"Terrible" is how Bob Foster, Southern California Edison's former president, sums up the state's experience with electricity industry deregulation. "It's not a commodity that lends itself to complete deregulation at the retail level." A decade ago, Edison was dragged into deregulation kicking and screaming. With Foster as chief negotiator, however, the utility ended up supporting the plan once the state and regulators agreed to a full payoff of utility stranded assets. That is, when utilities were forced to compete, ratepayers were obligated to pay for all of the utility investments - mainly in nuclear power plants - to allow them to come to the market without baggage, like their new competitors. "What people tend to misunderstand is that when they look at restructuring in California they think of the Legislature and AB 1890," Foster recalled. "What they forget is that the California Public Utilities Commission in 1994 laid out a plan to deregulate electricity by 1995 in its Blue Book. On December 20, 1995, the CPUC adopted deregulation." Foster, now mayor of Long Beach, said that Edison and other utilities opposed the CPUC plan. He said the utility, in particular, did not want to divest its gas-fired power plants, leaving it to rely on the market for purchasing much of its power. The Legislature jumped into the fray, Foster recalled, to improve the plan and to provide better consumer protections. By all accounts, Foster was integral to the legislation - staying up nights during the "Peace Death March," subsisting on M&Ms and caffeine, to shape the legislation to Edison's best interest. Since deregulation backfired in the 2000-01 energy crisis, energy policy for utilities has been a mix of deregulation and reregulation. Foster said this mix needs to be improved. "One of the problems in California is you have these vestiges" of both systems, he said. For instance, Foster cited the state's decision during the crisis to freeze rates for customers consuming up to 130 percent of electricity baseline usage. The result, he said, is that most of the incremental costs of meeting new power demand - including transmission, distribution, and generation - are placed on the biggest residential users, who now pay up to 45 cents\/kWh for power. The state's electricity market also remains clouded by "distrust" stemming from the crisis, according to Foster. Independent power producers are worried that they will not be able to recover unexpected costs when they enter long-term supply contracts with utilities. On the other hand, utilities are worried that independent producers will stick them with costs not anticipated in supply contracts. To solve this problem, Foster urged the CPUC to set new policies that will allow both parties to recover their full costs from ratepayers. "That marriage is what you need," he said.