2. Requirements for Awards of Compensation
The intervenor compensation program, set forth in Pub. Util. Code
§§ 1801-1812,1 requires California-jurisdictional utilities to pay the reasonable costs of an intervenor's participation if that party makes a substantial contribution to the Commission's proceedings. The statute provides that the utility may adjust its rates to collect the amount awarded from its ratepayers.
All of the following procedures and criteria must be satisfied for an intervenor to obtain a compensation award:
1. The intervenor must satisfy certain procedural requirements including the filing of a sufficient notice of intent (NOI) to claim compensation within 30 days of the PHC, pursuant to Rule 17.1 of the Commission's Rules of Practice and Procedure (Rules), or at another appropriate time that we specify. (§ 1804(a).)
2. The intervenor must be a customer or a participant representing consumers, customers, or subscribers of a utility subject to our jurisdiction. (§ 1802(b).)
3. To seek a compensation award, the intervenor must file and serve a request for a compensation award within 60 days of our final order or decision in a hearing or proceeding. (§ 1804(c).)
4. The intervenor must demonstrate "significant financial hardship." (§§ 1802(g) and 1804(b)(1).)
5. The intervenor's presentation must have made a "substantial contribution" to the proceeding, through the adoption, in whole or in part, of the intervenor's contention or recommendations by a Commission order or decision or as otherwise found by the Commission. (§§ 1802(i) and 1803(a).)
6. The claimed fees and costs must be reasonable (§ 1801), necessary for and related to the substantial contribution (D.98-04-059), comparable to the market rates paid to others with comparable training and experience (§ 1806), and productive (D.98-04-059).
In the discussion below, the procedural issues in Items 1-4 above are combined and a separate discussion of Items 5-6 follows.
2.1. Preliminary Issues
Under § 1804(a)(1) and Rule 17.1(a)(1), a customer who intends to seek an award of intervenor compensation must file an NOI before certain dates.
In a proceeding in which a PHC is held, the intervenor must file and serve its NOI between the dates the proceeding was initiated until 30 days after the PHC is held. (Rule 17.1(a)(1).) The PHC in this matter was held on January 15, 2008. IAG's unopposed NOI was timely filed on January 22, 2008.
In its NOI, IAG asserted financial hardship. On March 17, 2008, the Administrative Law Judge (ALJ) issued a ruling finding that IAG had failed to make the required showing of "customer status" under § 1802(b) and "significant financial hardship" under § 1802(g). The March 17, 2008 ruling permitted IAG to amend its showing within 15 days.
IAG filed an amendment on March 25, 2008. On April 21, 2008, a second ALJ ruling was issued requesting that IAG make an additional showing in an effort to resolve continuing uncertainties under §§ 1801-1812 regarding "customer status" and "significant financial hardship." This requested information was received from IAG through two additional amendments filed on May 21, 2008 and April 27, 2009. Since that time, no ruling on the issue of IAG's customer status or significant financial hardship has been issued. In this decision, we rule on both.
2.1.1. Customer Status
Section 1802(b)(1) defines a "customer" as: (A) a participant representing consumers, customers or subscribers of a utility; (B) a representative who has been authorized by a customer; or (C) a representative of a group or organization authorized pursuant to its articles of incorporation or bylaws to represent the interests of residential or small business customers. (§ 1802(b)(1)(A) through (C).) IAG is a small business and a current customer of SCE with electric service at an office with employee housing in Mono County, California. IAG has also applied to receive electric service at the location of its fish rearing operations, where it intends to use electricity for the continuous operation of a water pump. IAG stated that it participated in this proceeding to ensure that unnecessary and/or unreasonable costs related to hydroelectric projects were not passed on to customers through increased rates. IAG anticipated that neither DRA nor other intervenors in this proceeding would have the on-the-ground knowledge that IAG has of SCE's hydroelectric power operations in order to identify certain types of unnecessary projects and expenses that might appear reasonable as presented by SCE's application. IAG believed that its participation would provide the Commission with information about expenses and projects that the Commission would otherwise be unlikely to discover.
In response to questions from the ALJ on IAG's participation in the proceeding, IAG stated that it acted beyond its own self-interest, the foremost being the desire to raise trout for planting in Mono County waters to meet the demand of the angling public and Mono County's tourist-based economy. IAG's future goals are to develop a fully functioning fish rearing and educational facility to enhance and preserve recreational fishing opportunities in Mono County and the Eastern Sierras of California.
On the topic of IAG's own self-interests in the Lundy Project, a
hydroelectronic project in Mono County, IAG stated it was participating in this proceeding "without a clear business interest beyond that of a ratepayer . . . ."2 IAG also stated that SCE's future work on the Lundy Project may effect IAG's interests, but IAG characterized the possibility that SCE's Lundy Project would impact its business interest as "speculative at this time, but it is conceivable . . . . " In response to additional questions from the assigned ALJ, IAG also stated that IAG's participation in this proceeding would not further or protect the business interests of IAG's three owners.3 IAG stated that while the Lundy Project may impact one of the owners' residential property interests, this potential did not motivate IAG's participation.4
IAG makes every effort to present itself as a participant with no
self-interests, especially no financial interests, in this proceeding, but at the same time IAG refuses to completely deny the potential for some level of financial interests to exist. Moreover, should such self-interest materialize, IAG fails to elaborate on the extent of such self-interest. On a number of occasions, IAG insinuates that financial interests may exist related to, for example, the Lundy Project. However, even after the ALJ raised questions related to financial interest, IAG never specifically identifies the nature of its financial interests in the Lundy Project. While the Commission does not require the complete absence of self-interests for participants seeking to qualify as customers under
§ 1802(b)(1)(A), participants must provide the Commission with sufficient information to weigh a participant's self-interests against the broader interests of the ratepayers when determining customer status.
In addition, the Commission requires intervenors to be forthright when discussing their potential interests in a proceeding. As such, intervenors must refrain from oblique statements, such as those used by IAG, when describing potential interest. For example, IAG's statement that its business interests in the proceeding are speculative but conceivable was not helpful. Furthermore, we find that our understanding of IAG's interests could have been expedited, meaning the ALJ would not have had to request IAG to respond to as many questions, if IAG had relied upon clear unambiguous statements.
Therefore, while we find IAG qualifies as a "customer" for purpose of the proceeding under § 1802(b)(1)(A), our finding is limited to this proceeding and is made somewhat reluctantly based on IAG's failure to respond more clearly to the uncertainty surrounding its self-interest in this proceeding.
2.2. Timeliness
Regarding the timeliness of the request for intervenor compensation, IAG filed its request for compensation on May 15, 2009, which is within 60 days of D.09-03-025 being issued.5 SCE filed a response in opposition to IAG's request for Intervenor Compensation on June 10, 2009. We address the merits of SCE's response in Sections 3, 5.1 and 5.2 but briefly summarize the contents here. SCE contends: (1) no basis exists for IAG's claim that its participation yielded a
$2.4 million benefit to ratepayers,6 (2) IAG did not meet its burden of justifying its requested hourly rate for its attorney, Kathleen Maloney-Bellomo, and (3) IAG should not be compensated for the excessive number of hours it requests for time spent on the preparation of its NOI and its many amendments filed in response to various ALJ rulings. IAG did not file a response to SCE's opposition.
2.3. Financial Hardship
An intervenor seeking compensation must show that, without undue hardship, it cannot pay the reasonable costs of effective participation in the proceeding. A participant representing consumers (§ 1802(b)(1)(A)) must disclose its finances to the Commission to make this showing. This showing may be made under an appropriate protective order. In its amended NOIs, IAG provided financial information (annual income and expense statements and balance sheets) for the years 2005-2008. IAG disclosed its gross and net monthly income, monthly expenses, and cash and assets, including equity in real estate. IAG stated that it owns no real estate and few tangible assets. IAG stated that since its inception in 2005, it has not generated a net profit. IAG argued that while it may generate a profit in the future, it is not in a position at this time to predict when a profit may occur.
IAG explained that it has suffered many setbacks due to an increase in construction costs and a severe increase in fuel costs. Both increases have negatively impacted the cost of transporting fish to the facility and the cost of transporting fish out of the facility for planting in waters. In addition, the cost of fish food has risen sharply and a change in California Department of Fish and Game regulations has severely reduced IAG's potential market growth. Lastly, IAG explained that fish stocking is related to recreation, one of the industries hardest hit in the economic downturn. As a result, its future remains bleak at best.
In D.85-05-007, we concluded that where an individual intervenor's financial data has demonstrated that the compensation requested would amount to a large portion of the intervenor's uncommitted annual compensation, it is reasonable to conclude that the § 1802(b)(1)(A) intervenor has demonstrated undue hardship.
Based on our analysis of IAG's financial data and IAG's assertions of financial hardships, we conclude that IAG has met the requirements of § 1802(g) to demonstrate significant financial hardship and, as a result, is eligible for compensation in this proceeding.
1 All subsequent statutory references are to the Public Utilities Code unless otherwise indicated.
2 Amended Notice of Intent date May 21, 2008 at 8.
3 Id. at 10.
4 Id. at 10.
5 D.09-03-025 issued March 17, 2009.
6 IAG's Claim and Decision on Request for Intervenor Compensation, dated May 15, 2009 at 7.
