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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

started by PURPA. PURPA aimed to set standards for state PUC ratemaking that would promote energy savings and be partial to residential consumers over industrial consumers. this was the marginal cost associated with procuring new generation capacity. 16. 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. PURPA was very significant in creating a market for non-traditional generators. was charged with writing the rules required to implement this legislation. It also created new 8 9 Pechman. In capacity constrained systems. This legislation allowed FERC to order utilities to provide transmission access at non-discriminatory rates. The Federal Energy Regulatory Commission (FERC). 343. 10 Davis. which is critical for wholesale competition. recent successor to the FPC. Hempling.”910 Public Utility Regulatory Policies Act of 1978 Passed by Congress as part of President Carter’s National Energy Plan.investment options of utilities so that each was confined in scope to an “integrated public-utility system. 17.11 Energy Policy Act of 1992 EPAct continued the Federal trend. ERG Master’s Project Mark Stout 10 . towards more competition in electricity generation. Qualifying Facilities were primarily cogeneration and small renewable energy electricity producers. 11 Pechman. 166-167.

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

and 3) rate changes to encourage efficiency and distribution of power. 6. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 18 Mydans. 1996.18 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. all residential consumers eligible on January 1. A more definitive policy statement was 16 17 Haddad. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers. industrial customers taking power at the transmission level eligible on January 1. and if successful. The Blue Book laid out an aggressive. customer class-staged schedule for direct access implementation. 2002. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”. 55.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. ERG Master’s Project Mark Stout 12 . Hoffman.supplies. with large. This utility restructuring involves the divestiture of utility electricity generation facilities into separate companies from the original utility which would still be responsible for transmission and perhaps distribution. 1999. In April of 1994. sending “a shockwave through the electric industry”. 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. all commercial customers eligible January 1.

where customers voluntarily pay more to promote renewables. 1994. and asserted that. and documentation resulting in a report back to the Governor and Legislature by January 31. 1995. Wagner. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23. For instance. “alternative frameworks based on ‘let the market decide’”. In their place. pushing back their goal for a policy decision until September of 1995. the CPUC proposed. including private and public-interest organizations. Status Report. 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 requires the CPUC to engage in a series of public hearings. were concerned about the content and timetable of this proposal. 1994. The first issue addressed open access to the transmission system 19 20 CPUC. 21 CPUC. This led to the passage of Assembly Concurrent Resolution 143. 1994. where CPUC President Fessler and Commissioner Knight testified on their proposal. Blue Book. 1995. such as “green pricing”. Blue Book. “a vibrant market exists for energy efficiency services”.19 Since the release of the Blue Book proposal. coupled with a lack of prior coordination with the state Legislature. evidentiary hearings. ERG Master’s Project Mark Stout 13 . which had been dubbed the MegaNOPR. This process tempered the CPUC’s frenetic timetable. FERC released a dual-issue Notice of Proposed Rulemaking.21 This stakeholder response.scheduled to be issued by the CPUC in August of 1994. 1.22 FERC MegaNOPR In March of 1995. numerous other states have also proposed electric utility deregulation.20 Many stakeholders.

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

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

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

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

1996 31 Rader. compared to the reckless pace of the legislative wrangling. Even given the large economic and environmental stakes. and especially residential and small commercial California ratepayers. omnibus legislation which preempts much of the PUC vision31."33 However. 1996 Roadmap CPUC press release. California Public Utilities Commission President Conlon praised members of the legislative conference committee: "It is through their tireless efforts that this legislation was crafted to provide balance of interests between utilities. arguing that it should not be used as a national model for protection of residential and small commercial consumer interests. 1997. neither process involved substantial public education or participation. 1996 ERG Master’s Project Mark Stout 18 . Several public interest organizations served as advocates for small consumer and environmental protection. 1996 32 Weisman. small consumer group. 1996 34 TURN press release. TURN. cutting deals with the stakeholders that would be required to “deliver the votes” within the committee. December. 1995 Decision. and confidential correspondence with stakeholder representative. the final product of this bipartisan conference committee handily passed on the Senate and Assembly floors with minimal debate. since it was perceived as a best effort compromise between the two main political parties.committee on deregulation worked at breakneck speed. has criticized AB 1890. a prominent. Pete Wilson signed AB 1890 on September 2330.34 There is concern that 29 30 CPUC. As the PUC stakeholder working group process drew to an end. but some have argued that the environmental organizations are not effectively representing the interests of their constituencies32. other market participants. While the pace of the PUC process was tempered so that their final policy decision could better reflect stakeholder interests. 33 CPUC press release.

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

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). As Carter and Cavanagh have noted. “If the bill had failed. 1997 41 Marshall. 1997. The overall levels are: 45 % existing technologies. 1997 42 Weisman. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. 1997. and 15% consumer-side incentives. 1996 CEC.41 There are currently several electric utility restructuring bills in Congress. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. would be eligible for direct access January 1. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 30% new technologies. including residential and small commercial consumers. In March of 1997. chair of the House Energy and Power Subcommittee. 10% emerging technologies. It divides up this amount into four accounts that vary over four years of funding.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. 1998.40 On May 6. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 .

these concerns are represented by the California Large Energy Consumers Association (CLECA). and overcapitalized due to state regulation.44 Factors Behind the Drive for Deregulation Now that I have reviewed the history of Federal and state electric utility regulation. “Restructuring Hearings on the Road” Levison. a consultant representing CLECA explains their 43 44 Levison. services. “DOE Restructuring Bill” 45 Stevenson. it is time to gain a fuller understanding of why California has proceeded down the path towards deregulation. 1997.43 The Department of Energy (DOE) has also been circulating a draft bill that includes a Renewables Portfolio Standard. 355. 1997. the companies have no incentive to be efficient.”46 In California.. ERG Master’s Project Mark Stout 21 . cement. Retail wheeling sits at the top of the agenda of this coalition of steel. too conservative.”. There is literally no profit in it for them. Davis explains their reasoning: “the electric companies are inefficient. Because the PUCs determine the rates. The state commissions typically calculate a company’s profits as a return on investment. and future expansion. It has an incentive to build a new plant even if it is not really needed. if a company wants more revenue it must invest more capital. 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.” Barbara Barkovich..requirement".45 Large Consumer Pressure Large industrial energy consumers have the most to gain from the lower electricity prices that may accompany greater industry competition. “12 companies--most foreign-owned--that really soak up the juice. Therefore. “Discretionary Evolution.

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

who in the past had enjoyed privileged status with cheap rates.”. 150. ERG Master’s Project Mark Stout 23 . Gordon. 84-108.. 50 Flavin and Lenssen. 51 Stevenson. greatly increasing opportunities for bulk power sales. “Discretionary Evolution. but now had to pay higher rates. 1993.. 1994. Hoffman 55-62.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. enabling increased competition.intense pressure from large industrial customers. Davis. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. 447-475. 195. 1993.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. 356-357. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. basing their arguments on welfare economics as applied to the changing electric utility landscape.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. 52 Gilbert.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A careful examination of the interviews with stakeholder representatives for environmental organizations draws out two other factors that may have impaired these public interest groups. along with small consumer advocates. Things were changing too fast. Some public interest (small consumer/environmentalist) advocates were not in the game at all. The municipal utilities had trouble articulating proposed solutions to their concerns in the AB 1890 Conference Committee. We didn’t do grassroots letters. mice stay away’.. minimizing this group’s losses. but were able to recover when pressured by Steve Peace. but depended on a consensus-based.. faced an un-level playing field all along. First. 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. but we have learned ‘when elephants dance. 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 . and Why: A pattern consisting of three stakeholder groups who may not have received what they wanted emerges from the staff interview data. This pattern of stakeholder groups is consistent with the results of the stakeholder cluster analysis. there was not enough time. in large part due to the free-market ideology of Governor Wilson’s office which has been passed down to the CPUC Commissioners over years of appointments. and were relegated to complaining after the deal was done. The clean power advocates.Synthesis of Stakeholder & Staff Comments on Who Got Rolled. “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. “insider” strategy: • A volunteer on the Sierra Club California Legislative Committee noted.

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

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

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

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

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

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

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

630 $300 N/A $0 $5.479 $2.000 $681.031.500 $190.000 $1.405 $0 $722.758 $2.374 $1.675 $384.000 $62.153 $750 N/A $8.416 $5. (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 $59.272 $0 $64. 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. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.995 $596.981 $1.370 $648 N/A $0 $208.818 $0 $65.745 $68.157 $0 $188.595 $0 $21.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.588 $500 $32.181 $0 $160.079 $950 $14.470 $10.S.752 $0 $51.741 $21.102 $0 $73.835 $1.180 $0 $209.500 $1.096 $971.000 $634.500 $78.419 $13.000 $480.000 $0 $70.112 $3.496 $8.592 $846 $0 ERG Master's Project Mark Stout 54 .149 $3.608 $3.075 $4.952 $1.110 $34.000 N/A $0 $18.819 $0 $323.964 $0 $40.308 $516.079 $13.500 $263.500 $533.675 $736.000 $562.000 $225.203.092 $3.125 $0 $4.163 $0 $25.101 $495 $10.516.559 $0 $246.239 $0 N/A $0 $89.166 $5.

362.723 $0 $38.319 $0 $10. 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 $4.207 $5.145 $5.600 N/A $5. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp. (gasoline refining and marketing) Tower Energy Group (oil.000 $524.081 $1.203 $5.326 $0 $100. (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.701 $0 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .000 $20.000 $383.947 $500 $281.596.401 $1.003.495 $27.083 $0 $20.000 $0 $6.203 $0 $30.400 $100 $79.665 $0 $262. natural gas.271 $0 $12.250 $0 $30.230.099 $12.291 $3.000 $37.600 $32.492 $0 $66.519 $11.675 $0 $1.716 $39.197 $500 N/A $2.167 $500 $25.000 $0 $171.000 $526.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.495 $1.000 $0 $15.055 $0 $151.551 $12.850 $1.938 $0 $118.

060 $6.571 $500 N/A $200 N/A $1.500 N/A ERG Master's Project Mark Stout 56 .1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.286 $3.000 $33.147 $500 $739.724 $500 not applicable $500 $57.000 $85. producers.590 $5. 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.100 $144.000 N/A $100 N/A $7.543 $29. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.250 $148. and Hamrin.589 $26.600 $276.605 $250 N/A $1.017 $1.750 $418. Dist. 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.611 $1.200 $837.454 $3.250 N/A $100 N/A $2.460 $50.400 $1.100 $0 $500 N/A $100 $0 $500 N/A $2.748 $32.819 $921.S.905 $30.) 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.750 $1.500 N/A $0 $211.000 $50. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. McQuat.500 $29. (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) $145.331 $0 $97.025.240 $0 $178.000 NA $500 $0 $2. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.159 $3.000 $35. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.118 $0 $144.179 $0 $3.281 $1.882 $15.229 $100 N/A $1.917 $300 $5.195 $401.626 $0 $8.717 $500 not applicable $0 $138. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.450 $566.000 $209.845 $452.782 $981.750 $267.032 $0 $172.862 $21.

500 $277.622 $67.958 $2.643 $1.250 $34. diesel) Unocal (CMA member) Victory Oil Co.960 $2.950 $3. (CLECA member) California Retailers Association California Steel Industries (CLECA member) Californians for Competitive Electricity Fontana Steel Kaiser Aluminum Kaiser Cement Corporation Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) RMC Lonestar (CLECA member) Schnitzer Steel Industries (CLECA member) Southwest Portland Cement Co.650 $3.500 $251.000 $233.689 $2.245 $335.478.016 $1.347 $9.521 $1.177 $300 N/A $0 $29.138 $1.000 $500 $456.925 $0 $44.000 $76.072 $918.995 N/A $100 N/A $0 $3.407 $200 $61.900 $1.878 $12.181 $1. (gasoline refining and marketing) Tower Energy Group (oil.000 $22.900 $0 $21.521 $0 N/A $50 $87.050 $949.861 $1. natural gas.137 $550 N/A $5.761 $0 $73.712 $100 N/A $200 $16.511 $1.384 $2.573 $2.334 $498 $1.705 $19.754 $4.438 $500 N/A $0 $1.750 $23.1996 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.090 $749 $38.989 N/A $9.661. Texaco Tidelands Oil Tosco Corp.500 $47.417 $9.296 $800 $25.495 $22.532 $4.780 ERG Master's Project Mark Stout 57 .050 N/A $0 $214.721 $748.636 $0 $103. (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.750 $37.800 not tracked $3.209. 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) $41.885 $300 $207.521 $14.000 $65.

of California.438 $4.585 $33.462 $500 $14.066 $500 N/A $250 N/A $22.448 $424.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .068 $14.000 $15.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.790 $100 $14.250 $21.066 $500 $21.378 $100 $21.462 $208.000 $2.000 $700 $117. 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.

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

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

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

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e. 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.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. 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. CPUC vs. 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.

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

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

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

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

We were strongly opposed to the RPS. 1995 Decision? The PUC was on the right track. [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 went to FERC. The lucky Arizona utilities went with coal. ERG Master’s Project Mark Stout 71 . How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. with the exception of the legislation’s mechanism for a rate reduction. so we would have to buy energy or credits. When Tom Page came in as CEO in 1981. High priced renewables are OK if you are not moving to a competitive future. we had the highest rates in the nation.84] SDG&E does not have any renewables. if you are a broker. except for electricity purchases from Mexican geothermal generators. it would be difficult to get 5% renewables. Also. everyone should pay. 84 CPUC Renewables Working Group. SDG&E wanted to become the lowest priced California IOU. they did not get there by investing in high cost renewables. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. AB 1890 mirrors the Decision in many ways. but are not viable with competition. SDG&E was a supporter of the PoolCo market structure along with Edison. and got it struck down. Throughout the ‘70s. This would put us at a competitive disadvantage compared to PG&E and Edison. 1996. We were very opposed to the BRPU.What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? Our main goals were stranded assets recovery and the creation of a new marketplace where we could compete.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

which had passed the Assembly the previous year. State Institutions California Energy Commission Eric Saltmarsh was serving as Staff Counsel in the CEC during the prior CPUC proceedings as well as the past Legislative session. He is currently the counsel for the Oversight ERG Master’s Project Mark Stout 137 . as included in Assembly Bill 1202. at the very least they could have stopped AB 1890 from passing unanimously. 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. demanding continued environmental protection and renewable energy development after the transition to a deregulated industry. the legislative outcome would have been different. Because of splintering and infighting within the public interest community. gathering dozens of hand written letters from California residents to their state legislators. Thousands of UCS California activists received letters asking them to write their state senator in support of the Renewables Portfolio Standard. I worked for UCS coordinating our participation in Clean Power Day. While Joe continued to lobby Senators. counting only those copied to UCS.California in April. She went on to say that if the whole environmental community was working under a unified strategy. resulting in over two hundred letters to Sacramento. a legislative education and lobbying event in early August. 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”. 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.

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

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

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

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

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

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

The renewables could have fared much better if they stuck together as a coalition. After they finally recognized the problem ERG Master’s Project Mark Stout 144 . but they were too busy negotiating other aspects of AB 1890 to followup on my requests for further discussion of RD&D. They proposed to me funding at current RD&D budget levels. “Do people have to fail intelligence tests to run a muni?” Anonymous Comments #2: AB 1890 funding levels for Public Interest RD&D The initial funding levels being discussed for public interest RD&D were very low. They probably thought that this funding level included regulated transmission and distribution RD&D. but they allowed me to put in definitions derived from the CPUC RD&D Working Group Report on RD&D [which distinguished between public interest and regulated T&D RD&D] and other language. current levels for moving to a future restructured market. The IOUs wanted to use post-Blue Book. pre-Blue Book. at one point Steve Peace threw all of the renewables community out of the room to resolve an issue. For example. University of California representatives and I advocated for higher. SDG&E and PG&E RD&D funding fell from over $120 million in 1994 down to just over $60 million in 1995102]. the renewables community cam back in.Anonymous Stakeholder Comments Anonymous Comments #1: Parties who could have improved their performance The renewables and municipal utilities were very poorly represented in hearings. historic levels [combined SCE. 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. After seven hours of negotiation. The municipal utilities angered Peace so much that he asked.

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

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

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

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

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

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

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

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

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

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

SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. 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. Labor wanted to protect their employees. He walked out at one point to force the munis to make up their mind. The IOUs got complete stranded cost recovery. Political clout can be bought with lobbying and campaign contributions. The IOUs were clear that they wanted full recovery. Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. Bill Leonard said that if you want to charge an exit fee. However. while the large customers got the ability to go first on direct access. and look for ways to get around paying the CTC. Bill Leonard did not historically support ratepayer funding for renewables. What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Getting the help of the Governor’s office. it was all over. It looks most likely that it will be adopted. ERG Master’s Project Mark Stout 155 . causing chaos. The ability to fund politicians helped. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. Once the Governor’s office was behind the MOU. There was a lot of play between SMUD and the large customers. you must play. Was it always clear what outcomes each stakeholder group wanted from the process? Yes.

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

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

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

California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 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 .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 .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association .Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees .

Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Interview #1 Coalition of California Utility Employees . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California. California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear Most 0 0 3 1 1 1 0 2 0 1 1 0 0 2 1 1 1 1 3 1 1 1 1 1 0 0 1 1 1 1 1 1 1 4 1 1 1 1 1 1 .Interview #1 California Municipal Utilities Association .Interview #1 Natural Resources Defense Council .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 .Interview #1 Coalition of California Utility Employees .Interview #1 California Municipal Utilities Association .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #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 .Interview #1 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California. California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .

495 $7.995 $21.191 $2.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.000 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $3.000 $2.000 $3.995 $300 $12.495 $1.000 $495 $950 $696 $2.000 $1.896 $3.000 $1.800 $1.000 $500 $1.495 $10. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $7.000 $2.429 $498 $1.000 $4.000 $0 $0 ERG Master’s Project Mark Stout 162 .500 $22.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.

995 $2. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.000 $1.495 $4.750 $4.990 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $800 $498 $200 $9.995 $0 $0 ERG Master’s Project Mark Stout 163 .995 $1.995 $14.511 $3.Table 2: Assemblymember Jim Brulte.460 $200 $500 $750 $2.500 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.000 $10.017 $749 $750 $3.000 $8.500 $1.000 $3.000 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.500 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.250 $2.000 $2.000 $1.500 $47.

750 $750 $1. 4 ERG Master’s Project Mark Stout 164 .000 $2.750 $2. and Privatization” visiting London. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Chevron treated Brulte to two meals. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. 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. Table 3: Senator Steve Peace. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.500 $1. Paling in comparison.000 $1. Sweden. by the California Foundation on the Environment and the Economy.000 $1. CFEE is a “non-profit. totaling $101.000 $3. 1996.750 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. and Budapest.000 $750 $0 $0 103 Asmus.250 $500 $1. Mobil treated Brulte to a $60 event in 1996.490 “Travel project to Europe on Electric Restructuring.000 $1. Brulte was taken on a $7. Not to be outdone. Conservation. From 3/28/96 to 4/8/96. as well as an event.000 $2.

Table 4: Senator Steve Peace.115 $18.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.572 $1.000 $500 $2.100 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.750 $0 $0 ERG Master’s Project Mark Stout 165 . Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.250 $2.500 $8.000 $4.000 $300 $1.250 $7.450 $7.072 $2. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $750 $750 $750 $1.250 $1.000 $6.050 $3.500 $3.600 $2.250 $750 $500 $1.500 $16.815 $750 $6.000 $1.

1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. IEP made a gift of $241 for his speech at a conference. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Southern California Edison was granted a high level of access. Peace was treated to a $52 sports event by Mobil Oil. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89.000 $5.450 166 ELECTRIC/GAS $6. 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. as well as chair of the Senate Energy and Utilities Committee. 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. Table 5: Senator Byron Sher. In 1995.000 Table 6: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals. In 1996.900 .100 $2. taking Steve to 11 meals.

000 locals) Southern California Pipe Trades United Assoc.100 $500 $2. and Hamrin. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.500 Int.000 $500 $500 $9. Brotherhood of Electrical Workers (various $9.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. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. $2.482 $100 $1. EVs) Hansen.882 $100 $1. McQuat.600 $13.000 $100 producers. (biomass) Edson + Modisette (lobbyist for indep. (geothermal) Colmac Energy Inc.000 $500 $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .

Indpependent Energy Producers Modesto burning) SeaWest Windpower United American Energy Wadham Energy Limited Partnership (biomass) Zond Windpower DSM ENERGY SERVICE Energy Limited Partnership $1.000 $100 $1.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 Large Energy Consumers $3.000 $1.000 (tire $1.500 COMPANIES $1.000 $100 $100 $500 $1.000 $1.

Tosco Corp.585 $100 $500 $2. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.448 $14. of California.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 .000 $700 $4.000 $300 $300 $22.

Sher received no other gifts that year from energy utility stakeholders. totaling $2608. Sher holds over $100. Mobil. In 1996. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS California Steel Industries (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $3.000 $1.500 $300 $0 $0 $2.300 $500 $1. 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 $758. Table 7: Senator Bill Leonard.000 in each of Amoco. Exxon. and GE. NARUC treated Sher to a two day trip to DC for another meeting.400 $750 $150 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 .1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.

080 $10. The Pacific Rim Conference of Seattle. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.650 $500 $1.650 $2.000 $5.000 $2. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. saving up for a $77 dinner with head lobbyist Bob Foster. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.500 $150 $500 $3. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.Table 8: Senator Bill Leonard. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. SCE treated Leonard to dinner and lodging for Legislative Ski Day.730 $2.500 $500 $1. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. extending his stay from 12/8/96 to 12/13/96.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. WA paid $734 for Leonard to moderate a conference session on utility deregulation.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. for a paltry $20.000 $1.000 $2. While the Senator was there. Edison again ERG Master’s Project Mark Stout 171 .000 $500 $500 $4.000 $1.000 $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.

) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. 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.had Senator Leonard out for Legislative Ski Day. PG&E took Leonard out to a Kings game.600 $750 $750 $500 $1.000 $1.600 $1. for the modest tab of $56. They also had Leonard out for two meals in Sacramento.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . ARCO treated Leonard to a $19 meal at a reception.750 $1.000 $1. Table 9: Assemblymember Mickey Conroy.000 $1. including lunch with Bob Foster.250 $1. paying $44 for two meals and lodging.000 $750 $750 $650 $150 $500 $3.

700 $750 $450 $250 $250 $1.500 $2. two meals for $44.000 $3.600 $500 $1.Table 10: Assemblymember Mickey Conroy.000 $500 $750 $250 $500 $2. and to 104 Asmus. the California Foundation on the Environment and the Economy took Conroy on an 11 day. 4 ERG Master’s Project Mark Stout 173 .600 $3.000 $5. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.050 $1. $7. and Inner Mongolia.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil 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 California State Pipe Trades Council PAC Int. CFEE is a “non-profit.700 $500 $300 $550 $2. 1996. PG&E treated him to a basketball game with $51 tickets. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. 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. Shanghai.000 $2.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.000 $500 $2.

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

000 $1.750 $4. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.750 $1.250 $1.675 $2.750 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.250 $1.175 $500 $1.Table 11: Assemblymember Diane Martinez.000 $1.

000 $500 $500 $500 $500 $500 $3. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.000 $4.000 $5.000 $4.750 $1.500 $1.000 $1.Table 12: Assemblymember Diane Martinez. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $500 $500 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $1.500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $7.000 $500 $1.500 $6.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $1.000 $500 $3.000 $500 $500 $5.000 $1.250 $1. Dist.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.

The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.500 $1.208 $0 $0 $1. the Illinois Energy Association flew Martinez out for a $1. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. natural gas.Table 13: Assemblymember Steve Kuykendall.850 $1. ERG Master’s Project Mark Stout 177 . (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.058 $500 $500 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.000 $8. 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.600 $1.500 $1.100 $100 $1.000 $1.900 $3.000 $500 $500 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.

000 $500 $2.490 “Travel project to Europe on Electric Restructuring. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Kuykendall was taken on a $7. natural gas.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.500 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $19.500 $1. However. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.000 $1.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.Table 14: Assemblymember Steve Kuykendall. Sweden. Kuykendall’s social calendar was destined to pick up in 1996.350 $500 $1.443 $6. and Privatization” visiting London. From 3/28/96 to 4/8/96.250 $100 $500 $35.374 $500 $2.000 $1.500 $0 $1.000 $2. diesel) Unocal (CMA member) Victory Oil Co. ERG Master’s Project Mark Stout 178 .000 $1.254 $200 $500 $4.374 $4. and Budapest. Conservation.

to meet with CEOs of the electricity industry. A trade association. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. a trade association for publicly owned utilities. Chevron treated Kuykendall to two dinners for $131.167 junket visiting London. The Aspen Institute.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. 1996. CO. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). The Large Public Power Council. spent $1402 to fly Fessler to Charleston. an Edison lobbyist was added to the international travel party at the last minute. 4 ERG Master’s Project Mark Stout 179 . According to investigative writer Peter Asmus. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. one of CFEE’s funders.WEST. known as the Council of States Government .by the California Foundation on the Environment and the Economy. and environmental groups to discuss the British experience with deregulation of electricity. government ministers.”105 The Consolidated Edison IOU spent $1. by the California Foundation on the Environment and the Economy. The California Mining Association took him out for an evening of recreation and dinner costing $89. The California 105 Asmus. for $610. Fessler was taken on a $7. in Aspen. and Paris.051 to fly the President out to New York City for a ConEdison Management Conference. Another non-profit organization. paid $1. SC to address their membership. Edison. wholesale PoolCo model. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. regulators. Brussels. was very interested in California moving to the UK-style.

Finally. In April of 1995.000 in Ohio Edison stock. ZEV’s and Rethinking the Environment Conference. The Western States Coordinating Council. spending $291. the California Foundation on the Environment and the Economy took Fessler on an 11 day. NJ to speak at the 1994 DSM Implementation Conference. for $61. The Cato Institute. The Energy Foundation brought him to Dallas and Salt Lake City for the “Utility Futures V and VII meetings. Kansai Electric utility spent $222 to fly Feeler to roundtable discussions at the NARUC/Kansai Electric Senior Executives Meeting in New York City. The Rocky Mountain Electrical League. PG&E had him out for two lunches. the Center for Resource Management flew him to Midway. Utah to speak at the “Utility Restructuring. EEI is a trade association representing investor owned utilities. $7. DC. Synergics Resources Corporation had Fessler out to Princeton. Fessler holds over $10.802 junket to talk with Chinese central government and provincial leaders in Beijing. spent $249 to fly him to their annual meeting in Las Vegas. had Fessler speak at their conference in Washington. for $467 airfare. The Illinois Power Company spent $427 to bring the CPUC President out to speak at the Edison Electric Institute Joint Executives Symposium. a libertarian think-tank.Energy Coalition flew him to Wyoming to join roundtable discussions at an Aspen Accord Working Group meeting. and Inner Mongolia. spent $314 to bring him to speak at their Spring Conference. On the investment side. spending $1006. The American Enterprise Institute for Public Policy spent $120 for Fessler to make it to their Energy Policy Forum in Washington. Finally. ERG Master’s Project Mark Stout 180 . a utility association. in Fort Collins. CO. Fessler was flown to The National Association of Energy Service Companies for $249 to speak at their annual conference in Boca Raton. for $323. Shanghai. a utility planning association. DC.

1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Brussels.000 in each of Chevron. by the California Foundation on the Environment and the Economy. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He does own less than $10. Edison. was very interested in California moving to the UK-style. government ministers. 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 Montana Power Company and Exxon stock. 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. and less than $10. In 1995. regulators.167 junket visiting London. Jr. He left office on February 23. and Paris. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. Unocal. spending $258.000 in each of Central & Southwest Corp. utility and General Electric stock. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. wholesale PoolCo model. 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. Conlon was taken on a $7. one of CFEE’s funders. He does own more than $10. to meet with CEOs of the electricity industry. PG&E had him out to three meals for $71. ERG Master’s Project Mark Stout 181 . and environmental groups to discuss the British experience with deregulation of electricity.

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