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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

regulated utilities were discouraged from pursuing demand-side resources because of a profit structure that was directly linked to the amount of energy sold..” 356-357. One prominent utility regulator remarked on the situation that had developed in the 1980s: “In the current scheme of regulation. Stevenson.” 521.. inadequate information available to customers. 356.”.” 407.12 While encouraging wholesale competition. These lead to what the National Association of Regulatory Commissioners calls the “payback gap”: substantially higher rate of return expectations for energy efficiency measures compared to supply-side investments.”15 EPAct attempts to correct this supply-side/demand-side imbalance by encouraging state Public Utility Commissions to consider. which compares supply. “Global Warming and Least-Cost. This money-losing proposition is not significantly improved by any of the conservation cost recovery or incentive mechanisms now in use.13 and the transient nature of short term building owners and renters. EPAct also aimed to level the playing field for supply-side and demand-side (energy efficiency) resource options.. “1) implementing Integrated Resource Planning (IRP). Utilities lose money when customers engage in conservation. “Social Goals. “Energy Efficiency Solutions. utilities make money in only one way--selling [units of energy]. 14 Cavanagh. 14 Also. “Discretionary Evolution.... 15 Cavanagh.and demand-side options systematically when seeking least-cost energy 12 13 Stevenson... Energy efficiency is often underinvested in due to the high transaction costs of decentralized customer decisions. They likewise lose money when the encourage customers to engage in conservation. allowing larger generation plants to be exempt from traditional regulation. ERG Master’s Project Mark Stout 11 .classes of IPPs including Exempt Wholesale Generators.

17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. and 3) rate changes to encourage efficiency and distribution of power. all residential consumers eligible on January 1. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations.18 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. sending “a shockwave through the electric industry”. customer class-staged schedule for direct access implementation. 2002. 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. 1999. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers. The Blue Book laid out an aggressive. Hoffman. all commercial customers eligible January 1. ERG Master’s Project Mark Stout 12 . 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 1996. and if successful. In April of 1994. 18 Mydans. A more definitive policy statement was 16 17 Haddad.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 6. industrial customers taking power at the transmission level eligible on January 1.supplies. with large. 55. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”.

“a vibrant market exists for energy efficiency services”. For instance. This led to the passage of Assembly Concurrent Resolution 143. including private and public-interest organizations. evidentiary hearings. “alternative frameworks based on ‘let the market decide’”.20 Many stakeholders. where CPUC President Fessler and Commissioner Knight testified on their proposal. such as “green pricing”. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. 1. which had been dubbed the MegaNOPR. FERC released a dual-issue Notice of Proposed Rulemaking. coupled with a lack of prior coordination with the state Legislature. where customers voluntarily pay more to promote renewables. The first issue addressed open access to the transmission system 19 20 CPUC. ERG Master’s Project Mark Stout 13 . Wagner. Blue Book. the CPUC proposed. 1995.21 This stakeholder response. 21 CPUC.22 FERC MegaNOPR In March of 1995. 1994.19 Since the release of the Blue Book proposal. Status Report. This process tempered the CPUC’s frenetic timetable. 1994. Blue Book. were concerned about the content and timetable of this proposal. 1995. pushing back their goal for a policy decision until September of 1995. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. 1994. In their place. numerous other states have also proposed electric utility deregulation.scheduled to be issued by the CPUC in August of 1994. and asserted that. which requires the CPUC to engage in a series of public hearings. and documentation resulting in a report back to the Governor and Legislature by January 31.

Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition.for wholesale transactions. in May of 1995. is based on a common wholesale power pool. scheduled and dispatched by an independent system operator (ISO). Generators are scheduled into the pool based on time-based bids submitted to the ISO.24 22 23 CPUC. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs. Asmus and Smeloff. the California Commissioners released two draft proposals for pursuing rate deregulation in California. A common price for all electricity in the state would then be set by the market clearing price based on the bids. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. meaning the utilities could not discriminate against other electricity suppliers. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. 1997. 1995.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. The majority proposal known as PoolCo. All power purchases would be made through the pool. Status Report. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . Stranded costs are past investments rendered uneconomic (market value less than book value) by the competition brought about through deregulation. favored by CPUC President Fessler and two other Commissioners. Retail contracts with a particular generator could be handled with separate “contracts for differences”. which is usually considered state jurisdiction.

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

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

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

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

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

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

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

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

Hoffman 55-62. Gordon.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 356-357.intense pressure from large industrial customers. who in the past had enjoyed privileged status with cheap rates. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. Davis. greatly increasing opportunities for bulk power sales. 52 Gilbert. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 1993. but now had to pay higher rates. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 150.. ERG Master’s Project Mark Stout 23 . 50 Flavin and Lenssen. 447-475.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis.. enabling increased competition. 1993. 51 Stevenson. 1994.”. 84-108. 195. “Discretionary Evolution.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. basing their arguments on welfare economics as applied to the changing electric utility landscape.

the camel of competition forced its nose under the monopoly tent. competition takes on several forms in this market. “With this act. Many electrical applications have substitutable fuels.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities. 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.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology. Utilities compete for industrial customers who are relocating. and it was only 53 54 Stevenson.”.54 Since 1992.S. 355-356. such as natural gas for space heating. “Discretionary Evolution.. as well as those on the border of service districts. 357.53 allowing a policy trend that emphasizes markets rather than social welfare. “Discretionary Evolution. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power. 1994.55 Other Industries and Countries The deregulation of the telecommunications and natural gas industries serves as an analogy to the potential for electric utility deregulation. Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. 55 Flavin and Lenssen.. generating capacity has been supplied by alternative.. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. over half of new U. Stevenson.. non-utility providers. ERG Master’s Project Mark Stout 24 .”.

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

ERG Master’s Project Mark Stout 26 . though it urges states to consider retail competition. were the key retail wheeling champions within the CPUC.61 California Public Utility Commissioners Jesse Knight and Norm Shumway. Connecticut.”62 a form of integrated resource planning know as the BRPU. “Discretionary Evolution. Commissioner Knight.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.”.. according to Jeff Dassovich. 1995. “the DOE bill does not mandate retail markets by any date certain.has noted. 1997.”. 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. Maine. Colorado.. Massachusetts. an analyst with CPUC’s Division of Strategic Planning.. “DOE Restructuring Bill” Stevenson. 60 61 Levison. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. both appointees of Governor Pete Wilson. Michigan initiated a five year retail wheeling experiment involving two utilities.63 This move towards greater reliance on the marketplace to make supply decisions is clearly in line with the free-market ideologies of the Republican Governor. the same year that California’s Blue Book proposal was released. 62 Asmus. Calls for bids have often been oversubscribed by a wide margin. “Retail wheeling. 24. In 1994. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). 355-356.. New York. and Wisconsin. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail.

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

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

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

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

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

while having access to new customers willing to pay more for “green” power. protecting the sanctity of the QF contracts. Independent producers gain access to new customers through the adoption of direct access. Most are proponents of direct access. • Renewable Technology Independent Producers: As a subset of independent generators. it leaves these negotiations as voluntary. 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: Independent generators want to protect the sanctity of their existing contracts. although a lack of specificity in the policy language with regard to percentage levels for the minimum renewables purchase requirement was a cause for concern. They would like continued funding to reflect the public goods benefits offered by their technologies (such decreased air pollution). • December Decision outcome: The CPUC’s endorsement of the Renewables Portfolio Standard was applauded by existing renewable energy generators. ensuring their continued financial well-being. the renewables industry would like to rebound from difficult financial times many of them are facing due to the sunset or failure of previous policy support mechanisms. • December Decision outcome: 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 made available to them. Short-run avoided cost (SRAC) payments to QFs are to be set to the market-clearing price in the Power Exchange. • AB 1890 outcome: The legislation nearly mirrors the CPUC Decision in terms of impacts on independent producers.

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

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

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

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

say that their organizations got most of what they wanted ERG Master’s Project Mark Stout 37 . as well as the majority of large electricity consumers. 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. this provides a baseline to determine if they got what they wanted. nearly half of the representatives say that their organization got most of what it wanted from the December Decision.The stakeholder representatives were asked what outcomes their organizations wanted to obtain from the California electric utility restructuring process as it was just unfolding. Figure 2 shows that all of the investor-owned utilities and independent producers. and the remaining minority claim that their organization got rather little. a slightly smaller number of representatives report a mixed or unclear outcome. 1995 Decision. As INVESTOR-OWNED ELECTRIC UTILITIES 0 1 2 3 4 5 Figure 1 indicates. When combined with comments filed by that organization early in the restructuring process at the CPUC.

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

as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. As Figures 5 indicates. either the CPUC December Decision or AB 1890.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

995 $596.405 $0 $722.149 $3.101 $495 $10.592 $846 $0 ERG Master's Project Mark Stout 54 .239 $0 N/A $0 $89.419 $13.000 $62.758 $2.516. 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.000 N/A $0 $18.745 $68.500 $533.500 $78.479 $2.308 $516.500 $263.595 $0 $21.092 $3.835 $1.500 $1.163 $0 $25. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.110 $34.000 $1.630 $300 N/A $0 $5.981 $1.000 $480.496 $8.675 $384.416 $5.157 $0 $188.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.818 $0 $65.000 $634.079 $950 $14.752 $0 $51.588 $500 $32.470 $10.S.180 $0 $209.079 $13.500 $190.559 $0 $246.964 $0 $40.741 $21.203.112 $3.370 $648 N/A $0 $208.166 $5.675 $736.075 $4.102 $0 $73.000 $225.153 $750 N/A $8.096 $971.374 $1.272 $0 $64.952 $1.608 $3. (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 $59.125 $0 $4.000 $562.000 $681.000 $0 $70.031.819 $0 $323.181 $0 $160.

197 $500 N/A $2.230.207 $5.600 N/A $5. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.495 $1.319 $0 $10.203 $5.000 $37.083 $0 $20.401 $1.145 $5. (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.723 $0 $38.400 $100 $79.000 $20.551 $12.326 $0 $100.167 $500 $25.519 $11.055 $0 $151.850 $1.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.000 $383.600 $32.500 $0 $0 ERG Master's Project Mark Stout 55 .362.495 $27.271 $0 $12.938 $0 $118.250 $0 $30.000 $526. (gasoline refining and marketing) Tower Energy Group (oil.000 $524.716 $39.081 $1. natural gas.596. 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 $4.701 $0 $5.000 $0 $171.675 $0 $1.492 $0 $66.947 $500 $281.665 $0 $262.099 $12.003.000 $0 $15.291 $3.203 $0 $30.000 $0 $6.

331 $0 $97.717 $500 not applicable $0 $138.589 $26.000 $33. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. producers.450 $566.240 $0 $178. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.118 $0 $144.626 $0 $8.905 $30.250 $148.000 $50.500 N/A ERG Master's Project Mark Stout 56 .250 N/A $100 N/A $2.) Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District Turlock Irrigation District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.543 $29.060 $6.845 $452.229 $100 N/A $1.179 $0 $3. Dist.100 $0 $500 N/A $100 $0 $500 N/A $2.000 $85. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.017 $1. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.782 $981.750 $1.460 $50.S.571 $500 N/A $200 N/A $1.000 N/A $100 N/A $7. and Hamrin.750 $418.159 $3.750 $267. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc. McQuat.400 $1.032 $0 $172.862 $21.600 $276.590 $5. 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 $1.605 $250 N/A $1.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.500 N/A $0 $211. 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.724 $500 not applicable $500 $57.917 $300 $5.100 $144.611 $1. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.147 $500 $739.000 $35.286 $3.195 $401. (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) $145.025.000 NA $500 $0 $2.200 $837.500 $29.819 $921.882 $15.000 $209.454 $3.748 $32.

989 N/A $9. Texaco Tidelands Oil Tosco Corp. diesel) Unocal (CMA member) Victory Oil Co. 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) $41.347 $9.000 $65.137 $550 N/A $5.925 $0 $44.750 $37.754 $4.209.000 $76.417 $9.500 $47.750 $23.995 N/A $100 N/A $0 $3. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Southern Counties Oil Co.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.050 $949.250 $34.573 $2.384 $2.521 $0 N/A $50 $87.761 $0 $73.780 ERG Master's Project Mark Stout 57 .296 $800 $25.643 $1.000 $500 $456. (gasoline refining and marketing) Tower Energy Group (oil.500 $277. natural gas.500 $251.950 $3.521 $14.050 N/A $0 $214.245 $335.885 $300 $207.622 $67.000 $22.438 $500 N/A $0 $1. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.650 $3.878 $12.900 $0 $21.177 $300 N/A $0 $29.712 $100 N/A $200 $16.521 $1.532 $4.861 $1.181 $1.072 $918.900 $1.960 $2.000 $233.689 $2.705 $19.636 $0 $103.721 $748.016 $1.090 $749 $38.478.407 $200 $61.495 $22.138 $1.800 not tracked $3.334 $498 $1.661.511 $1.958 $2.

438 $4.000 $15.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.462 $500 $14.378 $100 $21.066 $500 N/A $250 N/A $22.790 $100 $14.068 $14. of California.000 $2.462 $208.066 $500 $21.448 $424.585 $33.250 $21. 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) $1.000 $700 $117.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .

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

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

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

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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 how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i.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. CPUC vs.. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.

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

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

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

San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. Sirard. 1996. “a subsidiary of Enova Corporation. and gas service to 0. the parent company of Southern California Gas Company83. SDG&E. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. and willing to be straightforward on what they can give on. Jack. while holding on to what they really wanted. App. is a California Investor Owned Utility Company founded in 1881.15 million electric customers in San Diego and southern Orange Counties. E.”82 Enova Corporation has announced a merger with Pacific Enterprises. SDG&E provides service to 1. ERG Master’s Project Mark Stout 70 . a gas utility which serves a territory largely overlapping with Southern California Edison’s.” Organizations had to be able to make decisions right on the spot to shape the outcome.” according to Kathy.reasonableness check. It allows an organization to get buy-in from other parties in advance. 82 83 CPUC Renewables Working Group. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. 1996. “People who influenced the outcome were present.7 million customers in San Diego County.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 Marc Joseph is an attorney actively representing CUE through both the CPUC and legislative tracks. As it became clear that this argument would be lost. We pointed out that the only part of the industry subject to competition was the variable cost of energy. and to what extent. and how the market should be shaped. We initially focused on whether. ERG Master’s Project Mark Stout 86 . and responsiveness to customer inquiries. We already had viable wholesale competition. a technical consultant to CUE [see preceding interview]. a result where the only criteria was not cents/kWh. increasing efficiencies without sacrificing reliability and service. We are willing to compete. Marc was referred to me by David Marcus. 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. transmission. Coalition of California Utility Employees . but criteria of reliability and quality of service. there are no savings to customers to be gained from retail competition.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Getting CTC recovery for worker retraining and severance packages was a major victory. and distribution reliability. we shifted to focus on generation. Enron now agrees with us. Also. Most customers want more than incremental savings. when a utility plant is divested to a new company. but with a rational transition. the existing unions get a contact for two years of plant operation. The legislation also attempts to ensure the reliability of the system by building in responsibility for inspection and maintenance into the new regulatory structure.

we supported AB 1890. AB 1890 provided for recovery of reasonable employee transition costs. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Most of what we sought. AB 1890)? Why? Yes.. The CPUC is required to ensure that generation reliability is maintained before plants leave their jurisdiction. CPUC vs.e. with a 2 year continuation of the existing staff. ERG Master’s Project Mark Stout 87 . and quantitative reliability measures were beginning in another rulemaking. For example. and it did not provide for generation supply reliability. AB 1890 also gives the ISO the responsibility to achieve Western Systems Coordinating Council (WSCC) standards for planning reserve criteria. Some things were being addressed in other proceedings. ‘98 start date because of that. or the value of a highly skilled. It attempted to address the means for employees to be provided with assistance to handle their transition. It calls for the adoption of standards for the inspection and maintenance of distribution and transmission. Is your organization more comfortable with one policy decision over the other (i.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. The Decision fell considerably short of where it needed to be. The Decision also did not recognize the importance of maintaining local generation throughout California. But no standards were discussed for inspection and maintenance. distribution reliability was in a separate rulemaking. dedicated workforce. It recognizes the need for divested plants to be operated by capable people. and have committed to the January 1. 1995 Decision? Not very much.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS.000 environmentalists in California. UCS took part in a mailing to 60. asking them to respond to the CPUC through a Western Union automated fax number. By helping to get Assembly Concurrent Resolution No. 143 adopted.What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? UCS used a dual approach outsider/insider strategy to influence policy formulation at the CPUC. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position. as well as staff people for Commissioners Knight and Conlon. 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 Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners. as well as meetings arranged jointly by Jane and AWEA’s Nancy Rader to lobby for the Renewables Portfolio Standard with then-current CPUC President Fessler. as well as generating a large number of letters to the CPUC. resulting in over 2. To compliment this public participation strategy. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC.

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

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

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

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

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

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

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

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

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

There was nothing for small customers. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? There was a lot of lobbying. 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. but is instead offering personal observations. He later acted as a project manager of support teams analyzing the drafts of AB 1890. he is not representing the position of the Commission. when ex parte rules are in effect. Large customers were less influential. This offered a substantial opportunity for access. except for a rate cap that was set high anyway. resulting in the most influential stakeholders being granted the most access. 1995. In this interview. 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. Lobbying access is only as good as a Commissioner’s willingness to meet. Senate Bill 1960 legislates that there must be a record of who was granted and who was denied ex parte communication. mostly focusing on market structure.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. with no ex parte rules during the pure rule-making period before December 20. personal meetings with the Commissioners. ERG Master’s Project Mark Stout 146 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .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 .

495 $1.000 $495 $950 $696 $2.995 $21.000 $1.000 $7.000 $3.000 $3.191 $2.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $7.000 $3. 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.429 $498 $1.000 $1.000 $500 $1.896 $3.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.995 $300 $12.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $4. (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.500 $22.800 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.000 $1.500 $1.495 $10.000 $2.

000 $8.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.995 $2.500 $47.Table 2: Assemblymember Jim Brulte. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $10. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.460 $200 $500 $750 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.990 $1.500 $1.495 $4.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $2.750 $4.500 $1.000 $3.500 $800 $498 $200 $9.000 $1.000 $1.995 $0 $0 ERG Master’s Project Mark Stout 163 .995 $14.017 $749 $750 $3.511 $3.500 $6.000 $2.995 $1.250 $2.

500 $1. Not to be outdone.750 $3.000 $1. 4 ERG Master’s Project Mark Stout 164 . totaling $101. by the California Foundation on the Environment and the Economy. Paling in comparison.000 $3.000 $1. Sweden. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.250 $500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.750 $750 $1.490 “Travel project to Europe on Electric Restructuring. Conservation. From 3/28/96 to 4/8/96. Table 3: Senator Steve Peace. Mobil treated Brulte to a $60 event in 1996.000 $2.000 $2.000 $1. Chevron treated Brulte to two meals. as well as an event.000 $750 $0 $0 103 Asmus.750 $2. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. and Budapest. and Privatization” visiting London. CFEE is a “non-profit. Brulte was taken on a $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. 1996.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.

500 $16.572 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.050 $3.600 $2.815 $750 $6.115 $18.000 $750 $750 $750 $1.072 $2.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $6.250 $750 $500 $1.450 $7.000 $4.000 $500 $2.250 $2.000 $300 $1.250 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $8.500 $3.000 $1.100 $2.250 $7.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.Table 4: Senator Steve Peace.

000 $5. 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. taking Steve to 11 meals. Peace was treated to a $52 sports event by Mobil Oil. In 1996. while Edison treated him to five meals and a sports event. Table 5: Senator Byron Sher.100 $2.450 166 ELECTRIC/GAS $6. as well as chair of the Senate Energy and Utilities Committee.900 . IEP made a gift of $241 for his speech at a conference. 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. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals. In 1995. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Southern California Edison was granted a high level of access.

(biomass) Edson + Modisette (lobbyist for indep. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $500 $9. Brotherhood of Electrical Workers (various $9.482 $100 $1. and Hamrin.000 locals) Southern California Pipe Trades United Assoc. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.500 Int.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1.600 $13. $2.100 $500 $2.882 $100 $1.000 $500 $1. EVs) Hansen. McQuat.000 $100 producers. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (geothermal) Colmac Energy Inc.

Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 (tire $1.000 $1.000 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 $100 $100 $500 $1.000 Large Energy Consumers $3.500 COMPANIES $1.

Tosco Corp.448 $14.585 $100 $500 $2. of California. 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.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $700 $4.000 $300 $300 $22.

000 $1. NARUC treated Sher to a two day trip to DC for another meeting. Sher holds over $100.000 in each of Amoco. Exxon.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. totaling $2608. totaling $758.300 $500 $1. Mobil.500 $300 $0 $0 $2.500 $0 $0 ERG Master’s Project Mark Stout 170 . In 1996. Table 7: Senator Bill Leonard. 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. and GE.400 $750 $150 $1. Sher received no other gifts that year from energy utility stakeholders. 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.

) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $2.500 $150 $500 $3. While the Senator was there.000 $5.080 $10. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. Edison again ERG Master’s Project Mark Stout 171 .000 $500 $500 $4.Table 8: Senator Bill Leonard. 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. saving up for a $77 dinner with head lobbyist Bob Foster.650 $2. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.650 $500 $1.730 $2. for a paltry $20. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $2. SCE treated Leonard to dinner and lodging for Legislative Ski Day. extending his stay from 12/8/96 to 12/13/96. The Pacific Rim Conference of Seattle.000 $1.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.500 $500 $1.

600 $750 $750 $500 $1. They also had Leonard out for two meals in Sacramento.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .had Senator Leonard out for Legislative Ski Day. Table 9: Assemblymember Mickey Conroy. including lunch with Bob Foster. PG&E took Leonard out to a Kings game.250 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $1.750 $1.000 $1. paying $44 for two meals and lodging.000 $750 $750 $650 $150 $500 $3. for the modest tab of $56. ARCO treated Leonard to a $19 meal at a reception.000 $1.

500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $500 $300 $550 $2.000 $2.000 $5.300 junket to talk with Chinese central government and provincial leaders in Beijing. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $500 $750 $250 $500 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. two meals for $44. 4 ERG Master’s Project Mark Stout 173 . Shanghai.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.600 $500 $1. PG&E treated him to a basketball game with $51 tickets. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $3. 1996.000 $500 $2.700 $750 $450 $250 $250 $1.050 $1.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. CFEE is a “non-profit.Table 10: Assemblymember Mickey Conroy.600 $3. and Inner Mongolia. $7. and to 104 Asmus.

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

Table 11: Assemblymember Diane Martinez. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1.000 $1.175 $500 $1.750 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $4.750 $1.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.250 $1.675 $2.750 $1.750 $2.

(member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.750 $1. Dist.Table 12: Assemblymember Diane Martinez.500 $1.000 $500 $500 $5.000 $1.000 $5.500 $1.500 $1.000 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.500 $500 $500 $1.500 $6.000 $500 $3.000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $500 $500 $500 $500 $500 $3.000 $500 $1.000 $1.000 $7.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $4.250 $1.

058 $500 $500 $1.600 $1.208 $0 $0 $1.500 $1.100 $100 $1. natural gas.000 $1.500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.Table 13: Assemblymember Steve Kuykendall.000 $500 $500 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. the Illinois Energy Association flew Martinez out for a $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.900 $3.000 $8.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. ERG Master’s Project Mark Stout 177 . diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.850 $1.

) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $1.000 $1. However. Conservation. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Sweden.500 $1.000 $2.374 $500 $2.000 $500 $2. Kuykendall’s social calendar was destined to pick up in 1996.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.500 $1. natural gas. and Budapest.250 $100 $500 $35. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $19. diesel) Unocal (CMA member) Victory Oil Co.350 $500 $1.500 $0 $1.000 $1.443 $6. and Privatization” visiting London. 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.374 $4.490 “Travel project to Europe on Electric Restructuring. From 3/28/96 to 4/8/96.Table 14: Assemblymember Steve Kuykendall.254 $200 $500 $4. Kuykendall was taken on a $7. ERG Master’s Project Mark Stout 178 .

CO. regulators. for $610.167 junket visiting London. a trade association for publicly owned utilities. Brussels. wholesale PoolCo model. Edison.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The California Mining Association took him out for an evening of recreation and dinner costing $89. paid $1. 1996.051 to fly the President out to New York City for a ConEdison Management Conference. The Large Public Power Council. to meet with CEOs of the electricity industry. SC to address their membership. A trade association. Another non-profit organization. by the California Foundation on the Environment and the Economy.by the California Foundation on the Environment and the Economy. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. and Paris. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. one of CFEE’s funders. was very interested in California moving to the UK-style. The Aspen Institute.”105 The Consolidated Edison IOU spent $1. 4 ERG Master’s Project Mark Stout 179 . in Aspen. spent $1402 to fly Fessler to Charleston. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. and environmental groups to discuss the British experience with deregulation of electricity. Chevron treated Kuykendall to two dinners for $131. known as the Council of States Government . government ministers. Fessler was taken on a $7. an Edison lobbyist was added to the international travel party at the last minute.WEST. According to investigative writer Peter Asmus. The California 105 Asmus.

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

He left office on February 23.000 in each of Chevron. ERG Master’s Project Mark Stout 181 . the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Jr. spending $258.167 junket visiting London. and environmental groups to discuss the British experience with deregulation of electricity. one of CFEE’s funders. wholesale PoolCo model. and Schlumberger oilfield services stock. Edison.000 in each of Montana Power Company and Exxon stock. was very interested in California moving to the UK-style. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. PG&E had him out to three meals for $71. by the California Foundation on the Environment and the Economy. and less than $10. He does own more than $10. Unocal. utility and General Electric stock. In 1995. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. to meet with CEOs of the electricity industry. 1995. He does own less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. Brussels. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. regulators. and Paris.000 in each of Central & Southwest Corp. government ministers. Conlon was taken on a $7.

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