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 which will be superseded to a great extent by the details of AB 1890.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

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

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

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

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

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

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

Blue Book. 1994. such as “green pricing”. 1995. ERG Master’s Project Mark Stout 13 . and asserted that. In their place. 1995. where CPUC President Fessler and Commissioner Knight testified on their proposal.19 Since the release of the Blue Book proposal. This led to the passage of Assembly Concurrent Resolution 143.22 FERC MegaNOPR In March of 1995. the CPUC proposed. 1994. FERC released a dual-issue Notice of Proposed Rulemaking.21 This stakeholder response. which requires the CPUC to engage in a series of public hearings. For instance. 21 CPUC. pushing back their goal for a policy decision until September of 1995. “alternative frameworks based on ‘let the market decide’”. Wagner. numerous other states have also proposed electric utility deregulation. where customers voluntarily pay more to promote renewables.20 Many stakeholders. including private and public-interest organizations.scheduled to be issued by the CPUC in August of 1994. The first issue addressed open access to the transmission system 19 20 CPUC. This process tempered the CPUC’s frenetic timetable. evidentiary hearings. which had been dubbed the MegaNOPR. 1. Blue Book. coupled with a lack of prior coordination with the state Legislature. 1994. “a vibrant market exists for energy efficiency services”. 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. and documentation resulting in a report back to the Governor and Legislature by January 31. were concerned about the content and timetable of this proposal. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23.

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

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

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

as well as a “minimum renewables purchase requirement”. The December Decision mirrored the market structure defined in the MOU. through a Competitive Transition Charge (CTC). while the state Legislature took up the issue of electric utility deregulation on their own terms. ERG Master’s Project Mark Stout 17 . A legislative conference 28 Framework Parties. bilateral. direct access contracts. the Decision proposed a nonbypassable “public goods charge” (PGC). which should.expand renewables development above 1993 levels while commercializing new renewable energy technologies. the CPUC released a policy decision on December 20.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. For public purpose programs. with several key implementation areas to be hammered out by stakeholder working groups. “be based on need”. The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. coupled with an IOU rate cap at January 1. nor a renewables purchase requirement level. requesting input from stakeholder working groups. so that input can be made to the Legislature.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. The Decision called for 100% stranded cost recovery by IOUs over a five year period. and an Independent System Operator centrally controlling California’s transmission system. with financial incentives tied to the level of divestiture. Aside from funding levels for low-income rate discounts. the Decision does not define any public program funding levels. and allow for uncapped low-income programs. PG&E (Pacific Gas and Electric) and SCE. 1995 which laid out a more defined vision of a deregulated ut ility environment. based on a wholesale Power Exchange. 1995. 1996 levels.

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

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

30% new technologies. chair of the House Energy and Power Subcommittee.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. 1997 42 Weisman. 1998.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 10% emerging technologies. 1997. 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. 1996 CEC. It divides up this amount into four accounts that vary over four years of funding.40 On May 6.”39 Recent State and Federal Activity Since the signing of AB 1890 into law.41 There are currently several electric utility restructuring bills in Congress. 1997 41 Marshall. 1997. As Carter and Cavanagh have noted. and 15% consumer-side incentives. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . including residential and small commercial consumers. including a prominent one authored by Representative Dan Schaefer (R-CO). The overall levels are: 45 % existing technologies. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. In March of 1997. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. “If the bill had failed. would be eligible for direct access January 1.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. As Figures 5 indicates. either the CPUC December Decision or AB 1890. It is 0 1 2 3 4 5 clear from the interview transcripts Figure 5: What Policy Outcome Does Your Organization Prefer? No preference / Unclear CPUC December Decision that those few organizations that stated a preference for the December Decision did so based on their support Portfolio selected for the Renewables that was Standard by the Commissioners as a renewables AB 1890 policy. as opposed to the nonbypassable surcharge funding mechanism adopted in AB 1890 ERG Master’s Project Mark Stout 39 . most organizations preferred the INDEPENDENT PRODUCERS SMALL ELECTRICITY CONSUMERS LARGE ELECTRICITY CONSUMERS Rather Little Mixed/Unclear Most language of AB 1890.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

595 $0 $21.374 $1.516.031.112 $3.419 $13.500 $78.075 $4.500 $190.500 $1.470 $10.166 $5.000 $480. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.180 $0 $209.952 $1.496 $8.S.741 $21.000 $681.000 N/A $0 $18.272 $0 $64.163 $0 $25.405 $0 $722.000 $62.608 $3.835 $1.000 $0 $70.675 $384.818 $0 $65.745 $68.675 $736.588 $500 $32.096 $971.239 $0 N/A $0 $89.500 $263.758 $2.559 $0 $246.819 $0 $323.079 $13.370 $648 N/A $0 $208.000 $562.500 $533.964 $0 $40.079 $950 $14.000 $634.149 $3.630 $300 N/A $0 $5.181 $0 $160.153 $750 N/A $8.125 $0 $4.110 $34.592 $846 $0 ERG Master's Project Mark Stout 54 .000 $1.092 $3.102 $0 $73.995 $596.101 $495 $10.000 $225.752 $0 $51.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.981 $1. (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. 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.416 $5.308 $516.157 $0 $188.479 $2.203.

723 $0 $38.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.003.495 $1.850 $1.250 $0 $30.203 $0 $30.938 $0 $118.230.055 $0 $151.716 $39. 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. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO California Independent Oil Marketers Association California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Exxon Kaiser International Corp.000 $37.000 $0 $171.197 $500 N/A $2.203 $5.207 $5.000 $20.083 $0 $20.145 $5.551 $12.495 $27.362.000 $0 $15.326 $0 $100.000 $383.401 $1.081 $1.600 N/A $5.000 $0 $6.492 $0 $66.596.701 $0 $5. natural gas.947 $500 $281. (gasoline refining and marketing) Tower Energy Group (oil.600 $32.000 $524.400 $100 $79.675 $0 $1.000 $526.665 $0 $262.099 $12.519 $11.291 $3.271 $0 $12.167 $500 $25.319 $0 $10.500 $0 $0 ERG Master's Project Mark Stout 55 .

000 NA $500 $0 $2.286 $3.000 $209.748 $32.454 $3.147 $500 $739.179 $0 $3. McQuat.200 $837. producers.400 $1.450 $566.240 $0 $178.543 $29.862 $21.159 $3.917 $300 $5.S.605 $250 N/A $1.017 $1.750 $1.000 $33. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen.500 $29.717 $500 not applicable $0 $138.500 N/A $0 $211.626 $0 $8.882 $15.000 $85.000 $50.) 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 $418.600 $276.025.571 $500 N/A $200 N/A $1.590 $5.724 $500 not applicable $500 $57. and Hamrin.281 $1. 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.331 $0 $97.845 $452.032 $0 $172.250 N/A $100 N/A $2.589 $26. Inc (consultants) Independent Energy Producers Kenetech Windpower Modesto Energy Limited Partnership (tire burning) Pacific Lumber Company/MAXXAM (solid fuel biomass) SeaWest Windpower Sithe Energies Co. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.782 $981.000 $35.819 $921. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.500 N/A ERG Master's Project Mark Stout 56 .460 $50.118 $0 $144.060 $6.100 $144.000 N/A $100 N/A $7. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.750 $267.250 $148. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U. (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) $145.905 $30.611 $1. Dist.100 $0 $500 N/A $100 $0 $500 N/A $2.229 $100 N/A $1.195 $401.

478.900 $0 $21.181 $1.407 $200 $61.137 $550 N/A $5.750 $23. natural gas.573 $2.384 $2.500 $251.689 $2. diesel) Unocal (CMA member) Victory Oil Co.090 $749 $38.000 $76.925 $0 $44.800 not tracked $3.250 $34.016 $1.072 $918.1996 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.861 $1.417 $9.643 $1.177 $300 N/A $0 $29.712 $100 N/A $200 $16.960 $2.705 $19.000 $22.050 $949.636 $0 $103.532 $4. (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. 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. Texaco Tidelands Oil Tosco Corp.334 $498 $1.050 N/A $0 $214.000 $500 $456.500 $47.347 $9.750 $37.495 $22.761 $0 $73.622 $67.950 $3.296 $800 $25.245 $335.138 $1. (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.000 $65.661. (gasoline refining and marketing) Tower Energy Group (oil.500 $277.521 $1.000 $233.958 $2.989 N/A $9.209.995 N/A $100 N/A $0 $3.721 $748.878 $12.650 $3.521 $0 N/A $50 $87.511 $1.521 $14.885 $300 $207.780 ERG Master's Project Mark Stout 57 .900 $1.754 $4.438 $500 N/A $0 $1.

of California.000 $2.438 $4.066 $500 N/A $250 N/A $22.1996 Lobbying Totals ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation/The Tides Center Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.000 $15.000 $700 $117.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 . 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) $1.585 $33.790 $100 $14.378 $100 $21.066 $500 $21.448 $424.068 $14.462 $208.250 $21.462 $500 $14.

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

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

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

Bibliography
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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.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. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate..e. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. and how could they have improved their approach? Was it always clear what outcomes each stakeholder group wanted from the process? ERG Master’s Project Mark Stout 66 . and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. CPUC vs.

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

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

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

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

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

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

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

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

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

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

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

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

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

created in 1946. 1993.88 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. Sacramento Municipal Utility District Allan Lind has been SMUD’s contract lobbyist since September. CMUA did not have the army of people Edison did. ERG Master’s Project Mark Stout 80 . 88 Asmus & Smeloff. volunteering to do public purpose programs in exchange for other concessions. We were called in by the Committee. beat up.legislation passed. Stuart Wilson and me. see interviews]. SMUD has a notable history of investing heavily in renewable energy and energy efficiency technologies. SMUD also wanted to ensure that the ability to preserve our financial integrity was not adversely affected. and sent out to negotiate. It was difficult to imagine how the Legislature would perceive a muni’s need. We maintained flexibility. In the Conference Committee meetings there were also 10 to 15 of our members present at any one time. but were concerned that legislation would handicap our ability to recover them. We never questioned that there would be stranded assets. Reinventing Electric Utilities. Our mantra was lockstep with the California Municipal Utilities Association [CMUA. We were prepared to oppose the bill if it did not include local control for municipal utilities. and regulated by an elected district board which sets policy and rates for this electric utility. CMUA had two lobbyists. in other words we wanted to be able to recover our stranded costs. SMUD is a Publicly Owned Utility for the Sacramento region. 1997.

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

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

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

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

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

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

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

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

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

or over time? According to Nancy. and ERG Master’s Project Mark Stout 90 . Nancy. 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. Nancy relied mainly on written testimony filed with the Commission.RPS was a lack of support from the Sierra Club. and that consequently UCS’s support of the RPS was critical. It amounted to nothing more than a deal. along with Jane Kelly of UCS. 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. market-driven policy. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. the meetings with Commissioner Knight’s staff were. they were not able to get any of what the organization originally wanted in the bill’s language. “productive discussions”. arranged for personal meetings with CPUC President Fessler and the staff of Commissioners Knight and Conlon. is a long-term. In comparison. Nancy remembers that the meeting with President Fessler resulted in a “vague discussion”. Nancy said that the allocation of Systems Benefits Charge money for renewables in AB 1890 was a temporary pile of dollars. when Nancy was hired to develop a strategy for how renewables policy would be structured in a competitive industry. AWEA’s position in the CPUC and Legislature has been consistent since October of 1994. The RPS. whose outcome was dependent on allocation by a state agency. leading to no long term policy. comprised of detailed arguments. in comparison. and that she was not certain of his support at the 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? In contrast. AWEA relied mainly on Senate and Conference Committee hearings as well as input on draft legislative language to influence the policy outcome. and it worked. the Legislative process in the summer of 1996 was a “nightmare” according to Nancy. Nancy remembers that the conference committee meetings were occurring in an. At one point towards the end of the Conference Committee process. “Knight was sold on the RPS concept because he is a believer in markets. Steve Peace. and people were not listening to arguments. with many issues being ironed out at once. There were major egos on the Conference Committee with pre-formed opinions. but Peace killed it again. By melting down the proposed language.” One issue that hampered Nancy was that the Independent Energy Producers (IEP) representative “had control of the pen for draft language. Nancy continued to describe the process: “Time was too short. “trusted in the process. resulting in very little control for AWEA. AWEA lobbyist Joe Caves was able to get John White’s customer rebate proposal pulled from the draft language.Nancy feels that. had killed the RPS before any discussion began. “incredible time crunch. 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 . Chairman Peace. The new CPUC President Conlon tried to put the RPS back on the table for discussion. Nancy said she.” She was also invited to participate in a full panel hearing on public purpose programs. she was able to get rid of the Renewables Marketing Agent concept without insulting its creator. In retrospect.” Nancy did feel that AWEA got things derailed out of the conference committee that would have been worse than what eventually emerged.” The Committee Chairman.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The “consensus process” was just everybody taking. creating a huge advantage to have a fresh mind. TURN tried to marshal support with kindred groups UCAN [Utilities Consumers’ Action Network. What was eye opening about working with the Framework Parties [Framework for Restructuring in the Public Interest] was the divergent positions of the environmental groups. So much of the deal had been cut in advance by large powerful interests. issue specific attorneys with support staff. like an armadillo in the middle of the road. Lenny was in the Conference Committee every day. big customers. supported by the appropriate staff. Once Edison was on board for Direct Access. Several times people did leave the negotiations. Public purpose concerns become peripheral. unions. Critical consumer interests were not present. another small consumer advocacy group] and Greenlining Institute/Latino Issues Forum [low income and minority community advocates]. There were waves of utility employees. I went up three or four times. If you can get all of the big dogs to reach consensus.for the meetings leading up to the MOU. the whole thing would fall apart with parties leaving the table. it is tough to stop the momentum. ERG Master’s Project Mark Stout 118 . nobody gave everything up. it was all over. taking care of small consumers would have led to compromise. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? TURN hoped that if you knocked out enough of the gifts. they just loaded up the plate. Hearings were going on till two or three AM. utilities. IPPs. making it very easy for the Republican Commissioners to adopt. utilities. and IPPs [Independent Power Producers]. TURN contracted with Lenny Goldberg. with a troika of large customers.

we are in favor of competition. and law to create innovative. economics. As stated in EDF’s first round comments on the Blue Book. and 4) incentives for uneconomic sales promotion minimized. depending on interpretation.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. The Decision was vague. and punted on the details to the Legislature. EDF supports the earliest possible implementation of direct access for all classes of customers.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. It gave us nothing until the Legislature tells us otherwise. yes. 2) an Integrated Resource Planning process should exist for energy efficiency. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. “There is no reason to proffer the benefits of competition first to only selected classes of customers. [which] represents 300. economically viable solutions to today’s environmental problems. if restructuring is implemented properly: 1) energy efficiency investments should continue. 1995 Decision? Almost nothing. EDF has participated in California energy policy issues since 1975. EDF links science.000 members nationwide.”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. E-1.000 of whom live in California. “a leading non-profit organization. Assuming these problems are resolved. ERG Master’s Project Mark Stout 119 . If focusing 94 CPUC Renewables Working Group. more than 55.

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

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

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

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

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

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

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

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

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

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

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

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

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

Integrated Resource Planning (IRP). UCS has 100. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group. As the deregulation process unfolded at the CPUC. Peace was the idea person. UCS was also opposed to 100% “stranded cost” recovery for utilities. Byron Sher was fine. Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. The level of renewables support included in the BRPU served as a target for UCS. “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency. E-3. was just beginning to be used as a policy option in several states. Jane conjectured that one of the driving forces behind deregulation was to do away with utility requirements that were designed to protect environmental quality. 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.John White were the front folks. including 13.000 sponsors nationwide.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. Deregulation of the electricity industry threatened to tear this house of cards down. manifest in California as the Biennial Resource Plan Update (BRPU). ERG Master’s Project Mark Stout 133 .000 in California”. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. As long as the Sierra Club and other groups were happy.

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

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

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

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

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

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

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

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

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

and their was a steady chatter amongst parties. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? We were part of many informal groups discussing the bill. The University has a counsel on the PUC service lists. ERG Master’s Project Mark Stout 143 . they have usually been good. They have been favorable in principle the whole way through. For the conference committee we had an attorney representing the University. supplemented by several support staff. but they permitted some very big cuts in R&D funding in late 1994. The office has two advocates. Would you say that there is a noticeable difference between Governor Wilson’s CPUC appointees and those from the previous administration? There is no big difference between the two governor’s appointees in sympathy towards public goods R&D. and spoke at one public hearing. The Governor can appoint one Commissioner a year. myself and another University employee were there off and on. and commented publicly at the Conference Committee. We had a presence. In practice.interested in technology and became a CIEE board member. who handle all University issues. We had informal contacts with the CPUC staff. We filed comments. allowing for inertia. about five people in the meileu. but nobody dedicated to the PUC proceedings. These cuts were part of the utilities' cost cutting efforts that followed the April 20th decision. The University is represented by a legislative affairs office. but not an overwhelming one.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 California Municipal Utilities Association .Interview #1 Natural Resources Defense Council . 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 .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 . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 Coalition of California Utility Employees .Interview #1 California Large Energy Consumers Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS 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 #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS CPUC DD AB 1890 No preference/Unclear 0 3 0 1 1 1 0 1 1 1 1 1 1 1 1 0 1 1 4 1 1 1 1 0 1 1 3 1 1 1 1 0 0 2 1 1 3 14 4 1 1 0 0 0 0 0 2 1 California Energy Commission University of California.Interview #1 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 #1 Natural Resources Defense Council . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Municipal Utilities Association .Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

495 $7.000 $0 $0 ERG Master’s Project Mark Stout 162 .000 $500 $1.995 $21. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.000 $3.500 $22.191 $2.000 $4.000 $1.000 $2.500 $1.995 $300 $12.000 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte.495 $1.000 $7.000 $495 $950 $696 $2.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.896 $3.800 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Farm Bureau Federation PAC California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Louisiana Pacific (CMA member) Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.495 $10.000 $1.429 $498 $1.000 $3.000 $2.

) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.500 $800 $498 $200 $9.500 $1.000 $2.017 $749 $750 $3.500 $6.995 $1.500 $47.Table 2: Assemblymember Jim Brulte.000 $1. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.495 $4.995 $2.750 $4.460 $200 $500 $750 $2. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.995 $14. (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 $1.000 $3.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.000 $2.511 $3.250 $2.000 $8.500 $1.000 $10.990 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.

750 $750 $1. and Budapest.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. From 3/28/96 to 4/8/96. Not to be outdone. as well as an event. 1996.000 $2.000 $3.250 $500 $1. Sweden. Conservation.000 $1. 4 ERG Master’s Project Mark Stout 164 . totaling $101. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.000 $1.000 $750 $0 $0 103 Asmus. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. Table 3: Senator Steve Peace.000 $2.750 $3. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.490 “Travel project to Europe on Electric Restructuring. Mobil treated Brulte to a $60 event in 1996. and Privatization” visiting London.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. by the California Foundation on the Environment and the Economy. CFEE is a “non-profit. Brulte was taken on a $7.750 $2.500 $1. Paling in comparison. Chevron treated Brulte to two meals.

) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.600 $2.000 $6.500 $3.000 $750 $750 $750 $1.500 $8.450 $7.572 $1.000 $1.072 $2.500 $16.115 $18.000 $300 $1.815 $750 $6. 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. (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.050 $3. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $2.250 $1.000 $4.Table 4: Senator Steve Peace.100 $2.250 $7.250 $2.250 $750 $500 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .

In 1995. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5. as well as chair of the Senate Energy and Utilities Committee.900 .000 $5. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. while Edison treated him to five meals and a sports event.450 166 ELECTRIC/GAS $6. SDG&E had Peace out to six meals. taking Steve to 11 meals. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. Table 5: Senator Byron Sher.100 $2.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Peace was treated to a $52 sports event by Mobil Oil. In 1996. IEP made a gift of $241 for his speech at a conference.000 Table 6: Senator Byron Sher. Southern California Edison was granted a high level of access. 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.

of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . McQuat.500 Int. (biomass) Edson + Modisette (lobbyist for indep.000 $500 $500 $9. EVs) Hansen.482 $100 $1. (geothermal) Colmac Energy Inc.000 $100 producers.600 $13.882 $100 $1. and Hamrin. $2. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $1.100 $500 $2. Brotherhood of Electrical Workers (various $9.000 locals) Southern California Pipe Trades United Assoc.

000 $1.000 $100 $100 $500 $1.000 $100 $1.000 $1.000 (tire $1.500 COMPANIES $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 Large Energy Consumers $3.250 $100 $50 $500 $500 $250 ERG Master’s Project Mark Stout 168 .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 $700 $4.448 $14.Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.585 $100 $500 $2. of California.000 $300 $300 $22. (gasoline refining and marketing) SMALL ELECTRICITY CONSUMERS California Association ENVIRONMENTAL ADVOCATES California League of Conservation Voters Energy Foundation Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS U.

000 $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.500 $300 $0 $0 $2. In 1996. Mobil. and GE. Exxon. 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 in each of Amoco. NARUC treated Sher to a two day trip to DC for another meeting. but his Statement of Economic Interest reveals large holding of oil and electricity stocks. Sher holds over $100. totaling $758. Table 7: Senator Bill Leonard.1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.400 $750 $150 $1. totaling $2608.300 $500 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 . Sher received no other gifts that year from energy utility stakeholders.

WA paid $734 for Leonard to moderate a conference session on utility deregulation.Table 8: Senator Bill Leonard.500 $500 $1.000 $2. 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. extending his stay from 12/8/96 to 12/13/96.000 $5. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.650 $500 $1. saving up for a $77 dinner with head lobbyist Bob Foster.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19.000 $1.650 $2.000 $2.000 $500 $500 $4.730 $2.500 $150 $500 $3. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. The Pacific Rim Conference of Seattle. While the Senator was there. SCE treated Leonard to dinner and lodging for Legislative Ski Day. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.080 $10. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.000 $1.000 $2. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co. for a paltry $20. Edison again ERG Master’s Project Mark Stout 171 . (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

including lunch with Bob Foster.had Senator Leonard out for Legislative Ski Day. They also had Leonard out for two meals in Sacramento.000 $750 $750 $650 $150 $500 $3.000 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 .000 $1. Table 9: Assemblymember Mickey Conroy.600 $750 $750 $500 $1.600 $1.250 $1. PG&E took Leonard out to a Kings game. ARCO treated Leonard to a $19 meal at a reception. paying $44 for two meals and lodging. 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. for the modest tab of $56.750 $1.000 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.

) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.600 $500 $1. two meals for $44.000 $5. PG&E treated him to a basketball game with $51 tickets.700 $500 $300 $550 $2. $7.500 $2. and Inner Mongolia. 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.000 $3. 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. 4 ERG Master’s Project Mark Stout 173 .000 $500 $750 $250 $500 $2.Table 10: Assemblymember Mickey Conroy. and to 104 Asmus.000 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995.300 junket to talk with Chinese central government and provincial leaders in Beijing.000 $2.700 $750 $450 $250 $250 $1. 1996.050 $1. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9. the California Foundation on the Environment and the Economy took Conroy on an 11 day. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.600 $3. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. Shanghai.000 $500 $2. CFEE is a “non-profit.

Kansas City Power & Light. SDG&E. $10 in candy. Edison wined and dined the Assemblymember with four meals at $134. General Electric. ERG Master’s Project Mark Stout 174 .000 in Orange & Rockland Utilities. and Westinghouse Electrical. and $25 of cookies and candy. four rounds of “refreshments” for $30.make sure Conroy kept a sweet spot in his heart for them. costing $99. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. In terms of investment. with investments of greater than $10. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. and less than 10.000 each in Edison. Pacificorp. After such a busy social calendar in 1995. Chevron took Conroy out for two business meals.

1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.250 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $1.750 $4.175 $500 $1.000 $1.675 $2.750 $1.250 $1.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.750 $2.750 $2.000 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .Table 11: Assemblymember Diane Martinez.

500 $1.500 $6.000 $4.250 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .000 $4.000 $500 $500 $5.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int. 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. Dist.000 $500 $1. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $500 $3.500 $500 $500 $1.000 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.500 $1.000 $1.Table 12: Assemblymember Diane Martinez.500 $1.500 $1.000 $5.000 $7.750 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.

000 $8.000 $500 $500 $1.500 $1. natural gas.058 $500 $500 $1.500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 . diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.600 $1.Table 13: Assemblymember Steve Kuykendall.208 $0 $0 $1.100 $100 $1.000 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995.850 $1.900 $3. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. the Illinois Energy Association flew Martinez out for a $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.467 trip to Northwestern University to discuss the deregulation of public utilities. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

000 $1.490 “Travel project to Europe on Electric Restructuring. and Budapest.000 $1. Kuykendall was taken on a $7. 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.500 $1. diesel) Unocal (CMA member) Victory Oil Co.500 $0 $1. Conservation. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. However.000 $500 $2.350 $500 $1.Table 14: Assemblymember Steve Kuykendall. Kuykendall’s social calendar was destined to pick up in 1996.250 $100 $500 $35.374 $500 $2.000 $19. and Privatization” visiting London.000 $1. Sweden.254 $200 $500 $4. natural gas.000 $2.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995. From 3/28/96 to 4/8/96.443 $6.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.374 $4. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.500 $1. ERG Master’s Project Mark Stout 178 .

government ministers. to meet with CEOs of the electricity industry. by the California Foundation on the Environment and the Economy. The California 105 Asmus. Another non-profit organization. 1996. Brussels. A trade association. CO. regulators. The California Mining Association took him out for an evening of recreation and dinner costing $89.by the California Foundation on the Environment and the Economy. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). a trade association for publicly owned utilities. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. Fessler was taken on a $7. was very interested in California moving to the UK-style. in Aspen.WEST. According to investigative writer Peter Asmus. spent $1402 to fly Fessler to Charleston. wholesale PoolCo model. and Paris.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. 4 ERG Master’s Project Mark Stout 179 . for $610. one of CFEE’s funders. The Large Public Power Council. The Aspen Institute.”105 The Consolidated Edison IOU spent $1.167 junket visiting London. SC to address their membership. known as the Council of States Government . and environmental groups to discuss the British experience with deregulation of electricity. an Edison lobbyist was added to the international travel party at the last minute. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. Edison.051 to fly the President out to New York City for a ConEdison Management Conference. paid $1. Chevron treated Kuykendall to two dinners for $131.

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

1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. Jr. ERG Master’s Project Mark Stout 181 . 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. to meet with CEOs of the electricity industry. spending $258. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and less than $10. and Paris. Conlon was taken on a $7. government ministers. regulators. was very interested in California moving to the UK-style. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He does own more than $10. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton.000 in each of Montana Power Company and Exxon stock.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. Brussels. and environmental groups to discuss the British experience with deregulation of electricity.000 in each of Chevron. utility and General Electric stock. wholesale PoolCo model. He does own less than $10. Edison. 1995. one of CFEE’s funders. PG&E had him out to three meals for $71.167 junket visiting London. In 1995. by the California Foundation on the Environment and the Economy. He left office on February 23. and Schlumberger oilfield services stock. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.000 in each of Central & Southwest Corp. Unocal.

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