5. Reasonableness of Requested Compensation

UCAN requests compensation for its participation in this proceeding, as follows:

Advocate	Year	Rate	Hours	Total
Shames
	2005	$310	4.2	$ 1,302
	2006	$310	282.7	$ 87,637
	2007	$310	76.1	$ 23,591
Subtotal for Shames			363	$112,530
Marcus	2006	$220	44.84	$ 9,865
	2007	$235	0.92	$ 216
Schilberg	2005	$150	4.47	$ 670
	2006	$175	307.49	$ 53,811
	2007	$185	37.35	$ 6,910
Nahigian	2005	$140	4.5	$ 630
(January to March)	2006	$155	3.5	$ 543
(April to December)	2006	$165	324.6	$ 53,559
	2007	$175	57.85	$ 10,124
Ruszovan	2006	$165	25.3	$ 4,175
Smart Grid Study				$211,000
Miscellaneous				$ 2,258
TOTAL				$466,291

UCAN's calculations result in the slightly different amount of $466,309.41. We will base our calculations on the corrected requested amount in the table above. In general, the components of this request must constitute reasonable fees and costs of the customer's preparation for and participation in a proceeding that resulted in a substantial contribution. The issues we consider to determine reasonableness are discussed below.

5.1. Hours and Costs Related to and Necessary
for Substantial Contribution

We first assess whether the hours claimed for the customer's efforts that resulted in substantial contributions to Commission decisions are reasonable by determining to what degree the hours and costs are related to the work performed and necessary for the substantial contribution.

UCAN documented its claimed hours by presenting a daily breakdown of the hours of its attorney and witness, Shames, accompanied by a brief description of each activity.

UCAN provided monthly invoices of the hours worked by its consultant, JBS Energy, Inc. (JBS). The JBS invoices provide only a total for the hours billed for the proceeding, but do not sufficiently specify the time period for which the invoice applies or the tasks and work performed during that time period. We will award full compensation of the hours requested for each of UCAN's consultants. UCAN is cautioned that in the future additional specificity of description of the services rendered is necessary for the hours claimed by its consultants, similar to the documentation it provided for attorney Shames. In summary, we will award compensation for $460,324.

5.2. Hourly Rates

We next take into consideration whether the claimed fees and costs are comparable to the market rates paid to experts and advocates having comparable training and experience and offering similar services.

UCAN seeks an hourly rate of $300 for work performed by Shames in 2005. We previously approved this rate for work performed by Shames in 2005 in
D.06-01-034. UCAN seeks an hourly rate of $310 for work performed by Shames in 2006 and 2007. We approved this rate in D.07-04-029 for 2006. UCAN asks that this $310 rate also be used for 2007 work performed by Shames in this proceeding, if the 4.2 hours (out of 363 total hours) performed in 2005 is compensated at the 2006 rate. Alternatively, UCAN seeks a 3% increase from 2006 rates for 76.1 hours of 2007 work (i.e., from $310 to approximately $320). While an increase for 2007 may be appropriate, we find it reasonable to accept UCAN's offer for a lower total amount, and compensate all of Shames' work at $310/hour.

UCAN seeks to use the hourly rates of JBS consultants William Marcus, Gayatri Schilberg, Jeffrey Nahigian, and Greg Ruszovan already approved by the Commission in cases in 2006 and 2007. The rates UCAN seeks are consistent with previous Commission decisions and are adopted here, except:

a. The requested hourly rate for Marcus in 2007 ($235) is higher than the previously approved rate. We will allow the approved $220/hour rate (D.08-01-038). This change reduces the total by $14,

b. The requested hourly rate for Nahigian for 2007 ($175) is higher than the previously approved rate. We will use the approved 2007 hourly rate of $165 (D.08-01-038). This change reduces the total by $579, and

c. The requested hourly rate for Schilberg for 2007 ($185) is higher than the previously approved rate. We will use the approved 2007 hourly rate of $175 (D.08-04-014) instead of the requested $185. This change reduces the total by $374.

The total adjustment for hourly rates is $967.

5.3. Smart Grid Study Expenses

UCAN is also seeking $206,000 (modified from its original request of $211,000) in compensation for its share of the costs of the University of San Diego (USD) Smart Grid study. The study was jointly sponsored and paid for by UCAN and SDG&E. UCAN states it entered into the contract with USD for purposes of presenting the report to the Commission in the Long-Term Resource Planning proceeding. However, due to changes in schedules, UCAN submitted the report in this proceeding in Shames' testimony and elsewhere.

UCAN acknowledges that it is unusual to submit a joint report in Commission hearings sponsored by both sides. However, UCAN claims it did so in order to effectuate a common technical baseline for informed debate and to inform regulators of this knowledge baseline. UCAN submits that the joint report model as part of a contested proceeding is a model the Commission should support and encourage.

SDG&E supports the UCAN request related to the USD study for three reasons. First, SDG&E says it would not have contracted for the study in the absence of UCAN's advocacy. Second, the study was directly utilized in the settlement of the proceeding. Finally, SDG&E claims the study has proven useful to SDG&E's TAP which was formed as a part of the settlement in this proceeding.

SDG&E presented documentation that it directly paid $156,000 for its portion of the study's costs and was credited another $50,000 for work directly contributed by SDG&E staff. SDG&E's total contribution was $206,000, the same amount that UCAN is seeking here. SDG&E states that SDG&E and UCAN reached an agreement to split the costs of the study through informal verbal exchanges, formalized through the final agreements with USD. UCAN documented its costs of $211,000, later corrected to be $206,000, through invoices from USD. These invoices are consistent with UCAN's subcontract agreement with USD.

We turn to the reasonableness of UCAN's costs of the study (half of the total costs of the study). The study in this proceeding is atypical in that it is not a study of the specific project proposed in the application, advanced meters, but a study of a much broader proposal, for a smart grid, which contains many features well beyond the scope of this proceeding.

Given the limited applicability of the study to SDG&E's AMI proposal, and the limited use of the study in crafting the settlement and the advanced meter program adopted by the Commission, and other concerns specified above, we do not approve UCAN's request for $206,000 in compensation for the USD study. We note that SDG&E's co-funding of this study likely results in ratepayers already paying half of the study costs. We encourage UCAN and other intervenors to indicate the likeliness of any similar study in the future in the NOI.

5.4. Direct Expenses

The itemized direct expenses submitted by UCAN include costs for travel, photocopying, postage, and telephone. The total is $2,258.10. The cost breakdown included with the request shows the miscellaneous expenses to be commensurate with the work performed. We find these costs reasonable.

5.5. Productivity

D.98-04-059 directed customers to demonstrate productivity by assigning a reasonable dollar value to the benefits of their participation to ratepayers. The costs of a customer's participation should bear a reasonable relationship to the benefits realized through its participation. This showing assists us in determining the overall reasonableness of the request. UCAN did not attempt to quantify the monetary benefits of its participation although it discussed that it minimized duplication with other parties, its efforts reduced the scope of funding authorized in Phase 1, and it promoted efficient use of utility resources through the conditions adopted in the settlement. We find that UCAN's efforts were productive.