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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edf. and why. fossil fuel-based electricity generation is currently the largest source of greenhouse gas emissions and the largest source of air pollution in the U. California electric utilities have a combined annual revenue of roughly $23 billion dollars1. Governor Pete Wilson signed into law California Assembly Bill 1890 (AB 1890). with varying success. 1995 Electric Restructuring Decision. representing a spectrum of private and public interests attempted to influence both the CPUC and legislative processes.4 Given the stakes involved with this industry. Various stakeholder groups. contrasting the results of CPUC process resulting in their December. a product with well documented environmental impacts including local air pollution.org/programs/Energy/green_power/a_better.Introduction On September 23. which sets in motion a process of electric utility deregulation beginning in 1998. which will be superseded to a great extent by the details of AB 1890.3 According to the Environmental Defense Fund. This bill is an important milestone in an ongoing process towards electric utility deregulation in California.html ERG Master’s Project Mark Stout 4 . 1995 Decision with the California legislative process resulting in AB 1890. 1996 California Energy Commission. The vision of electric utility deregulation legislated in AB 1890 is significantly different from that contained in the California Public Utility Commission’s (CPUC) December. This paper develops a comparison of which stakeholder groups got what they wanted. selling 250 billion kWh of electricity per year2. 1994 4 WWW page: http://www. there will probably be significant winners and losers as a result of this legislation. acid rain and climate change. 1995 3 Flavin and Lenssen. 1 2 CPUC RD&D Working Group.S. 1996.

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

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

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

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

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

5

Glaser and Strauss, 1967, Glaser, 1978.

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

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

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

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

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

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

In April of 1994. 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. 6. customer class-staged schedule for direct access implementation. ERG Master’s Project Mark Stout 12 . all commercial customers eligible January 1. Hoffman.supplies. 2002. The Blue Book laid out an aggressive. with large. 1999. 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. A more definitive policy statement was 16 17 Haddad. 1996. sending “a shockwave through the electric industry”. 18 Mydans. and if successful.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. all residential consumers eligible on January 1. These generation companies would then compete with Independent Power Producers (IPPs) to provide power to a central electricity grid operator based on a combination of pool-based wholesale competition as well as direct contracts with individual customers. industrial customers taking power at the transmission level eligible on January 1.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 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. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. 55.

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

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

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

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

with several key implementation areas to be hammered out by stakeholder working groups. 1996 levels. PG&E (Pacific Gas and Electric) and SCE.29 The spring and summer of 1996 saw a flurry of deregulation activity as PUC working groups fleshed out options for moving towards the PUC vision. while the state Legislature took up the issue of electric utility deregulation on their own terms. The Decision also called for the voluntary divestiture of 50% of fossil fuel generation plant owned by the two largest IOUs. the Decision does not define any public program funding levels. coupled with an IOU rate cap at January 1. Aside from funding levels for low-income rate discounts.expand renewables development above 1993 levels while commercializing new renewable energy technologies. “be based on need”.28 CPUC December 1995 Decision and California Assembly Bill 1890 Building on their previous proposals and stakeholder input. The December Decision mirrored the market structure defined in the MOU. based on a wholesale Power Exchange. A legislative conference 28 Framework Parties. bilateral. For public purpose programs. which should. 1995 which laid out a more defined vision of a deregulated ut ility environment. as well as a “minimum renewables purchase requirement”. and an Independent System Operator centrally controlling California’s transmission system. requesting input from stakeholder working groups. nor a renewables purchase requirement level. through a Competitive Transition Charge (CTC). direct access contracts. ERG Master’s Project Mark Stout 17 . and allow for uncapped low-income programs. so that input can be made to the Legislature. The Decision called for 100% stranded cost recovery by IOUs over a five year period. 1995. with financial incentives tied to the level of divestiture. the CPUC released a policy decision on December 20. the Decision proposed a nonbypassable “public goods charge” (PGC).

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

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

and 15% consumer-side incentives. It divides up this amount into four accounts that vary over four years of funding. the CEC released a report to the legislature with policy recommendations for the allocation of up to $540 million renewables funding codified in AB 1890. including a prominent one authored by Representative Dan Schaefer (R-CO). 1997 42 Weisman. the California PUC was on a clear course to abandon all [funding for public purpose programs] on grounds of lack of statutory authority. 1998. would be eligible for direct access January 1. including residential and small commercial consumers. 1997.”39 Recent State and Federal Activity Since the signing of AB 1890 into law. chair of the House Energy and Power Subcommittee.40 On May 6. 30% new technologies. “Primed for Congressional Battle” ERG Master’s Project Mark Stout 20 . In March of 1997. 1997. 10% emerging technologies. 1996 CEC. the CPUC and California Energy Commission (CEC) have been working towards the implementation of this legislation. the CPUC released its latest restructuring decision which surprised stakeholders by announcing that all customers. As Carter and Cavanagh have noted. The overall levels are: 45 % existing technologies.41 There are currently several electric utility restructuring bills in Congress.42 This bill includes a "minimum renewable energy generation 39 40 Carter and Cavanagh. 1997 41 Marshall.environment/equity agenda” which had gripped the industry since the release of the Blue Book in 1994. “If the bill had failed.

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

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

1994. enabling increased competition. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. This reduction in scale has brought down the capital requirements of entering the electricity generation industry.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry. 447-475. but now had to pay higher rates. 1993. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. basing their arguments on welfare economics as applied to the changing electric utility landscape. 150. Gordon. Hoffman 55-62.”. 84-108. Davis. 51 Stevenson. who in the past had enjoyed privileged status with cheap rates. ERG Master’s Project Mark Stout 23 . 50 Flavin and Lenssen. 1993.50 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.intense pressure from large industrial customers. “Discretionary Evolution. 195. greatly increasing opportunities for bulk power sales. 52 Gilbert. 356-357.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis...

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

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

”. Commissioner Knight. an analyst with CPUC’s Division of Strategic Planning. 1997. 62 Asmus. “Retail wheeling. 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. “Discretionary Evolution..”62 a form of integrated resource planning know as the BRPU. Massachusetts. New York. One of the stated proposals of the Blue Book is to eliminate the Biennial Resource Planning Update (BRPU). Colorado. They “became increasingly perplexed about the arcaneness and gridlock that seemed to pervade the utility resource planning process. Calls for bids have often been oversubscribed by a wide margin. 24. both appointees of Governor Pete Wilson. a proceeding in which the Commission attempts to determine how much capacity will be needed and structures the acquisition process in great detail. In 1994.61 California Public Utility Commissioners Jesse Knight and Norm Shumway.”60 State Regulatory Policy Bidding programs for wholesale electric generation have been established in California. Maine.. the same year that California’s Blue Book proposal was released. were the key retail wheeling champions within the CPUC.63 This move towards greater reliance on the marketplace to make supply decisions is clearly in line with the free-market ideologies of the Republican Governor. “DOE Restructuring Bill” Stevenson.”. “the DOE bill does not mandate retail markets by any date certain. 60 61 Levison. Michigan initiated a five year retail wheeling experiment involving two utilities. Connecticut. and Wisconsin..has noted. 355-356. 1995. according to Jeff Dassovich.. ERG Master’s Project Mark Stout 26 . though it urges states to consider retail competition.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1% of IOU revenues. funding for public purpose programs: low income. reduced funding to an average of 2. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions.. agricultural consumers. TURN was one of several public interest organizations who opposed the change. CLECA. less than two weeks before the Bill would be reported out of committee.A prominent example of a failed consensus was the 11th hour changes to the funding levels that had been agreed to in the Memorandum of Understanding. Industrial Users. 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.. 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. During the Conference Committee hearings. a perusal of legislative language that was proposed during the long. EDF. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15. and energy efficiency.. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. The August 15 language from a coalition of powerful interests.. RD&D. including IEP. As a Sierra Club California legislative chair recounts on meetings between CMA. renewables with an incremental cost estimate from the BRPU.3% of utility revenues. These got translated into dollars. “We reached a consensus on. The 3% [it was actually a cap of 3. and the Sierra Club.72 At this point late in the game. 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 .” However.

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

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

these tables cover the years 1995 and 1996 for the author of AB 1890. Our largest problem area. OK?... The following campaign contribution summary tables were compiled from Officeholder. Candidate. no attempt has been made at determining total annual contributions from all sources to each officeholder. even though there some parts they might hate. Because of the difficulty of tracking the transfers of funds between different office-holder controlled accounts. and the six members of the Conference Committee on Electric 77 California Senate TV video of August 10. if there is something you can bring to the table. 1996 Conference Committee on Electric Restructuring ERG Master’s Project Mark Stout 52 . 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.. Senator Peace implored all of the parties to become “enthusiastic advocates” for the package. Gift information is also provided based on Statement of Economic Interest Forms filed at the Fair Political Practices Commission. everybody should suffer except for us.start unilaterally resolving issues. A full breakdown of contributions for each legislator is included in Appendix E.. 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. is clearly renewable folks. and Controlled Committee Campaign Statements filed at the California Secretary of State Political Reform Division.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. in terms of complicated problem area. obviously there is going to be many political philosophies on that issue. The other thing is.” That same hearing session. in order to move forward with a product. and my rule is when we are forced to unilaterally resolve issues.

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

470 $10.308 $516.405 $0 $722.101 $495 $10.500 $533.370 $648 N/A $0 $208.416 $5.000 $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 $59.516.000 $562.239 $0 N/A $0 $89.675 $384.595 $0 $21.000 $0 $70.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $681.500 $78.981 $1.559 $0 $246.374 $1.630 $300 N/A $0 $5.075 $4.096 $971.153 $750 N/A $8. Generating Company San Diego Gas and Electric/Enova Southern California Edison/Mission Energy/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association Imperial Irrigation District Modesto Irrigation District Northern California Power Agency Sacramento Municipal Utility District UTILITY LABOR UNIONS California State Association of Electrical Workers California State Pipe Trades Council PAC Int. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.592 $846 $0 ERG Master's Project Mark Stout 54 .835 $1.964 $0 $40.079 $13.479 $2.203.112 $3.995 $596.588 $500 $32.419 $13.741 $21.752 $0 $51.000 $225.675 $736.181 $0 $160.000 N/A $0 $18.166 $5.496 $8.110 $34.149 $3.163 $0 $25.819 $0 $323.157 $0 $188.000 $480.125 $0 $4.031.092 $3.S.500 $1.272 $0 $64.102 $0 $73.500 $190.952 $1.079 $950 $14.818 $0 $65.500 $263.608 $3.000 $62.745 $68.758 $2.180 $0 $209.000 $634.

000 $526.207 $5.000 $0 $6.250 $0 $30.055 $0 $151.400 $100 $79.701 $0 $5.000 $524.495 $1.723 $0 $38.083 $0 $20. diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.000 $20. (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.500 $0 $0 ERG Master's Project Mark Stout 55 .000 $0 $171.551 $12.519 $11.716 $39.492 $0 $66.291 $3.081 $1. (gasoline refining and marketing) Tower Energy Group (oil.145 $5.167 $500 $25.203 $5.665 $0 $262.000 $383.271 $0 $12.003. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.401 $1.099 $12.938 $0 $118.850 $1.230.600 $32.319 $0 $10.495 $27.362. natural gas.1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.326 $0 $100.947 $500 $281.675 $0 $1.000 $37.197 $500 N/A $2.000 $0 $15.203 $0 $30.596.600 N/A $5.

159 $3. 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.454 $3.605 $250 N/A $1.000 $85.100 $144.179 $0 $3.017 $1.500 N/A ERG Master's Project Mark Stout 56 .250 N/A $100 N/A $2.819 $921.917 $300 $5.717 $500 not applicable $0 $138.543 $29.100 $0 $500 N/A $100 $0 $500 N/A $2.147 $500 $739.200 $837. Dist. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.748 $32. McQuat. 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.118 $0 $144. (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) $145.450 $566.000 $50.195 $401.905 $30. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.882 $15.000 N/A $100 N/A $7.611 $1.626 $0 $8.000 $209.750 $1.281 $1. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $33.025.400 $1.571 $500 N/A $200 N/A $1.500 $29.750 $418. and Hamrin. producers.589 $26.500 N/A $0 $211.845 $452.000 $35.060 $6.331 $0 $97.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U.590 $5.862 $21.S. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.286 $3.) 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 $267.000 NA $500 $0 $2.240 $0 $178.782 $981.600 $276.250 $148.229 $100 N/A $1.460 $50.724 $500 not applicable $500 $57.032 $0 $172. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.

(gasoline refining and marketing) Tower Energy Group (oil.000 $500 $456.138 $1.000 $65. 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) $41.925 $0 $44.750 $23.532 $4.712 $100 N/A $200 $16.650 $3.050 $949.000 $22.000 $233.500 $251.958 $2.750 $37.885 $300 $207.900 $0 $21.761 $0 $73.800 not tracked $3.622 $67.1996 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.960 $2.296 $800 $25.705 $19.334 $498 $1.661. (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.754 $4.511 $1.643 $1.950 $3.636 $0 $103.900 $1.989 N/A $9.478.521 $1.780 ERG Master's Project Mark Stout 57 .050 N/A $0 $214.721 $748.500 $277.016 $1.438 $500 N/A $0 $1.878 $12.072 $918.689 $2.417 $9.181 $1.384 $2. diesel) Unocal (CMA member) Victory Oil Co.495 $22. Texaco Tidelands Oil Tosco Corp.861 $1.177 $300 N/A $0 $29.209. (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.245 $335.407 $200 $61.573 $2.995 N/A $100 N/A $0 $3.090 $749 $38.347 $9.521 $0 N/A $50 $87.250 $34.000 $76. natural gas.521 $14.500 $47.137 $550 N/A $5.

790 $100 $14.448 $424.462 $208.585 $33. of California.000 $15.462 $500 $14.1996 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.438 $4.068 $14.066 $500 N/A $250 N/A $22. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.250 $21.000 $2.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 $21.000 $700 $117.378 $100 $21.

and Inner Mongolia. 4 ERG Master’s Project Mark Stout 59 . From 3/28/96 to 4/8/96.”80 In April of 1995. their “Travel project to Europe on Electric Restructuring. 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. government ministers. Brussels. alternative energy producers. were able to far outspend environmental organizations (who were usually spread thin over many issues). CPUC President Fessler and Commissioner Gregory Conlon were taken by CFEE on an excursion visiting London. including oil and natural gas companies. the lobbying summary tables above. According to investigative writer Peter Asmus. for $7. CFEE is a “non-profit. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure. regulators. and Paris. and environmental groups to discuss the British experience with deregulation of electricity. to meet with CEOs of the electricity industry.800 each. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). 4 Asmus.167 per guest. 1996.79 From 3/16/94 to 3/27/94. and Privatization” took AB 1890 author Jim Brulte and Conference Committee 79 80 Asmus. and small consumer groups. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. Shanghai. Conservation. as well as the legislator breakdown tables and gift descriptions in Appendix E show that IOUs and large consumers. an Edison lobbyist was added to the international travel party at the last minute. 1996.As one would imagine. 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. paying up to $7.

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

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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e. CPUC vs. and why? Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. or over time? What methods and approaches were used to advance your organization's goals and objectives in the CPUC hearings and the subsequent decision? What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? Officeholder Staff Interviews • • • • • Which stakeholder groups do you think were most effective in influencing the policy formulation process of ____________ and what were they able to obtain from the process? What methods or strategies did these effective groups use to influence the process? Was any particular method or sets of methods most influential? Which stakeholder groups do you think were best able to set the terms of the debate. 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 . 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. AB 1890)? Why? Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings.Appendix A: Semi-Structured Interview Questions Stakeholder Interviews • • • • • • • What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20..

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

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

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

a gas utility which serves a territory largely overlapping with Southern California Edison’s. and gas service to 0.7 million customers in San Diego County. 1996. Jack. What methods and approaches were used to advance your organization’s goals and objectives in the Assembly hearing and the subsequent issuance of AB 1890? In contrast. 1996. ERG Master’s Project Mark Stout 70 . SDG&E.” Organizations had to be able to make decisions right on the spot to shape the outcome. App.”82 Enova Corporation has announced a merger with Pacific Enterprises. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report. 82 83 CPUC Renewables Working Group. Sirard.reasonableness check. SDG&E provides service to 1. “a subsidiary of Enova Corporation. the parent company of Southern California Gas Company83. It allows an organization to get buy-in from other parties in advance.” according to Kathy. is a California Investor Owned Utility Company founded in 1881.15 million electric customers in San Diego and southern Orange Counties. and willing to be straightforward on what they can give on. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. “People who influenced the outcome were present. E. Kathy said that what mattered most in influencing the formulation of AB 1890 was responsiveness to Steve Peace’s requirements. while holding on to what they really wanted.

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

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

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

“the nation’s second largest utility. If any customers are to benefit. were equity.Southern California Edison Tommy Ross is the Director of Public Affairs at the Sacramento office for SCE. 000 square mile service territory has a population of more than 11 million. opportunity. First. don’t rock the boat utility. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20.2 million customers in Central and Southern California. all customers should at the same time. Over time. be we did get a principled ERG Master’s Project Mark Stout 74 . and SCE investors as well as independent energy producers should have the opportunity for a return on investment. The 109-year old investor owned utility serves more than 4. We could have been perceived as opposing direct access. With the encouragement of the Governor’s office. We also pursued the opportunity for a return on investment. equity. not “the big guys eat first”. This is best implemented under a transition. The utility’s 50. and return on investment. we adopted a principled approach that recognized the interests of Edison. with a phase-in to direct access. we were positioned as an anti-restructuring. The regulatory compacts that we entered into need to be recognized. so we decided if this was going to come into play. 1995 Decision? Those three principles were significant components of the December Decision. large and small customers. a manifestation of these mutual interests. restructuring came to be viewed as inevitable. based on number of customers.”86 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? In early 1995. Our three principles. creating a level playing field. and other energy service providers. I would not say we got everything we wanted. let’s do this the right way. and served as a basis for AB 1890.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We did not want to have to pass new legislation. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. People close to Sacramento knew the RPS did not have a chance. see interview] thought she got and what she got from the Commission. It is a hard call from a policy standpoint: Sierra Club members would love the RPS. 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. creating a tension. Energy efficiency and RD&D funding does not sunset in AB 1890. “set up the market. There always was a disconnect between what Nancy Rader [West Coast Representative for AWEA. ERG Master’s Project Mark Stout 129 . There was a concern that the RPS was seen as ratcheting up the compact of the BRPU [Biennial Resource Plan Update. 1995 Decision? The Renewables Portfolio Standard (RPS) was included in the Decision as a renewables policy [the Sierra Club California Legislative Committee had voted to endorse AB 1202. but you have to be a political pragmatist.How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. and we won’t need this regulation stuff”. In the PUC Decision. The customer groups had the same attitude. I do not know why the PUC put it in the Decision. I knew the consumer groups and power marketers hated it. How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? Because of the lack of acceptance for the RPS. the RPS Working Group is not reality. while the latest CPUC Decision sunsets energy efficiency. we didn’t want it or not want it. environmental programs are seen as transitional. so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. 98 Personal communication with Sierra Club Committee members. an earlier legislative vehicle for the RPS98].

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

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

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

Union of Concerned Scientists Jane Kelly is the California Policy Coordinator for the Union of Concerned Scientists. UCS’s overriding goal was to ensure policy were developed that would provide for continued environmental protection with regards to renewables and energy efficiency.000 sponsors nationwide. The level of renewables support included in the BRPU served as a target for UCS. Deregulation of the electricity industry threatened to tear this house of cards down. UCS was also opposed to 100% “stranded cost” recovery for utilities. Integrated Resource Planning (IRP).John White were the front folks. including 13. pointing towards a future based on environmentally cleaner electricity generation and energy efficiency. manifest in California as the Biennial Resource Plan Update (BRPU). Byron Sher was fine. 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. As the deregulation process unfolded at the CPUC.100 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? According to Jane. UCS has 100.000 in California”. E-3. ERG Master’s Project Mark Stout 133 . “an independent nonprofit public interest organization which works on issues where science and technology play a critical role. 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. As long as the Sierra Club and other groups were happy. Peace was the idea person. a policy decision that is widely viewed as a financial 100 CPUC Renewables Working Group.

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

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

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

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

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

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

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

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

7 per year to the utilities.e. Steve Peace and Byron Sher recently sent a letter to the PUC. Was your organization able to publicly maintain a consistent position or set of positions in the two sets of hearings. Neeper did after the December. we did not change our stance. ‘97 Decision on public purpose programs. Also. Conlon attended a briefing a few years back. 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. stating that their intent was that the PUC retain authority for energy efficiency funding. realizing the dollars available for public purpose programs were limited. AB 1890)? Why? I would see them as an appropriate sequence of decisions. not end this authority after four years. CPUC vs. the Legislature or PUC could modify. and this comes through in our briefings. Whether or not the Legislature intended this was a point of contention. briefings to the IOUs were a standard part of the communication. or over time? I think so.. Fessler attended one earlier. compared to just 0.How much of what your organization sought to obtain from the process was included in Assembly Bill 1890? The University supported AB 1890.8 million per year. Duque was very ERG Master’s Project Mark Stout 142 . In the February 14. but it was a reasonable outcome. ‘95 decision. The funding for public interest RD&D will be reviewed after three years. very committed. We have good people involved in research. 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. More money could have been spent on public interest RD&D. working well together.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Which Policy Outcome Does Your Organization Prefer? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #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 Municipal Utilities Association . California Institute for Energy Efficiency Total note: 1 selects column ERG Master’s Project Mark Stout 161 .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 .

000 $4.000 $3.995 $300 $12.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.495 $10.000 $2.495 $7.500 $22.000 $495 $950 $696 $2.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear generation) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $3.191 $2.000 $7.000 $0 $0 ERG Master’s Project Mark Stout 162 .495 $1.995 $21.000 $2. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $1.000 $500 $1.500 $1.800 $1.000 $1.000 $3.896 $3.Appendix E: Restructuring Stakeholder Campaign Contribution/Gift Analysis Detail Table 1: Assemblymember Jim Brulte. (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.429 $498 $1.

511 $3.990 $1.Table 2: Assemblymember Jim Brulte.995 $14.000 $2.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.000 $2.995 $1.500 $47.017 $749 $750 $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 Int. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $10. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. (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 $3.000 $1.000 $1.460 $200 $500 $750 $2.500 $1.500 $1.500 $800 $498 $200 $9.250 $2.500 $6.495 $4.995 $2.750 $4.000 $8.

750 $750 $1. From 3/28/96 to 4/8/96. Table 3: Senator Steve Peace. and Privatization” visiting London. Not to be outdone. Brulte was taken on a $7.750 $2.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995. Mobil treated Brulte to a $60 event in 1996. by the California Foundation on the Environment and the Economy. Paling in comparison. 1996.000 $1.500 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.000 $3. totaling $101. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $11. Chevron treated Brulte to two meals. and Budapest. 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. 4 ERG Master’s Project Mark Stout 164 .000 $1.750 $3.000 $2.000 $2. Conservation. as well as an event.490 “Travel project to Europe on Electric Restructuring. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders. CFEE is a “non-profit.000 $750 $0 $0 103 Asmus.000 $1. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103. Sweden.250 $500 $1.

000 $1.000 $6. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $750 $750 $750 $1.100 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.250 $7.572 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .Table 4: Senator Steve Peace.500 $16.000 $500 $2.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.050 $3.500 $8.815 $750 $6.072 $2. (geothermal) California Solar Energy Industry Association Cannon Energy (windpower) Destec (gas-fired) Independent Energy Producers Pacific Lumber Company (solid fuel biomass) SeaWest Windpower Zond Windpower DSM ENERGY SERVICE COMPANIES (ESCOS) SESCO (energy services) LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Retailers Association California Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.115 $18.250 $2.450 $7.250 $750 $500 $1.500 $3.600 $2.000 $300 $1.250 $1.000 $4.

Southern California Edison was granted a high level of access. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips.000 $5. taking Steve to 11 meals. In 1996. Peace was treated to a $52 sports event by Mobil Oil. IEP made a gift of $241 for his speech at a conference. as well as chair of the Senate Energy and Utilities Committee.900 .450 166 ELECTRIC/GAS $6. SDG&E had Peace out to six meals. 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 $5.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring. In 1995. 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. Table 5: Senator Byron Sher.000 Table 6: Senator Byron Sher. while Edison treated him to five meals and a sports event.100 $2. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995.

000 $500 $500 $9. (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co. McQuat. Brotherhood of Electrical Workers (various $9.482 $100 $1.500 Int.882 $100 $1.100 $500 $2.000 $100 producers.000 $500 $1. $2. and Hamrin. (biomass) Edson + Modisette (lobbyist for indep. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 .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 $1.600 $13. (geothermal) Colmac Energy Inc. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.000 locals) Southern California Pipe Trades United Assoc. EVs) Hansen.

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 (tire $1.500 COMPANIES $1.000 $1.000 $1.250 $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 $100 $1.000 Large Energy Consumers $3.000 $100 $100 $500 $1.

000 $300 $300 $22.000 $700 $4.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . of California.448 $14. (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.Tosco Corp.585 $100 $500 $2. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.

totaling $2608. Sher received no other gifts that year from energy utility stakeholders.500 $0 $0 ERG Master’s Project Mark Stout 170 .1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.300 $500 $1. NARUC treated Sher to a two day trip to DC for another meeting. and GE.000 $1.400 $750 $150 $1. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.000 in each of Amoco. In 1996. Sher holds over $100.500 $300 $0 $0 $2. 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. Mobil. totaling $758. Exxon. 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. Table 7: Senator Bill Leonard.

) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. Senator Leonard was courted a little more heavily by energy stakeholders in 1996. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster. Edison again ERG Master’s Project Mark Stout 171 . WA paid $734 for Leonard to moderate a conference session on utility deregulation. and a $75 dinner at the American Legislative Exchange Council’s annual meeting.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995. While the Senator was there. Edison’s lobbyists got to spend a little more quality time with Leonard for their money. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.650 $2.080 $10. The Pacific Rim Conference of Seattle.000 $5. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala.000 $500 $500 $4.000 $1.000 $2. saving up for a $77 dinner with head lobbyist Bob Foster. extending his stay from 12/8/96 to 12/13/96. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $1.500 $500 $1. for a paltry $20.000 $2.730 $2.650 $500 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day.000 $2.500 $150 $500 $3.Table 8: Senator Bill Leonard. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. (CLECA member) California Steel Industries (CLECA member) Mitsubishi Cement (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.

750 $1.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6.000 $750 $750 $650 $150 $500 $3.000 $1. They also had Leonard out for two meals in Sacramento. paying $44 for two meals and lodging.had Senator Leonard out for Legislative Ski Day.000 $1.600 $1. for the modest tab of $56.000 $1.600 $750 $750 $500 $1.250 $1.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . Table 9: Assemblymember Mickey Conroy. ARCO treated Leonard to a $19 meal at a reception. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. PG&E took Leonard out to a Kings game. including lunch with Bob Foster.

700 $750 $450 $250 $250 $1.000 $2. $7.000 $5. Shanghai.700 $500 $300 $550 $2. (CLECA member) California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $500 $750 $250 $500 $2. PG&E treated him to a basketball game with $51 tickets. and Inner Mongolia.600 $3.000 $3.300 junket to talk with Chinese central government and provincial leaders in Beijing.Table 10: Assemblymember Mickey Conroy. two meals for $44.050 $1.000 $500 $2. the California Foundation on the Environment and the Economy took Conroy on an 11 day.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co.500 $2. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.600 $500 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. 4 ERG Master’s Project Mark Stout 173 . and to 104 Asmus. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104. 1996. 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 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. CFEE is a “non-profit.

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

250 $1. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.Table 11: Assemblymember Diane Martinez.000 $1.000 $1.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .750 $2.750 $1.675 $2.250 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int.750 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.000 $1.175 $500 $1. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.750 $2.750 $4.

000 $0 $0 ERG Master’s Project Mark Stout 176 .500 $1.000 $1. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.500 $1.000 $1.500 $500 $500 $1.000 $5.000 $7.000 $4.500 $6.Table 12: Assemblymember Diane Martinez.000 $500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $1. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $500 $500 $500 $500 $500 $3.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.000 $500 $500 $5.000 $500 $3.000 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.750 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $4. Dist.250 $1.

100 $100 $1.000 $500 $500 $1.850 $1.058 $500 $500 $1. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996.600 $1.208 $0 $0 $1.Table 13: Assemblymember Steve Kuykendall. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.900 $3.467 trip to Northwestern University to discuss the deregulation of public utilities.500 $1. the Illinois Energy Association flew Martinez out for a $1.000 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS LARGE ELECTRICITY CONSUMERS Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $8. ERG Master’s Project Mark Stout 177 . natural gas.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.500 $1.

and Privatization” visiting London. natural gas. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS INDEPENDENT PRODUCERS Bechtel (gas-fired) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Farm Bureau Federation PAC California Mining Association PAC Kaiser Aluminum Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $0 $1.350 $500 $1.000 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil. Sweden. ERG Master’s Project Mark Stout 178 . SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10. Conservation. However.443 $6.254 $200 $500 $4.000 $500 $2.000 $1. From 3/28/96 to 4/8/96.250 $100 $500 $35. Kuykendall was taken on a $7. Kuykendall’s social calendar was destined to pick up in 1996.Table 14: Assemblymember Steve Kuykendall.000 $19. and Budapest.000 $1.374 $4. diesel) Unocal (CMA member) Victory Oil Co.500 $1.490 “Travel project to Europe on Electric Restructuring.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.374 $500 $2.500 $1. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62.000 $2.

167 junket visiting London. by the California Foundation on the Environment and the Economy. and Paris. for $610. CO.”105 The Consolidated Edison IOU spent $1. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings. Edison. paid $1. According to investigative writer Peter Asmus. A trade association. The California Mining Association took him out for an evening of recreation and dinner costing $89. 1996.WEST. was very interested in California moving to the UK-style. known as the Council of States Government .051 to fly the President out to New York City for a ConEdison Management Conference. Fessler was taken on a $7.916 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. one of CFEE’s funders. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”.by the California Foundation on the Environment and the Economy. The Aspen Institute. The Large Public Power Council. SC to address their membership. a trade association for publicly owned utilities. spent $1402 to fly Fessler to Charleston. 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. a clean power auction the CPUC repeatedly postponed upon the urging of the utility. wholesale PoolCo model. government ministers. to meet with CEOs of the electricity industry. Another non-profit organization. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). The California 105 Asmus. regulators. Chevron treated Kuykendall to two dinners for $131. in Aspen. Brussels. 4 ERG Master’s Project Mark Stout 179 .

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

utility and General Electric stock. regulators. one of CFEE’s funders. by the California Foundation on the Environment and the Economy. Brussels. and Paris. wholesale PoolCo model. Conlon was taken on a $7. PG&E had him out to three meals for $71. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. He does own more than $10. 1995. Edison. He left office on February 23. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight. and less than $10.000 in each of Chevron. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. to meet with CEOs of the electricity industry. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995. ERG Master’s Project Mark Stout 181 . In 1995. He does own less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994.167 junket visiting London.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. and environmental groups to discuss the British experience with deregulation of electricity. and Schlumberger oilfield services stock.000 in each of Central & Southwest Corp. Jr. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. government ministers. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. was very interested in California moving to the UK-style. spending $258.000 in each of Montana Power Company and Exxon stock. Unocal.

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