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.³

With this guidance in mind, we turn to L. Jan Reid's claimed contributions.

Reid asserts he contributed to the following three matters considered in this proceeding: a temporary waiver of Affiliate Rule V.E, extension of the temporary waiver, and withdrawal of the application.

Reid stated that his July 18, 2008 response to PG&E's Motion for Interim Decision Granting Limited Temporary Waiver of Affiliate Transaction Rule V.E contributed to the temporary waiver issue. L. Jan Reid opposed the motion: among other things, he warned the Commission of the serious conflict of interest that may occur if PG&E purchases energy or capacity from a company partly owned by PG&E Corporation via the investment relationship, which would create profit opportunities for PG&E Corporation at ratepayer expense. (Reid's July 18, 2008 response at 3.) Reid's protest to the application also states:

A serious conflict of interest may occur if PG&E Company purchases energy or capacity from a company which is partly owned by PG&E Corp. via the investment relationship. In that case, PG&E Company may be creating profit opportunities for PG&E Corp. at ratepayer expense.

It is clear that Affiliate Rule V.E is needed to protect ratepayer interests in this instance. Therefore, the Commission should not waive Affiliate Rule V.E when it processes the instant application. (Reid's July 18, 2008 protest to the application at 4.)

Reid claims D.08-09-013 addressed the conflict of interest issue by providing, as follows:

PG&E's Rule II.B affiliates must not expand their existing activities or enter into new commitments throughout the duration of the temporary waiver, and no new holding company capital investment commitments shall be undertaken and no new holding company subsidiaries shall be formed during the waiver period. (D.08-09-013, Ordering Paragraph 1(d) at 15.)

On October 16, 2008, PG&E, on behalf of all active parties, requested an extension of the temporary waiver granted in D.08-09-013. D.09-12-009 granted the request. Reid asserts that since he was one of the active parties requesting the extension, his participation in this matter contributed to the decision.

Finally, in the matter of the withdrawal of the application, Reid refers to his response to the motion for interim relief and his protest to the application where he explained:

Additionally, there is no good reason why Mr. Darbee should hold both positions. PG&E Company can appoint an interim CEO who is employed only by PG&E Company. The interim appointment could last until PG&E Company chooses a permanent CEO who is not employed by PG&E Corp. (July 18, 2008 protest and July 18, 2008 response to PG&E's motion for the interim relief at 5.)

Reid asserts that by approving the applicants' request to close the proceeding, Commission reached the same result that he sought in the above argument. D.09-09-021, Ordering Paragraph 2 at 5-6 concluded:

Because upon his appointment, Mr. Johns became the functional equivalent of the Utility Chief Executive Officer, PG&E and PG&E Corporation no longer formally nor functionally share a Chief Executive Officer. As a result, with the appointment of Mr. Johns as President of the utility, both companies are now in compliance with Rule V.E.

Reid believes his participation provided substantial contributions to D.08-09-013, D.08-12-009, and D.09-09-021.

We agree, in part, with Reid's description of his contributions to this proceeding. Reid filed the following documents on the merits of the application:

Date	Document
7/18/08	Protest
7/18/08	Response to PG&E Motion for Interim Decision Granting Limited, Temporary Waiver of Affiliate Transaction Rule V.E
8/25/08	Comments on proposed decision (PD) granting motion for temporary waiver of Affiliate Transaction Rule V.E
1/20/09	Opening Brief (jointly with PG&E and PG&E Corporation)
2/2/09	Reply Brief (jointly with PG&E and PG&E Corporation)

Initially, Reid opposed the application and the applicants' motion for a temporary waiver of Affiliate Transaction Rule V.E.⁴ Among his concerns was a serious conflict of interest that may occur if PG&E purchases energy or capacity from a company which is partly owned by PG&E Corporation via the investment, and that PG&E may be creating profit opportunities for PG&E Corporation at ratepayer expense. (Protest at 4, Response to PG&E's motion at 3.) Reid opposed the PD granting the motion, contending that if adopted, that decision would adversely impact ratepayers, and that there was potentially a serious conflict of interest between PG&E and PG&E Corporation. (Reid's comments on the proposed decision at 2-3.) D.08-09-013 discussed these concerns.

D.08-09-013 granted the temporary waiver of Rule V.E, subject to conditions set forth in that decision, for a limited period not to exceed 120 days from the effective date of D.08-09-013, or upon the adoption of a final decision. Although Reid's position did not prevail, we find that he contributed to this issue because his argument helped the Commission to design strict safeguards preventing a conflict of interest and adverse risk to ratepayers that could occur as a result of the temporary waiver of Rule V.E. The Commission agreed with parties that the limited exemption sought in the application raised important questions that would require careful consideration in the next phase of the proceeding.

After the adoption of D.08-09-013, a PHC was held, a Ruling Providing Schedule and Scoping Memo issued, and discovery conducted. Multiple parties, including Reid, asked the Commission to extend the schedule to provide additional time to prepare testimony. As a condition to the schedule extensions, the parties agreed to an extension of the temporary waiver. D.08-12-009 granted the extensions: "... in view of the extensions in the procedural schedule that have been authorized, it is appropriate to extend the duration of the temporary waiver from Rule V.E to continue until a final decision on the application is issued" (D.08-12-009 at 2). Reid's participation on this issue was directed at the procedural convenience to have more time to prepare his testimony and did not involve a work on the merits. We disallow Reid's time spent on this matter (0.1 hour)⁵ since it did not contribute to this proceeding.

In November 2008, Reid negotiated a separate settlement agreement (attached to the applicants' rebuttal testimony) with the applicants. The agreement addressed key issues of the proceeding as well as resolved the applicants' differences with Reid (see, Ruling of December 30, 2008 at 2-3). In his testimony of December 4, 2008, Reid urged the Commission to approve the settlement. He argued that the settlement contained protections that would provide significant benefits to PG&E ratepayers and constitute a significant improvement over the current regulatory system. (Reid's testimony at 4.)

Subsequently, PG&E, PG&E Corporation and L. Jan Reid filed joint opening and reply briefs urging the Commission to grant the application as modified by the settlement agreement and arguing against the positions of
non-settling intervenors, including TURN, DRA, and Independent Energy Producers Association (Opening Brief at 8-13; Reply Brief at 1-12).

Although D.09-09-021 resolves the matter procedurally rather than substantively, Reid attempts to establish that his input influenced the decision in some substantive rather than procedural way. Reid refers to his response to the motion for an interim relief where he explained that there was no good reason for Darbee to hold both positions and suggests that PG&E could appoint an interim CEO who is employed only by PG&E and would serve until PG&E chooses a permanent CEO (Response at 5). Reid asserts that since Johns is not an employee of PG&E Corporation, and is a functional equivalent of CEO of PG&E, the result Reid initially sought was eventually established by the Commission when it granted PG&E's motion to close the proceeding. (Request at 9.) In fact, Reid is trying to demonstrate that he had control over the closure of the proceeding. We recognize the fact that no decision on the merits of the application was adopted.

The Commission in its past decisions awarded intervenor compensation in the absence of a decision on the merits.⁶ For example, in D.06-06-026, we stated that to deny compensation because the proceeding was closed for reasons beyond the intervenor's control would be "unfair, inconsistent with the intent of the intervenor compensation statutes, and either discourage future participation or create an inappropriate incentive for intervenors to champion continued litigation" (D.06-06-026 at 5-6). Here, D.09-09-021 granted the applicants' request to terminate the proceeding without further action because, in view of subsequent events, the application has become moot. Consistent with our policy, we conclude that Reid's request should be granted.

³ D.98-04-059, 79 CPUC2d 628 at 653.

⁴ Oppositions to the motion were filed by several other parties, including The Utility Reform Network (TURN), Division of Ratepayer Advocates (DRA), and jointly California Farm Bureau Federation and California Large Energy Consumers Association.

⁵ Request at 14 (allocation of professional time by major issue).

⁶ For example, D.02-08-061, D.02-07-030, or D.06-06-026.