STRATEGIC PLAN -- APPENDICES
California Energy Commission

Phase I

The contractor held a series of meetings with the Commissioners, Executive Management Team and other . Four major products were produced in Phase I, one of which was the "Road Map," a 20-page document that recommended an approach for the strategic planning process. It included project assumptions, a strategic planning model, goals and objectives of the three phases of the process, key participants and their roles, and an overall schedule.

The other major products from Phase I included the draft Energy Commission Mission and Vision Statements, Key Challenges and an Initial Action Agenda. The Commissioners developed and agreed on these products in a series of meetings facilitated by the contractor, including the first offsite meeting of all five Energy Commissioners.

Phase II

Also in Phase II, the Executive Management Team and the Commissioners developed and assessed alternative strategies and outcomes to achieve the vision for the future and to respond to the key challenges. This culminated with one-and-one-half days of public hearings where Commissioners, executives and stakeholders discussed the Plan, especially the strategies.

Phase III and Beyond

Implementation of the Strategic Plan must be consciously and deliberately planned, managed and budgeted. The Energy Commission will use the adopted goals and strategies to develop outcomes and action plans which identify resource requirements and allocate resources which most effectively meet the goals. Any consideration of reorganization or internal realignment will be developed in this phase.

Strategic planning does not end once strategies and plans are implemented. Ongoing strategic thinking and acting at all levels of the organization must take into account likely changes in circumstances. The Energy Commission will continue to review implemented policies, strategies, plans, programs and projects to decide on future courses of action. Desired outcomes include maintenance of good strategies, modifications of less successful ones, and elimination of ineffective strategies.

Implementation of the Strategies will require redirection of resources. These redirections will be reflected beginning with the Energy Commission's 1998-99 proposal for the Governor's Budget. The plan will be accomplished within the 1997-98 resource base.

Additional responsibilities as a result of implementation of AB 1890 and related legislation or other workload increases will result in proposed resource augmentations.

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Two approaches were used to gather stakeholder input -- focus groups and one-on-one interviews. The Resources Company was designated to conduct these efforts to ensure confidentiality and candid feedback. This appendix contains a brief summary of those focus groups and the interviews conducted.

A total of more than 40 organizations and 50 people participated.

Five half-day focus groups were held with stakeholders from a cross-section of organizations including transportation, public and private utilities, trade associations, the development community, consultants, advocacy groups, public officials, etc.

These focus groups were supplemented by individual interviews with additional organizations and key individuals the Energy Commission selected for their ability to provide specific insight into customer issues. An interview guide was developed to solicit answers to key questions useful in planning the future direction of the Energy Commission.

The primary goal of the focus groups and interviews was to solicit stakeholder feedback on the following questions:

• What are the major challenges facing the "energy industry" of California? How might those challenges impact the Energy Commission?

• What were the stakeholders' needs as customers of the Energy Commission?

• What did they see as the role of the Energy Commission in the future?

• What did they perceive as working well at the Energy Commission? How could the Energy Commission improve and change?

• Finally, what were their comments on the Energy Commission's rough draft "mission" and "vision" statements?

Major Challenges Facing the Energy Industries
and How Those Challenges Impact the Energy Commission

• Shifting the paradigm from a regulatory model to a competitive model.

• Is there a need for an Energy Commission?

• Shifting roles -- regulator to facilitator.

• Assuming a smaller role in the utilities industry.

• Shifting risk from the public to the private sector.

• Increasing Energy Commission knowledge and understanding of a free-market environment.

• Determining customer needs.

• Determining information needs and how to provide information services to its customers.

• Modifying information requests to the new market environment.

• Adapting to the restructuring of the electric industry (i.e., AB 1890).

• Reviewing the Energy Commission's oversight responsibilities and determining its new roles.

• Eliminating functional overlap and confusion between regulatory agencies.

• Balancing long-term environmental quality with near-term economic efficiency.

• Rethinking alternative energy strategies and mandates.

• Balancing the duality reflected in the Warren-Alquist Act -- that of environmentalism and energy supply.

• Increasing collaboration with other government agencies.

• Exploring and developing partnerships with public and private entities.

• The Energy Commission needs to decide how it will integrate the pieces (e.g., energy efficiency and renewable energy) under the new market economy model.

• Developing policy recommendations for a non-intrusive but effective state energy policy.

• Integrating existing policies.

• Renaming "integrated resource planning" to "strategic policy analysis."

• Considering future renewable energy issues beyond AB 1890.

• The Energy Commission needs to think about its role in transportation planning from an energy efficiency and environmental standpoint.

• Who will translate still-complex regulations into "real world" applications in a free market economy?

• How to deal with the EPA's proposal to tighten ozone levels by mandating particulate matter of 2.5 in the summer of 1997 (encouraging the use of natural gas)?

• The issue of "retrofitting" must be addressed in terms of whether or not it is worth doing and, if so, what are the appropriate incentives to encourage industry to do so?

The Energy Commission's Role in the Future Should be to:

• Support and facilitate consumer choice and a competitive energy market.

• Act as the Governor's and Legislature's policy adviser on broad, global, national and state energy-related issues.

• Continue to evaluate and assess state energy policies in light of the national and international energy market.

• Be an independent third party in the energy process.

• Provide selected information and data needed by customers -- industry, public consumer and policy makers.

• Facilitate and expedite the siting of power plants while balancing public needs.

• Serve as a "one stop shop" for siting.

• Continue to guarantee energy efficiency by ensuring that adequate research and development funding exists and appropriate partnerships are created.

• Encourage the renewables market and alternative energy technologies.

• Focus on existing commercial and industrial construction for energy efficiency.

• Provide state-wide, energy-related emergency contingency plans.

• Reevaluate forecasting programs and efforts and redirect them to meet the needs of specific organizations (i.e., small businesses).

• Work with the air districts to capitalize on the public's concern for clean air in order to get additional support for energy efficiency.

• Redefine the Energy Commission's role regarding energy issues and usage.

• Take the leadership role in re-engineering the local, state and federal agencies' involvement in energy in order to reduce redundant programs. Clarify overlapping functions and jurisdictions with the objective of streamlining and improving efficiency.

• Serve as an independent arbitrator in resolving market disputes that might impact the provision of adequate power to meet public needs.

• Work in partnership with local regulatory and land use agencies (i.e., city, county and regional planning commissions) in order to maximize effective use of limited energy resources.

• Assess the economic case for renewables.

What is Working Well at the Energy Commission

• Perceived as doing a good job implementing AB 1890 so far.

• Acts as an historical resource and clearinghouse for energy data.

• Recognized as having made major efforts in increasing energy efficiency (i.e., through consistent building code standards).

• The standards set by the Energy Commission are well balanced.

• The ongoing allocation of renewable funds is viewed as a success.

• Established credible forecasts.

• Perceived as having effective emergency plans that are seen as necessary and important.

• Overall, external and internal communications at the Energy Commission are viewed as improving (i.e., the website is a good information source).

• Commissioners are accessible and willing to make decisions.

• The siting licensing process has been improved and streamlined.

• Recognized international leader in establishing energy policies and programs.

• Over the last several years, the Energy Commission staff and management have been perceived as becoming better customer-service oriented.

• Presented programs that show a good balance between public and industry interests.

• Perceived as being fairly politically independent.

• Staff perceived as having good technical expertise, tools, methodologies, and models.

• Use of information technology has increased the public access to Energy Commission information -- Web site.

How the Energy Commission Could Improve

• The Energy Commission is involved in areas outside its core business functions (e.g., International Energy Fund, forecasting, transmission issues) and should not be doing some of these activities.

• There are too many public entities, like the Energy Commission, compiling the same data and asking industry to supply the raw data. (redundancy)

• Needs to analyze the functionality, usefulness and impacts on the customer before compiling the data for a report.

• There is regulatory and jurisdictional overlap between governmental agencies and a need to clarify and streamline roles and responsibilities.

• In the new market environment, inefficiencies of this sort will be passed on in higher prices to the consumer.

• Commissioners and staff are inconsistent in their responses to stakeholders' questions regarding energy policies and procedures.

• There is poor communication at the Energy Commission's upper levels (Commissioners, management and staff).

• Staff appears to circumvent the Commissioners.

• Needs to interface more effectively with other state departments.

• CPUC and Energy Commission energy policies seem inconsistent.

• There has been strong support for focus group and other alternative public input processes.

• The "public" outreach and feedback process needs significant improvement.

• Numerous Energy Commission mandates are dated, need to be changed or are not fully implemented.

• The Energy Commission has no overall, integrated strategy or policy framework.

• Needs to increase its public and private partnerships with local special (Air) districts.

• Organizational structure, itself, appears fragmented across programs, giving the impression that the Energy Commission does not understand, or is not in a position to handle, the "big" picture.

• Energy Commission has limited jurisdictional authority and funding.

• Contracting for professional services needs improvement.

• There is a need to continually improve staff and management competencies and performance.

• Should increase the use of information technology to improve customer service -- electronic filing of permits and applications has been well received.

• There is a critical need to evaluate the usefulness of existing Energy Commission publications and reports with external users.

External Stakeholder Participants

• Tom Adams, Program Manager, Proven Alternatives, Inc.
• Aeron Arlin, Environmental Coordinator, Western States Petroleum Association
• Carl Blumstein, UC Energy Institute
• Del Bosowski, Modesto Irrigation District
• Cheryl Carter, Natural Resources Defense Council
• Gary Clifford, Manager, Energy Services Western Region, Cenerprise
• Jack Coffey, Manager, California State Relations, Chevron Company
• Jim Cole, Executive Director, California Institute for Energy Efficiency
• Dennis DeCota, Executive Director, California Service Station and Automotive Repair Association
• Marcie Edwards, Director of Bulk Power, Los Angeles Department of Water and Power
• Eric Eisenman, Manager, California Marketing, Pacific Gas Transmission Company
• Jim Fieder, Regional Manager, Western Area Power Administration
• John Fielder, Vice President, Regulatory Policy and Affairs, Southern California Edison
• Jesse Fredericks, President, Consumers Utility Brokerage Inc.
• Mike Gable, Board Member, California Association of Building Energy Consultants
• Peter Guisasola, President, California Building Officials
• Fred John, Senior Vice President, Public Policies and Law, Pacific Enterprises
• Gerald L. Jordon, Executive Director, California Municipal Utility Association
• Robert Kuntz, Ph.D., President, California Engineering Foundation
• Jody London, Director, Working Assets Inc.
• Gavin McHugh, Manager, Public and Government Affairs, Texaco Refining and Marketing
• Carl Moyer, Chief Scientist, Acurex Environmental
• Christina Nagy-McKenna, Director, CPUC Gas Regulatory Policy & Analysis, Pacific Gas and Electric Company
• Alvin Pak, Senior Counsel, Regulatory Relations, Electric Power Research Institute
• John Patton, Director, County of Santa Barbara Planning and Development
• Mark Pisano, Executive Director, Southern California Association of Governments
• Robert Raymer, Technical Director, California Building Industries Association
• William Reed, Vice President, Regulatory Affairs, San Diego Gas & Electric Company
• Steve Robinson, Sales Engineer, Viron Energy Services, Inc.
• Rick Shapiro, Vice President, Government Affairs, ENRON
• Rich Sommerville, Director, San Diego Air Pollution Control District
• Juleen Stenzel, Senior Labor Relations Representative, California State Employees Association
• William Stevens Taber, Jr., Chairman, Princeton Development Corporation
• Allen Thompson, Attorney at Law
• Mark Timmerman, Lobbyist, California Manufacturers' Association
• Kathy Treleven, Assistant to Vice President for Policy Coordination, Pacific Gas and Electric Company
• Emilio Varanini, Senior Partner, Marron, Reed & Sheehey
• Phil Vermeulen, Silk Roads Ltd.
• Gregory Vlasek, Executive Director, California Natural Gas Vehicle Coalition
• Barry Wallerstein, Deputy Executive Director, South Coast Air Quality Management District
• Tom Willoughby, Manager, State Government Affairs, Pacific Gas and Electric Company
• Terry Woolsey, Senior Energy Adviser, Region 9, EPA
• Eric Woychik, President, Strategy Integration (and UCAN)
• Bill Woods, Calpine Corporation

In November 1996, the Strategic Planning Management Team (SPMT) distributed a detailed questionnaire to more than 500 Energy Commission employees (from students to Commissioners). The survey was based upon questionnaires developed by the Energy Commission's consultant, The Resources Company. The SPMT was instructed to maintain confidentiality of the responses so that the Energy Commission would receive candid feedback. The survey contained 56 questions in the following areas:

• What are the key functions and program activities that are working well?
• What are the Energy Commission's strengths or assets?
• What makes the Energy Commission different and unique?
• What are the most critical challenges and issues facing the Energy Commission?
• What are the most obvious opportunities for the Energy Commission?
• What should be changed about the Energy Commission?
• What are the potential "barriers" or weaknesses facing the Energy Commission?
• Comments on the Energy Commission's mission, vision, programs and services.
• Comments on the Energy Commission's responses to stakeholders.
• Comments on the Energy Commission's use of information technology.
• Comments on Commission-wide decision making and management.
• Comments on the work environment.
• Any other issues that employees would like to see addressed as part of the strategic planning process.

In response to the overall "Roles and Goals" developed by the Commissioners, division and office staff also became directly involved in the drafting of proposed strategies for consideration in completing the Strategic Plan.

The following is a summary of the staff survey comments.

Key Strengths and Assets

• Dedicated, committed, knowledgeable, intelligent, experienced, skillful, and/or remarkable staff and management.

• Strong analytical ability.

• Professional expertise in energy issues.

• A credible source of information on energy efficiency technology and financing.

• Effective siting and monitoring procedures for new energy facilities.

• Building and appliance efficiency standards -- the attempt to simplify and improve.

• RD&D functions, contracts and program activities that seem to stay current.

• A respected source of independent data collection analysis and policy development.

• An ability to balance private market efficiency with public policy goals.

• Premier expertise in modeling electrical systems operations and transmission.

• Participation in restructuring leadership in AB 1890/Restructuring/CPUC activities.

• Public input-gathering process/providing a forum/developing consensus.

• National reputation as the leader in energy policy issues and energy programs.

• Open public process -- facilitating disputes, mediating compromises among differing parties.

• Bert Fegg humor is alive and well.

• The ability to bring together analysts from different market areas to discuss common or overlapping problems, allowing for a dialogue between analysts related to how energy markets interact.

• Energy Commission managers, from Commissioners on down, are willing to back professional staff in controversial situations to the extent of taking professional risks, if necessary.

• The Energy Commission structure and its implementation has been conducive to interaction with energy stakeholders and the public to achieve balanced public policies and regulations.

• Uniquely positioned to provide public education services if appropriate programs are put into place.

• The Energy Commission will be the only repository of total energy consumption data.

Key Challenges and Themes

1. Strategic Direction
   • Strategic Planning -- Mission/Vision -- needs to be clear and communicated to all.
   • Mission/Vision need to incorporate "new" mission of restructured industry.
   • Mission/Vision need to be linked to leadership and decision making.
   • Mission/Vision need to be related to "reinventing" and reorganizing the Energy Commission.
   • Mission/Vision need to reflect specific program review and suggestions.

   
   
2. Management of Change
   • Need better response to accommodate and adjust to changes and uncertainty.
   • The Energy Commission is too "risk averse" -- we need to be more proactive about how we approach change.
   • Lack of clear priorities -- gets in the way of effectively responding to change.
   • Need more training to help us better manage the change process.

   
   
3. The Commission Roles and Responsibilities
   • Need to define new roles in AB 1890 and "restructuring."
   • Need to update and clarify current roles of the Energy Commission.
   • Need to address and clarify internal operating roles -- i.e., Commissioners and Executive Office.

   
   
4. Mandates
   • Old vs. New -- need to update Warren-Alquist mandates to better reflect changes.

   
   
5. Funding
   • Diminishing and uncertain -- need to explore options.
   • Need Governor's Office and Legislative support.
   • Link strategic planning to Budget Change Proposals.

   
   
6. Commission Organization Effectiveness
   1. Structure
      • Need to clarify internal roles and responsibilities.
      • Need to address and decide internal reorganization issues -- Energy Commission or department question? New organization structure question?
      • Need for better coordination and team emphasis -- "Unified."

      
      
   2. Management
      • Need to clarify internal roles and responsibilities.
      • Need to improve leadership, priority setting and decision making. (need clear priorities and accountability).
      • Need for better people management.
      • Need to improve internal and external communications.
      • Need to cut bureaucracy and streamline processes (i.e., decision making).

      
      
   3. Operations
      • Need better performance feedback and recognition of staff.
      • Need to improve internal communications with staff.
      • Need more training and development -- dollars and support.
      • Need to cut bureaucracy and streamline processes and procedures.
      • Need to improve how technology and computer services are used.

      
      
7. Commission Stakeholder Relations
   1. External
      • Need to improve getting the message out -- better communications/access.
      • Need to assure greater recognition of our value by stakeholders.
      • Need to have better coordination and improve external partnerships.

      
      
   2. Internal
      • Need to find ways to get greater involvement of Energy Commission staff -- all levels.
      • Need for better communication and feedback loops.

      
      
8. Commission Expertise
   • Need to maintain the high caliber staff and high level of technical expertise.
   • Need to better utilize the staff expertise and experience.
   • Need to keep current on developing technical expertise.

The Commissioners appoint an Executive Director who manages a staff currently organized in five divisions:

• Energy Information and Analysis Division, which is responsible for collecting and analyzing data on energy demand and supply options, and planning for and directing the state's response to energy emergencies.

• Energy Technology Development Division, which is responsible for developing alternative energy technologies.

• Energy Efficiency Division, which is responsible for promoting energy efficiency.

• Energy Facility Siting and Environmental Protection Division, which is responsible for licensing power plants and providing environmental expertise to other Commission programs.

• Administrative Services Division, which provides administrative support to the Energy Commission.

• Office of Governmental Affairs, which develops proposed legislation and provides analysis of energy related legislation.

• Office of Media and Public Communications, which provides news and information to the public on Energy Commission programs, and administers the Commission's Internet site.

• Chief Counsel's Office, which provides legal support to the staff and Commissioners.

• Hearing Officers' Office, which provides attorneys to serve as hearing officers to assist the Commissioners in conducting quasi-adjudicatory proceedings.

Over the last 10 years, a substantial amount of federal funds have been provided to California from the Petroleum Violation Escrow Account (PVEA), and much of that has been included in the Energy Commission's budget on a pass-through basis. The PVEA funds are money paid by oil companies as restitution for overcharging U.S. consumers from 1973 to 1981 during a period of oil price controls. Since 1986, $294 million in PVEA funds were appropriated to the Energy Commission, which were passed through to recipients in the state.

The Energy Commission's total budget was approximately $72 million for the current fiscal year (FY) 1996/97. A large portion of these funds were passed through to support business and government energy projects ($33 million), while the remainder were for the Energy Commission's personnel and operating expenses ($39 million). These resource levels will begin to increase in FY 1997/98 with additional funding to support electricity research and development and the state's renewable energy industry. The overall budget for 1997/98 is expected to be $122 million, with $81 million for pass-through projects and $41 million for other program support, including personnel and operating expenses. Currently, the Energy Commission has 472.3 authorized positions. The Governor's Budget for Fiscal Year (FY) 1997/98 reflects the Energy Commission's funding levels and positions as summarized below:

Goal
A long-term target that states what the organization wants to accomplish.

Leadership
Leadership is the art of mobilizing other to endeavor for shared aspirations. Leaders perform political, spiritual and intellectual functions as-well-as managerial and group-maintenance tasks. It's doing the right things.

Mission Statement
A statement of organizational purpose. It reflects the reason for the agency's existence.

Outcome
A measurable result or accomplishment that indicates success or progress in implementing the organization's strategies and reaching its goals.

Performance Measure
A means of objectively assessing the results of programs, products, projects, or services. It is the quantified result to be achieved. It provides a basis for assessing successful achievement of the agency mission, goals and objectives.

Role
A key function of the organization or what it is here to do.

Stakeholder
Any person, group or organization that can place a claim on an organization's attention, resources or output, or is affected by that output.

Strategic Planning
A disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does and why it does it.

Strategy
The approach or means by which an organization intends to accomplish a goal.

Teamwork
Teamwork represents a set of values that encourages behavior such as listening and constructively responding to points of view expressed by other , giving other the benefit of the doubt, providing support to those who need it and recognizing the interests and achievements of other . Teamwork encourages and helps teams and organizations succeed, but teamwork alone never makes a team.

Values Statement
A description of the code of behavior -- in relation to employees, other key stake-holders, and society at large -- to which an organization adheres or aspires.

Vision Statement
A description of what an organization will look like if it succeeds in implementing its strategies and achieves its full potential. It is an ideal and unique image of the future.

Well Functioning Energy Markets
Fair and efficient well-functioning energy markets have the following four basic characteristics:

• Workable competition that motivates rival sellers to supply a variety of energy related goods and services, including different levels of energy efficiency, that satisfy diverse customer needs and circumstances at competitive prices.

• A customer friendly information environment in which customers can readily obtain and process trustworthy information that enables them to reliably compare the prices and energy related qualities of different products offered by rival suppliers.

• A positive legal and regulatory enforcement infrastructure that
  • minimizes undue barriers to the entry of new energy service suppliers, provides for internalization of environmental damages in competitive prices, in order to balance mitigation and damage costs.
  • where necessary, provides for expeditious redress of legitimate customer complaints about defective energy related goods and services.

• A positive and innovative learning environment where all the market's characteristics, taken in their entirety, motivate rival entrepreneurs to compete by innovatively discovering heretofore untapped energy and energy efficiency opportunities. It empowers customers to learn how new more energy efficient products and practices may better satisfy their needs and circumstances.

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