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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California electric utilities have a combined annual revenue of roughly $23 billion dollars1. This paper develops a comparison of which stakeholder groups got what they wanted. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890).S. Various stakeholder groups. acid rain and climate change. 1996 California Energy Commission. selling 250 billion kWh of electricity per year2. 1994 4 WWW page: http://www. 1 2 CPUC RD&D Working Group.3 According to the Environmental Defense Fund.html ERG Master’s Project Mark Stout 4 . a product with well documented environmental impacts including local air pollution. which will be superseded to a great extent by the details of AB 1890. with varying success. 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. which sets in motion a process of electric utility deregulation beginning in 1998.4 Given the stakes involved with this industry. there will probably be significant winners and losers as a result of this legislation.edf. contrasting the results of CPUC process resulting in their December. 1995 Electric Restructuring Decision. 1996.Introduction On September 23. 1995 3 Flavin and Lenssen. 1995 Decision with the California legislative process resulting in AB 1890. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes.org/programs/Energy/green_power/a_better. and why. This bill is an important milestone in an ongoing process towards electric utility deregulation in California. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U.

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

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

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

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

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

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

numerous other states have also proposed electric utility deregulation. In their place.20 Many stakeholders. evidentiary hearings. Status Report. 1995.19 Since the release of the Blue Book proposal. 1994. and documentation resulting in a report back to the Governor and Legislature by January 31. such as “green pricing”. where CPUC President Fessler and Commissioner Knight testified on their proposal. This process tempered the CPUC’s frenetic timetable. 21 CPUC. 1. the CPUC proposed.22 FERC MegaNOPR In March of 1995.21 This stakeholder response. This led to the passage of Assembly Concurrent Resolution 143. For instance. “alternative frameworks based on ‘let the market decide’”. including private and public-interest organizations.scheduled to be issued by the CPUC in August of 1994. where customers voluntarily pay more to promote renewables. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. and asserted that. 1994. ERG Master’s Project Mark Stout 13 . Blue Book. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. coupled with a lack of prior coordination with the state Legislature. were concerned about the content and timetable of this proposal. 1994. Blue Book. Wagner. 1995. The first issue addressed open access to the transmission system 19 20 CPUC. “a vibrant market exists for energy efficiency services”. which requires the CPUC to engage in a series of public hearings. pushing back their goal for a policy decision until September of 1995. FERC released a dual-issue Notice of Proposed Rulemaking. which had been dubbed the MegaNOPR.

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

investor owned utilities in California). renewables. and R&D were not to exceed 3.25 In response to the Commissioner proposals. In structure. No central entity would schedule power generation. and the actual generation scheduling and dispatch decisions would be made by a separate Independent System Operator based on transactions mediated by the PX as well as direct access contracts. a group of seemingly influential special interests. Full stranded cost recovery is agreed to for Edison. Southern California Edison Company (one of three regulated. low-income ratepayer assistance would be funded at an uncapped. including bilateral contracts for direct access customers. wholesale pool. at the prompting of California Governor Pete Wilson. although generators would submit projections to an independent system operator (OPCO). and low-income weatherization would be funded at 25 CPUC Direct Access Proposal ERG Master’s Project Mark Stout 15 . and Independent Energy Producers. it is a hybrid of the two proposals. the only IOU signing the MOU. as well as a central. California Manufacturers Association.3% of total utility revenue requirements as of January 1. or through the creation of optional pools which could manage bids in a manner similar to the PoolCo proposal.Commissioner Knight’s alternate proposal is based on direct access contracts between generators and customers. 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). as-needed basis. California Large Energy Consumers Association. who is responsible for maintaining transmission system reliability. Out of this surcharge. The MOU also proposed a nonbypassable charge to fund public policy programs. 1995. funding levels for energy efficiency. know as the “Memorandum of Understanding” (MOU). Prices would be determined either through bilateral contracts between direct access customers and generators.

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

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

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

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

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

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

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

who in the past had enjoyed privileged status with cheap rates. 50 Flavin and Lenssen. 1993. basing their arguments on welfare economics as applied to the changing electric utility landscape. ERG Master’s Project Mark Stout 23 . 447-475. Davis. Hoffman 55-62. 1993.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 150. “Discretionary Evolution. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles.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. enabling increased competition. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation.. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 356-357. 195. but now had to pay higher rates.intense pressure from large industrial customers.. greatly increasing opportunities for bulk power sales. 52 Gilbert. 1994.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. Gordon. 84-108. 51 Stevenson.”.

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

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

. an analyst with CPUC’s Division of Strategic Planning. “DOE Restructuring Bill” Stevenson. 60 61 Levison. Connecticut. “Discretionary Evolution. ERG Master’s Project Mark Stout 26 . Dassovich explained that they were frustrated with the “myriad of complex and controversial balancing accounts and rate adjustment mechanisms they had to contend with every 12 months” as part of the rate-making process. Commissioner Knight. 24. both appointees of Governor Pete Wilson. Michigan initiated a five year retail wheeling experiment involving two utilities. New York.”62 a form of integrated resource planning know as the BRPU. Maine. though it urges states to consider retail competition. the same year that California’s Blue Book proposal was released. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail.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. 1997. In 1994.has noted. “the DOE bill does not mandate retail markets by any date certain..”. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. 1995. Colorado. 355-356. “Retail wheeling. 62 Asmus. according to Jeff Dassovich..”. Calls for bids have often been oversubscribed by a wide margin..61 California Public Utility Commissioners Jesse Knight and Norm Shumway. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). and Wisconsin. Massachusetts. were the key retail wheeling champions within the CPUC.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California.

October 9.65 Analysis The California electric utility deregulation experience has often been described as a stakeholder-driven process.. in that not all interest groups who might be impacted by the process participated in the 63 64 CPUC Blue Book. nineteen state legislatures have reviewed bills in response to the potential for greater competition in the electric utility industry. A15(Western). ERG Master’s Project Mark Stout 27 .”64 As of October. As it was too esoteric a topic. 1995. letter to the editor. “Freeing Californians from the monopoly grip of the utilities and granting consumers direct access to competitive power suppliers will greatly benefit the state’s economy and enhance the quality of life in my state. I decided it would be insightful to interview people who represented stakeholder organizations that were active in the process. Wall Street Journal. so there was not enough press coverage. writes.” [see Anonymous Officeholder Staff Interview #1] Because of this stakeholder-representative orientation. Jesse J. There are limits to this approach.in a fit of political posturing. Based on my experience as a representative for an environmental organization. Knight. “There was not enough education or public involvement. as well as the staff of the officeholders they were trying to influence. it was clear that the general public was not very involved in the process. As a staffperson for a prominent officeholder noted during our interview. including authorizations for legislative and regulatory study committees as well as direct access for certain customers to alternative generators. 1995. as well as interviews for this analysis. 32. Many of the outcomes of the deregulation policy formulation were a result of negotiations between organizations representing different stakeholder groups.

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

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

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

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

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

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

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

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

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

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

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

As Figures 5 indicates. 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. either the CPUC December Decision or AB 1890.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . 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 well as three subjects ERG Master’s Project Mark Stout 40 . forward Decision. PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. As excerpted from the PG&E stakeholder interview. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. evolutionary the step INVESTOROWNED ELECTRIC UTILITIES 0 1 2 3 4 5 ENVIRONMENTAL ADVOCATES SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS CPUC December Decision AB 1890 No preference / Unclear INDEPENDENT PRODUCERS UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES from December Officeholder Staff Interviews Officeholder staff interviews are another data source that I now use to cross-check the previous cluster analysis on who did and did not get what they wanted out of the restructuring process. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. Natural Resources Defense Council #1. and to begin to build theories for why. restructuring as envisioned in the CPUC Decision would have been less likely to take place in an orderly manner due to legal wrangling and ongoing filings at the CPUC.[see American Wind Energy Association.” Many of the other stakeholders consider AB 1890 an incremental. and Union of Concerned Scientists interviews].

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

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

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

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

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

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

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

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

“We reached a consensus on. The 3% [it was actually a cap of 3.. not simply subsidizing other consumers or increasing IOU shareholder profits 72 Confidential binder of proposed language and other stakeholder notes ERG Master’s Project Mark Stout 49 . roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. During the Conference Committee hearings. and the Sierra Club. These got translated into dollars. The August 15 language from a coalition of powerful interests. TURN was one of several public interest organizations who opposed the change. renewables with an incremental cost estimate from the BRPU. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. less than two weeks before the Bill would be reported out of committee.72 At this point late in the game.” However. Industrial Users. CLECA. a perusal of legislative language that was proposed during the long. funding for public purpose programs: low income. agricultural consumers. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced. As a Sierra Club California legislative chair recounts on meetings between CMA. reduced funding to an average of 2..3% of utility revenues. including IEP. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. 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. EDF. and energy efficiency..1% of IOU revenues.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding.. RD&D.

They may be allowed to participate in the policymaking process.. one Senator’s Chief of Staff revealed. without making it at all clear if these voluntary contributions will actually decrease the amount the IOUs must contribute towards renewables support funding from their frozen revenues. 75 The state imperative of “accumulation” came up several times during interviews with officeholder staff. recession. 1996 ERG Master’s Project Mark Stout 50 . section 381.74 Dryzek has voiced concern that by accepting a seat at government policymaking tables. if they pursue antibusiness policies. so that the [legislative] Members and Governor bought in that restructuring would be good for California businesses. receiving “symbolic rewards only”.for a static amount of renewables capacity.influential players relied on a “fairness and competition” argument.. the final language of AB 1890 allows IOU customers to voluntarily contribute money to support renewable development. 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. “Large businesses articulated the issues. As noted earlier. As he explains. To the extent that public policy remains under the sway of state imperatives. but outcomes will be systematically skewed against them.. This had 73 74 California Senate TV video of August 10.the first imperative facing states in capitalist systems is what post-Marxists call “accumulation”. .” An anonymous staffer’s comment also resonated with this state imperative.. “. subdivision (e) 75 Dryzek. and unpopularity in the eyes of the public. groups whose inclusion coincides with no imperative will not easily acquire the tangible goods they value.73 However.. 1996 Conference Committee on Electric Restructuring AB 1890... then they are punished by “capital strike”. public interest organizations have been “co-opted or bought off cheaply”.. States simply must provide the conditions that facilitate capitalist investment and economic growth. falling tax revenues. There was no significant opposition to this point during the hearing.

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

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

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

153 $750 N/A $8.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.500 $263.000 $634.157 $0 $188.092 $3.416 $5.110 $34.419 $13.952 $1.741 $21.675 $736.500 $190.079 $13.000 $1.000 $225.101 $495 $10.000 $562.595 $0 $21.000 $0 $70.102 $0 $73.S.181 $0 $160.479 $2.374 $1.981 $1.112 $3.239 $0 N/A $0 $89.470 $10.203.630 $300 N/A $0 $5.500 $78.995 $596.149 $3.079 $950 $14.075 $4.559 $0 $246.745 $68. 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.272 $0 $64.752 $0 $51.308 $516.819 $0 $323. (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. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.818 $0 $65.500 $533.592 $846 $0 ERG Master's Project Mark Stout 54 .370 $648 N/A $0 $208.000 $480.000 $62.166 $5.835 $1.758 $2.500 $1.125 $0 $4.000 $681.180 $0 $209.516.496 $8.588 $500 $32.675 $384.000 N/A $0 $18.096 $971.964 $0 $40.608 $3.405 $0 $722.163 $0 $25.031.

099 $12.145 $5.197 $500 N/A $2.000 $0 $15.716 $39.000 $0 $6.250 $0 $30.495 $27.203 $0 $30.850 $1.400 $100 $79.596.081 $1.230.492 $0 $66. (gasoline refining and marketing) Tower Energy Group (oil.000 $526.000 $20.495 $1.207 $5.203 $5. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.000 $383.600 $32. 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 $4.167 $500 $25.055 $0 $151.000 $37.500 $0 $0 ERG Master's Project Mark Stout 55 .326 $0 $100.000 $0 $171.723 $0 $38.600 N/A $5.291 $3. natural gas. (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.271 $0 $12.319 $0 $10.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.675 $0 $1.519 $11.947 $500 $281.003.362.665 $0 $262.551 $12.701 $0 $5.401 $1.938 $0 $118.083 $0 $20.000 $524.

159 $3.589 $26.724 $500 not applicable $500 $57.460 $50.748 $32.286 $3.543 $29.331 $0 $97.905 $30.717 $500 not applicable $0 $138.250 N/A $100 N/A $2.917 $300 $5.000 $33.229 $100 N/A $1. 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.590 $5.450 $566. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145. producers. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.454 $3.195 $401.845 $452.118 $0 $144.000 N/A $100 N/A $7.200 $837.179 $0 $3. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Gualco Group (lobbyist: Imperial & Modesto Irigatn.626 $0 $8.032 $0 $172.017 $1.000 $50. McQuat.400 $1.750 $267.750 $418. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.819 $921.600 $276. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.500 N/A $0 $211. and Hamrin. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.500 N/A ERG Master's Project Mark Stout 56 . Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.100 $144.500 $29.882 $15.S.862 $21.000 $209.605 $250 N/A $1.240 $0 $178.100 $0 $500 N/A $100 $0 $500 N/A $2. Dist.611 $1.281 $1.025.250 $148. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.750 $1.147 $500 $739.000 $85.000 NA $500 $0 $2.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.) 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.571 $500 N/A $200 N/A $1.000 $35.060 $6.782 $981.

636 $0 $103.000 $22.000 $233.800 not tracked $3.181 $1.000 $65.438 $500 N/A $0 $1.072 $918.712 $100 N/A $200 $16.861 $1.521 $1.245 $335.925 $0 $44.1996 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. diesel) Unocal (CMA member) Victory Oil Co.209.177 $300 N/A $0 $29.878 $12.960 $2.750 $37.643 $1.885 $300 $207.417 $9.900 $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.138 $1.995 N/A $100 N/A $0 $3.761 $0 $73.705 $19.090 $749 $38.521 $0 N/A $50 $87.347 $9.495 $22.750 $23.754 $4. (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.500 $277.000 $500 $456.780 ERG Master's Project Mark Stout 57 .511 $1.721 $748.689 $2.622 $67.650 $3.532 $4.137 $550 N/A $5.407 $200 $61.950 $3.958 $2.334 $498 $1.500 $47. (gasoline refining and marketing) Tower Energy Group (oil.250 $34.573 $2.000 $76.989 N/A $9.521 $14. 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) $41.050 N/A $0 $214. natural gas.900 $0 $21. Texaco Tidelands Oil Tosco Corp.478.661.296 $800 $25.016 $1.384 $2.050 $949.500 $251.

462 $208.066 $500 $21.000 $2.000 $700 $117. of California.438 $4.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $15.378 $100 $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) $1.250 $21.068 $14.448 $424.790 $100 $14.462 $500 $14.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 N/A $250 N/A $22.585 $33.

Shanghai. an Edison lobbyist was added to the international travel party at the last minute. their “Travel project to Europe on Electric Restructuring.167 per guest. 4 ERG Master’s Project Mark Stout 59 . government ministers. for $7. Conservation. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. regulators. the lobbying summary tables above. 4 Asmus. Brussels. and Inner Mongolia. 1996. 1996.800 each. CFEE is a “non-profit. 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. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU).”80 In April of 1995. and Paris. alternative energy producers. and small consumer groups. to meet with CEOs of the electricity industry.79 From 3/16/94 to 3/27/94. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. were able to far outspend environmental organizations (who were usually spread thin over many issues). and environmental groups to discuss the British experience with deregulation of electricity. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. paying up to $7. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus.As one would imagine. including oil and natural gas companies. CFEE took Fessler and Conference Committee Assemblyman Mickey Conroy on an 11 day trip to talk with Chinese central government and provincial leaders in Beijing. From 3/28/96 to 4/8/96. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. According to investigative writer Peter Asmus.

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

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

Bibliography
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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 . AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.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.e. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. CPUC vs. 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.

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

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. increasing the risk to full stranded cost recovery. 1995 Decision? PG&E got what it wanted on some of the more important issues in the CPUC’s Decision. Several areas of compromise for PG&E included irrigation district exemptions for collection of the Competition Transition Charge. Also. Kathy indicated that the Decision included a plan for an orderly transition to a deregulated generation environment that PG&E desired. PG&E largely got what it wanted. compared to the four year collection period in AB 1890.” according to Kathy..How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and a shortened period for CTC collection. “Steve Peace forced everybody to confess what was important to them. 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. and own up to what they would let go.e. ERG Master’s Project Mark Stout 68 . what they perceive as significant funding for renewable energy support. Kathy said that it was important for the Legislature to use a process which brought disparate parties together. CPUC vs. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? In the formulation of AB 1890. the CPUC Decision allowed for more generous stranded cost recovery with a 5 year collection period. but had to compromise a little more than in 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. there was consensus within the organization on the basic decisions: direct access was to be supported. this flexibility combined with the pressures of negotiation sometimes resulted in. “way to advance goals with a ERG Master’s Project Mark Stout 69 . the negotiating team was given complete freedom to make policy. Although they checked back in with company officers. PG&E relied upon lobbying at the Commission. For the formulation of the CPUC Decision. while the concept of a wholesale-only pool [President Fessler’s original PoolCo proposal] was to be resisted. and responses to Commission requests for input. Kathy said that there was a. in Kathy’s view. however. or over time? At a macro level. “healthy internal debate. The legislative process can be even messier. She thought this was due to the nature of the regulatory process: workshops. According to Kathy. “compromises that generated internal dissent. This more inclusive process is a. formal filings. and outside conversations. However. discussions in open forums. which was required because of the Conference Committee environment created by Chair Peace. she indicated that there was an occasional rough edge. that sometimes leaked. PG&E had a core set of negotiators for AB 1890. the Working Group process. The collaboration that went into the MOU was an example of this approach.Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. More so than in the past. PG&E approached other parties to float proposal ideas by them. However. at finer levels of technical detail.” outside of the organization. PG&E was able to maintain a consistent position on issues throughout the CPUC and Legislative process.” 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

it limited CTC recovery to a shorter period of time. We had suggested that community access provide an out for people that did not want in. requiring a written. so he was amenable to this. 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. This raises a substantial barrier for municipalities to aggregate their residents’ loads. and offered a good commitment to low income programs.So we were stuck with a bill that we hated. ERG Master’s Project Mark Stout 116 .e. we decided not to oppose. we did not oppose or support AB 1890. Is your organization more comfortable with one policy decision over the other (i. On the good side. divested power plants must come with a contract for the original staff for the first two years.. into a very bad bill. Since we felt that it was incrementally better than the December Decision. firmed up the nonbypassability of the CTC. In the end.5 billion increase. signed document with independent verification that a customer wants to be included in an aggregation. there were some self-generation projects in the pipeline. but a narrow set of projects. Peace’s residence had gotten slammed a couple times. a very. Unions got a huge bone by having the cost of retraining and severance included in the CTC. CPUC vs. Also. We had the option of opposing it and jeopardizing the concessions in it. but Edison successfully created this barrier under the guise of anti-slamming language. leading to a heated internal debate. AB 1890)? Why? At the end of the process. Edison gets coal cost increases. TURN felt it had turned AB 1890. Some customers got away with no CTC. It turns out that independent generation plants are run with much less staff. very bad bill. PG&E gets a $0. On the bad side.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As the deregulation process unfolded at the CPUC. including 13.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. Byron Sher was fine. E-3. UCS’s initial position after the release of the CPUC Blue Book Proposal was that the deregulatory roadmap laid out in this proposal was too hasty. Deregulation of the electricity industry threatened to tear this house of cards down. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. Integrated Resource Planning (IRP). “an independent nonprofit public interest organization which works on issues where science and technology play a critical role.000 in California”. UCS was also opposed to 100% “stranded cost” recovery for utilities. was just beginning to be used as a policy option in several states. Peace was the idea person. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. ERG Master’s Project Mark Stout 133 . UCS has 100. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group.000 sponsors nationwide. manifest in California as the Biennial Resource Plan Update (BRPU).John White were the front folks. As long as the Sierra Club and other groups were happy. The level of renewables support included in the BRPU served as a target for UCS.

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

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

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

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

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

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

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

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

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

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

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

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

Lobbying access is only as good as a Commissioner’s willingness to meet.Appendix C: Officeholder Staff Interviews California Public Utilities Commission Tom Thompson was a project supervisor in the CPUC’s Commission Advisory and Compliance Division during the December 1995 Decision formulation process. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? There was a lot of lobbying. ERG Master’s Project Mark Stout 146 . It was conspicuous that an Edison employee always traveled with President Fessler on his trips to Europe. he is not representing the position of the Commission. but is instead offering personal observations. except for a rate cap that was set high anyway. There was nothing for small customers. when ex parte rules are in effect. This offered a substantial opportunity for access. Large customers were less influential. He later acted as a project manager of support teams analyzing the drafts of AB 1890. with no ex parte rules during the pure rule-making period before December 20. resulting in a partial phase in of Direct Access. personal meetings with the Commissioners. 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. resulting in the most influential stakeholders being granted the most access. 1995. In this interview. mostly focusing on market structure. Senate Bill 1960 legislates that there must be a record of who was granted and who was denied ex parte communication.

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

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

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

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

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

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

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

no one was happy. such as CalPIRG and one of Ralph Nader’s organizations. as well as an acceleration of recovery.Which stakeholder groups do you think were most effective in influencing the policy formulation process of AB 1890 and what were they able to obtain from the process? The IOUs were able to pull people together. and how could they have improved their approach? Power marketers such as Enron. The full recovery of their stranded assets was very important to them. They also were able to offer a lot of help with technical drafting. could not go to a competitive market with a debt hindrance. They needed to get their nukes off of the books. If they were there and could contribute. He represented himself well in the hearings and actually helped to draft language that made it into the bill. NEVs. The Committee Members took some things from the Decision. anyone could have influence. otherwise blew it up. and Working Assets were just not there when their issues came up. A lot of their lawyers did technical language work in coalition with the legislative counsel. The munis had a hard time articulating how to ERG Master’s Project Mark Stout 154 . This put everything on the table. Which stakeholder groups do you think were best able to set the terms of the debate. To contrast this. Groups that opposed the bill without participating also were ineffective. and why? When the PUC December Decision came out. they had the manpower to make sure their positions were taken care of. This was the greatest expression of coalition building. Wayne Rafesberger. 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. was a one-man machine. a small generation developer. IOUs very quickly were able to get 100% stranded cost recovery firmed up. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process.

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

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

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

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

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

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

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

000 $2.000 $4.000 $1.000 $7.495 $7.000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $3. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $2.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.191 $2.495 $1.500 $22.429 $498 $1.000 $3.995 $300 $12.000 $3.495 $10. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $0 $0 ERG Master’s Project Mark Stout 162 .800 $1.995 $21.000 $1.896 $3.000 $495 $950 $696 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $500 $1.

460 $200 $500 $750 $2.990 $1.000 $1.495 $4.995 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $8.500 $6. (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.017 $749 $750 $3.000 $2.000 $2.000 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.250 $2.000 $3.000 $10. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.995 $1.500 $1.750 $4.995 $14.500 $800 $498 $200 $9.Table 2: Assemblymember Jim Brulte.511 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .500 $47.500 $1.

and Budapest.490 “Travel project to Europe on Electric Restructuring.750 $2.000 $2. 1996. Chevron treated Brulte to two meals. Not to be outdone.000 $1.000 $750 $0 $0 103 Asmus. by the California Foundation on the Environment and the Economy.750 $3.250 $500 $1. Sweden.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. From 3/28/96 to 4/8/96. Mobil treated Brulte to a $60 event in 1996. Conservation.000 $1. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.500 $1. Brulte was taken on a $7. totaling $101. (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 Privatization” visiting London. as well as an event. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $3.000 $2. Paling in comparison.750 $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 Int. CFEE is a “non-profit. 4 ERG Master’s Project Mark Stout 164 . charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Table 3: Senator Steve Peace.

600 $2.500 $16.000 $300 $1.050 $3.572 $1.250 $750 $500 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $500 $2.072 $2.Table 4: Senator Steve Peace.000 $1.000 $750 $750 $750 $1.100 $2. (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.500 $3.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48. 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.115 $18.000 $4. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.450 $7.815 $750 $6.250 $2.000 $6.250 $7.500 $8.250 $1.

1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. IEP made a gift of $241 for his speech at a conference.450 166 ELECTRIC/GAS $6. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Table 5: Senator Byron Sher.900 . 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5. In 1995. as well as chair of the Senate Energy and Utilities Committee. Peace was treated to a $52 sports event by Mobil Oil. SDG&E had Peace out to six meals. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.000 $5. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Southern California Edison was granted a high level of access. while Edison treated him to five meals and a sports event.100 $2. taking Steve to 11 meals. 1996 Campaign Contributions INVESTOR-OWNED UTILITIES Electric Power Research Institute (EPRI) General Electric (nuclear plants) Pacific Gas & Electric ERG Master’s Project Mark Stout $250 $1.000 Table 6: Senator Byron Sher. In 1996.

000 $100 producers.000 locals) Southern California Pipe Trades United Assoc. and Hamrin.500 Int. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. $2.100 $500 $2.482 $100 $1. (biomass) Edson + Modisette (lobbyist for indep. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $500 $9.600 $13.000 $500 $1. McQuat. (geothermal) Colmac Energy Inc. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . Brotherhood of Electrical Workers (various $9.882 $100 $1. EVs) Hansen.

000 (tire $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 Large Energy Consumers $3.000 $1.500 COMPANIES $1.000 $100 $1.000 $100 $100 $500 $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.Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $1.

of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .585 $100 $500 $2.448 $14.000 $300 $300 $22.000 $700 $4. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.Tosco Corp.

300 $500 $1. and GE. totaling $2608. In 1996. Mobil. Sher holds over $100.500 $0 $0 ERG Master’s Project Mark Stout 170 .500 $300 $0 $0 $2. Exxon.000 in each of Amoco. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. Sher received no other gifts that year from energy utility stakeholders. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 $1. totaling $758.400 $750 $150 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. 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. NARUC treated Sher to a two day trip to DC for another meeting.

500 $150 $500 $3. SCE treated Leonard to dinner and lodging for Legislative Ski Day. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $500 $500 $4.650 $2.Table 8: Senator Bill Leonard. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $2.500 $500 $1.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. While the Senator was there.000 $1. Edison again ERG Master’s Project Mark Stout 171 .080 $10. The Pacific Rim Conference of Seattle.730 $2.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster. WA paid $734 for Leonard to moderate a conference session on utility deregulation. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.650 $500 $1. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. extending his stay from 12/8/96 to 12/13/96.000 $2. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. for a paltry $20.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. 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.000 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $5.

750 $1. for the modest tab of $56. They also had Leonard out for two meals in Sacramento.250 $1.had Senator Leonard out for Legislative Ski Day. PG&E took Leonard out to a Kings game.000 $1.000 $750 $750 $650 $150 $500 $3.600 $1. ARCO treated Leonard to a $19 meal at a reception. Table 9: Assemblymember Mickey Conroy.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.600 $750 $750 $500 $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.000 $1. paying $44 for two meals and lodging.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . including lunch with Bob Foster.

000 $500 $750 $250 $500 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing. 1996.500 $2.Table 10: Assemblymember Mickey Conroy. 4 ERG Master’s Project Mark Stout 173 .700 $750 $450 $250 $250 $1.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. PG&E treated him to a basketball game with $51 tickets.050 $1. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. and Inner Mongolia. $7. and to 104 Asmus.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.700 $500 $300 $550 $2. two meals for $44.000 $3.000 $5.000 $500 $2.600 $500 $1. Shanghai. the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $2.600 $3.

After such a busy social calendar in 1995. Pacificorp. costing $99. Edison wined and dined the Assemblymember with four meals at $134. and $25 of cookies and candy. In terms of investment. and Westinghouse Electrical. General Electric.000 in Orange & Rockland Utilities. $10 in candy. and less than 10. four rounds of “refreshments” for $30. with investments of greater than $10. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996.000 each in Edison. ERG Master’s Project Mark Stout 174 . Chevron took Conroy out for two business meals. SDG&E.make sure Conroy kept a sweet spot in his heart for them. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. Kansas City Power & Light.

750 $4.175 $500 $1.750 $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. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.675 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $1.000 $1.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.250 $1.750 $2.750 $2.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.Table 11: Assemblymember Diane Martinez.250 $1.

000 $500 $500 $500 $500 $500 $3. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $4.500 $1.000 $5.750 $1.500 $1.500 $1.250 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.000 $1.000 $7. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. Dist. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $500 $500 $5.500 $500 $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.000 $1.000 $4.Table 12: Assemblymember Diane Martinez.000 $500 $3.500 $1.000 $500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $1.

208 $0 $0 $1.058 $500 $500 $1.000 $500 $500 $1.000 $8.500 $1.000 $1.600 $1.Table 13: Assemblymember Steve Kuykendall. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.900 $3. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.850 $1. the Illinois Energy Association flew Martinez out for a $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. ERG Master’s Project Mark Stout 177 . natural gas.100 $100 $1.467 trip to Northwestern University to discuss the deregulation of public utilities. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.

000 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. and Budapest.000 $500 $2.Table 14: Assemblymember Steve Kuykendall.374 $4.500 $0 $1. natural gas. 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. Kuykendall was taken on a $7.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. and Privatization” visiting London.500 $1.443 $6.000 $19. From 3/28/96 to 4/8/96.250 $100 $500 $35.254 $200 $500 $4. However. Kuykendall’s social calendar was destined to pick up in 1996.000 $1.500 $1.490 “Travel project to Europe on Electric Restructuring.374 $500 $2. diesel) Unocal (CMA member) Victory Oil Co. ERG Master’s Project Mark Stout 178 . Sweden. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.350 $500 $1.000 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $1. Conservation.

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

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

Jr. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.167 junket visiting London. and Paris. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. He does own less than $10. to meet with CEOs of the electricity industry. He left office on February 23. regulators. 1995. and less than $10. government ministers. by the California Foundation on the Environment and the Economy. He does own more than $10. and environmental groups to discuss the British experience with deregulation of electricity.000 in each of Chevron. and Schlumberger oilfield services stock. Edison. was very interested in California moving to the UK-style. utility and General Electric stock. Brussels. ERG Master’s Project Mark Stout 181 . one of CFEE’s funders. PG&E had him out to three meals for $71. Unocal. spending $258.000 in each of Montana Power Company and Exxon stock. In 1995. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. wholesale PoolCo model. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. Conlon was taken on a $7.000 in each of Central & Southwest Corp. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.

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