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----- Forwarded by Jeff Dasovich/NA/Enron on 03/28/2001 11:04 AM ----- Jean Munoz <jmunoz@mcnallytemple.com< 03/27/2001 08:53 PM To: Katie Kaplan <kaplan@iepa.com<, "'Andy Brown (E-mail)'" <ABB@eslawfirm.com<, "'B Brown Andy (E-mail)'" <andybrwn@earthlink.net<, "'Baker Carolyn (E-mail)'" <cabaker@duke-energy.com<, "'Bob Escalante (E-mail)'" <rescalante@riobravo-gm.com<, "'Bob Weisenmiller (E-mail)'" <rbw@mrwassoc.com<, "'Curtis Kebler (E-mail)'" <curtis_l_kebler@reliantenergy.com<, "Dean. Nistetter (E-mail)" <Dean.Nistetter@dynegy.com<, "'Douglas Kerner (E-mail)'" <DKK@eslawfirm.com<, "'Greg Blue (E-mail)'" <gtbl@dynegy.com<, "'Jan Smutny-Jones (E-mail)'" <smutny@iepa.com<, "'Jeff Dasovich (E-mail)'" <Jeff.Dasovich@enron.com<, "'Joe Ronan (E-mail)'" <joer@calpine.com<, "'John Larrea (E-mail)'" <john.g.larrea@williams.com<, "'John Stout (E-mail)'" <John_H_Stout@reliantenergy.com<, "'Julee Malinowski-Ball (E-mail)'" <jmball@ns.net<, "'Kassandra Gough (E-mail)'" <kgough@calpine.com<, "'kent Palmerton (E-mail)'" <kent.palmerton@williams.com<, "'Lynn Lednicky (E-mail)'" <lale@dynegy.com<, "Marie Moretti (E-mail 2)" <mmoretti@mccabeandcompany.net<, "'Marty Wilson (E-mail)'" <mwilson@pstrategies.com<, "'McNally Ray (E-mail)'" <rmcnally@mcnallytemple.com<, "''Nam Nguyen' (E-mail)'" <nam.nguyen@powersrc.com<, "'Norton Kelli (E-mail)'" <knorton@mcnallytemple.com<, "'Paula Hall-Collins (E-mail)'" <paula.hall-collins@williams.com<, "'Pigott Jack (E-mail)'" <jackp@calpine.com<, "'Richard Hyde (E-mail)'" <rwhyde@duke-energy.com<, "'Roger Pelote (E-mail)'" <roger.pelote@williams.com<, "'Stephanie-Newell (E-mail)'" <stephanie-newell@reliantenergy.com<, "'Sue Mara (E-mail)'" <smara@enron.com<, "'Tom Ross (E-mail)'" <tross@mcnallytemple.com<, "Tom Williams (E-mail)" <tcwillia@duke-energy.com<, "'Alex Sugaoka (E-mail)'" <alex.sugaoka@uaecorp.com<, "'Bill Carlson (E-mail)'" <william_carlson@wastemanagement.com<, "'Bill Woods (E-mail)'" <billw@calpine.com<, "'Bob Ellery (E-mail)'" <bellery@spi-ind.com<, "'Bob Gates (E-mail)'" <bob.gates@enron.com<, "'Cody Carter (E-mail)'" <cody.carter@williams.com<, "'Curt Hatton (E-mail)'" <Curt.Hatton@gen.pge.com<, "'David Parquet'" <david.parquet@enron.com<, "'Dean Gosselin (E-mail)'" <dean_gosselin@fpl.com<, "'Doug Fernley (E-mail)'" <fernley.doug@epenergy.com<, "'Duane Nelsen (E-mail)'" <dnelsen@gwfpower.com<, "'Ed Tomeo (E-mail)'" <ed.tomeo@uaecorp.com<, "'Eileen Koch (E-mail)'" <eileenk@calpine.com<, "'Eric Eisenman (E-mail)'" <eric.eisenman@gen.pge.com<, "'Frank DeRosa (E-mail)'" <frank.derosa@gen.pge.com<, "Frazier Blaylock (E-mail)" <frazier_blaylock@ogden-energy.com<, "'Hap Boyd (E-mail)'" <Hap_Boyd@enron.com<, "'Hawks Jack (E-mail)'" <jack.hawks@gen.pge.com<, "'Jim Willey (E-mail)'" <elliottsa@earthlink.net<, "'Joe Greco (E-mail)'" <jgreco@caithnessenergy.com<, "'Jonathan Weisgall (E-mail)'" <jweisgall@aol.com<, "'Kate Castillo (E-mail)'" <CCastillo@riobravo-gm.com<, "'Kelly Lloyd (E-mail)'" <kellyl@enxco.com<, "'Ken Hoffman (E-mail)'" <khoffman@caithnessenergy.com<, "'Kent Fickett (E-mail)'" <kfickett@usgen.com<, "'Lynn Lednicky (E-mail)'" <lynn.a.lednicky@dynegy.com<, "'Marty McFadden (E-mail)'" <marty_mcfadden@ogden-energy.com<, "'Paula Soos'" <paula_soos@ogden-energy.com<, "'Randy Hickok (E-mail)'" <rjhickok@duke-energy.com<, "Rick S. Koebbe (E-mail)" <rskoebbe@powerworksinc.com<, "'Rob Lamkin (E-mail)'" <rllamkin@seiworldwide.com<, "'Ross Ain (E-mail)'" <ain@worldnet.att.net<, "'Steve Iliff'" <siliff@riobravo-gm.com<, "'Steve Ponder (E-mail)'" <steve_ponder@fpl.com<, "'Tony Wetzel (E-mail)'" <twetzel@thermoecotek.com<, "'William Hall (E-mail)'" <wfhall2@duke-energy.com<, <trusso@mcnallytemple.com< cc: Subject: Initiative Campaign Strategy Outline The following memo is for discussion during our Wednesday public affairs committee meeting. Thanks! Jean March 26, 2001 MEMORANDUM To: IEP Fr: Ray McNally, Richard Temple, Tony Russo, Jean Munoz, Tom Ross Re: Initiative Campaign Strategy Outline Harvey Rosenfield has on numerous occasions threatened to place an initiative on the 2002 ballot to re-regulate the power industry. It is not a hollow threat. Not only has Rosenfield successfully placed initiatives on the ballot in the past, but the current energy crisis has become the number one issue on the minds of voters dd making it easier to qualify a ballot measure. And our own internal polling for IEP shows voters would initially support the concept of re-regulating the industry. However, qualifying an initiative for next year?s election is not a foregone conclusion. And passing one is an even more difficult task. Rosenfield faces several roadblocks: o The current energy issue is complicated, and all potential solutions have weaknesses that could be exploited in a political campaign. o IEP?s internal polling shows Rosenfield?s proposal has weaknesses that could be exploited dd including the price tag and the image of a state-run energy department that could be compared to the DMV and CalTrans. o Rosenfield would have a difficult time funding a campaign, especially raising the resources to overcome a strong, well funded "no" campaign. o The burden of "proof" always falls on the "yes" campaign rather than the "no" campaign. Voters are concerned about giving their approval to changes that could make things worse. Rosenfield will have to prove his case beyond a shadow of a doubt, and therefore it is easier to defeat an initiative than it is to pass one. o If power generators become motivated they can be a formidable opponent. Following is (1) a preliminary timeline Rosenfield would face in trying to qualify an initiative for the ballot in 2002, (2) strategic concepts that should be considered before pursuing a plan to defeat the initiative, (3) preliminary strategic and tactical options in opposing the initiative, and (4) a discussion of campaign costs. We recommend using this outline as a starting point to develop an effective campaign plan that could successfully defeat Rosenfield if he pursues an initiative strategy. Timeline To date, no proposed ballot initiative has been submitted to the Attorney General for title and summary. Accordingly, there is not sufficient time available to qualify an initiative for the March 2002 ballot. However, there is still adequate time to qualify a measure for the November 2002 ballot. We believe Rosenfield could submit a measure to the Attorney General as late as September, 2001 and still qualify the initiative for the November 2002 ballot dd especially if the summer months produce power blackouts, skyrocketing energy bills, and the image of a bungling Governor, legislature and regulators. The following timeline would allow Rosenfield to submit language for title and summary as late as September 28, 2001 and qualify the initiative for the November 2002 ballot: September 28, 2001 Proposed measure is submitted to the AG for title and summary. November 20, 2001 Attorney General prepares and issues title and summary. Proponent can begin circulating petitions. April 19, 2002 The proponent files the petitions with county elections officials. May 1, 2002 County elections officials complete petition raw count totals and certify raw numbers to the Secretary of State. June 23, 2002 County elections officials verify and certify results of the number of valid signatures in their counties and turn in counts to the Secretary of State. June 27, 2002 Secretary of State determines if the initiative qualifies for the ballot. Proponent needs 670,816 valid signatures to qualify a constitutional amendment or 419,260 valid signatures to qualify a straight statute. Strategic Concepts There are several strategic concepts that should be reviewed: o While satisfying Rosenfield may be impossible, IEP could push hard to ensure a "solution" is passed by the legislature to give credibility to the criticism that Rosenfield is an extremist whose initiative could undercut the legislative remedy. o The industry could organize a well-funded campaign that contains an early advertising blitz to quickly define the ballot measure in the most negative manner possible, and that delivers a knock out punch in October. o Generators could promote a counter-initiative proposal, either through the legislature or qualified by petition dd stopping Rosenfield?s proposal if more "yes" votes are received for the counter initiative than the Rosenfield measure. o Paid signature gathering firms could be put on contract for industry-related business dd thus keeping these firms off the table for Rosenfield. Another variation would be to hire firms to gather signatures calling for legislative action dd thus gaining names of voters who support our position, but also keeping signature gatherers too busy to help Rosenfileld. o The industry could pay to gather signatures on petitions that removes names of people who may have signed the petition for Rosenfield?s initiative. This could cut down the number of valid signatures accepted by county election officials. o A paid advertising campaign could be run during the proposal?s signature gathering phase urging voters not to sign the petitions. An added benefit of the concept is defining the proposal early if it still qualifies for the ballot. o We could organize a legal assault on the proposal dd stopping their signature gathering efforts or keeping it off the ballot. Campaign Strategy If the proposal qualifies for the ballot, the industry must pursue an aggressive strategy to defeat the measure. We need to identify weaknesses in the proposal and share those weaknesses with voters. We must also push voters to question the motives behind the initiative. We need to make sure voters are uncomfortable with all or portions of the initiative to ensure they vote no despite wanting adequate and affordable energy. The campaign should conduct thorough research to determine the best strategy to defeat the measure. Initially we believe the "no" campaign should focus on testing and developing the following messages: o The measure will hurt taxpayers. A $40 billion price tag is too much for voters to accept as the only solution to the problem. o The proposal will hurt public services. The cost of Rosenfield?s measure will keep money away from more important programs dd like schools, public safety and programs for children and seniors. o The ballot measure is simply a way for elected officials to get more tax dollars to cover up their failures dd and they should not be rewarded with public support. o Rosenfield?s proposal will result in higher taxes to pay for more bureaucracy and wasted tax dollars. o The proposal will result in more inefficient government that will produce unreliable power dd hurting consumers, and vital services such as hospitals and public safety. o The measure will hurt the economy and cost jobs at a time when the economy is hurting. Campaign Tactics The campaign should follow an aggressive battleplan that includes the following components: Research Focus groups and quantitative surveys should be conducted to help craft the best messages to attack the proposal. This research would also be important in efforts to secure the most favorable ballot title and summary possible to our goal of defeating it. Demographic and election research should also be conducted to determine voters most open to our campaign messages. We should also conduct thorough research on Rosenfield to expose his true motivations for proposing this measure and its inherent weaknesses. Legal, Title & Summary, and Ballot Argument Challenges We should pursue every possible legal option to either get the proposal off the ballot, or ensure the most favorable title & summary and weakened ballot arguments for the initiative sponsors. Our experience shows that the ballot title and summary can swing initial vote margins either way by as much as 10 points. Paid Advertising Statewide campaigns in California require paid advertising dd including electronic media, direct mail, and telemarketing. Advertising should be carefully targeted to ensure the most "bang for the buck." Earned Media Editorial support is an important part of successful statewide campaigns, as is ensuring favorable media coverage of the campaign. A focused earned media campaign would greatly enhance the chances for success and editorial support and Op-Ed?s can provide important third party credibility to the no campaign. Coalition Building It will be critical for the industry to gain credible allies in its fight against Rosenfield. We do not want the campaign to be portrayed as generators versus consumer groups. Therefore, we need credible, third party groups standing along side us to broaden our appeal and message, like taxpayer groups, business leaders, consumer organizations, energy experts, economists, educators, law enforcement and seniors. Campaign Costs How much will be needed to defeat Rosenfield will depend on several factors. Depending on several variables, the cost of a "no" campaign can range from a few million dollars to as much as the $40 million spent to defeat Proposition 9. Campaign costs to defeat ballot measures are contingent upon several variables: o The popularity of the measure with voters. The more they like it on the natural, the more expensive it will be to defeat the measure. o How much money Rosenfield can raise to promote the measure. If he has few resources, the "no" campaign will have an uncontested paid advertising campaign, which will make defeating the proposal much easier. o How bad the energy crisis impacts voters. If the next 15 months produce an on-going crisis, campaign costs will rise. o The effectiveness of messages against the proposal. If focus group and survey research confirm the proposal has an Achilles heel, the cost to defeat the measure will go down dramatically. Thorough research of Rosenfield?s actual proposal will better enable us to recommend a campaign plan, message and budget. In summary, defeating the Rosenfield initiative will cost from a few to several million dollars and a united industry effort.
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