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 which will be superseded to a great extent by the details of AB 1890.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

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

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

8 Public Utility Holding Company Act of 1935 In order to establish market power which would otherwise have been illegal under antitrust law.” This legislation sought to avoid market abuses by limiting the size and 7 Davis. Based on the Interstate Commerce Clause. A number of these holding companies owned. led to the passage of the Federal Power Act. Hempling explains. ERG Master’s Project Mark Stout 9 .” The early 1900s were marked by the rapid increase in electric utility regulation by state public utility commissions (PUCs) to address this natural monopoly character. a small number of holding companies owned most utilities in the United States.utilities as natural monopolies and hence inevitable. Beginning in 1907 with New York and Wisconsin. “Before passage of the Public Utility Holding Company Act of 1935 (PUHCA). by 1922 47 states and the District of Columbia were regulating electric utilities. 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. electric utilities developed a pyramid scheme based on holding companies that was effective at obscuring market dominance. with at least 20% of electricity crossing state lines in 1935.7 Federal Power Act of 1935 The growing interconnection of local utilities in interstate grids. 166-167. or were owned by. large nonutility companies such as electric equipment contractors. This being the case the best solution seemed to be regulation by public commission.

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

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

with large. In April of 1994. industrial customers taking power at the transmission level eligible on January 1. ERG Master’s Project Mark Stout 12 . A more definitive policy statement was 16 17 Haddad.17 A security analyst noted that the release of the Blue Book will: speed up the deregulation of the industry. 6. 2) providing cost recovery for energy efficiency programs that are at least as profitable as supply side measures. all commercial customers eligible January 1. sending “a shockwave through the electric industry”. especially since the California regulators have been considered in the past to be one of the leading regulatory commissions and many states have followed their recommendations. customer class-staged schedule for direct access implementation. 1999. and if successful.supplies. all residential consumers eligible on January 1. 2002. 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. the CPUC issued a staff proposal regarding electric utility deregulation known as the “Blue Book”.”16 CPUC “Blue Book” Proposal California’s Public Utility Commission is widely viewed as a trend-setter for state PUC electric utility regulation. 55. The Blue Book laid out an aggressive. 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. 18 Mydans. 1996.18 The proposed deregulated electricity market would allow individual customers to choose their electricity generation supplier using bilateral contracts in a system known as retail wheeling or direct access. and 3) rate changes to encourage efficiency and distribution of power. Hoffman.

Blue Book. where customers voluntarily pay more to promote renewables. prompted the Assembly Committee on Utilities and Commerce and the Assembly Committee on Natural Resources to hold a joint oversight hearing on May 23.19 Since the release of the Blue Book proposal. numerous other states have also proposed electric utility deregulation. coupled with a lack of prior coordination with the state Legislature. Status Report. evidentiary hearings. The first issue addressed open access to the transmission system 19 20 CPUC.scheduled to be issued by the CPUC in August of 1994. “alternative frameworks based on ‘let the market decide’”. and documentation resulting in a report back to the Governor and Legislature by January 31. 1994. including private and public-interest organizations. 1995. pushing back their goal for a policy decision until September of 1995.20 Many stakeholders. which requires the CPUC to engage in a series of public hearings. the CPUC proposed. 1994. “a vibrant market exists for energy efficiency services”. 1994. ERG Master’s Project Mark Stout 13 . which had been dubbed the MegaNOPR. 21 CPUC. 1. where CPUC President Fessler and Commissioner Knight testified on their proposal. FERC released a dual-issue Notice of Proposed Rulemaking. In their place. This process tempered the CPUC’s frenetic timetable. and asserted that. This led to the passage of Assembly Concurrent Resolution 143. such as “green pricing”. Blue Book. Wagner. For instance. 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.21 This stakeholder response.22 FERC MegaNOPR In March of 1995. were concerned about the content and timetable of this proposal. 1995.

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

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

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

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

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

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

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

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

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

. but now had to pay higher rates. 52 Gilbert.51 Academics & Ideologues Neo-classical economists have argued since the 1970’s for the deregulation of the electric utility industry.50 Economic Rent The potential to capture higher profits offers a significant incentive for well-positioned electric utilities to pursue an end to price controls and enhanced opportunities to sell excess power outside of their service area. Davis. 1993. enabling increased competition. 195. 447-475. Hoffman 55-62.52 The “new industrial organization” espoused by these economists has served as 48 49 Davis. “Discretionary Evolution. 84-108. 356-357. 1994. This reduction in scale has brought down the capital requirements of entering the electricity generation industry. Gordon. 150. Advancements in transmission line technology now allow the efficient transmission of electricity for distances of hundreds of miles. ”49 Technology The development of gas turbine generation technology has greatly reduced the scale requirements for efficient electricity generation. who in the past had enjoyed privileged status with cheap rates. 51 Stevenson.”. greatly increasing opportunities for bulk power sales. ERG Master’s Project Mark Stout 23 . 50 Flavin and Lenssen.intense pressure from large industrial customers.. basing their arguments on welfare economics as applied to the changing electric utility landscape. 1993.

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

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

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

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

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

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

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

leading to an overlap of their interests with public interests. we can point to the legislation. “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. • AB 1890 outcome: The legislation allows for the collection of IOU employee severance and retraining costs in the CTC. and pursue ratepayer support for worker severance payments and retraining.• AB 1890 outcome: The municipal utilities lost autonomy in making decisions about direct access as a tradeoff to ensure their ability to collect stranded costs. They resist retail competition. As the lobbyist for the Sacramento Municipal Utility District points out. They are strong proponents of maintaining system reliability as this requires adequate staffing. AB 1890 also requires that IOU-divested generation plants come with two-year contracts for operation and maintenance by the existing staff. 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. An unexpected positive outcome was the improved leverage munis gained over IOUs. while going further to directly support the goals of system reliability through adequate inspection and maintenance. Appendix B] The inclusion of direct access was not embraced by munis. • December Decision outcome: Although the Decision does allow for the collection of IOU employee severance and retraining costs in the CTC. it does not focus on maintaining system reliability. ERG Master’s Project Mark Stout 31 .” [see interview.

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

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

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

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

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

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

say that their organizations got most of what they wanted from AB 1890. The utility labor unions and municipal utilities representatives reported receiving relatively little from this policy outcome. The small consumer and environmental organization representatives appear to have taken a step backwards in terms of getting what they wanted compared to the CPUC December Decision policy outcome. 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. 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. ERG Master’s Project Mark Stout 38 . nearly half of the representatives say that their Rather Little Figure 3: How much of what your organization wanted was in AB 1890? organization got most of what it wanted from AB 1890. a similar number of representatives report a mixed or unclear outcome.from the December Decision.

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.Figure 4: How much of what your organization wanted was in AB 1890? One of the interview questions asked which policy outcome was STATE INSTITUTIONS ENVIRONMENTAL ADVOCATES preferred by the subject’s organization. as 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. 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 Figures 5 indicates.

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

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

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

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

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

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

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

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

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

a perusal of legislative language that was proposed during the long.. 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 . The 3% [it was actually a cap of 3.1% of IOU revenues. The August 15 language from a coalition of powerful interests. 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. Industrial Users. “We reached a consensus on. and the Sierra Club. TURN was one of several public interest organizations who opposed the change. a representative from the American Wind Energy Association argued that customers paying more on their electricity bills to support renewable energy should cause an impact in terms of more kWh of renewable energy produced. A legislative outcome related to “green” pricing for renewables provides another example of an ephemeral consensus. CLECA.72 At this point late in the game.3% of utility revenues. These got translated into dollars.” However. EDF. RD&D.. agricultural consumers. During the Conference Committee hearings. As a Sierra Club California legislative chair recounts on meetings between CMA. and energy efficiency. funding for public purpose programs: low income. less than two weeks before the Bill would be reported out of committee.. roughly $660 million a year for the IOUs alone] of utility revenues for public purpose programs in the MOU came out of these discussions. including IEP.. reduced funding to an average of 2.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. renewables with an incremental cost estimate from the BRPU. hot days of August in the 1996 Conference Committee reveals that this “consensus” funding level took a large hit on August 15.

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

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

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

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

592 $846 $0 ERG Master's Project Mark Stout 54 .000 $634.588 $500 $32.102 $0 $73.559 $0 $246.370 $648 N/A $0 $208.608 $3.995 $596.308 $516.092 $3.952 $1.112 $3.405 $0 $722.125 $0 $4.180 $0 $209.500 $533.031.101 $495 $10.272 $0 $64.479 $2.374 $1.079 $13.496 $8. (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 $59.203.157 $0 $188.000 $480.745 $68.758 $2.964 $0 $40.752 $0 $51.516.239 $0 N/A $0 $89.110 $34.000 $62. 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.000 $1.S.079 $950 $14.819 $0 $323.166 $5.000 $681.419 $13.000 $225.470 $10.818 $0 $65.1995 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas General Electric (nuclear plants) Joint Electrical Industry Fund Pacific Gas & Electric/U.000 $562.149 $3.096 $971.741 $21.181 $0 $160.000 N/A $0 $18.835 $1.500 $1.075 $4.675 $384.500 $190.675 $736.153 $750 N/A $8. Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.500 $263.595 $0 $21.630 $300 N/A $0 $5.000 $0 $70.500 $78.416 $5.981 $1.163 $0 $25.

diesel) Unocal (CMA member) Western States Petroleum Association SMALL ELECTRICITY CONSUMERS Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) ENERGY SERVICE COMPANIES (ESCOs) Appliance Recycling Centers of America ENVIRONMENTAL ADVOCATES California League of Conservation Voters Center for Energy Efficiency and Renewable Technologies Environmental Defense Fund Natural Resources Defense Council Planning and Conservation League Sierra Club California Union of Concerned Scientists STATE INSTITUTIONS Note: N/A = not available Conference Committee Campaign Total California Contributions Lobbying Expenses $0 $4.207 $5.723 $0 $38.519 $11.947 $500 $281.701 $0 $5.500 $0 $0 ERG Master's Project Mark Stout 55 .1995 Lobbying Totals RMC Lonestar (CLECA member) Southwest Portland Cement Co.271 $0 $12.000 $526.675 $0 $1. natural gas.000 $0 $6.938 $0 $118.600 $32.600 N/A $5.000 $20.167 $500 $25.319 $0 $10.000 $37. (bulk terminals) Mobil Texaco Tidelands Oil Tosco Corp.596.081 $1.055 $0 $151.203 $0 $30.495 $1.099 $12.000 $383.250 $0 $30.850 $1.003.400 $100 $79.203 $5.716 $39.362.401 $1.145 $5.291 $3.000 $0 $15.665 $0 $262.000 $524.000 $0 $171.326 $0 $100. (gasoline refining and marketing) Tower Energy Group (oil.551 $12.197 $500 N/A $2.492 $0 $66.083 $0 $20.230. (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.495 $27.

and Hamrin.) 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.882 $15. Dist.571 $500 N/A $200 N/A $1.000 $209.590 $5.862 $21.229 $100 N/A $1. (gas-fired) American Wind Energy Association Bechtel (gas-fired) Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.819 $921.S.118 $0 $144.025.454 $3.600 $276.000 $50.750 $418.500 N/A ERG Master's Project Mark Stout 56 .331 $0 $97.589 $26.100 $0 $500 N/A $100 $0 $500 N/A $2. 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.159 $3.917 $300 $5.626 $0 $8.782 $981.000 $35.500 $29.605 $250 N/A $1.750 $267.400 $1.017 $1.748 $32. EVs) Enron Corporation (gas fired) GWF Power Systems (oil and coal-fired) Hansen. (geothermal) California Cogeneration Council California Solar Energy Industry Association Cannon Energy (windpower) Colmac Energy Inc.240 $0 $178.500 N/A $0 $211.250 $148.032 $0 $172.717 $500 not applicable $0 $138.100 $144.724 $500 not applicable $500 $57.460 $50.000 N/A $100 N/A $7. (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) $145.1996 Lobbying Totals INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Electric Power Research Institute General Electric (nuclear plants) Pacific Gas & Electric/U. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades United Assoc.147 $500 $739. producers.905 $30.250 N/A $100 N/A $2.000 $85.200 $837.450 $566.179 $0 $3. of Jrnymn & Aprt Underground Utility/Landscape Utility Workers Union of America INDEPENDENT PRODUCERS AES Pacific/SF Energy Co.750 $1.000 $33.000 NA $500 $0 $2. (biomass) Destec (gas-fired) Edson + Modisette (lobbyist for indep.611 $1.543 $29. 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.060 $6.845 $452.281 $1.286 $3.195 $401. McQuat.

495 $22.347 $9.800 not tracked $3.925 $0 $44. natural gas.000 $500 $456. (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.050 $949.989 N/A $9. Western States Petroleum Association SMALL ELECTRICITY CONSUMERS California Nevada Community Action Association Greenlining Institute The Utility Reform Network (TURN) Utility Consumer's Action Network (UCAN) Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $41.438 $500 N/A $0 $1.177 $300 N/A $0 $29.500 $251.137 $550 N/A $5.245 $335.650 $3.500 $47.643 $1.1996 Lobbying Totals LARGE ELECTRICITY CONSUMERS Adams Steel Agricultural Energy Consumers Association California Cement Producers Association California Farm Bureau Federation California Industrial Users California Large Energy Consumers Association California Manufacturers Association California Mining Association PAC California Portland Cement Co.250 $34.622 $67.521 $14.754 $4. diesel) Unocal (CMA member) Victory Oil Co.407 $200 $61.573 $2.900 $0 $21.958 $2.000 $233.780 ERG Master's Project Mark Stout 57 .995 N/A $100 N/A $0 $3.521 $0 N/A $50 $87.181 $1.296 $800 $25.878 $12.478.636 $0 $103.090 $749 $38.689 $2.521 $1. (gasoline refining and marketing) Tower Energy Group (oil.900 $1.334 $498 $1.661.050 N/A $0 $214.209.000 $65.712 $100 N/A $200 $16. (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.861 $1.000 $76.721 $748.417 $9.072 $918.500 $277.016 $1.384 $2.511 $1.950 $3.532 $4.960 $2.705 $19.750 $23.885 $300 $207.750 $37. Texaco Tidelands Oil Tosco Corp.000 $22.761 $0 $73.138 $1.

448 $424. of California.000 $700 $117.250 $21.438 $4.000 $2.066 $500 $21.790 $100 $14.585 $33.068 $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.462 $208.378 $100 $21.000 $900 N/A $400 N/A $500 N/A ERG Master's Project Mark Stout 58 .066 $500 N/A $250 N/A $22.462 $500 $14. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass) Note: N/A = not available Conference Committee Total California Campaign Lobbying Expenses Contributions (Jan-Sept) $1.000 $15.

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

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

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

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

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

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

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

is a California Investor Owned Utility Company founded in 1881.7 million customers in San Diego County. It allows an organization to get buy-in from other parties in advance. “People who influenced the outcome were present. E. “a subsidiary of Enova Corporation. App. SDG&E provides service to 1.”82 Enova Corporation has announced a merger with Pacific Enterprises.reasonableness check. 1996.15 million electric customers in San Diego and southern Orange Counties. ERG Master’s Project Mark Stout 70 . SDG&E. 1996.” according to Kathy. 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. 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. San Diego Gas and Electric Jim Cassie is the Director of State Governmental Affairs for SDG&E. Jack. and gas service to 0. and willing to be straightforward on what they can give on. the parent company of Southern California Gas Company83.” Organizations had to be able to make decisions right on the spot to shape the outcome. 82 83 CPUC Renewables Working Group. a gas utility which serves a territory largely overlapping with Southern California Edison’s. Sirard. “Uncertain road ahead for utilities” and Enova Corporation 1996 annual report.

84] SDG&E does not have any renewables. Also. SDG&E was a supporter of the PoolCo market structure along with Edison. We were very opposed to the BRPU. with the exception of the legislation’s mechanism for a rate reduction. we had the highest rates in the nation. ERG Master’s Project Mark Stout 71 . High priced renewables are OK if you are not moving to a competitive future. This would put us at a competitive disadvantage compared to PG&E and Edison. 84 CPUC Renewables Working Group. it would be difficult to get 5% renewables. but are not viable with competition. 1995 Decision? The PUC was on the right track.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. except for electricity purchases from Mexican geothermal generators. they did not get there by investing in high cost renewables. and got it struck down. How much of what your organization sought to obtain from the process was included (or represented) in the California Public Utility Commission’s December 20. [The CPUC’s proposal in the December Decision would have required roughly 10% of all retail sales to be backed up by tradable credits for renewables. We were strongly opposed to the RPS. We went to FERC. The lucky Arizona utilities went with coal. 1996. so we would have to buy energy or credits. Throughout the ‘70s. It does not make sense for SDG&E alone to go out and acquire more expensive renewable resources. SDG&E wanted to become the lowest priced California IOU. if you are a broker. AB 1890 mirrors the Decision in many ways. everyone should pay. When Tom Page came in as CEO in 1981.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

we are in favor of competition. The Decision was vague. depending on interpretation. ERG Master’s Project Mark Stout 119 . 1995 Decision? Almost nothing. yes. and law to create innovative. E-1. 3) externality accounting should ensure that customers weigh external costs in their decisions among alternate suppliers. Assuming these problems are resolved. 2) an Integrated Resource Planning process should exist for energy efficiency. It gave us nothing until the Legislature tells us otherwise. economically viable solutions to today’s environmental problems.000 members nationwide. economics. “a leading non-profit organization. As stated in EDF’s first round comments on the Blue Book. and 4) incentives for uneconomic sales promotion minimized. EDF has participated in California energy policy issues since 1975.”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. “There is no reason to proffer the benefits of competition first to only selected classes of customers.Environmental Advocates Environmental Defense Fund Dan Kirshner is a Senior Economic Analyst for EDF. and punted on the details to the Legislature. if restructuring is implemented properly: 1) energy efficiency investments should continue. EDF supports the earliest possible implementation of direct access for all classes of customers. [which] represents 300. If focusing 94 CPUC Renewables Working Group.”94 What outcomes did your organization want to attain from the California electric utility restructuring policy formulation process? EDF sought an environmental quid pro quo. EDF links science. more than 55.000 of whom live in California.

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

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

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

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

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

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

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

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

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

so Senators Peace and Sher sent a letter to the CPUC pulling the sunset language out for energy efficiency. There was a concern that the RPS was seen as ratcheting up the compact of the BRPU [Biennial Resource Plan Update. We did not want to have to pass new legislation. In the PUC Decision. 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. creating a tension. 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. we didn’t want it or not want it. Energy efficiency and RD&D funding does not sunset in AB 1890. People close to Sacramento knew the RPS did not have a chance. 98 Personal communication with Sierra Club Committee members. “set up the market. Perhaps Commissioner Conlon latched onto the idea of spreading out QF costs amongst different players. but you have to be a political pragmatist. the RPS Working Group is not reality. There always was a disconnect between what Nancy Rader [West Coast Representative for AWEA. while the latest CPUC Decision sunsets energy efficiency. environmental programs are seen as transitional. I do not know why the PUC put it in the Decision. The customer groups had the same attitude. 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. and we won’t need this regulation stuff”. an earlier legislative vehicle for the RPS98]. I knew the consumer groups and power marketers hated it. ERG Master’s Project Mark Stout 129 . 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.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 got angry because PG&E would get paid large sums. I said. Peace would send the hagglers off. see interview] did much of the speaking for low income programs. When developing a strategy. President Fessler was livid. Low income advocates insisted their programs were outside of the 3% of revenue cap for other public purpose programs. how can you guarantee above market rates for the nukes. The SF Bay Guardian [a long time opponent of PG&E] picked up this article. CTC money is defined as a property right so that future attempts to repeal it can be secured against as a taking. I wrote an article for the CEERT newsletter a few years back on how much money could be saved by shutting down Diablo Canyon and paying PG&E by giving them all of their money back. Peace had a hearing back then. one needs to reduce the rate of return on utility investments. The magnitude of the CTC collection is bothersome. The IOUs wanted only $10 million per year. and we would go to IEP’s [Independent Energy Producers] office. you need to make sure you have Plan B. but if CMA and CLECA go along. In AB 1890. the Sierra Club is not going to make much of a difference.California’s implementation of integrated resource planning (IRP)] that everyone had agreed to. the public interest community wanted a figure closer to the historical average [1994 California IOU ERG Master’s Project Mark Stout 130 . “Do a revenue bond”. On public interest RD&D funding. and asked me where to get the money from. Fessler did not get the rate of return reduction he wanted. in case Plan A [the RPS] does not work out. I said that if you want competition. On stranded costs. The most outrageous part is special rates for the nukes. saying that if stranded cost recovery is to be guaranteed. When the MOU came out. AB 1890 delivered the $3 billion laid out in the December Decision. Ralph Cavanagh [NRDC Energy Program Director. Peace poo-pooed the idea at the time. but then unearthed it for AB 1890. I and others agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

He had a conversation with Senator Lockyer to staff up the Conference Committee. Most parties felt that with the right bill. Senator Peace decided on a process with long discussions. and how could they have improved their approach? The environmental and renewables communities made the Committee punt. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. CLECA. encouraging other people to accept the process who otherwise would not have. The Conference Committee tried to put together legislation that made sense. Which stakeholder groups do you think were best able to set the terms of the debate. They waited until late in the process to get organized. These groups could not come to a resolution. The California Municipal Utilities Association folks lacked effectiveness also. Senator Peace was making a decision. but not all six. CMA. and Edison set the tone. and Edison. you could get four votes. Mark Timmerman. Peace’s mind was made up. could not address the problem of a competitive market and participation. They did not want to participate. 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 . decision makers at the table.During the summer recess in July. He wanted people who would get engaged. and why? CLECA. It was unclear whether consensus among the Committee Members was going to happen. having conversations with the Governor’s office. The Committee engaged in months of hearings issue by issue. LADWP was trying to cause trouble with restructuring. and Bob Foster. DJ Smith [CLECA] and Bob Foster [Edison] wanted to make a case to ratify the MOU. CMA. They were a guiding light. getting everyone engaged for buy-in. John Rozsa and I were brought on board. 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.

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

Because of the genius of the legislators. ERG Master’s Project Mark Stout This had to be shaped by pressures on the 152 . Office of Senator Byron Sher Kip Lipper is Senator Byron Sher’s Chief of Staff. There were also “grassroots” astroturf groups based on utility shareholders.Legislative Conference Committee. The IOUs spent millions on astroturf such as “Shareholders for Equity”. establishing a level playing field. 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. The template was in large part formed by the CPUC’s December ‘95 Decision. all of the outside lobbying did not matter. A lot of PR and press consultants got rich from this. then your voice was heard. Senator Peace established a process that was a model of openness. Which stakeholder groups do you think were best able to set the terms of the debate. lawyers. but it mainly was a waste of money. Some groups also used press conferences. and accountants. due to the egalitarian nature of the structure. Groups participated in coalition building. Steve Peace. and Bill Leonard were the masterminds. One strategy was to get bills established early on in the session. based on the free market-driven ideologues on the Commission. 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. A stakeholder representative recommended that I speak with him because of his level of involvement with the Conference Committee. If your case fit into the unfolding structure. getting a place at the table. Senators Byron Sher. and why? The PUC laid out the framework for restructuring in the Blue Book.

Large.Legislature. considering the situation. He threw the munis out. This schism was a recipe for having the least influence. Peace was demanding in terms of defining your position. Renewables and energy efficiency were also guaranteed protection. Legislative Conference Committee. The utilities established early on the full reimbursement for stranded costs. the residential ratepayers also had trouble. He ended up doing quite well. To a lesser extent. large entities had unified positions. Lenny Goldberg from TURN was stellar. it is illuminating to get a perspective from one of his key staff who was quite active on the Committee. Leonard was a Senator on the Conference Committee during the summer of ‘96. The Decision by the PUC was going to be implemented unless the Legislature was able to deliver a package. fiscally conservative member of the Conference Committee. Since several interview subjects described Bill Leonard as a powerful. the fact that the renewables and environmentalists were divided was damaging. Later on in the Committee. ERG Master’s Project Mark Stout 153 . and they subsequently came around with an articulated position a day later. Office of Senator Bill Leonard Delaney Hunter is a Legislative Aide for Republican Assemblyman Bill Leonard. as when he threw the munis out of the Committee for their inability to articulate what they wanted. Was it always clear what outcomes each stakeholder group wanted from the process? Peace forced clarity. Which stakeholder groups do you think could have been more effective in influencing the policy formulation process. powerful interests already had an advantage from the PUC Decision. but the playing field was tilted. As a general matter. 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.

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

He walked out at one point to force the munis to make up their mind. Once the Governor’s office was behind the MOU. Political clout can be bought with lobbying and campaign contributions. it was very interesting how the environmentalists and renewables fought each other when it was clear the money had to be split. The ability to fund politicians helped. Bill Leonard said that if you want to charge an exit fee. Bill Leonard did not historically support ratepayer funding for renewables. you must play. SB 90 is the vehicle to make the CEC report on allocating renewables funding into statute. while the large customers got the ability to go first on direct access. The IOUs were clear that they wanted full recovery. However. and look for ways to get around paying the CTC. Labor wanted to protect their employees. 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. causing chaos. Was it always clear what outcomes each stakeholder group wanted from the process? Yes. ERG Master’s Project Mark Stout 155 . it was all over. The IOUs got complete stranded cost recovery. Anonymous Officeholder Staff Interview #1 Which stakeholder groups do you think were most effective in influencing the overall policy formulation process and what were they able to obtain from the process? Large customers and the utilities both had the most money to spend. There was a lot of play between SMUD and the large customers.maintain an exit fee [for direct access customers leaving their electricity procurement service] without joining the ISO. such as irrigation districts and economic development rates. It looks most likely that it will be adopted.

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

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

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 #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association .Interview #1 California Large Energy Consumers Association .Appendix D: Cluster Analysis of Stakeholder Interview Data How much of what you wanted was in the December Decision? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .Interview #2 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .Interview #1 Natural Resources Defense Council .Interview #1 Coalition of California Utility Employees .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees . California Institute for Energy Efficiency Total note: 1 selects column Rather Little Mixed/Unclear 0 0 Most 3 1 1 1 0 1 1 1 1 1 1 0 0 0 0 0 2 1 1 2 1 1 3 1 1 1 0 1 1 2 1 1 1 0 2 1 1 0 2 1 1 8 1 0 3 10 ERG Master’s Project Mark Stout 159 .Interview #1 California Municipal Utilities 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 Sierra Club Union of Concerned Scientists STATE INSTITUTIONS California Energy Commission University of California.Interview #1 Natural Resources Defense Council .Interview #1 California Large Energy Consumers Association .Interview #2 Sacramento Municipal Utility District UTILITY LABOR UNIONS Coalition of California Utility Employees .Interview #1 Coalition of California Utility Employees .Interview #2 INDEPENDENT PRODUCERS American Wind Energy Association Independent Energy Producers LARGE ELECTRICITY CONSUMERS Agricultural Energy Consumers Association California Industrial Users California Large Energy Consumers Association . 0 0 1 0 1 1 3 9 10 ERG Master’s Project Mark Stout 160 .Interview #1 California Municipal Utilities Association .Interview #2 California Manufacturers Association SMALL ELECTRICITY CONSUMERS Latino Issues Forum The Utility Reform Network ENVIRONMENTAL ADVOCATES Environmental Defense Fund Natural Resources Defense Council .How much of what you wanted was in AB 1890? INVESTOR-OWNED ELECTRIC UTILITIES Pacific Gas & Electric San Diego Gas and Electric Southern California Edison MUNICIPAL ELECTRIC UTILITIES California Municipal Utilities Association .

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

429 $498 $1.000 $1.000 $495 $950 $696 $2.800 $1.000 $7.000 $1.000 $500 $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.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.495 $7.500 $1.) California Independent Oil Marketers Association Chevron (CMA member) Mobil Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $22.000 $4.000 $2.495 $10.000 $3.000 $2.995 $300 $12.896 $3.000 $3.495 $1.191 $2.000 $1.995 $21. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.500 $22.000 $3.000 $0 $0 ERG Master’s Project Mark Stout 162 .

500 $1. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS Adams Steel California Manufacturers Association California Mining Association PAC California Steel Industries (CLECA member) Fontana Steel Mitsubishi Cement (CLECA member) National Cement (CLECA member) Riverside Cement (CLECA member) Southwest Portland Cement Co.511 $3.000 $2.495 $4.460 $200 $500 $750 $2.017 $749 $750 $3.995 $1.000 $1.500 $47.000 $1. (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.500 $800 $498 $200 $9.Table 2: Assemblymember Jim Brulte.990 $1.250 $2.750 $4.500 $1.) California Independent Oil Marketers Association California Independent Petroleum PAC Chevron (CMA member) Exxon Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $28. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades INDEPENDENT PRODUCERS CalEnergy Co.000 $8.500 $6.000 $3.995 $2.995 $0 $0 ERG Master’s Project Mark Stout 163 .000 $1.000 $10. 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.995 $14.000 $2.

by the California Foundation on the Environment and the Economy.000 $750 $0 $0 103 Asmus.000 $1.500 $1. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. 1996.000 $1.1995/1996 Stakeholder Gift Information for Assemblymember Jim Brulte In 1995.750 $3. Table 3: Senator Steve Peace. Mobil treated Brulte to a $60 event in 1996.000 $2.000 $1.250 $500 $1. Paling in comparison. Sweden.000 $3. AB 1890 author Assemblyman Jim Brulte accepted no gifts from stakeholders.000 $2.750 $2. 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. Not to be outdone. and Privatization” visiting London. as well as an event. 4 ERG Master’s Project Mark Stout 164 . From 3/28/96 to 4/8/96. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co. CFEE is a “non-profit. Conservation.490 “Travel project to Europe on Electric Restructuring.750 $750 $1. and Budapest. Chevron treated Brulte to two meals. Brulte was taken on a $7. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure103.

250 $7.000 $4.Table 4: Senator Steve Peace.250 $750 $500 $1.050 $3.250 $1.115 $18.000 $750 $750 $750 $1.750 $0 $0 ERG Master’s Project Mark Stout 165 .500 $8.815 $750 $6.072 $2.500 $3.572 $1.500 $16. Brotherhood of Electrical Workers (various locals) Southern California Pipe Trades Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co.000 $1.) California Independent Petroleum PAC Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $48.450 $7.250 $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.100 $2.000 $500 $2.600 $2.000 $300 $1. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int.000 $6.

000 $5. SDG&E pulled on Peace’s ear over a sports event and meal totaling $89. Peace was treated to a $52 sports event by Mobil Oil.900 . IEP made a gift of $241 for his speech at a conference. Peace began a practice of reimbursing all utilities for meals and outings starting with Edison in 1995. Southern California Edison was granted a high level of access. Table 5: Senator Byron Sher.100 $2. while Edison treated him to five meals and a sports event. as well as chair of the Senate Energy and Utilities Committee. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Southern California Edison/Edison International UTILITY LABOR UNIONS California State Pipe Trades Council PAC INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES California League of Conservation Voters $500 $500 $500 $500 $500 $500 $0 $0 $5.000 Table 6: Senator Byron Sher. he maintained a pretty low profile in 1995 and 1996 in terms of accepting gifts and trips. SDG&E had Peace out to six meals. taking Steve to 11 meals. 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 $1.1995/1996 Stakeholder Gift Information for Senator Steve Peace Given Steve Peace’s prominence as chair of the Conference Committee on Electric Utility Restructuring.450 166 ELECTRIC/GAS $6. In 1995. In 1996.

482 $100 $1. (geothermal) Colmac Energy Inc.San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California Workers California State Pipe Trades Council PAC State Association of Electrical $1.000 locals) Southern California Pipe Trades United Assoc. McQuat.000 $500 $1.500 Int.600 $13. $2. EVs) Hansen.000 $100 producers. and Hamrin. of Journeymen & Apprentice Underground Utility/Landscape INDEPENDENT PRODUCERS AES Pacific/SF Energy Co. (biomass) Edson + Modisette (lobbyist for indep.882 $100 $1. Brotherhood of Electrical Workers (various $9.100 $500 $2. Inc (consultants) $200 ERG Master’s Project Mark Stout 167 . (gas-fired) American Wind Energy Association Bonnie Hays Consulting (Clean Power Day organizing) CalEnergy Co.000 $500 $500 $9.

000 (tire $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 $100 $100 $500 $1.250 (ESCOS) Appliance Recycling Centers of America Onsite Energy (energy service company) Preferred Energy Services (energy service company) LARGE ELECTRICITY CONSUMERS Adams Steel California Association California Retailers Association California Steel Industries (CLECA member) Louisiana Pacific (CMA member) Schnitzer Steel Industries (CLECA member) OIL AND NATURAL GAS COMPANIES $1.000 $1.500 COMPANIES $1.000 Large Energy Consumers $3.000 $1.

Tosco Corp.462 $100 $900 $400 $500 ERG Master’s Project Mark Stout 169 . (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. California Institute for Energy Efficiency California Integrated Waste Management Board (biomass proponents) Nevada Community Action $1.448 $14.000 $700 $4.000 $300 $300 $22. of California.585 $100 $500 $2.

000 $1. the National Association of Regulatory Utility Commissioners (NARUC) bought Sher two plane tickets for quick trips to the Steering Committee meetings of the Electric Utility Restructuring Project. totaling $758. 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 $3.400 $750 $150 $1.500 $300 $0 $0 $2. Table 7: Senator Bill Leonard. Mobil. NARUC treated Sher to a two day trip to DC for another meeting. In 1996. and GE. totaling $2608. Sher holds over $100. but his Statement of Economic Interest reveals large holding of oil and electricity stocks.000 in each of Amoco. Exxon. Sher received no other gifts that year from energy utility stakeholders.300 $500 $1.500 $0 $0 ERG Master’s Project Mark Stout 170 .1995/1996 Stakeholder Gift Information for Senator Byron Sher In 1995.

000 $1. SCE treated Leonard to dinner and lodging for Legislative Ski Day. WA paid $734 for Leonard to moderate a conference session on utility deregulation. (geothermal) Pacific Lumber Company (solid fuel biomass) LARGE ELECTRICITY CONSUMERS California Mining Association PAC California Portland Cement Co.000 $500 $500 $4. for a paltry $20.000 $5.650 $500 $1.730 $2.650 $2.500 $150 $500 $3.) Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $19. 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.000 $2. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS Int. Senator Leonard was courted a little more heavily by energy stakeholders in 1996.Table 8: Senator Bill Leonard. SCE treated him to a $30 beach party and a $20 lunch with lobbyist Bob Foster.000 $2.000 $2. While the Senator was there. The Pacific Rim Conference of Seattle. saving up for a $77 dinner with head lobbyist Bob Foster.000 $0 $0 1995/1996 Stakeholder Gift Information for Senator Bill Leonard In 1995.500 $500 $1. extending his stay from 12/8/96 to 12/13/96. Edison’s lobbyists got to spend a little more quality time with Leonard for their money.080 $10. SDG&E bought Leonard a $125 ticket to the Pete Wilson Inaugural Gala. and a $75 dinner at the American Legislative Exchange Council’s annual meeting. Edison again ERG Master’s Project Mark Stout 171 .000 $1.

000 $1. Table 9: Assemblymember Mickey Conroy. 1995 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Joint Electrical Industry Fund Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Association of Electrical Workers INDEPENDENT PRODUCERS Indpependent Energy Producers LARGE ELECTRICITY CONSUMERS Adams Steel Louisiana Pacific (CMA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1. for the modest tab of $56.600 $750 $750 $500 $1.250 $1. They also had Leonard out for two meals in Sacramento.250 $750 $0 $0 ERG Master’s Project Mark Stout 172 . ARCO treated Leonard to a $19 meal at a reception.000 $750 $750 $650 $150 $500 $3. PG&E took Leonard out to a Kings game.) Chevron (CMA member) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $6. including lunch with Bob Foster.750 $1.000 $1.had Senator Leonard out for Legislative Ski Day.600 $1. paying $44 for two meals and lodging.

the California Foundation on the Environment and the Economy took Conroy on an 11 day.000 $500 $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 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Mickey Conroy In April of 1995. CFEE is a “non-profit.700 $500 $300 $550 $2.700 $750 $450 $250 $250 $1.050 $1. and Inner Mongolia.000 $2. $7.300 junket to talk with Chinese central government and provincial leaders in Beijing. PG&E treated him to a basketball game with $51 tickets. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises UTILITY LABOR UNIONS California State Pipe Trades Council PAC Int. Shanghai.500 $2. 1996. and to 104 Asmus. Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $9.600 $500 $1.000 $3.) California Independent Petroleum PAC Chevron (CMA member) Southern Counties Oil Co. charitable organization 501(c)(3)” funded by Edison to push Edison’s preferred wholesale PoolCo style market structure104.000 $500 $750 $250 $500 $2. 4 ERG Master’s Project Mark Stout 173 . 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.Table 10: Assemblymember Mickey Conroy. two meals for $44.600 $3.000 $5.

In terms of investment. Pacificorp. ERG Master’s Project Mark Stout 174 . General Electric.000 each in Edison. and less than 10. it is surprising that no electric utility deregulation stakeholders made any gifts to Assemblymember Conroy in 1996. Edison wined and dined the Assemblymember with four meals at $134. the Assemblymember seems to have a penchant for electric utilities and nuclear power plant manufacturers. and $25 of cookies and candy. and Westinghouse Electrical. SDG&E. After such a busy social calendar in 1995. Chevron took Conroy out for two business meals. four rounds of “refreshments” for $30. Kansas City Power & Light. with investments of greater than $10. $10 in candy.make sure Conroy kept a sweet spot in his heart for them. costing $99.000 in Orange & Rockland Utilities.

750 $2.175 $500 $1.750 $1.250 $1.675 $2.750 $750 $500 $500 $750 $0 $0 ERG Master’s Project Mark Stout 175 .000 $1.000 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7.250 $1.750 $4. (geothermal) Indpependent Energy Producers OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co. Brotherhood of Electrical Workers (various locals) INDEPENDENT PRODUCERS CalEnergy Co.750 $1.000 $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.Table 11: Assemblymember Diane Martinez.750 $2.

Brotherhood of Electrical Workers (various locals) Utility Workers Union of America INDEPENDENT PRODUCERS CalEnergy Co. 1996 Campaign Contributions INVESTOR-OWNED ELECTRIC/GAS UTILITIES El Paso Natural Gas Pacific Gas & Electric San Diego Gas and Electric/Enova Southern California Edison/Edison International Southern California Gas/Pacific Enterprises MUNICIPAL ELECTRIC UTILITIES Gualco Group (lobbyist: Imperial & Modesto Irigatn.500 $1.000 $1.000 $7.) UTILITY LABOR UNIONS California State Association of Electrical Workers Int.500 $1.000 $4. Dist.500 $1.000 $500 $500 $500 $500 $500 $3.Table 12: Assemblymember Diane Martinez.000 $500 $500 $5. (CLECA member) California Steel Industries (CLECA member) Tamco Steel (CLECA member) OIL AND NATURAL GAS COMPANIES ARCO (Atlantic Richfield Co.000 $1.000 $4. (member of IPPs of NY) Zond Windpower LARGE ELECTRICITY CONSUMERS California Manufacturers Association California Portland Cement Co.000 $500 $3.000 $1.000 $5.000 $500 $1.000 $0 $0 ERG Master’s Project Mark Stout 176 .250 $1.500 $1.) Chevron (CMA member) Mobil Texaco Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $20.500 $6.750 $1.500 $500 $500 $1. (geothermal) Destec (gas-fired) Enron Capital & Trade (gas-fired) GWF Power Systems (oil and coal-fired) Pacific Lumber Company (solid fuel biomass) Sithe Energies Co.

500 $1.000 $500 $500 $1.850 $1.058 $500 $500 $1. The Assemblymember enjoyed no such gifts from deregulation stakeholders in 1996. 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. (bulk terminals) Mobil Tidelands Oil Tower Energy Group (oil. ERG Master’s Project Mark Stout 177 .500 $1.) California Independent Oil Producers Chevron (CMA member) Kaiser International Corp.000 $1.000 $8. the Illinois Energy Association flew Martinez out for a $1.600 $1.600 $500 $0 $0 1995/1996 Stakeholder Gift Information for Assemblymember Diane Martinez In 1995. diesel) Unocal (CMA member) SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $7. natural gas.Table 13: Assemblymember Steve Kuykendall.900 $3.100 $100 $1.467 trip to Northwestern University to discuss the deregulation of public utilities.208 $0 $0 $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 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.000 $1. Sweden. However. Kuykendall’s social calendar was destined to pick up in 1996.250 $100 $500 $35.989 $500 $500 $0 $0 1995/1996 Kuykendall Stakeholder Gift Information for Assemblymember Steve In 1995.500 $1.374 $500 $2.Table 14: Assemblymember Steve Kuykendall.500 $1. ERG Master’s Project Mark Stout 178 .000 $19. Conservation. and Privatization” visiting London.350 $500 $1. natural gas. and Budapest.500 $0 $1.490 “Travel project to Europe on Electric Restructuring. SMALL ELECTRICITY CONSUMERS ENVIRONMENTAL ADVOCATES $10.443 $6.000 $2. Kuykendall was taken on a $7. Western States Petroleum Association treated Kuykendall to a reception and a dinner totaling $62. From 3/28/96 to 4/8/96.000 $1.) California Independent Oil Producers California Independent Petroleum PAC Chevron (CMA member) Mobil Texaco Tidelands Oil Tower Energy Group (oil.000 $500 $2.254 $200 $500 $4. diesel) Unocal (CMA member) Victory Oil Co.000 $1.374 $4.

SC to address their membership.”105 The Consolidated Edison IOU spent $1. Fessler was taken on a $7. wholesale PoolCo model. spent $516 to fly Fessler to a “Series on Energy Efficiency in the 21st Century”. The California 105 Asmus. in Aspen. known as the Council of States Government . Chevron treated Kuykendall to two dinners for $131.916 for the Assemblymember to speak and moderate a panel discussion on electric utility deregulation. A trade association. “though the CPUC had imposed a ban on communications regarding the Biennial Resource Plan Update (BRPU). The Aspen Institute. an Edison lobbyist was added to the international travel party at the last minute. to meet with CEOs of the electricity industry.167 junket visiting London. 1994/1995 Stakeholder Gift Information for CPUC President Daniel Fessler From 3/16/94 to 3/27/94. and environmental groups to discuss the British experience with deregulation of electricity. regulators. The California Mining Association took him out for an evening of recreation and dinner costing $89. was very interested in California moving to the UK-style. CO. and Paris. 1996. According to investigative writer Peter Asmus. Brussels. Edison. 4 ERG Master’s Project Mark Stout 179 . a clean power auction the CPUC repeatedly postponed upon the urging of the utility. for $610. The Large Public Power Council. Another non-profit organization. spent $1402 to fly Fessler to Charleston. government ministers.WEST. paid $1. by the California Foundation on the Environment and the Economy. a trade association for publicly owned utilities. one of CFEE’s funders. The Energy Foundation flew him to Colorado twice for “Future of Utilities” and “Utility Futures IV” meetings.by the California Foundation on the Environment and the Economy.051 to fly the President out to New York City for a ConEdison Management Conference.

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

000 in each of Chevron. wholesale PoolCo model. He left office on February 23. In 1995. 1994/1995 Stakeholder Gift Information for Commissioner Jesse Knight.000 in each of Central & Southwest Corp. utility and General Electric stock. He does own less than $10. government ministers. and environmental groups to discuss the British experience with deregulation of electricity. Brussels. Conlon was taken on a $7. Unocal. 1995. one of CFEE’s funders. ERG Master’s Project Mark Stout 181 . and less than $10. 1994/1995 Stakeholder Gift Information for Commissioner Norm Shumway In February of 1994. Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. and Schlumberger oilfield services stock. PG&E had him out to three meals for $71.1994/1995 Stakeholder Gift Information for Commissioner Gregory Conlon From 3/16/94 to 3/31/94. was very interested in California moving to the UK-style. by the California Foundation on the Environment and the Economy. 1994/1995 Stakeholder Gift Information for Commissioner Henry Duque Duque did not report any electricity deregulation stakeholder gifts in 1994 or 1995.167 junket visiting London. He does own more than $10.000 in each of Montana Power Company and Exxon stock. 1994/1995 Stakeholder Gift Information for Commissioner Josiah Neeper Knight did not report any electricity deregulation stakeholder gifts in 1994 or 1995. spending $258. and Paris. regulators. Edison. the Northwest Electric Light and Power Association flew Shumway to their 3rd annual Non-Utility Generation Conference. The Edison Electric Institute spent $279 to fly the Commissioner to a conference on the results of State Competition in Boca Raton. Jr. to meet with CEOs of the electricity industry.

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