4. 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.⁴

With this guidance in mind, we turn to the contributions Reid claims he made to the proceeding.

Reid claims that he made a substantial contribution on seven issues in four areas. The four areas are: Imperial Valley, Project Viability, RPS Plans, and General. We examine these contribution areas individually based on the issues in the September 26, 2008 Scoping Memo and Ruling of Assigned Commissioner, and Reid's contribution to these issues via Energy Division's workshops on Project Viability (which were held on February 17, 2009 and April 7, 2009).

PG&E's Pilot Program

Reid recommended that the "Commission should reject PG&E's proposed `pilot program' for contract pre-approval."⁵ Reid contends the Commission agreed by stating that "PG&E's proposal is therefore not accepted as part of its 2009 RPS procurement plan, and should be removed from the Amended Plan to be filed pursuant to this order."⁶ In further support of his contribution, Reid offers the Commission's statement that "[t]hese disputes will not be resolved here, but in a separate proposed decision that addresses the streamlining of RPS contracting."⁷

Reid contends that the Commission effectively agreed with his recommendation to reject the PG&E Pilot Program. That is incorrect. The Commission eliminated the PG&E Pilot Program from PG&E's 2010 Procurement Plan because the Commission moved the issue to a different decision, not because the Commission considered the substance of Reid's recommendations here. The matter was decided in D.09-06-050. If Reid later submits a claim for significant contributions to D.09-06-050, Reid may include his request for compensation on this issue there, and the Commission will examine it at that time. For purposes of this claim, we disallow all 13.35 hours that Reid requests for his time on PG&E's Pilot Program (itemized in Reid's request as RPS Plans). This represents a reduction of 18% of Reid's issue specific hours in this proceeding. Accordingly, we also reduce Reid's general hours by 3.10 hours, equal to the same 18% disallowance for lack of substantial contribution.

Remedial Measures for 2010 Solicitation

The Commission identified three remedial measures relative to Imperial Valley renewables project and asked for parties' comments.⁸ The measures were:

· Require utilities to automatically shortlist all Imperial Valley proposals that are received in the solicitation so that the projects receive special consideration;

· Include an Imperial Valley bid evaluation metric in the least cost-best fit methodology to give preference to Imperial Valley resources, and;

· Require each utility to conduct a special Imperial Valley RPS solicitation.

Reid argued that the "proposals were unnecessary because Imperial Valley RPS projects already have a build-in advantage (access to transmission) in the contract evaluation process."⁹ The Commission agreed, and specifically cited his rationale in the decision.¹⁰ Moreover, Reid addressed consideration of remedial measures generally, the record was informed by Reid's comments, and he contributed to the Commission's consideration of the issues.

Credit Attributes

Reid claims he made a substantial contribution on the issue of credit attributes. In support he references our decision, which states that:

Reid is concerned with PG&E's use of qualitative assessments as part of its bid evaluation. To particularly address this concern, Reid recommends the use of commercially available software to assess, and quantify, the probability of default as part of the credit attribute item in bid evaluation.¹¹

We declined to adopt Reid's specific recommendation regarding the use of commercially available software to address project default as it related to credit and bid evaluation. The Commission, however, said:

Nonetheless, the concept of quantifying and more objectively assessing the probability of default has merit. We encourage parties to continue to explore the subject and bring us additional proposals if and when reasonable.¹²

We find that Reid contributed to the consideration of the issue. Even if his specific proposal was not adopted, his comments helped inform the Commission on the subject matter, with the Commission saying that the subject matter had merit and should continue to be explored.

Project Viability Calculator

Staff proposed a project viability calculator, and suggested project development security be linked to the output of the calculator. In response to an Energy Division discovery request, Reid addressed refinement to the calculator and limitations on its use. Reid contends that he made a substantial contribution to the resolution of this issue by filing comments on the item. Our decision says:

We agree with staff and parties that the current project viability assessment tools can be improved by adopting a requirement for a more transparent and uniform approach. Among other things, this will increase the public's confidence that projects with demonstrated indicia of viability are given appropriate weight.¹³

We find that Reid's comments, elicited by Commission staff, were beneficial to the Commission in its understanding and consideration of reasonable use of the project viability calculator.

Development Security

In response to the Energy Division's discovery request, Reid states that he argued in his comments on the project viability calculator that:

Our goal should be to decrease the failure rate and to attempt to ensure that all projects selected are successful in meeting their on-line dates. I do not support the UCS [Union of Concerned Scientists] proposal because the UCS proposal is not consistent with this goal. Under the UCS proposal, different projects would pay significantly different levels of development security. This will place more financial pressure on marginal projects and may effectively discriminate against small developers. Thus, the UCS proposal would tend to place additional financial pressure on marginal projects and increase the project failure rate.¹⁴

The Commission declined to adopt Reid's recommendation to charge the same development security to each project, which Reid describes as having been advanced during staff development of the calculator in May 2009. In fact, the Commission found it conceptually reasonable to vary development security based on project-specific facts (e.g., project viability) and concluded that such variations are available within the current RPS structure.¹⁵ Reid contributed to the consideration of this issue, however, even though his recommendation was not specifically adopted.

Contract Approval

Reid contends he made a substantial contribution in his reply comments on the issue of contract approval. In particular, Reid argued:

The Commission should not set up two levels of contract approval, based on inherently arbitrary project viability scores. At best, project viability scores are an estimate of the probability of project failure. Project viability should be weighed against other factors such as price, on-line date, length of contract, project location, and credit and collateral in the contract selection process. To do otherwise, constitutes poor public policy to the detriment of California ratepayers.¹⁶

The Commission found that "[t]he project viability calculator should be used as a screening tool, not to determine the exact merit of a project or contract."¹⁷ Reid made a substantial contribution on this issue.

Flexible Compliance

Finally, on the issue of flexible compliance, Reid argued that:

If the Commission approves a contract, the IOU should be able to amend the contract, earmark the project for flexible compliance purposes, and use the contract to justify a compliance deficit in the event such justification becomes necessary. If the Commission believes that a particular contract is not viable, the Commission should protect ratepayers by rejecting the contract.¹⁸

Reid asserted that the Commission should protect ratepayers by rejecting non-viable contracts rather than making other compensating adjustments and changes in the contract. In support of his contribution, Reid cites the Commission's rejection of a proposal to link flexible compliance rules with project viability and quotes our order, which found that "[f]lexible compliance rules should not be linked to scores from the project viability calculator at this time."¹⁹ We agree with Reid's claim of substantial contribution on this issue.

⁴ D.98-04-059, 79 CPUC2d 628 at 653.

⁵ Comments of L. Jan Reid on PG&E's Draft 2009 Renewable Energy Procurement Plan and Solicitation Protocol at 1-4, filed October 15, 2008.

⁶ D.09-06-018 at 54-55.

⁷ D.09-06-018 at 54.

⁸ D.09-06-018 at 16-17.

⁹ D.09-06-018 at 18, citing Reid Sunrise Comments at 7.

¹⁰ D.09-06-018 at 18.

¹¹ D.09-06-018 at 46.

¹² Id.

¹³ D.09-06-018 at 21.

¹⁴ See Responses of L. Jan Reid to the Energy Division's Discovery Request, May 5, 2009 at 4.

¹⁵ D.09-06-018 at 27.

¹⁶ Reply Comments of L. Jan Reid on Imperial Valley Renewables Development and Evaluation of all Renewable Procurement Contracts, filed on March 6, 2009 at 3.

¹⁷ D.09-06-018, Conclusion of Law 12 at 79.

¹⁸ Reply Comments on L. Jan Reid on Imperial Valley Development and Evaluation of all Renewable Procurement Contracts, filed March 6, 2009 at 3.

¹⁹ D.09-06-018, Conclusion of Law 14 at 79.