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 which will be superseded to a great extent by the details of AB 1890. 1995 Electric Restructuring Decision. 1 2 CPUC RD&D Working Group.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

Objectives
• Evaluate which stakeholder groups got what they wanted: Each stakeholder group influencing the process pursued policy outcomes that they felt were in their self-interest. This paper determines which groups had their requests granted, and which had their requests ignored, looking at both the language of AB 1890, as well as the CPUC December, 1995 decision. Groups that fared better in one arena than the other are highlighted. Determine why or why not a stakeholder group was successful in getting what they wanted out of each policy process: In many cases, interest groups were able to influence outcomes in the legislative and/or CPUC forums through well reasoned comment filings, direct lobbying, campaign contributions, as well as other avenues. This paper explores what mechanisms the different interest groups used to influence these policy outcomes, contrasting differences in techniques applied between the Legislature and CPUC, focusing on whether each decision making body or individual had particular avenues that were most effective.

Methodology
In order to answer the questions of which stakeholder groups got what they wanted and why, I based my research on an analysis of three categories of data: 1) background utility regulation literature, 2) semi-structured interviews with stakeholders as well as CPUC and legislative staff, and 3) archival analysis of CPUC filings, legislative language and videos, and state officeholder filings. Rather than approaching the data with a hypothesis to verify, I compare and cluster the data to allow patterns to flow out that can then generate theories. I compare the CPUC and legislative policy processes, determining similarities and differences in how each party fared in each forum, as well as why each party fared as they did. This data-driven approach to the generation of theory is based on the work of Glaser and Strauss, who contrast the use of data to

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generate grounded theory with the use of data to verify logico-deductive theory.5 Below I describe the use of each of these data types. Background literature on electric utility regulation is used to provide a historical context for California’s electric utility deregulation, which is presented in the next two sections of this report, History of Electric Utility Industry Regulation and Factors Behind the Drive for Deregulation. Semi-structured interviews were conducted with 26 representatives of different stakeholder organizations. The semi-structured format allows flexibility in altering the flow of the interview, following up on interesting points as they arise. I selected an initial set of organizations to contact, trying to cover as wide a spectrum of stakeholder groups as possible, based on my experience representing a stakeholder organization on the issue of electric utility deregulation in the CPUC and legislative arenas. Most interviews were conducted in person, while several where over the phone. As I conducted interviews, subjects referred me to additional representatives to contact, both in their organizations as well as in others. An interview guide was used for

recording notes, which were typed up later. Questions were developed for the interview guide to determine for each organization what outcomes were sought, what outcomes were obtained in each of the policy decisions, and what methods and strategies were used to influence each policy decision. A list of questions for the semi-structured stakeholder interviews is included in

Appendix A. A full transcript of these interviews is included in Appendix B. These interview subjects are clustered into the following categories for analysis: investor-owned electric utilities, municipal electric utilities, utility labor unions, independent producers, large electricity consumers,

5

Glaser and Strauss, 1967, Glaser, 1978.

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small electricity consumers, environmental advocates, and state institutions. The organizations represented by each interview subject are listed, by category, in the Table of Contents for Appendix B. Semi-structured interviews were conducted with two staff of the CPUC and three staff of members of the legislative Conference Committee on Electric Industry Restructuring. An

interview guide was used, with questions developed to determine which stakeholder organizations were perceived by the staff as being most effective in influencing the respective policy outcome, and why; which stakeholder organizations were perceived as being able to set the terms of the debate, and why; as well as which stakeholder organizations were perceived as least effective in influencing that policy outcome, and why. A list of questions for the semi-structured officeholder staff interviews is included in Appendix A. A full transcript of these interviews is included in Appendix C. Finally, an archival analysis was performed on the CPUC formal filings, Fair Political Practices Commission records, Secretary of State Political Reform Division records, proposed and final legislative language, as well as legislative conference committee videos. The CPUC filings can be used to cross-check what each major interested party had originally requested from the process, tracking how that may change over time, as well as to determine policy outcomes from the CPUC. The California Fair Political Practices Commission archives an annual Statement of Economic Interest for each state office holder. The EIS forms for the CPUC Commissioners and Conference Committee members were examined to determine which organizations used trips, events, meals, and other gifts to gain access to decision makers. The California Secretary of State Political Reform Division keeps Officeholder, Candidate, and Controlled Committee Campaign Statements on file for each elected state officeholder and candidate. These Statements were ERG Master’s Project Mark Stout 7

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

Beginning in 1907 with New York and Wisconsin. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). this act expanded the role of the Federal Power Commission to regulate wholesale electric transfers.utilities as natural monopolies and hence inevitable. ERG Master’s Project Mark Stout 9 . A number of these holding companies owned. Hempling explains. by 1922 47 states and the District of Columbia were regulating electric utilities. with at least 20% of electricity crossing state lines in 1935.” This legislation sought to avoid market abuses by limiting the size and 7 Davis. a small number of holding companies owned most utilities in the United States. or were owned by.” The early 1900s were marked by the rapid increase in electric utility regulation by state public utility commissions (PUCs) to address this natural monopoly character.8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law. This being the case the best solution seemed to be regulation by public commission. 166-167.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids. State and Federal regulation of rates and securities failed to keep up with sophisticated holding company attempts to evade regulation. led to the passage of the Federal Power Act. Based on the Interstate Commerce Clause. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. large nonutility companies such as electric equipment contractors.

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

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

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

pushing back their goal for a policy decision until September of 1995. 1995. and asserted that. “alternative frameworks based on ‘let the market decide’”. 1994. The first issue addressed open access to the transmission system 19 20 CPUC. 1994. 1. This process tempered the CPUC’s frenetic timetable. and documentation resulting in a report back to the Governor and Legislature by January 31. the CPUC proposed. coupled with a lack of prior coordination with the state Legislature. such as “green pricing”. where CPUC President Fessler and Commissioner Knight testified on their proposal.21 This stakeholder response. 1995. evidentiary hearings. 21 CPUC. Wagner. This led to the passage of Assembly Concurrent Resolution 143. In their place.20 Many stakeholders. 1994.22 FERC MegaNOPR In March of 1995. where customers voluntarily pay more to promote renewables. Blue Book. environmental organizations were frightened by the Commission’s decision to move away from the current IRP process and mechanism for decoupling utility profits from sales volumes. which had been dubbed the MegaNOPR. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. FERC released a dual-issue Notice of Proposed Rulemaking. “a vibrant market exists for energy efficiency services”. For instance. Status Report.scheduled to be issued by the CPUC in August of 1994.19 Since the release of the Blue Book proposal. were concerned about the content and timetable of this proposal. which requires the CPUC to engage in a series of public hearings. Blue Book. including private and public-interest organizations. ERG Master’s Project Mark Stout 13 . numerous other states have also proposed electric utility 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. The MegaNOPR also granted utilities the ability to collect 100% of their stranded costs due to wholesale transactions. the California Commissioners released two draft proposals for pursuing rate deregulation in California. some thought the MegaNOPR ruling may set a precedent for 100% stranded cost recovery at the retail level. favored by CPUC President Fessler and two other Commissioners. Generators are scheduled into the pool based on time-based bids submitted to the ISO. Although stranded costs due to wholesale competition would be much smaller then those posed by retail competition. in May of 1995. Retail contracts with a particular generator could be handled with separate “contracts for differences”.for wholesale transactions. 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. The majority proposal known as PoolCo. 1997.24 22 23 CPUC. Status Report. 24 CPUC PoolCo Proposal ERG Master’s Project Mark Stout 14 . scheduled and dispatched by an independent system operator (ISO). 1995.23 CPUC May 1995 Draft Proposals and Stakeholder Responses As a result of the Blue Book CPUC staff proposal. is based on a common wholesale power pool. Asmus and Smeloff. which is usually considered state jurisdiction. forcing utilities to allow non-utility generators to use their transmission systems on a “comparable basis” at standard tariffs.

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

a new mechanism is to be developed. to decouple utility profits from sales volume. with utility shareholders accepting some of the burden for past. To enhance energy efficiency efforts. the Framework demands that each individual utility customer. as a response to the MOU. Framework Parties. continuation of low income programs. including NRDC. 1995. does not actually propose a specific electric utility industry structure. A minimum level of renewables is proposed for each IOU supply portfolio to return the states resource diversity to 1993 levels. and continued progress for energy efficiency and renewable resources. By combining this with effective Performance Based Ratemaking. As in the MOU. uneconomic investments. The Framework. a coalition of public interest groups and renewable energy advocates. in the spirit of the existing Electric Revenue Adjustment Mechanism (ERAM). ERG Master’s Project Mark Stout 16 .27 Outraged that they had been left out of the MOU negotiating process. UCS. should see short and long term rate reductions. 26 27 MOU Parties. 1995.26 The CPUC held a full-panel hearing to focus on the details of the MOU in September of 1995. small customer equity. but with increased funding levels to restore energy efficiency and R&D spending at pre-Blue Book levels. EDF. The Framework calls for equitable opportunities for small consumer participation in any move to allow direct access. The Framework calls for less than 100% stranded cost recovery. but spells out a set of public interest concerns that should be addressed by any industry restructuring including mitigation of market power. Utilities Consumer Action Network. including residential and small commercial consumers. (PBR).1995 levels. and at the level of attention given to the MOU. and Towards Utility Rate Normalization (TURN) submitted a “Framework for Restructuring in the Public Interest” to the CPUC. a non-bypassable systems benefits charge is proposed.

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

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

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

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

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

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

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

non-utility providers. Utilities compete for industrial customers who are relocating.”. “Discretionary Evolution. 55 Flavin and Lenssen. over half of new U. the camel of competition forced its nose under the monopoly tent. generating capacity has been supplied by alternative.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.. Examples of national electric utility deregulation have already been provided by the United Kingdom and Norway. 355-356.56 Federal Regulatory Policy By requiring utilities to pay avoided costs to the new class of qualifying facilities..53 allowing a policy trend that emphasizes markets rather than social welfare. allowing frequent comparisons between the California Blue Book’s proposed wholesale pool and a similar pool already implemented in the UK. Stevenson. 357. There is significant competition in the wholesale electric generation market. the 1978 Public Utility Regulatory Policies Act greatly invigorated the wholesale market for electric power.. ERG Master’s Project Mark Stout 24 . Existing Competitive Forces Although electric utilities are often viewed as pure monopolies. competition takes on several forms in this market. 1994. Many electrical applications have substitutable fuels.S. “Discretionary Evolution.54 Since 1992..”. and it was only 53 54 Stevenson. as well as those on the border of service districts. such as natural gas for space heating. “With this act.the academic rationale for the recent flurry of deregulation activity being pushed by free-market ideology.

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

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

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

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

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

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

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

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

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

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

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

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

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

The stakeholder representatives were also asked how much of what their organization wanted was included in AB 1890. The small consumer and environmental organization representatives appear to have taken a step backwards in terms of getting what they wanted compared to the CPUC December Decision policy outcome. as well as the majority of large electricity consumers. 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. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. ERG Master’s Project Mark Stout 38 . As Figures 3 indicates. say that their organizations got most of what they wanted from AB 1890.from the December Decision. and the remaining minority claim that their organization got rather little. nearly half of the representatives say that their Rather Little Figure 3: How much of what your organization wanted was in AB 1890? organization got most of what it wanted from AB 1890.

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. most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890. 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. Figure 6 shows that the only organizations interviewed that prefer the December Decision are among the environmental and UTILITY LABOR UNIONS MUNICIPAL ELECTRIC UTILITIES INVESTOR-OWNED ELECTRIC UTILITIES independent power communities. either the CPUC December Decision or AB 1890. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 .

and Union of Concerned Scientists interviews].” Many of the other stakeholders consider AB 1890 an incremental. forward Decision. As excerpted from the PG&E stakeholder interview.[see American Wind Energy Association. and to begin to build theories for why. as well as three subjects ERG Master’s Project Mark Stout 40 . 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. 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. STATE INSTITUTIONS Figure 6: What Policy Outcome Does Your Organization Prefer? “Although the CPUC Decision was financially easier on PG&E.

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

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

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

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

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

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

1997. In the end.• A senior analyst for the Environmental Defense Fund comments on their participation in the CPUC process. Critical stakeholders who could have derailed did not. We were on separate tracks with industrial customers to ensure no cost shifting occurred. it did become clear that NRDC’s strategy was based on coalitions of insiders. We were in constant contact. one on one.70 [also see numerous comments in interview transcripts] An American Wind Energy Association representative was disheartened that Cavanagh would not pull NRDC’s endorsement for AB 1890. didn’t want to ruffle any strategies. It was strong going in and going out of the process. AWEA endorsed the bill reported out of the conference committee.” Later in my interview with Ralph.” 70 Weisman. and the Sacramento Bee focusing on public purpose programs. made no attempt to build clout. largely because no public interest group was willing to oppose the bill. the San Francisco Chronicle. If environmental groups collectively walked. but relied on their name instead. San Francisco Examiner. NRDC had no media strategy. not grassroots activists: “It was a consensus-based process. there was not enough activity. not turning it into a media tank battle. “Environmentalist Defends His Stance” ERG Master’s Project Mark Stout 47 .” • Cavanagh offers a different perspective on NRDC’s substantial media work. we could have killed it. because he. “NRDC did press work through editorial boards including the San Jose Mercury News.” • Ralph Cavanagh has served as a lightning rod for praise and criticism of the environmental community’s focus on an insider strategy. “Past EDF’s filing comments. NRDC’s relationship with the IOUs was important. The environmental groups and consumer groups such as TURN worked well together. “wanted a win.

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

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

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

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

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

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

092 $3.559 $0 $246.370 $648 N/A $0 $208.272 $0 $64.500 $1.496 $8.588 $500 $32.000 N/A $0 $18.000 $0 $70.308 $516.995 $596.675 $736.500 $78.157 $0 $188.000 $562.S.608 $3.000 $480.110 $34.964 $0 $40.079 $950 $14.000 $62.835 $1.592 $846 $0 ERG Master's Project Mark Stout 54 . Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.675 $384.470 $10.819 $0 $323.112 $3.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $681.180 $0 $209.096 $971.181 $0 $160.031.500 $190. (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 $59.000 $225.416 $5.153 $750 N/A $8.101 $495 $10.374 $1.479 $2.630 $300 N/A $0 $5.595 $0 $21.981 $1.516.102 $0 $73.149 $3.166 $5.500 $263.741 $21.952 $1.239 $0 N/A $0 $89.000 $634.405 $0 $722.419 $13.075 $4.818 $0 $65. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int.079 $13.203.758 $2.000 $1.752 $0 $51.163 $0 $25.500 $533.745 $68.125 $0 $4.

400 $100 $79.401 $1.675 $0 $1.938 $0 $118.319 $0 $10.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co. natural gas.197 $500 N/A $2.600 $32.203 $0 $30.003. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.665 $0 $262.716 $39.362.081 $1.000 $0 $15.271 $0 $12.492 $0 $66.000 $383.495 $1.000 $37.947 $500 $281.203 $5.099 $12.207 $5.326 $0 $100.000 $0 $171.000 $20.701 $0 $5.083 $0 $20.250 $0 $30.230.291 $3.551 $12.600 N/A $5. (gasoline refining and marketing) Tower Energy Group (oil.850 $1.000 $524.000 $0 $6.495 $27.145 $5.167 $500 $25.000 $526.500 $0 $0 ERG Master's Project Mark Stout 55 .723 $0 $38. (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.055 $0 $151.596.519 $11. 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 $50. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.589 $26. 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. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.100 $144.281 $1.179 $0 $3.500 N/A ERG Master's Project Mark Stout 56 .862 $21.882 $15. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.000 $85.626 $0 $8.025.460 $50.571 $500 N/A $200 N/A $1.000 $35.750 $418. producers.147 $500 $739.) 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. Dist. 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.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.250 N/A $100 N/A $2.611 $1.159 $3.819 $921.605 $250 N/A $1.917 $300 $5.100 $0 $500 N/A $100 $0 $500 N/A $2. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.543 $29.500 N/A $0 $211. McQuat.000 NA $500 $0 $2.750 $267.000 $209.717 $500 not applicable $0 $138.724 $500 not applicable $500 $57.200 $837.331 $0 $97.240 $0 $178.750 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.118 $0 $144.748 $32.250 $148.845 $452.017 $1.590 $5.450 $566. (member of IPPs of NY) United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $145.286 $3.454 $3.905 $30.600 $276.229 $100 N/A $1. and Hamrin.195 $401.000 $33.060 $6. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.400 $1.S.500 $29.032 $0 $172.782 $981.000 N/A $100 N/A $7.

(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. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.347 $9.090 $749 $38.521 $14. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.478.181 $1.885 $300 $207.500 $47.250 $34.296 $800 $25.138 $1.661.072 $918. Texaco Tidelands Oil Tosco Corp.689 $2.050 N/A $0 $214.995 N/A $100 N/A $0 $3. diesel) Unocal (CMA member) Victory Oil Co.925 $0 $44.000 $500 $456.622 $67.900 $0 $21.1996 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. natural gas.900 $1.495 $22.177 $300 N/A $0 $29.861 $1.754 $4.650 $3.209.384 $2.438 $500 N/A $0 $1.521 $1.750 $23.958 $2.000 $233.950 $3.000 $22.500 $251.989 N/A $9.407 $200 $61.016 $1.000 $76.750 $37. (gasoline refining and marketing) Tower Energy Group (oil.712 $100 N/A $200 $16.761 $0 $73.643 $1.573 $2.521 $0 N/A $50 $87.000 $65.511 $1.334 $498 $1.050 $949.705 $19.721 $748.137 $550 N/A $5.532 $4.245 $335.500 $277.878 $12.417 $9.800 not tracked $3.636 $0 $103.780 ERG Master's Project Mark Stout 57 .960 $2.

000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .250 $21.000 $15.000 $2.000 $700 $117.066 $500 $21.068 $14.585 $33.462 $208.378 $100 $21.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.790 $100 $14. 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) $1.438 $4. of California.462 $500 $14.066 $500 N/A $250 N/A $22.448 $424.

4 Asmus. One example of the type of access to officeholders that money can buy is the junkets run by the California Foundation on the Environment and the Economy. and small consumer groups. 1996.79 From 3/16/94 to 3/27/94. including oil and natural gas companies. alternative energy producers. an Edison lobbyist was added to the international travel party at the last minute. 4 ERG Master’s Project Mark Stout 59 . to meet with CEOs of the electricity industry. CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. and Inner Mongolia. their “Travel project to Europe on Electric Restructuring. were able to far outspend environmental organizations (who were usually spread thin over many issues). CFEE is a “non-profit.As one would imagine. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. and Paris. 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. 1996.800 each. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. regulators. Brussels. for $7.167 per guest.”80 In April of 1995. From 3/28/96 to 4/8/96. paying up to $7. and environmental groups to discuss the British experience with deregulation of electricity. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. According to investigative writer Peter Asmus. the lobbying summary tables above. Conservation. Shanghai. government ministers. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure.

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

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

Bibliography
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and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. CPUC vs.Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and 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. 1995 Decision? How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Is your organization more comfortable with one policy decision over the other (i..e.

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

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

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

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. SDG&E was a supporter of the PoolCo market structure along with Edison. and got it struck down. everyone should pay. 1996. Throughout the ‘70s. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. We went to FERC. ERG Master’s Project Mark Stout 71 . It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. 1995 Decision? The PUC was on the right track. We were very opposed to the BRPU. The lucky Arizona utilities went with coal. Also. if you are a broker. with the exception of the legislation’s mechanism for a rate reduction. AB 1890 mirrors the Decision in many ways. we had the highest rates in the nation. When Tom Page came in as CEO in 1981.84] SDG&E does not have any renewables. it would be difficult to get 5% renewables. [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. We were strongly opposed to the RPS. except for electricity purchases from Mexican geothermal generators. This would put us at a competitive disadvantage compared to PG&E and Edison. so we would have to buy energy or credits. High priced renewables are OK if you are not moving to a competitive future. 84 CPUC Renewables Working Group. but are not viable with competition. they did not get there by investing in high cost renewables. SDG&E wanted to become the lowest priced California IOU.

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

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

restructuring came to be viewed as inevitable. large and small customers. The regulatory compacts that we entered into need to be recognized. With the encouragement of the Governor’s office. and other energy service providers. We also pursued the opportunity for a return on investment. we were positioned as an anti-restructuring. be we did get a principled ERG Master’s Project Mark Stout 74 . Our three principles. don’t rock the boat utility. If any customers are to benefit. I would not say we got everything we wanted. “the nation’s second largest utility. 000 square mile service territory has a population of more than 11 million. The utility’s 50. were equity. The 109-year old investor owned utility serves more than 4. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. We could have been perceived as opposing direct access. and served as a basis for AB 1890. opportunity. let’s do this the right way. creating a level playing field. based on number of customers. so we decided if this was going to come into play. Over time. and SCE investors as well as independent energy producers should have the opportunity for a return on investment. a manifestation of these mutual interests. with a phase-in to direct access. equity. 1995 Decision? Those three principles were significant components of the December Decision. and return on investment. all customers should at the same time. not “the big guys eat first”. we adopted a principled approach that recognized the interests of Edison. This is best implemented under a transition.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE.”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. First.2 million customers in Central and Southern California.

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

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

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

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

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

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

In the June. SMUD is very committed to renewables. Assemblyman Steve Kuykendall was direct in his comments. there was a questioning of what role. It is difficult to maintain public purpose programs if everyone else abandons them. SMUD will finish recovering our CTC by 2002. Even though municipal utilities have the authority to recover costs. The Legislature did not elevate this to a well-reasoned. By constructing a brave new world for IOUs. 1995 Decision? There is nothing of direct benefit to SMUD in the Decision. SMUD responded. It created an environment of uncertainty. This was the bottom line. energy efficiency -. The munis are in a foreign land with the PUC. philosophical debate. that some other source should pay. SMUD’s territory is a small island surrounded by PG&E. he does not see a role for munis in a deregulated world. there was a question of whether we would get 100% stranded cost recovery. This is a classic question of public versus private decision making. it seemed obvious that these principles were a gimme. this made the question go away. SMUD would have been well served if the PUC jacked up IOU commitments for ERG Master’s Project Mark Stout 81 . if any.Going into the process. There was also a concern that munis would be constrained to the same clock as the IOUs in terms of the duration of the CTC recovery period. this impacts munis. with board candidates who run on platforms of clean energy and social responsibility that our consumers want sustained. But in reality. ‘96 Rate Restructuring Settlement. Since our rates were 25% below PG&E’s. should a public agency have in a restructured environment. Some would argue that the SMUD customer did not decide to open Rancho Seco. it is planned that PG&E will drop their rates below SMUDs by 2002. We are a consumer elected entity. what equity or fairness issues were raised by them being in the marketplace.clean energy. we have to resolve this by 2002. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

it was clear that the Legislature would be moving forward. with incentives for divestiture of utility generation. Under these decisions they cite. TURN also did not like it because we got a rate freeze. We thought there would not be comprehensive legislation that year. The PUC was vague on aggregation. but did include language describing it. The Decision made a good commitment to maintaining public purpose programs. 1995 Decision? There was good language on the non-bypassability of the CTC. amounting to $10’s of millions for divesting an industry segment with revenues in the billions. including low income. as opposed to the rate cap in the PUC December Decision. but TURN did not like the allocation of CTC costs to different classes. ERG Master’s Project Mark Stout 115 . although by July. and its inclusion of giveaways to large customer groups. based on geographical region. TURN was able to knock out an earlier Brulte bill. it was OK for regulators to deny full recovery. We had advocated a community access model. for aggregation of small customers to take advantage of direct access. but the incentives were weak. 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.to Supreme Court decisions allowing a “reasonable chance of recovery”. TURN applauded the focus. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? We fought AB 1890 because of its putting in place items from the PUC’s December Decision that we hated. Some commercial customers had wanted aggregation for different locations. Regulated entities can achieve their own version of the truth by repetition. It also included a recognition of the importance of market power. everyone except for small consumers. in concert with oil companies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5 million in public interest RD&D.several nights later. I went before the Conference Committee during discussion and it was explained as an error in redrafting. preserving $62. ERG Master’s Project Mark Stout 145 . All parties agreed that the earlier negotiated language. I believe that this was done by the IOUs. 102 Chart by Carl Blumstein based on 1995 CEC and PG&E data. all of the language that I had inserted earlier was removed. at approximately 11:30 PM. would be included back into the bill. including the $62.5 million per year funding level for public interest RD&D.

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

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

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

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

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

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

getting a place at the table. Senators Byron Sher. Some groups also used press conferences. lawyers. There were also “grassroots” astroturf groups based on utility shareholders. and Bill Leonard were the masterminds. Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. Because of the genius of the legislators. Which stakeholder groups do you think were best able to set the terms of the debate. The template was in large part formed by the CPUC’s December ‘95 Decision. 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. One strategy was to get bills established early on in the session. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee.Legislative Conference Committee. Groups participated in coalition building. and accountants. The IOUs spent millions on astroturf such as “Shareholders for Equity”. all of the outside lobbying did not matter. 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. Senator Peace established a process that was a model of openness. If your case fit into the unfolding structure. due to the egalitarian nature of the structure. establishing a level playing field. A lot of PR and press consultants got rich from this. Steve Peace. 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. then your voice was heard. based on the free market-driven ideologues on the Commission. but it mainly was a waste of money.

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

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

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

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

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

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

Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Natural Resources Defense Council .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 California Large Energy Consumers Association .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 .Interview #1 California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Coalition of California Utility Employees .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 #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #1 Natural Resources Defense Council .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .

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

000 $3.495 $10.191 $2.495 $7.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $500 $1.495 $1.000 $1.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $7.000 $495 $950 $696 $2.000 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. 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.000 $4.800 $1.000 $0 $0 ERG Master’s Project Mark Stout 162 .429 $498 $1.500 $22.896 $3.000 $2.500 $1.000 $2.995 $300 $12.995 $21.000 $3.000 $3.

995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.017 $749 $750 $3.500 $1.000 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.511 $3.000 $1.995 $2.250 $2.500 $47.000 $2.990 $1.750 $4.460 $200 $500 $750 $2.995 $14.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $800 $498 $200 $9. 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.Table 2: Assemblymember Jim Brulte.000 $8.495 $4.000 $2.000 $10.500 $6.995 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.

000 $1. Brulte was taken on a $7. CFEE is a “non-profit. Conservation.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. From 3/28/96 to 4/8/96.000 $1. and Privatization” visiting London. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $3.750 $750 $1.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and Budapest.000 $2. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. Not to be outdone. 4 ERG Master’s Project Mark Stout 164 .750 $3. as well as an event. 1996. Sweden. Table 3: Senator Steve Peace. totaling $101. by the California Foundation on the Environment and the Economy. Mobil treated Brulte to a $60 event in 1996.250 $500 $1. Chevron treated Brulte to two meals.490 “Travel project to Europe on Electric Restructuring.750 $2.000 $750 $0 $0 103 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Paling in comparison.

450 $7.000 $4.250 $7.000 $1.072 $2.000 $750 $750 $750 $1.100 $2.815 $750 $6. (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. 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 $16.115 $18.750 $0 $0 ERG Master’s Project Mark Stout 165 .250 $750 $500 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.600 $2.500 $3.000 $500 $2.000 $6.050 $3.500 $8.572 $1.250 $2.Table 4: Senator Steve Peace.250 $1.000 $300 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.

while Edison treated him to five meals and a sports event. 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 $1.900 .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. In 1996. taking Steve to 11 meals. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.000 $5. SDG&E had Peace out to six meals. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. In 1995. 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. Southern California Edison was granted a high level of access. Table 5: Senator Byron Sher.450 166 ELECTRIC/GAS $6.100 $2. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.000 Table 6: Senator Byron Sher. IEP made a gift of $241 for his speech at a conference. Peace was treated to a $52 sports event by Mobil Oil.

(biomass) Edson + Modisette (lobbyist for indep. $2.100 $500 $2. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. and Hamrin.500 Int.000 $500 $500 $9. Brotherhood of Electrical Workers (various $9. (geothermal) Colmac Energy Inc.000 $500 $1. EVs) Hansen. McQuat.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 $1.000 $100 producers.482 $100 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .882 $100 $1. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.600 $13.000 locals) Southern California Pipe Trades United Assoc.

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

585 $100 $500 $2. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $700 $4. of California.448 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.000 $300 $300 $22.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .Tosco Corp.

Sher holds over $100. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Exxon.000 $1.300 $500 $1. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995. In 1996. Sher received no other gifts that year from energy utility stakeholders.500 $300 $0 $0 $2. and GE. Mobil. 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. totaling $2608.400 $750 $150 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3. totaling $758.000 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting.500 $0 $0 ERG Master’s Project Mark Stout 170 .

SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.650 $2. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 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.650 $500 $1. Edison again ERG Master’s Project Mark Stout 171 .000 $1.000 $5. for a paltry $20.000 $2. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $500 $500 $4. WA paid $734 for Leonard to moderate a conference session on utility deregulation.500 $150 $500 $3. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.730 $2.080 $10. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. While the Senator was there.500 $500 $1. The Pacific Rim Conference of Seattle.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $2. extending his stay from 12/8/96 to 12/13/96.Table 8: Senator Bill Leonard.000 $1. saving up for a $77 dinner with head lobbyist Bob Foster.000 $2.

for the modest tab of $56. Table 9: Assemblymember Mickey Conroy.had Senator Leonard out for Legislative Ski Day.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $750 $750 $650 $150 $500 $3.000 $1. paying $44 for two meals and lodging.750 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.250 $1. PG&E took Leonard out to a Kings game.000 $1.600 $750 $750 $500 $1. They also had Leonard out for two meals in Sacramento.600 $1. including lunch with Bob Foster.000 $1. ARCO treated Leonard to a $19 meal at a reception.

$7.600 $3. and to 104 Asmus.600 $500 $1. 4 ERG Master’s Project Mark Stout 173 . 1996.000 $3.700 $750 $450 $250 $250 $1. and Inner Mongolia. PG&E treated him to a basketball game with $51 tickets. CFEE is a “non-profit.700 $500 $300 $550 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.000 $500 $750 $250 $500 $2. two meals for $44.500 $2.000 $5.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $2.Table 10: Assemblymember Mickey Conroy.000 $500 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS Destec (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Portland Cement Co. the California Foundation on the Environment and the Economy took Conroy on an 11 day. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Shanghai.050 $1.

General Electric.make sure Conroy kept a sweet spot in his heart for them. Edison wined and dined the Assemblymember with four meals at $134.000 each in Edison.000 in Orange & Rockland Utilities. After such a busy social calendar in 1995. In terms of investment. Chevron took Conroy out for two business meals. Kansas City Power & Light. ERG Master’s Project Mark Stout 174 . and less than 10. costing $99. SDG&E. and Westinghouse Electrical. four rounds of “refreshments” for $30. with investments of greater than $10. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. and $25 of cookies and candy. $10 in candy. Pacificorp. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996.

000 $1.750 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.000 $1.750 $1.250 $1.Table 11: Assemblymember Diane Martinez.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 . 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.175 $500 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $4.750 $2.675 $2.000 $1.250 $1.

000 $7.500 $1.500 $6.500 $1.000 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $500 $500 $500 $500 $500 $3.250 $1.750 $1.Table 12: Assemblymember Diane Martinez.500 $1.000 $1. Dist.000 $4.000 $4. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $1.000 $5.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $500 $3.000 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.500 $500 $500 $1.000 $500 $500 $5. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.

diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. natural gas.000 $500 $500 $1.208 $0 $0 $1.600 $1.100 $100 $1.500 $1.058 $500 $500 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.467 trip to Northwestern University to discuss the deregulation of public utilities.850 $1.000 $8. the Illinois Energy Association flew Martinez out for a $1.900 $3.Table 13: Assemblymember Steve Kuykendall. ERG Master’s Project Mark Stout 177 .

490 “Travel project to Europe on Electric Restructuring. However.000 $2.000 $500 $2. Kuykendall’s social calendar was destined to pick up in 1996.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. and Budapest.500 $1.000 $1. ERG Master’s Project Mark Stout 178 .250 $100 $500 $35.000 $1. and Privatization” visiting London.254 $200 $500 $4.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. Kuykendall was taken on a $7.Table 14: Assemblymember Steve Kuykendall. Conservation. natural gas. Sweden.500 $1. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.000 $1.374 $4.500 $0 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. From 3/28/96 to 4/8/96.374 $500 $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 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.443 $6.350 $500 $1.000 $19. diesel) Unocal (CMA member) Victory Oil Co.

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

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

1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Chevron. government ministers. to meet with CEOs of the electricity industry. He does own more than $10. regulators. In 1995. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995.167 junket visiting London. ERG Master’s Project Mark Stout 181 .000 in each of Montana Power Company and Exxon stock. PG&E had him out to three meals for $71. wholesale PoolCo model. He left office on February 23. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. 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. and Schlumberger oilfield services stock. one of CFEE’s funders. by the California Foundation on the Environment and the Economy. Brussels. and less than $10. was very interested in California moving to the UK-style. utility and General Electric stock. Unocal. He does own less than $10. 1995. spending $258. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. Conlon was taken on a $7.000 in each of Central & Southwest Corp. Edison. and Paris. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. and environmental groups to discuss the British experience with deregulation of electricity. Jr.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94.

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