5. Reasonableness of Requested Compensation

CFC requests $25,466.00 for its participation in this proceeding, as follows:

Work on Proceeding
Attorney	Year		Hours		Hourly Rate		Total
Alexis K. Wodtke	2008/09		64.91		$350		$22,718.50
Preparation of Compensation Request
Attorney		Year		Hours		Hourly Rate		Total
Alexis K. Wodtke		2010		15.719		$175		$2,747.50
Total Requested Compensation								$25,466.00

In general, the components of this request must constitute reasonable fees and costs of the customer's preparation for and participation in a proceeding that resulted in a substantial contribution. In the following section we consider the issues related to the reasonableness as well as certain aspects of CFC's claimed substantial contributions based on the allocation of time by issues.

5.1. Hours and Costs Related to and
Necessary for Substantial Contribution

We first assess whether the hours claimed for the customer's efforts that resulted in substantial contributions to Commission decisions are reasonable by determining to what degree the hours and costs are related to the work performed and necessary for the substantial contribution. CFC documented its claimed hours by presenting a daily breakdown of the hours of its attorney, accompanied by a brief description of each activity. The hourly breakdown reasonably supports the claim for total hours.

On June 21, 2010, CFC sent to the Commission a letter providing allocation of the time by the issues, on which CFC worked in the subject phase of the proceeding. There are nine issues: 1) SG Definition, Statute, Regs., standards; 2) Purpose/Functions/Capability; 3) Consumer Interest & Response; 4) Planning/Coordination; 5) Privacy/Security; 6) Cost, Rates & Prices; 7) Compare Costs to Benefits; 8). Obsolescence; and 9) Procedural.

We note that CFC breaks its work into two periods: first, from January 13, 2009 up to March 5, 2009, and second, from October 1, 2009 to December 7, 2009. With regard to the first time period, CFC explains in its letter of June 17, 2010, that it reduced by 90% all of these hours, and requested only approximately 10% of that time or 10.46 hours.²⁰ We agree with these voluntary reductions, based on our analysis of CFC's substantial contributions and the reasonableness of the request.

We note that CFC's issues 1 and 2 (SG Definition, Statute, Regs., standards and Purpose/Functions/Capability) were not exactly within the scope of the proceedings leading to D.09-12-046. As the Scoping Memo and Ruling of May 1, 2009, indicates at 12.

The Commission's focus in the OIR on the benefits and costs of a particular Smart Grid investment obviates the need for an overall inventory of projects already completed - existing projects (such as advanced metering infrastructure) will be reviewed only to the extent that they affect an evaluation of a proposed new investment.

The proceeding will not develop a "definition" of Smart Grid. A Smart Grid is not a policy destination, but a policy direction that subsumes a host of related activities that will evolve over time and as technology develops.

We find that, to a large extent, CFC's work on this issue was unproductive.

Based on our observations related to CFC's issues number 1 and 2, we agree with CFC's reductions of time in the first time period. For the second time period, CFC did not allocate any of its time to these issues.

We further analyze CFC's work on its other issues, and make reductions related to the 53.10 hours spent in the second time period marked by CFC. Regarding the issue number 4 (Planning/Coordination) CFC explains that it raised this issue and recommended that the utilities work jointly on creating a statewide plan for establishing a smart grid in California.²¹ However, these matters were not in the proceeding's phase leading to D.09-12-046. The September 28, 2009 Joint Ruling Inviting Comments on Proposed Policies and Findings Pertaining to the Smart Grid Policies Established by the EISA specifically states that the infrastructure issues will be addressed in the second ruling later in the proceeding.²² The second ruling, indeed, issued on February 8, 2010, a few months after D.09-12-046 issued. In accordance with that plan, D.09-12-046 did not focus on the aspects of the proceeding where CFC's Planning/Coordination argument could potentially contribute to the discussion. Therefore, CFC's effort in this area was, in part, unproductive, and we agree with the hourly reductions made by CFC in the first time period.

Our analysis of CFC's work in the first time period applies to CFC's work during the second time period, especially because the Joint Ruling clearly defined the scope of the proceeding. Based on that analysis, we assess that only approximately 10% of the time spent on the issue number 4 (Planning/Coordination) during the second time period have contributed to D.09-12-046. CFC spent 21.40 hours on this issue during the second time period; we disallow 90% of that time or 19.26 hours.

The issue number 9 (Procedural), as the June 21, 2010 letter explains, related to CFC's request for evidentiary hearing, presented as a part of CFC's October 26, 2009 comments on Joint Ruling, at 2-5. D.09-12-046 states that CFC failed to identify factual issues that would warrant hearings. The Commission denied the request.²³ We find that 5.00 hours spent on the Procedural issue were unproductive and should not be compensated.

We further analyze CFC's request based on our analysis of the documents filed by CFC in the second time period (after October 1, 2009), and make several additional disallowances.

November 2, 2009 Comments. According to CFC's time records, it spent 31.1 hours on these comments. The comments focused on description of the parties' positions and on discussion of the customer information and privacy issues.²⁴ CFC's time records indicate, however, that almost a half of that time or 14.5 hours was spent on the Planning/Coordination issue, which we have already reduced by 90% or by 13.05 hours. Of the remaining 18.05 hours, 6.00 hours were spent on the Costs, Rates & Prices, 9.6 hours on Privacy/Security, and 1.00 hour on the Obsolescence issues. Comments on Costs, Rates & Prices occupy less than a page where most of the text is a description of other parties' positions.²⁵ We find 6.00 hours for this task excessive. We reduce this time by 4.00 hours. We believe that 2.00 hours is more than sufficient to prepare the CFC's short comment on this issue. As to the Privacy/Security issue, CFC's comments, especially, CFC's information at 8-12, contributed to the Commission's decision in D.09-12-046 to explore some of the aspects of providing access to customers and authorized third parities to price and usage information. Based on this, we will allow 9.6 hours for these issues. One hour for the recovery of book-value costs of obsolete equipment is reasonable. The resultant 14.05 (31.1 - 13.05 - 4 = 14.05) hours is a more reasonable amount of time to prepare the comments.

The total reduction of the time spent on substantive issues is 28.26 hours.

We also consider the reasonableness of 15.7 hours spent on the intervenor compensation request. We find them excessive, considering that the claim concerns one year, one decision, and one attorney's work. We reduce this time by 4.00 hours. 11.7 hours is a more reasonable amount of time for a project of this complexity.

5.2. Intervenor Hourly Rates

We next take into consideration whether the claimed fees and costs are comparable to the market rates paid to experts and advocates having comparable training and experience and offering similar services.

CFC seeks an hourly rate of $350 for attorney Alexis Wodtke, for work performed in 2008 and the same rate for work performed in 2009 and 2010. We previously approved this rate for Wodtke in D.09-07-015 and D.09-11-030, and adopt it here.

¹⁹ We have corrected here CFC's erroneous figure of 15.4 hours. According to CFC's timesheet, it should be 15.7. The requested dollar amount is correct for 15.7 hours.

²⁰ CFC's June 17, 2010 letter (see the Correspondence file for the proceeding) corrects the originally requested 11.00 hours.

²¹ June 21, 2010 letter clarifying the subject intervenor compensation request can be found in the Correspondence file for this proceeding.

²² "This ruling proposes tentative findings based on the record in this proceeding and asks a series of questions (and establishes a cycle of comments and replies) to further develop a record that will permit the Commission to address the issues identified for resolution by the Public Utility Regulatory Policies Act (PURPA) as amended by the EISA and to adopt the requisite findings by December 19, 2009. A second ruling will follow shortly. This second ruling will solicit additional comments that pertain to this Commission's proposals to adopt policies to advance California's Smart Grid infrastructure [footnote omitted] and will address the issues raised for this proceeding by SB 17 (Padilla), if enacted." (Joint Ruling of September 28, 2009, at 2-3.)

²³ D.09-12-046 at 18. See, also Scoping Memo and Ruling of May 1, 2009, at 20, providing instructions for parties contending that evidentiary hearing was necessary.

²⁴ CFC's November 2, 2009 reply comments on Joint Ruling at 5-12.

²⁵ Id., at 3.