3. Substantial Contribution

In evaluating whether a customer made a substantial contribution to a proceeding, we look at several things. First, we look at whether the Commission adopted one or more of the factual or legal contentions, or specific policy or procedural recommendations put forward by the customer. (§ 1802(i).) Second, if the customer's contentions or recommendations paralleled those of another party, we look at whether the customer's participation unnecessarily duplicated or materially supplemented, complemented, or contributed to the presentation of the other party. (§§ 1801.3(f) and 1802.5.)

As described in § 1802(i), the assessment of whether the customer made a substantial contribution requires the exercise of judgment:

In assessing whether the customer meets this standard, the Commission typically reviews the record, composed in part of pleadings of the customer and, in litigated matters, the hearing transcripts, and compares it to the findings, conclusions, and orders in the decision to which the customer asserts it contributed. It is then a matter of judgment as to whether the customer's presentation substantially assisted the Commission.⁸

With this guidance in mind, we turn to the claimed contributions CFC made to the proceeding. CFC filed two sets of comments in this proceeding (Comments to the OIR and Comments on the Proposed Decision) which objected to the use of ratepayer funding for the creation of CICS. Contained in these comments were the following objections:

· The appropriation of $600 million, devoted to CICS, is the function of the California Legislature and the Governor, not the Commission, and the Commission should allow the legislature and other state agencies to determine best how to address the issue of climate change.

· The State Air Resources Board is expected to take the lead role in developing solutions to the problems of GHG emission, by adopting regulations and developing a "scoping plan for achieving maximum technologically feasible and cost-effective reductions in GHG emissions..." Health & Safety Code
§§ 38530, 38560 and 38561. The legislature and the Governor intended that CARB develop a coordinated, prioritized, and
cost-effective plan for expenditure of public funds on climate change research. Health & Safety Code § 38591(d).⁹

· The legislature has clearly `occupied the field' of climate change research and "laws passed by the Legislature under its general police power will prevail over regulations made by an agency with regard to matters which are not exclusively within the ambit of the agency."¹⁰

· Any power exercised by the Commission must be "cognate and germane to the regulation of public utilities," and the CICS was not. So. Calif. Gas. Co. v. Pub. Util. Com. (1979) 24 Cal. 3d 653, 656. The financing through the auspices of CICS, of job development, re-tooling of industries, and behavioral modification is not reasonably necessary to meet the public demand for utility service.¹¹

· Other branches of government had already been directed to perform most, if not all, of the project proposed by the University of California (UC).¹²

· Most of the research originally proposed by UC was already being undertaken by UC, funded by legislative appropriations for research, by private donors, and by the Air Resources Board and the Energy Commission, through its Public Interest Energy Research program (PIER), as prescribed by the Legislature.¹³ CFC argued that there was no justification for forcing the customers of investor owned utilities (IOUs) to pay for research funded by the State of California.

· The average electric rate in California for all sector (13.57¢/kWh) is the 6^th highest rate in the country (Only New England and Hawaii are higher) due, in part, to additional costs like CICS being collected through utility bills. High utility bills hurts California's economy.¹⁴

In its Comments on the Proposed Decision (PD), CFC asked the Commission "to reject the PD which proposed an unlawful levy of a special tax on ratepayers to support an Institute which is not required to invest in projects with ratepayers and will duplicate the research of other state agencies acting pursuant to AB 32. CFC's comments voiced the following objections:

· The Legislature has clearly and expressly manifested its intent to occupy the field of GHG emission control, under the umbrella of another state agency. The Commissions' creation and funding of the Climate Institute is preempted.¹⁵

· AB 32 specifically directs CARB to fund the same projects the PD anticipates the Climate Institute will fund, i.e., "technologies that improve efficiency" and "contribute to reductions of GHG emissions." Other redundancies include the creation of a comprehensive inventory of current climate change related research and educational activity, and bringing new energy services and products to the marketplace.¹⁶

· The appropriation from ratepayers of more than a half a billion dollars that would otherwise be spent supporting their families, paying for health care and insurance, housing, groceries and gasoline, is unfair and without legal authority.

· The products of the Climate Institute's research will benefit Californians, as a whole, rather than the ratepayers. The Climate Institute should be financed by the public, not the customers of investor-owned utilities.¹⁷

· The PD decision broadly delegates power to others to direct research efforts, without any clear standards or Commission control.¹⁸

The Commission's decision in this case (D.08-04-039, as modified by
D.08-04-054), responded to some of the concerns expressed by CFC: "We acknowledge that not all comments were supportive and we seriously consider the arguments raised against the establishment of the Institute, either in toto, or because it is funded by a surcharge on ratepayers of the ratepayer funding issue."¹⁹ "In response to both the supporting and opposing comments, we made many minor corrections and change amendments, and we incorporated suggested modifications in the following areas: ..."²⁰

In particular, the Commission recognized that "CFC, among others, contends that the PIER Program is already doing much of what the proposed Institute would do and the creation of the Institute would, therefore, interfere with the coordination of state policy. The Commission agrees that redundancy in research is not desirable because it may result in unnecessary ratepayer and taxpayer expenditures."²¹ We clarified that "the Institute, its funding and its functions, are to work in concert with, but not duplicate, the programs implemented pursuant to AB 32, as well as the Commission's ongoing efforts in the areas of energy efficiency and clean energy."²²

The Commission addressed the potential for duplication of efforts of the Commission and the California Air Resources Board: "It is the intent of the decision to have CICS' Strategic Plan build off of the AB 32 Scoping Plan and work in concert with, but not duplicate the work and funding of AB 32."²³ The Institute's Strategic Research Committee is to utilize the advice from the (Economic and Technology Advisory Committee) in developing the Strategic Plan Roadmap.

The Commission also recognized "taxpayer funding may indeed be a preferred means of financing the Institute, as some parties have argued. We are concerned, however, that waiting for collective statewide action to establish the framework for the Institute and authorize funding will incur undue delay."²⁴

Additionally, the Commission took into account the need to ensure ratepayer funds are used in a way that benefits ratepayers. "[W]e agree that there should be a direct tie between funded projects and benefits to ratepayers. Accordingly, a ratepayer-benefit index that ranks proposed projects from high ratepayer benefit to low, or no ratepayer benefit, will be an integral component that informs the entire grant process from the solicitations through selection."²⁵

"A ratepayer benefit index is to be a key component of the Strategic Plan that will then inform the grant selection process from solicitation... Proposal with no discernable ratepayer benefit will not be chosen for CICS grant funding..."²⁶

The Commission recognized the need to exert greater control over activities delegated to the Institute: "In response to parties' comments, we have taken several accountability measures that will safeguard ratepayers' interests and ensure ongoing oversight."²⁷ "We specify steps and procedures that ensure more oversight, governance and involvement by the Commission with the Institute."²⁸ "We now require more of an on-going consultation and collaborative process between the Institute Executive Director and the Commission on the preparation of the annual report, budget and Strategic Plan."²⁹

We affirm CFC's substantial contributions as outlined above.

On May 21, 2008, CFC applied for rehearing of the Commission's decision (D.08-04-039, as modified by D.08-04-054) and joined TURN, UCAN and DRA in a request that the Commission stay the decision pending final Commission decisions on the Joint Parties' Application for Rehearing. CFC argued that the creation of the Climate Institute was in excess of Commission's authority, citing Southern California Gas Co. v. Public Utilities Com., 24 Cal. 3d 653, 660 (Cal. 1979).

CFC provided the Commission with the authority for the proposition that the principle of preemption applied to this situation. "Where the Legislature has adopted statues governing a particular subject matter, its intent with regard to occupying the field to the exclusion of all local regulation is not to be measured alone by the language used, but by the whole purpose and scope of the legislative scheme." Tolman v. Underhill (1952) 39 Cal. 2d 708, 712. The Commission's assumption of authority to duplicate the Air Resources Board's "consider[ation of] all relevant information pertaining to GHG emissions reduction programs," identification of "new technologies, research, demonstration projects, funding opportunities," invaded a field already occupied by AB 32 and the Air Resources Board.³⁰

When Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E), Pacific Gas and Electric Company (PG&E), Sierra Pacific Power Company and PacifiCorp filed Advice Letters requesting authorization to begin collections for the California Institute for Climate Solutions, CFC filed its application for rehearing challenging the Commission's authority to establish the CICS and fund it through utility rates.³¹

On September 30, 2008, the Governor approved AB 1338. In pertinent part, AB 1338 provides:

Sec. 27. (a) the Public Utilities Commission shall not execute an order, or collect any rate revenues, in Rulemaking 07-09-008 (Order Instituting Rulemaking to establish the California Climate Institute for Climate Solutions), and shall not adopt or execute any similar order or decision establishing a research program for climate change unless expressly authorized to do so by statue.

(b) This section does not constitute a change in, but is declaratory of, existing law.

On November, 21 2008, the Commission vacated its earlier decision creating CICS, due to the passage of AB 1338.³² CFC states that it made a substantial contribution to the order reversing the decision (D.08-11-060). We disagree with their assessment. D.08-11-060 specifically states "as a result of the passage of AB 1338 we find it appropriate to vacate the Decision. We will direct the Energy Division to cease any efforts to review and approve utility advice letters filed for the purposes of implementing tariffs in connection with D.08-04-039, as modified by D.08-04-054."³³ As such, we do not find that CFC's rehearing efforts made a substantial contribution to D.08-11-060.

⁸ D.98-04-059, 79 CPUC2d 628 at 653.

⁹ Corrected Comments filed November 2, 2007, at 4-7.

¹⁰ Corrected Comments at 12.

¹¹ Corrected Comments at 15-16, see also, Comments on Proposed Decision at 1-2.

¹² Corrected Comments at 7-12.

¹³ Corrected Comments at 13-15.

¹⁴ Corrected Comments at 2-4.

¹⁵ Comments on PD at 10.

¹⁶ Comments on PD at 8-10.

¹⁷ Comments on PD at 4-5.

¹⁸ Comments on PD at 7.

¹⁹ D.08-04-039, as modified by D.08-04-054 at 8.

²⁰ Id. at 8-9.

²¹ Id. at 12.

²² Id. at 9.

²³ Id. at 18.

²⁴ Id. at 21.

²⁵ Id. at 22.

²⁶ Id. at 10.

²⁷ Id. at 47-48.

²⁸ Id. at 9.

²⁹ Id. at 9.

³⁰ Application for Rehearing filed on May 21, 2008 at 4-6.

³¹ CFC also asked the Commission to direct that any collections that are made to be made in accordance with its decision, i.e. on an equal cents per therm basis, rather than the Equal Percent of Base Revenues allocation method proposed in R.07-12-006.

³² D.08-11-060 at 4.

³³ D.08-11-060 at 2-3.