern California Pipe Trades United Assoc.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. (biomass) Edson + Modisette (lobbyist for indep.000 $500 $500 $9. McQuat. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. EVs) Hansen.000 $100 producers. and Hamrin.000 $500 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .500 Int. Brotherhood of Electrical Workers (various $9.882 $100 $1. $2.482 $100 $1. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.100 $500 $2.

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

448 $14.000 $300 $300 $22.Tosco Corp.585 $100 $500 $2. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . 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.000 $700 $4.

Sher received no other gifts that year from energy utility stakeholders.000 $1.000 in each of Amoco. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.400 $750 $150 $1. and GE. In 1996. totaling $758.300 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Exxon. Mobil. Sher holds over $100.500 $0 $0 ERG Master’s Project Mark Stout 170 . but his Statement of Economic Interest reveals large holding of oil and electricity stocks. totaling $2608.500 $300 $0 $0 $2. NARUC treated Sher to a two day trip to DC for another meeting. Table 7: Senator Bill Leonard.

for a paltry $20. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $5. 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. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.730 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.500 $500 $1.000 $500 $500 $4. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.650 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.000 $1.650 $500 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $1.000 $2. Edison again ERG Master’s Project Mark Stout 171 .500 $150 $500 $3. While the Senator was there. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.Table 8: Senator Bill Leonard.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster. extending his stay from 12/8/96 to 12/13/96.080 $10. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $2. The Pacific Rim Conference of Seattle.

600 $750 $750 $500 $1.had Senator Leonard out for Legislative Ski Day.000 $1.000 $1. Table 9: Assemblymember Mickey Conroy.750 $1. paying $44 for two meals and lodging. ARCO treated Leonard to a $19 meal at a reception.600 $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. PG&E took Leonard out to a Kings game.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. for the modest tab of $56. including lunch with Bob Foster. They also had Leonard out for two meals in Sacramento.000 $750 $750 $650 $150 $500 $3.250 $1.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .

Table 10: Assemblymember Mickey Conroy. and Inner Mongolia.700 $750 $450 $250 $250 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. PG&E treated him to a basketball game with $51 tickets. $7.000 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day.300 junket to talk with Chinese central government and provincial leaders in Beijing. Shanghai.050 $1. 4 ERG Master’s Project Mark Stout 173 .700 $500 $300 $550 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. 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.600 $3.000 $500 $750 $250 $500 $2.000 $3.000 $2. 1996.000 $5. and to 104 Asmus. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.500 $2. CFEE is a “non-profit. two meals for $44.600 $500 $1.

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

(geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.250 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2.750 $1.Table 11: Assemblymember Diane Martinez. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $4.750 $2.000 $1.000 $1.750 $1.250 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.675 $2.175 $500 $1.

(CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. Dist.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $500 $500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 . (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.000 $5.500 $6.250 $1.000 $500 $500 $5.Table 12: Assemblymember Diane Martinez.000 $500 $3.750 $1.500 $1.000 $500 $1.000 $4.000 $500 $500 $500 $500 $500 $3.500 $1.000 $1.500 $1.000 $7. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $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.000 $4.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $1.

467 trip to Northwestern University to discuss the deregulation of public utilities. the Illinois Energy Association flew Martinez out for a $1.850 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.500 $1. ERG Master’s Project Mark Stout 177 .000 $1.000 $500 $500 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.Table 13: Assemblymember Steve Kuykendall. natural gas.000 $8.100 $100 $1.500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.900 $3. 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.058 $500 $500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.208 $0 $0 $1.600 $1.

However.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. Kuykendall was taken on a $7.500 $0 $1. diesel) Unocal (CMA member) Victory Oil Co.490 “Travel project to Europe on Electric Restructuring.000 $1. Conservation. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.443 $6. Sweden.000 $1. natural gas.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. and Privatization” visiting London. and Budapest.500 $1. Kuykendall’s social calendar was destined to pick up in 1996. ERG Master’s Project Mark Stout 178 . Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $2.000 $19.374 $4.000 $500 $2.500 $1.350 $500 $1. From 3/28/96 to 4/8/96.Table 14: Assemblymember Steve Kuykendall.254 $200 $500 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $100 $500 $35.374 $500 $2.000 $1.

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

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

ERG Master’s Project Mark Stout 181 . utility and General Electric stock. 1995. and less than $10. PG&E had him out to three meals for $71. Unocal. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.000 in each of Central & Southwest Corp. by the California Foundation on the Environment and the Economy. spending $258. He does own less than $10.167 junket visiting London. regulators.000 in each of Montana Power Company and Exxon stock. wholesale PoolCo model. He does own more than $10. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. was very interested in California moving to the UK-style. and Paris. and environmental groups to discuss the British experience with deregulation of electricity. In 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. one of CFEE’s funders. to meet with CEOs of the electricity industry. government ministers. and Schlumberger oilfield services stock. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. Brussels.000 in each of Chevron. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. Edison. Jr. Conlon was taken on a $7. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. He left office on February 23. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.

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