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 which will be superseded to a great extent by the details of AB 1890. 1994 4 WWW page: http://www. 1 2 CPUC RD&D Working Group.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

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

Based on the Interstate Commerce Clause. large nonutility companies such as electric equipment contractors. led to the passage of the Federal Power Act. or were owned by. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance.” This legislation sought to avoid market abuses by limiting the size and 7 Davis. ERG Master’s Project Mark Stout 9 . A number of these holding companies owned. a small number of holding companies owned most utilities in the United States. 166-167.7 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.utilities as natural monopolies and hence inevitable.” 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. State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). Beginning in 1907 with New York and Wisconsin. by 1922 47 states and the District of Columbia were regulating electric utilities.8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law. Hempling explains. this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers. with at least 20% of electricity crossing state lines in 1935.

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

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

1996. all commercial customers eligible January 1. sending “a shockwave through the electric industry”. The Blue Book laid out an aggressive. industrial customers taking power at the transmission level eligible on January 1. all residential consumers eligible on January 1. 1999.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. Hoffman. 2002. 6. 55. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. and 3) rate changes to encourage efficiency and distribution of power. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation.supplies. with large. A more definitive policy statement was 16 17 Haddad. 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. 18 Mydans. 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. In April of 1994. customer class-staged schedule for direct access implementation. ERG Master’s Project Mark Stout 12 . and if successful.

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

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

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

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

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

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

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

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

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

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

“Discretionary Evolution. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. Gordon. 50 Flavin and Lenssen.. 52 Gilbert. ERG Master’s Project Mark Stout 23 .50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. 1993. but now had to pay higher rates. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. 1993. enabling increased competition. who in the past had enjoyed privileged status with cheap rates.”. 1994.. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 51 Stevenson. 356-357. greatly increasing opportunities for bulk power sales. 150.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. basing their arguments on welfare economics as applied to the changing electric utility landscape. Hoffman 55-62. 84-108. 195. Davis.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 447-475.intense pressure from large industrial customers.

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

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

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

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

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

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

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

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

resulting in generally higher prices paid to generators. • December Decision outcome: Although the CPUC supports the renegotiation (buyout) of Standard Offer contracts with qualifying facilities. • December Decision outcome: The CPUC’s endorsement of the Renewables Portfolio Standard was applauded by existing renewable energy generators. Most are proponents of direct access. ensuring their continued financial well-being. • Renewable Technology Independent Producers: As a subset of independent generators. although a lack of specificity in the policy language with regard to percentage levels for the minimum renewables purchase requirement was a cause for concern. Direct access with community-based aggregation of load would help facilitate the development of bilateral “green” pricing contracts with residential customers. • AB 1890 outcome: The legislation nearly mirrors the CPUC Decision in terms of impacts on independent producers.• Independent Producers: Independent generators want to protect the sanctity of their existing contracts. protecting the sanctity of the QF contracts. while having access to new customers made available to them. 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. Independent producers gain access to new customers through the adoption of direct access. Short-run avoided cost (SRAC) payments to QFs are to be set to the market-clearing price in the Power Exchange. while having access to new customers willing to pay more for “green” power. 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). As with non-renewable ERG Master’s Project Mark Stout 32 .

competitive market possible to drive down rates. As with non-renewable independent producers. • December Decision outcome: Large customers did get the market structure they desired. renewables funding through a systems benefits charge. Some argue that the level of funding is too low to maintain the current state renewables base and will end in 2002.25 years greatly increased large electricity consumers’ satisfaction with the deal. and want a choice of their electricity supplier. SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. direct access contracts. allowing bilateral. • Large Industrial & Agricultural Customers: The large consumers want the most efficient. • AB 1890 outcome: Again. this industries financial woes are not solely because of deregulation. They support granting the IOUs less than 100% stranded cost recovery. SRAC set according to the Power Exchange market clearing price should result in higher payments to QFs under contract. resulting in an industry shakeout.independent producers. They lost out on rather generous terms for collection of stranded costs by the IOUs. IOUs still have the opportunity to collect 100% of their stranded costs. However. with one that had known costs. As in the December Decision. making them the strongest proponents of direct access. large customers won on the inclusion of direct access. which could extend until 2005. and AB 1890 does provide a significant amount of money to existing renewables developers to help mitigate any downsizing in the industry. but limiting the competitive transition charge (CTC) cost recovery to 4. ERG Master’s Project Mark Stout 33 . the RPS. • AB 1890 outcome: Many renewables generators were disappointed with the replacement of a policy mechanism that had known outcomes.

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

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

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

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

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

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

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. PG&E and SDG&E indicated that part of their preference for AB 1890 was to avoid future litigation. 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. As excerpted from the PG&E stakeholder interview. as well as three subjects ERG Master’s Project Mark Stout 40 . forward Decision.” Many of the other stakeholders consider AB 1890 an incremental. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E. and Union of Concerned Scientists interviews]. Natural Resources Defense Council #1. I interviewed two subjects who were on the CPUC staff during the two years leading up to the December Decision. and to begin to build theories for why.[see American Wind Energy Association.

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

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

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

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

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

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

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

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

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

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

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

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

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

419 $13.000 $562.112 $3.500 $190.608 $3.308 $516.102 $0 $73.595 $0 $21.000 $480.500 $78.752 $0 $51.741 $21.516.981 $1.588 $500 $32.075 $4.092 $3.818 $0 $65.166 $5.157 $0 $188.405 $0 $722.559 $0 $246.500 $533.125 $0 $4.149 $3.675 $384.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $634.000 $225. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.203.000 $0 $70.819 $0 $323.500 $263. (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 $59.416 $5.110 $34.181 $0 $160.153 $750 N/A $8.101 $495 $10.745 $68.000 $1.496 $8.630 $300 N/A $0 $5.479 $2.758 $2.964 $0 $40.S.180 $0 $209.995 $596.000 N/A $0 $18.031.079 $950 $14.000 $681.675 $736.239 $0 N/A $0 $89.096 $971.952 $1.374 $1.272 $0 $64.000 $62.835 $1.592 $846 $0 ERG Master's Project Mark Stout 54 .079 $13.500 $1.470 $10.370 $648 N/A $0 $208.163 $0 $25. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.

083 $0 $20.716 $39.665 $0 $262.055 $0 $151.203 $5.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.850 $1.326 $0 $100.203 $0 $30.000 $383.197 $500 N/A $2.000 $0 $171. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.596.291 $3.250 $0 $30.701 $0 $5.401 $1.362.000 $0 $15.167 $500 $25.495 $1.271 $0 $12.600 $32.003. (gasoline refining and marketing) Tower Energy Group (oil.500 $0 $0 ERG Master's Project Mark Stout 55 . (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.000 $20.492 $0 $66.551 $12.145 $5.000 $37.000 $526.938 $0 $118.519 $11.230.495 $27.099 $12.947 $500 $281.600 N/A $5.675 $0 $1.400 $100 $79.000 $524. natural gas.319 $0 $10.000 $0 $6.081 $1.207 $5.723 $0 $38. 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.

000 $209.017 $1.460 $50.S.543 $29.286 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.589 $26.724 $500 not applicable $500 $57.500 N/A $0 $211.882 $15.000 $33.025. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.100 $144.454 $3.750 $267.147 $500 $739.600 $276.250 $148.862 $21.000 $85.500 $29.331 $0 $97.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.000 NA $500 $0 $2.060 $6.590 $5. (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) $145.500 N/A ERG Master's Project Mark Stout 56 . 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.917 $300 $5.748 $32.819 $921.782 $981.845 $452.400 $1.250 N/A $100 N/A $2. producers.229 $100 N/A $1.118 $0 $144.571 $500 N/A $200 N/A $1.200 $837.750 $418. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.032 $0 $172.750 $1.000 N/A $100 N/A $7.179 $0 $3.905 $30. McQuat. 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.) 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. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.611 $1.240 $0 $178.717 $500 not applicable $0 $138. Dist. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.000 $50. and Hamrin.000 $35.605 $250 N/A $1.100 $0 $500 N/A $100 $0 $500 N/A $2.626 $0 $8.159 $3.281 $1.195 $401.450 $566.

347 $9. 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) $41.780 ERG Master's Project Mark Stout 57 .750 $23.521 $1.878 $12.090 $749 $38. (gasoline refining and marketing) Tower Energy Group (oil.754 $4.495 $22.689 $2.500 $47.000 $233.960 $2.532 $4.500 $251. (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.900 $1.721 $748.958 $2. diesel) Unocal (CMA member) Victory Oil Co.885 $300 $207.622 $67.521 $0 N/A $50 $87.050 N/A $0 $214.478.137 $550 N/A $5.761 $0 $73. natural gas.000 $22.000 $500 $456.511 $1.661.438 $500 N/A $0 $1.500 $277.636 $0 $103. (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.750 $37.861 $1.995 N/A $100 N/A $0 $3.250 $34.950 $3.000 $76.989 N/A $9.650 $3.209.712 $100 N/A $200 $16.138 $1.334 $498 $1.177 $300 N/A $0 $29.407 $200 $61.072 $918.705 $19. Texaco Tidelands Oil Tosco Corp.181 $1.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.000 $65.417 $9.296 $800 $25.925 $0 $44.800 not tracked $3.016 $1.050 $949.643 $1.384 $2.900 $0 $21.245 $335.521 $14.573 $2.

000 $2.462 $500 $14.250 $21.378 $100 $21.462 $208. of California.066 $500 N/A $250 N/A $22.000 $700 $117.066 $500 $21.000 $15. 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) $1.448 $424.790 $100 $14.068 $14.585 $33.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .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.

“though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). to meet with CEOs of the electricity industry. paying up to $7. and Inner Mongolia.800 each. an Edison lobbyist was added to the international travel party at the last minute. Conservation. 1996. From 3/28/96 to 4/8/96. for $7. alternative energy producers. their “Travel project to Europe on Electric Restructuring.”80 In April of 1995.167 per guest. 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. were able to far outspend environmental organizations (who were usually spread thin over many issues). including oil and natural gas companies.As one would imagine. Brussels. Shanghai. and environmental groups to discuss the British experience with deregulation of electricity. 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. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London.79 From 3/16/94 to 3/27/94. and Paris. 4 ERG Master’s Project Mark Stout 59 . According to investigative writer Peter Asmus. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. 4 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. government ministers. 1996. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. the lobbying summary tables above. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. regulators. and small consumer groups.

This analysis generates the hypothesis that these parties were most influential because of superior staff and financial resources. Rather than attempting to verify a pre-determined hypothesis.Assemblymember Steve Kuykendall to London. Sweden. Using the same officeholder staff interviews and stakeholder interview cluster analysis. It is not so surprising that these “thousand pound gorillas” did well in the process. Because these stakeholder groups support the capitalist state imperative of wealth “accumulation”. and labor unions were the most influential in the deregulation process. as well as their ideological resonance with a conservative Governor’s office. my analysis uses patterns in the data to create emerging theories. along with small ERG Master’s Project Mark Stout 60 . These clean power advocates. several patterns emerged regarding which groups got far from all of what they wanted. large industrial customers. state government archives. and Budapest. Conclusion This project synthesized data from several sources including semi-structured interviews with stakeholder representatives & officeholder staff. at the mere cost of $7.490 per guest. they are well suited for influencing inclusive. and academic literature. it appears the investor owned utilities. and why or why not different groups were successful. in order to find out which stakeholder organizations got what they wanted from California’s electric utility deregulation policy formulation process. stakeholder-driven processes. such as the CPUC proceedings and legislative Conference Committee. Based on interviews with officeholder staff and a cluster analysis of stakeholder interviews. The clean power community (renewables industry and environmentalists) were held back by a lack of unity in the face of more monolithic stakeholders.

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

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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. 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 . CPUC vs. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. 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..e. 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.

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

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

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

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

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

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

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

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

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

and a Proposition 13 clause stating that local governments can not charge more than the cost of service for utility customers. even now we have weekly meetings with corporate officers to discuss implementation. regulatory. which ERG Master’s Project Mark Stout 76 . excluding electric co-operatives. working with broad-based coalitions. San Francisco. and legal expertise from the corporate offices.that everybody was giving up something. Municipal Electric Utilities California Municipal Utilities Association . we have a small. on-site staff. and DC offices also have weekly meetings to coordinate strategy. stranded costs are a bigger issue for municipal utilities than for the IOUs. CMUA members had a debate at the beginning of 1996 as to whether to pursue our own legislation. not getting all they wanted. This is why we were so successful in helping resolve issues. Edison strived to keep it simple. For both the Commission and Sacramento. On average. The Sacramento. with customers removing themselves from our distribution service. 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. There were two areas of concern: physical bypass.Interview #1 Stuart Wilson is the Assistant Executive Director for CMUA. We put in legislation to prevent customers from avoiding CTC payment. supported by policy. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In the political arena. for instance with the MOU partners. We also involved people at the highest levels. a lobbying organization representing all but three of the municipal utilities in California.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

or over time? CLECA’s positions were consistent. CLECA did not want a single market. given the PoolCo structure in the May. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? With regards to market structure. The MOU set the tone for that. I suggest you speak with Barbara Barkovich. there was not as much coordination or compromise amongst stakeholders. nothing changed significantly from the CPUC Decision. It used to be that the IOUs were driving everything. We did not have the expectation that it would happen tomorrow. ERG Master’s Project Mark Stout 103 . Prior to this proceeding. They were based on a consistent thread of how to organize a market. but wanted multiple ways to purchase electricity. even over time. The defining of industry structure for competition to drive prices down was important. 1995 CPUC majority proposal. 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. we met directly with Commissioners. but we came closer. On this question. [See interview with Barbara] Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. 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. but would trade off short term for long term gains. We also wanted the separation of the ISO and PX. I am unsure of whether it will happen. 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.

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

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

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

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

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

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

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

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

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

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

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

”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. The Decision was vague. we are in favor of competition. more than 55. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. [which] represents 300. 1995 Decision? Almost nothing. EDF supports the earliest possible implementation of direct access for all classes of customers. “a leading non-profit organization. yes. Assuming these problems are resolved. if restructuring is implemented properly: 1) energy efficiency investments should continue.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. ERG Master’s Project Mark Stout 119 . As stated in EDF’s first round comments on the Blue Book. depending on interpretation.000 of whom live in California. EDF has participated in California energy policy issues since 1975.000 members nationwide. E-1.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. EDF links science. If focusing 94 CPUC Renewables Working Group. economically viable solutions to today’s environmental problems. “There is no reason to proffer the benefits of competition first to only selected classes of customers. and law to create innovative. It gave us nothing until the Legislature tells us otherwise. and 4) incentives for uneconomic sales promotion minimized. and punted on the details to the Legislature. 2) an Integrated Resource Planning process should exist for energy efficiency. economics.

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

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

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

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

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

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

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

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

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

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

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

which will be handled separately as regulated RD&D.e.RD&D expenditures = $140 million. CPUC vs. The Framework language [Framework for Restructuring in the Public Interest] said that they would consider an Independent Administrator. Since the IOUs got some money for “reliability”. but the utilities 99 CPUC RD&D Working Group. The value of the RECs should go to the contract holder. Ralph Cavanagh and I agreed not to go to war on who would handle administration of funds. I felt double-crossed. On energy efficiency. The details were left out of AB 1890 on allocation of this money. First. App. An argument ensued on how much of this figure would be under their control. I would have wanted to see what was done with the RPS. including RD&D for transmission and distribution. the legislation does a better job. while I preferred independent administration. we don’t think AB 1890 is a good deal. III-3.5 million. arriving at an agreement of $62. In the negotiations. AB 1890)? Why? Overall. Having QF developers getting them was a political miscalculation. Renewables did well funding-wise in AB 1890. we would lose dollars.. Ralph advocating for utility administration. fearing that if administration of this funding was confused. This was a sore point that had to be finessed between players. There was an offer on the table for renewables that had been agreed to. John White [Sierra Club lobbyist and CEERT Executive Director] was on the fence because of a split in CEERT members. ERG Master’s Project Mark Stout 131 . Is your organization more comfortable with one policy decision over the other (i. The final stake through the heart was where the RECs [Renewable Energy Credits] where going. there is the presumption that energy efficiency money would die in the CPUC Decision. In the end. we didn’t actually get pre-Blue Book levels. and the Sierra Club didn’t endorse.]99. the DSM funding levels got dinged. they agreed.

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

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

1995 Decision? UCS was pleased that the CPUC’s December Decision called for a minimum renewables purchase requirement. and Latino Issues Forum.. Jane said that environmental organizations were. Jane indicated that.bailout for poor investments in nuclear power generation.” ERG Master’s Project Mark Stout 134 . “did not set public policy so much as doling out money in the transition period. so UCS also supported low income program protection as defined by coalition partners. “thrown a bone” with the moderate level of public-interest research. and no guaranteed market for renewable energy. The Greenlining Institute. 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. with no support for commercialization over a longer duration. As for renewable energy.101 To Jane. the legislation. an allocation that was “responsible public policy”. working in progressive coalitions was important for UCS. development. “despite other interpretations. based on the Renewables Portfolio Standard devised by UCS’s coalition partner Nancy Rader of the American Wind Energy Association. AB 1890 was not a victory” for environmental goals. and demonstration (RD&D) funding. “Environmentalist Defends.. She also noted that no stakeholders seemed to resist the lack of a cap on surcharge collection for low income programs. Jane said the inclusion of the renewables purchase requirement was. “one of a few good pieces UCS was in a position to defend”.” She said the whole battle for continuing renewables support will need to be refought in a few years. 101 Weisman. 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 small consumer advocate community also experienced this rift.e. the press had gone home. didn’t have a unified. Jane noting that The Utility Reform Network. or over time? When asked about UCS’s ability to maintain a consistent position over the CPUC and legislative policy formulation process. [Committee Chairman] Steve Peace was banging heads together. “In the end. while some see it as an opportunity for renewable energy generators to increase their markets. clearly articulated position on the desirability of retail wheeling. a process that she said environmentalists do not usually fare well in. However..Is your organization more comfortable with one policy decision over the other (i. while AB 1890 simply doled out ratepayer dollars according to disparate levels of power that special interest groups could bring to the Legislature. 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. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.” An alternative strategy that Jane considered would have been to oppose retail wheeling all the way along. Some environmentalists think retail wheeling threatens environmental protection. stating that the CPUC made a public policy decision for environmental protection. ERG Master’s Project Mark Stout 135 . and a huge decision was being made behind closed doors. AB 1890)? Why? Jane contrasted AB 1890 with the CPUC Decision. Jane said that her organization stood firmly behind the stance that the Renewables Portfolio Standard was the best policy for supporting renewables. CPUC vs. an organization representing small ratepayers. there was a real split in the public interest community as to whether retail wheeling was good or bad for social welfare.

as well as generating a large number of letters to the CPUC. Jane thought this amounted to a level of public pressure that was outside of the usual institutional experience at the CPUC. UCS then planned an outsider strategy that included turning out large numbers of supporters at public hearings. 143 adopted. 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. the CPUC deregulation process was thrown open to a much wider spectrum of public input than initially envisioned by the public utility commissioners.000 environmentalists in California. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? UCS made use of a similar outsider/insider strategy to influence the legislative outcome. UCS’s insider approach was composed of elements such as filed comments and full panel hearing testimony by UCS senior energy analyst Donald Aitken.000 faxes to the CPUC demanding that the environment not get forgotten in the policy formulation process. as well as staff people for Commissioners Knight and Conlon.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. To compliment this public participation strategy. UCS took part in a mailing to 60. UCS volunteers and staff were active at over a number of 1996 Earth Day events throughout ERG Master’s Project Mark Stout 136 . asking them to respond to the CPUC through a Western Union automated fax number. By helping to get Assembly Concurrent Resolution No. resulting in over 2. One interesting outcome of the meeting with President Fessler was that he started to lobby Jane and Nancy to support his position. which Jane believes was a response to the effectiveness of UCS’s outsider strategy to generate public support for the RPS.

California in April. as included in Assembly Bill 1202. UCS worked closely with AWEA at a June 1996 Senate Utility Committee hearing with both lobbyist Joe Caves and myself advocating for the Renewables Portfolio Standard and AB 1202. at the very least they could have stopped AB 1890 from passing unanimously. gathering dozens of hand written letters from California residents to their state legislators. 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. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . the legislative outcome would have been different. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. She went on to say that if the whole environmental community was working under a unified strategy. I worked for UCS coordinating our participation in Clean Power Day. Because of splintering and infighting within the public interest community. While Joe continued to lobby Senators. resulting in over two hundred letters to Sacramento. “progressive legislators did not have the usual suspects all opposing it”. a legislative education and lobbying event in early August. counting only those copied to UCS. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard. which had passed the Assembly the previous year. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #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 .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 Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #1 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 #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .

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

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

000 $0 $0 ERG Master’s Project Mark Stout 162 .) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $7.495 $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.800 $1.000 $1.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $2.995 $300 $12.000 $2.000 $1.495 $7.500 $22. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (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.896 $3.000 $500 $1.995 $21.429 $498 $1.000 $4.495 $10.000 $495 $950 $696 $2.191 $2.500 $1.000 $3.000 $3.000 $3.000 $1.

495 $4. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $1.017 $749 $750 $3.511 $3.Table 2: Assemblymember Jim Brulte.500 $1.500 $6.500 $47.995 $14.990 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $2.500 $800 $498 $200 $9.995 $1.000 $1.000 $2.460 $200 $500 $750 $2.000 $8.750 $4. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.500 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $10. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $2.995 $2.000 $1.

as well as an event. Sweden. Mobil treated Brulte to a $60 event in 1996. Brulte was taken on a $7. by the California Foundation on the Environment and the Economy. (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. From 3/28/96 to 4/8/96.750 $3. 1996. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.750 $750 $1.750 $2.000 $1. Conservation. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Paling in comparison.000 $2. Not to be outdone. 4 ERG Master’s Project Mark Stout 164 . and Privatization” visiting London.000 $2. Chevron treated Brulte to two meals.250 $500 $1. Table 3: Senator Steve Peace.000 $1. CFEE is a “non-profit.500 $1.000 $3.000 $750 $0 $0 103 Asmus. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. totaling $101. 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.490 “Travel project to Europe on Electric Restructuring. and Budapest.000 $1.

115 $18. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $8.050 $3.072 $2.250 $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.Table 4: Senator Steve Peace.600 $2.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.000 $300 $1. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $7.000 $1.000 $4.000 $750 $750 $750 $1.815 $750 $6.572 $1.450 $7.100 $2.250 $1.500 $16.500 $3.750 $0 $0 ERG Master’s Project Mark Stout 165 .000 $6.000 $500 $2.250 $750 $500 $1.

900 . while Edison treated him to five meals and a sports event. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.000 $5. taking Steve to 11 meals.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. as well as chair of the Senate Energy and Utilities Committee. 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. SDG&E had Peace out to six meals. Table 5: Senator Byron Sher. Southern California Edison was granted a high level of access. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.100 $2. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. In 1995.450 166 ELECTRIC/GAS $6. Peace was treated to a $52 sports event by Mobil Oil. IEP made a gift of $241 for his speech at a conference. In 1996.000 Table 6: Senator Byron Sher.

(biomass) Edson + Modisette (lobbyist for indep. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.600 $13.500 Int.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. (geothermal) Colmac Energy Inc.100 $500 $2.000 $500 $500 $9. EVs) Hansen.000 $100 producers. $2. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. McQuat.482 $100 $1.882 $100 $1.000 locals) Southern California Pipe Trades United Assoc. and Hamrin. Brotherhood of Electrical Workers (various $9.000 $500 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .

000 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .000 $100 $100 $500 $1.000 $100 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 Large Energy Consumers $3.000 $1.500 COMPANIES $1.000 (tire $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.

462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $700 $4. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.585 $100 $500 $2. of California.000 $300 $300 $22. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.448 $14.Tosco Corp.

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 $3.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher received no other gifts that year from energy utility stakeholders. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project.000 in each of Amoco. Exxon. totaling $758.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.400 $750 $150 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. In 1996. totaling $2608. Sher holds over $100. Table 7: Senator Bill Leonard.300 $500 $1.500 $300 $0 $0 $2.000 $1. NARUC treated Sher to a two day trip to DC for another meeting. Mobil. and GE.

650 $2.000 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. saving up for a $77 dinner with head lobbyist Bob Foster. The Pacific Rim Conference of Seattle. Edison again ERG Master’s Project Mark Stout 171 . Senator Leonard was courted a little more heavily by energy stakeholders in 1996.080 $10. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $150 $500 $3. 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. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $1.000 $1.650 $500 $1. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $2.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $500 $500 $4.Table 8: Senator Bill Leonard.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. While the Senator was there. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $5.500 $500 $1. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. for a paltry $20. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. SCE treated Leonard to dinner and lodging for Legislative Ski Day. extending his stay from 12/8/96 to 12/13/96.730 $2.000 $2.

PG&E took Leonard out to a Kings game.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . for the modest tab of $56.000 $1. They also had Leonard out for two meals in Sacramento. Table 9: Assemblymember Mickey Conroy.had Senator Leonard out for Legislative Ski Day.000 $1. paying $44 for two meals and lodging.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.250 $1.600 $1.750 $1.600 $750 $750 $500 $1.000 $1. ARCO treated Leonard to a $19 meal at a reception. 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 $750 $750 $650 $150 $500 $3. including lunch with Bob Foster.

4 ERG Master’s Project Mark Stout 173 . Shanghai.700 $750 $450 $250 $250 $1.050 $1.000 $500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.000 $3.000 $5.000 $500 $750 $250 $500 $2. CFEE is a “non-profit. the California Foundation on the Environment and the Economy took Conroy on an 11 day. PG&E treated him to a basketball game with $51 tickets. 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.600 $3.300 junket to talk with Chinese central government and provincial leaders in Beijing. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. 1996. and Inner Mongolia. and to 104 Asmus.700 $500 $300 $550 $2.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.600 $500 $1.500 $2. $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.Table 10: Assemblymember Mickey Conroy. two meals for $44.

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

750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.Table 11: Assemblymember Diane Martinez.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $4. 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.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.250 $1.000 $1.175 $500 $1.750 $2.675 $2.750 $1.750 $1.750 $2.

000 $500 $500 $500 $500 $500 $3.500 $6.500 $1.000 $500 $500 $5.500 $1.000 $1.500 $1.000 $500 $3.750 $1.000 $5. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1.250 $1.000 $500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.000 $4.000 $1. Dist.000 $7. (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 $1.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $4. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $500 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.Table 12: Assemblymember Diane Martinez.

ERG Master’s Project Mark Stout 177 .100 $100 $1.500 $1.600 $1.058 $500 $500 $1.208 $0 $0 $1.900 $3. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. natural gas.850 $1. the Illinois Energy Association flew Martinez out for a $1.000 $500 $500 $1.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $8.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.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.000 $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.

Table 14: Assemblymember Steve Kuykendall. Kuykendall’s social calendar was destined to pick up in 1996.000 $1. diesel) Unocal (CMA member) Victory Oil Co.250 $100 $500 $35.500 $1. However.000 $500 $2.000 $19. Sweden. Conservation.500 $0 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.500 $1. and Privatization” visiting London.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. From 3/28/96 to 4/8/96.443 $6. ERG Master’s Project Mark Stout 178 . 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.374 $4.350 $500 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.000 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. natural gas. Kuykendall was taken on a $7.254 $200 $500 $4. and Budapest.374 $500 $2.000 $2.490 “Travel project to Europe on Electric Restructuring.000 $1.

916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. The California Mining Association took him out for an evening of recreation and dinner costing $89.167 junket visiting London. A trade association. known as the Council of States Government . According to investigative writer Peter Asmus. and Paris. government ministers. in Aspen.by the California Foundation on the Environment and the Economy. one of CFEE’s funders.WEST.051 to fly the President out to New York City for a ConEdison Management Conference. The California 105 Asmus. a trade association for publicly owned utilities. CO. Edison. by the California Foundation on the Environment and the Economy. The Large Public Power Council. SC to address their membership. 1996. Brussels. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. 4 ERG Master’s Project Mark Stout 179 . to meet with CEOs of the electricity industry. Another non-profit organization.”105 The Consolidated Edison IOU spent $1. Fessler was taken on a $7. for $610. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). regulators. The Aspen Institute. spent $1402 to fly Fessler to Charleston. wholesale PoolCo model. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. and environmental groups to discuss the British experience with deregulation of electricity. an Edison lobbyist was added to the international travel party at the last minute. was very interested in California moving to the UK-style. paid $1. Chevron treated Kuykendall to two dinners for $131.

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

1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Conlon was taken on a $7. Unocal. by the California Foundation on the Environment and the Economy. In 1995. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1995. Edison. He left office on February 23.000 in each of Montana Power Company and Exxon stock. He does own more than $10. wholesale PoolCo model. He does own less than $10. Brussels. and Schlumberger oilfield services stock. and less than $10. ERG Master’s Project Mark Stout 181 . to meet with CEOs of the electricity industry.000 in each of Chevron. utility and General Electric stock. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. government ministers. and Paris. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton.000 in each of Central & Southwest Corp. Jr. PG&E had him out to three meals for $71. regulators.167 junket visiting London. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. spending $258. 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 Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.

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