3. Development of the Record
The range of potential issues under § 1806 is considerable. For example, how should the "market," to which § 1806 refers, be defined? Regarding the dollars per hour "market rate" paid by the utilities to their employees, what inputs (benefits, overheads) should be included in the dollars, and what assumptions should be made regarding the annual "billable" or "productive" hours worked, as distinguished from, e.g., vacation, training or administrative time. Not surprisingly, utilities differ regarding their approaches to compensation and personnel practices. Accordingly, a common reporting format and simplifying assumptions were needed to enable a fair analysis of the utilities' compensation data.
These issues were addressed and, to a remarkable extent, resolved at workshops held on December 9, 2004, and February 9, 2005. Certain utilities and intervenors continue to debate two conceptual issues, which we address later in today's decision. For now, however, these issues remain conceptual because the range of hourly rates proposed by the intervenors has proved in fact to be largely noncontroversial.
The success of the workshops is due to the participants, for which we acknowledge and thank them. Detail could easily have swamped this process; that it did not do so is a tribute to the focus, candor, and collaborative spirit displayed at the workshops.
In summary, the intervenors' hourly rates we establish today for their work performed in 2005 are based on (1) a series of data sets2 from the utilities, which include both compensation data and summary information regarding their representatives' qualifications, and (2) the intervenors' proposals, which analyze the utility data sets in relation to the qualifications of representatives who will appear on behalf of the intervenors. The intervenors' proposals were subject to comment and reply comment on April 6 and 18, respectively.
The Commission's costs of representation are also relevant under § 1806. Thus, in Resolution ALJ-184, we had our Executive Director review the utility data and report any instances in which the Commission had paid rates exceeding those paid by the utilities. The Executive Director duly reported, on June 7, 2005, that the Commission had not paid rates exceeding those paid by the utilities.
Finally, we note that Verizon presented an alternative proposal to the above data collection process. Verizon advocated retaining a private company, with expertise in personnel recruitment and compensation, to develop and analyze the "market rate" information. At Verizon's invitation, two prominent human resources consulting firms with extensive utility experience submitted responses describing how they would approach the project. The responses addressed scope of work, timing, project team, and cost, among other things.
The sense of the second workshop was that the alternative proposal could not be implemented at this time. We agree. Given our desire to set hourly rates before we receive large numbers of award requests involving 2005 work, we prefer to revisit the alternative proposal, if Verizon wishes to renew it, in our hourly rate update for 2006. In the meantime, we encourage Verizon and any others who may be interested in the alternative proposal to give more thought to its implementation, including at least the following questions:
1. Will the hourly rate recommendations developed through the alternative proposal be credible and objective? How and when will the consultant's process and methodology be open to public scrutiny?
2. Will the alternative proposal save time and effort for utilities, intervenors, and Commission staff? What other advantages might the alternative proposal have relative to the process that we rely on in today's decision?
3. What is the process by which the consulting contract will be awarded, and how will it be funded?
The responses elicited by Verizon provide concrete examples that may be evaluated in terms of how well they address the issues posed in the first two questions. The third question is more problematic, particularly if the Commission itself is expected to solicit bids and award, administer, and fund the consulting contract.
2 "Preliminary" data sets were submitted on November 19, 2004, by each utility that had been required by the Commission to pay an award for intervenors' work performed in 2001, 2002, or 2003. Revised data sets, using a spreadsheet developed by Pacific Gas and Electric Company (PG&E), were submitted on January 31, 2005, by the state's largest utilities. These utilities then provided 2004 data in submissions on March 4 and (with additional data for in-house representatives) on May 13. Consequently, our utility compensation data come chiefly from PG&E, San Diego Gas & Electric Company, Southern California Edison Company (Edison), Southern California Gas Company, SBC California, and Verizon California Inc. (Verizon). These utilities historically have paid 85-95% of all intervenors' compensation awards for which we have put the payment responsibility on individual utilities.
