5. 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.)
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.
Should the Commission not adopt any of the customer's recommendations, compensation may still be awarded if, in the judgment of the Commission, the customer's participation substantially contributed to the decision or order. For example, if a customer provided a unique perspective that enriched the Commission's deliberations and the record, the Commission could find that the customer made a substantial contribution. With this guidance in mind, we examine the specific issues where Aglet claims it made a substantial contribution.
5.1. RPS Transparency
The Commission has noted:
Each investor-owned utility (IOU) was directed to submit a preliminary Evaluation Criteria and Selection Process Report on September 29, 2006. A workshop on transparency of the RPS procurement process, including evaluation criteria, was held on December 15, 2006. The first reports from Pacific Gas and Electric Company (PG&E) and Southern California Edison Company (SCE) were filed on December 21, 2006 along with short lists.
Work continues in this area, and it continues to deserve this work. Each IOU can do a better job clearly explaining its evaluation criteria and selection process. Each must do so in its amended 2007 Plan.4
Jan Reid, Aglet's consultant attended the Energy Division workshop on RPS transparency on December 15, 2006. Energy Division Staff Proposals on transparency, reporting templates and other issues were distributed at the workshop. On December 19, 2006, Susannah Churchill sent an email to parties on behalf of the Energy Division in which she requested comments on the Energy Division Staff Proposals. Aglet attached to this claim a copy of the requested comments it submitted as follow-up to the RPS transparency workshop.
Aglet submits that it made a substantial contribution to the ongoing resolution of transparency and reporting issues through its participation both in the workshop and through the comments it served on January 5, 2007 to the Energy Division on its Energy Division Proposals.
We affirm Aglet's claim of substantial contribution for its participation on these issues, subject to our further analysis on the reasonableness of hours for which it seeks compensation.
5.2. Integrated Resource Plans of Multi-Jurisdictional Utilities
On May 8, 2007, Aglet filed and served comments on the Integrated Resource Plans (IRPs) of two multi-jurisdictional utilities: PacifiCorp and Sierra Pacific Power Company (Sierra). Aglet was the only party to file and serve comments on the IRPs recommending: (1) The Commission should not order Sierra and PacifiCorp to file renewable procurement plans; (2) The Commission should order Sierra and PacifiCorp to procure renewable resources for the California RPS program using the same procurement processes that they use under their existing IRPs; and (3) The Commission should review future IRPs for Sierra and PacifiCorp to determine whether they are consistent with the standards of the California RPS program.5
The Commission stated:
Aglet, the only commenter on the IRPs, notes that neither Sierra nor PacifiCorp specifically identifies how its respective IRP comports with the requirements set forth above. Aglet suggests that the IRPs be approved nevertheless, with instructions that the two utilities provide the necessary analysis in later years.
We agree with Aglet. Because § 399.17(b)(3)(d) requires that IRPs show overall conformity to RPS procurement planning processes, we examine the IRPs briefly here. As we explain below, we accept the 2007 IRPs of both utilities, but note the need for additional information in the future. We also set a schedule for subsequent submissions.6
We affirm Aglet's substantial contribution to the resolution of the IRP issue because the Commission adopted Aglet's recommendations, as reflected by the above-quoted text. We approve compensation on this issue subject to our further analysis on the reasonableness of hours for which Aglet seeks compensation.
5.3. Moderately Short-Term Price Benchmark
In May 2007, the Energy Division requested comments on a number of issues.7 Aglet filed and served opening comments (Benchmark Comments) on June 14, 2007 and reply comments (Benchmark Reply Comments) on June 25, 2007. In its comments, Aglet recommended the following: (1) the Commission should define a short-term contract as a contract of 10 years or less duration; (2) the RPS market price referent (MPR)8 be used as the benchmark for short-term contracts, with a separate MPR calculated for each year; and (3) a short-term MPR should be calculated annually and should be based on the existing long-term MPR.
Aglet submits that the Commission agreed with Aglet when it established a moderately short-term benchmark for contracts from four to ten years in duration. In support of its position, Aglet cites to the following in D.09-06-050 at 42, Ordering Paragraph 6.
The Director of Energy Division is authorized to calculate the a price reasonableness benchmark for procurement contracts for energy products for compliance with the renewables portfolio standard that have a duration of at least four years but less than 10 years based on the calculation of the market price referent established pursuant to § 399.15 for the same solicitation year as the year the contract is signed. Prices for such contracts that are equal to or less than the price reasonableness benchmark are per se reasonable and may be recovered in rates.
We affirm that Aglet made a substantial contribution on this issue, subject to our further analysis on the reasonableness of hours for which it seeks compensation.
5.4. Very Short-Term Price Benchmark
Aglet/Division of Ratepayer Advocates (DRA) provided the Commission with a price benchmark based on publicly posted prices available at the New York Mercantile Exchange. The prices would then be adjusted to reflect the IOUs' Time of Delivery profiles, gas transportation charges, environmental value, and the basis differential.9
The Commission ruled that "a very short-term contract that meets all other requirements but does not have a levelized price (including firming or shaping costs) equal to or below 150% of the index price (as determined by Energy Division staff) and below 90% of the 10-year MPR as well will not be eligible for the fast track."10
Aglet argues that it made a substantial contribution to the resolution of the Price Benchmark issue, because there is a small numerical difference between the benchmark established by the Commission and the benchmark recommended by Aglet/DRA. Under the Commission benchmark, the average benchmark would be approximately $72/megawatt-hour (MWh) compared to an average weighted benchmark of $80.28/MWh recommended by Aglet/DRA.
We agree that Aglet made a substantial contribution by identifying and supporting an index-based price benchmark. We approve Aglet's requested hours for its participation on this issue, subject to our further analysis on the reasonableness of hours for which it seeks compensation.
5.5. Contract Pre-Approval and Cost Recovery
The Commission noted that "Aglet and DRA argue that only the shortest contracts (less than six months) should be allowed on a pre-approval basis, without Commission review."11 The Commission also noted that "the reservations about blanket pre-approval of short-term contracts expressed by Aglet, DRA, Reid and TURN are significant."12
Aglet submits that although the Commission did not adopt the proposal of Aglet/DRA, the Commission did establish a fast-track structure for approval of contracts with a duration of at least one month and less than 48 months. If a contract met certain conditions, an IOU would be allowed to take advantage of the fast-track structure by filing a Tier 2 advice letter.13 We agree that Aglet made a substantial contribution to resolution of the pre-approval issue, subject to our further analysis on the reasonableness of hours for which it seeks compensation.
On a related issue, in its early comments, PG&E proposed that contracts of less than three years duration should not require Commission pre-approval for full rate recovery of costs.14 San Diego Gas & Electric Company (SDG&E) supported this suggestion, and took it a step further by stating that all contracts of less than five years duration should not require Commission pre-approval.15
Aglet and DRA recommended that "the Commission should reject this proposal as it would unnecessarily expose ratepayers to bearing costs the Commission might ordinarily reject. The purpose of the exemption for short-term contracts is to ensure that regulatory delays do not inhibit the ability of utilities to sign short-term contracts."16
Aglet argues that the Commission denied PG&E's proposal, effectively agreeing with Aglet/DRA.17 Although the Commission ruled on the modified form of this proposal PG&E presented in its 2009 RPS procurement plan, the substantive issues were the same as those on which Aglet commented. Aglet made a substantial contribution to the Commission's decision not to approve PG&E's modified proposal.
We agree that Aglet made a substantial contribution to resolution of the cost recovery issue (which is associated with the pre-approval issue), subject to our further analysis on the reasonableness of hours for which it seeks compensation.
5.6. Commercial Operation
Aglet and DRA recommended that:
The IOUs continue to submit short-term contracts for Commission approval via advice letter unless: (1) the contract duration is less than six months; and (2) the renewables plant commences delivery less than six months after the contract is signed. Additionally, Aglet and DRA recommended that the IOU be required to demonstrate in its quarterly filing: (1) why a contract with a duration of more than six months could not have been used instead of a contract with a duration less than six month; and (2) whether or not the IOU has signed the contract in a timely fashion relative to the close of contract negotiation. This will allow the Commission adequate time to approve or reject the proposed contracts. The IOUs should be required to demonstrate that they have signed contracts in a timely fashion in order to prevent the IOUs from avoiding Commission review by waiting until the six-month deadline has passed."18
Aglet submits that in part, the Commission agreed with Aglet/DRA when it found:
In order to protect ratepayers from unnecessary high prices for RPS eligible energy procured through short-term contracts with generation facilities that are in commercial operation or will commence commercial operation not later than six months from the date the contract is signed. It is reasonable to establish price reasonableness benchmarks for short-term contract prices.19
Aglet focused the Commission's attention on the issue of the date of commercial operation and made a proposal that was adopted in part. We agree that Aglet made a substantial contribution on this issue, subject to our further analysis on the reasonableness of hours for which it seeks compensation.
4 D.07-02-011 at 37.
5 Comments of Aglet on Integrated Resources Plans, filed on May 8, 2007, at 1.
6 D.08-05-029 at 19.
7 See Administrative Law Judge's Ruling Providing Opportunity For Comments and Reply Comments in R.06-02-012, dated May 10, 2007.
8 See § 399.15.
9 Aglet and DRA Joint Comments and Attachment A filed in R.06-02-012 on September 24, 2007 at 3-6.
10 D.09-06-050 at 18.
11 D.09-06-050 at 9.
12 D.09-06-050 at 19.
13 D.09-06-050 at 37, Ordering Paragraph 1.
14 PG&E Comments, R.06-02-012, September 24, 2007, at 12.
15 SDG&E Comments, R.06-02-012, September 24, 2007, at 12.
16 Aglet and DRA Joint Reply Comments filed in R.06-02-012 on October 1, 2007, at 2.
17 D.09-06-050 at 36, Conclusion of Law 12.
18 Joint Reply Comments of the DRA and Aglet on the ALJ's Ruling Requesting Further Comments on Short-Term Pricing Benchmark Proposals, filed in R.06-02-012 on September 24, 2007, at 8.
19 D.09-06-050 at 32, Finding of Fact 6.
