4. Greenlining's Actual Contributions

Recently, D.09-11-031 issued on November 20, 2009 in A.07-11-011, awarded compensation to Greenlining for its substantial contribution on issues of executive compensation, philanthropy, supplier diversity, and workforce diversity. Although the initial scoping memo did not include these issues for consideration in that proceeding, on March 4, 2008 in A.07-11-011, an Administrative Law Judge's Ruling Revising the Schedule Set Forth In the Scoping Memo and Clarifying the Scoping Memo was issued and indicates on page at 4, "the issue of shareholder philanthropy is excluded from the scope of this proceeding. However, to the extent Southern California Edison Company raises the issue of philanthropy in its testimony, Greenlining may seek to include testimony, engage in cross-examination, and brief this matter."

In this decision, we make a clear distinction between the facts used to determine an award for substantial contribution in that proceeding, versus the denial of substantial contribution here on similar issues advocated for by Greenlining. In A.06-12-009, on February 27, 2007, a Scoping Memo and Ruling of Assigned Commissioner and Administrative Law Judge was issued that did not include issues of corporate philanthropy, management diversity, workforce diversity, and supplier diversity. On July 30, 2007, Greenlining filed a motion to compel Applicants SDG&E and SoCalGas to provide a witness on philanthropy. The assigned ALJ denied the motion to compel by written ruling on August 2, 2007, On August 3, 2007, Greenlining filed a motion for review which the ALJ denied on August 6, 2007 during formal Hearings. (TR. pp. 108-111.) On August 8, 2007, Greenlining filed an amended motion for review of the ALJ's rulings. On August 22, 2007, an Assigned Commissioner and Administrative Law Judge's Joint Ruling Denying The Greenlining Institute's Motion on Philanthropy.

We draw our conclusions on Greenlining's claim of substantial contribution based on these facts and others we examine here.

There was an application for rehearing of D.08-07-046 filed by Greenlining and the Commission issued D.09-06-052 denying rehearing.¹² On rehearing, the Commission made the following specific changes to D.08-07-046 which nevertheless left intact the rejection of all of Greenlining's proposals, except for the issue of branch office closures. A portion of Ordering Paragraph 2 held:

"2. D.08-07-046 is modified as follows:

a. The three paragraphs contained in Section 15.3 Diversity - Greenlining on pages 74-75 are deleted, and replaced with the following language:

We deny the proposed settlement on workforce and supplier diversity because [it] has no quantifiable effect on test year or post test year revenue requirements in this proceeding. We nevertheless emphasize that SDG&E and SoCalGas should continue to be guided by G.O. 156. We appreciate the companies' voluntary efforts to be good corporate citizens.

No order by the Commission is necessary for an agreement to exist between the parties as to management and supplier diversity goals, and it is within the discretion of SDG&E and SoCalGas management to honor the diversity commitments made to Greenlining.

b. The first sentence of the second paragraph in Section 15.1 Summary on page 73 is deleted, and replaced with the following language:

As discussed below, we find that corporate philanthropic contributions are generally a shareholder matter, not a ratepayer issue, and thus, are not issues for resolution in this ratesetting proceeding. In addition, we find that the diversity portion of the settlement has no quantifiable effect on test year or post test year revenue requirements in this proceeding. Accordingly, we do not adopt the proposed settlement agreement.

c. The Decision is modified to remove the first paragraph on page 4, and replace this paragraph with the following language:

This decision addresses two other proposed settlements as follows:

1. Six Year Leadership Agreement with The Greenlining Institute - on Corporate Philanthropy and Diversity of SDG&E and SoCalGas, with The Greenlining Institute. The philanthropy portion of the settlement is outside the scope of the proceeding and beyond the Commission's authority to impose a lawful order on SDG&E and SoCalGas. The diversity portion of the settlement has no quantifiable effect on test year or post test year revenue requirements. Accordingly, we reject this proposed settlement; and

2. ...

d. ...

e. A footnote is inserted after the word "recommendations," on page 16, at the end of the third sentence of the above modification to Section 4.4 Reasonable in light of the Whole Record (ordering paragraph d). The footnote text reads as follows:

We recognize that SDG&E and SoCalGas reached a settlement with Greenlining Institute. We take no position as to the reasonableness, consistency with the law, or public interest value of this settlement. However, as more fully discussed in this decision, we deny the settlement with Greenlining Institute because the philanthropy portion of the settlement is outside the scope of the proceeding and beyond the Commission's authority to impose a lawful order on SDG&E and SoCalGas, and the diversity portion of the settlement has no quantifiable effect on test year or post test year revenue requirements.

f. ...

g. Findings of Fact 40 and 41 on page 94 are modified to read as follows:

40. The proposed settlement with Greenlining on diversity has no quantifiable effect on test year or post test year revenue requirements.

41. No order by the Commission is necessary for an agreement to exist between the parties as to management and supplier diversity goals, and it is within the discretion of SDG&E and SoCalGas management to honor the diversity commitments made to Greenlining.

h. Conclusions of Law 7, 8, 9, 10, and 15 on pages 99-100 are modified to read as follows:

7. The settlements, except for the settlement with Local 483, are reasonable in light of the whole record. We take no position as to the reasonableness, consistency with the law, or public interest value of the settlement with Greenlining.

8. The settlement with Local 483 is not reasonable when examined in the light of the whole record. We take no position as to the reasonableness, consistency with the law, or public interest value of the settlement with Greenlining.

9. The settlements, excluding the settlement with Local 483, are consistent with the law, and do not contravene or compromise any statutory provision or Commission decision. We take no position as to the reasonableness, consistency with the law, or public interest value of the settlement with Greenlining.

10. The settlements, except for the settlement with Local 483, are in the public interest. We take no position as to the reasonableness, consistency with the law, or public interest value of the settlement with Greenlining.

15. The proposed settlement with Greenlining on diversity has no quantifiable effect on test year or post test year revenue requirements in this proceeding.

i. The second and third paragraphs contained in Section 15.5 Funding of G.O. 156-Related Efforts on pages 76-77 are deleted and replaced with the following language:

We do not adopt the Greenlining settlement on diversity, instead, we emphasize that expenses included in the adopted Test Year 2008 revenue requirements settlements that either support WMDVBE activities, or are associated with workforce diversity, must be fully and only utilized as adopted and not subject to diversion or reallocation as might reasonably happen with other funding to meet the actual operational needs of SDG&E and SoCalGas to provide safe and reliable service to ratepayers.

We expect the companies to make every effort to competently staff at all times the full forecast of positions for WMDVBE activities and efforts in diversity. Diversity is good public policy and we believe it is good for SDG&E and SoCalGas. Otherwise, any such diversion will be investigated in the companies' next GRC.

j. Finding of Fact 42 is modified to read as follows:

42. Diversity is good public policy, therefore SDG&E and SoCalGas should competently staff at all times the full forecast of positions for WMDVBE activities and efforts in diversity.

k. Conclusions of Law 24 is modified to read as follows:

24. The Commission has the discretion and authority to require that expenses included in the adopted Test Year 2008 revenue requirements settlements that either support WMDVBE activities, or are associated with workforce diversity, must be fully and only utilized by SDG&E and SoCalGas as adopted.

l. Ordering Paragraph 29 on page 107 is modified to read as follows:

29. Expenses included in the adopted Test Year 2008 revenue requirements settlements that either support WMDVBE activities, or are associated with workforce diversity, must be fully and only utilized as adopted. Such allocation is not subject to diversion or reallocation as might reasonably happen with other funding to meet the actual operational needs of SDG&E and SoCalGas to provide safe and reliable service to ratepayers. Otherwise, any such diversion will be investigated in the companies' next GRC." (Emphasis added, remainder of Ordering Paragraph 29 omitted.)

We will not compensate Greenlining for its asserted efforts on philanthropy and diversity. D.08-07-046, as modified by D.09-06-052, held that Greenlining's proposals on diversity and philanthropy were beyond the scope of the proceeding and no order was necessary by the Commission for SDG&E and SoCalGas to honor any voluntary commitments in the agreement with Greenlining. This is consistent with all rulings throughout the proceeding which consistently found shareholder philanthropy outside the scope of the proceeding and Greenlining's diversity objectives had no quantifiable effect on test year or post test year revenue requirements and thus did not contribute to the ratesetting proceeding. The ordering language in the decision ensured that funding for WMDVBE and diversity activities would not be diverted to other business functions accomplishing a practical, quantifiable, and meaningful commitment to the goals and objectives of General Order (G.O.) 156.

The decision, as modified, meaningfully enforces the commitment to ratepayer funding for WMDVBE programs in a manner within the scope of a GRC proceeding. A review of the decision shows that this language was included in the decision as a specific alternative to Greenlining's proposal:

We do not adopt the Greenlining settlement on diversity, instead, we emphasize that expenses included in the adopted Test Year 2008 revenue requirements settlements that either support WMDVBE activities, or are associated with workforce diversity, must be fully and only utilized as adopted. (D.09-06-052 Ordering Paragraph 2.i., emphasis added.)

Greenlining was an opponent of office closures and the decision did impose a moratorium with guidelines for future closures and the decision included a discussion on the need for business offices. Greenlining made a substantial contribution on the issue of office closures.

¹² A separate application was filed by the Commission's Division of Ratepayer Advocates and The Utility Reform Network; D.09-06-052 denied rehearing of both applications. (At 3.)