III. Rules Amendments
A. Timing of Notice of Intent
Pub. Util. Code § 1804(a)(2)2 requires an intervenor to file a notice of intent to claim intervenor compensation within 30 days of a prehearing conference (PHC), if any is held. The proposed rule will allow an intervenor to seek an earlier determination of eligibility before undertaking a significant amount of work in the proceeding, which also benefits the Commission by providing an early indication of the range of parties intending to take an active part in a proceeding, the interests those parties would represent, and at least a tentative list of the issues those parties would raise. The proposed rule also clarifies the time for filing notices of intent in proceedings in which a PHC is not held.
The Joint Parties support the clarification, but comment that the proposed amendment does not necessarily address all situations that may entitle or merit allowing an intervenor to file a notice of intent. For example, a PHC may be scheduled even if (and possibly after) the events that are associated with an ex parte proceeding occur; under these circumstances, the proposed amendment would contravene the statute by requiring an earlier time for filing notices of intent. In order to cure this problem, we modify the proposed amendment to the rule to provide the opportunity under all circumstances to file notices of intent within 30 days of the PHC if one is held.
As another example, the Joint Parties note that an intervenor may not learn of a proceeding until after the 30-day period has passed, whether or not the 30-day period has been triggered by a PHC; under the statute and the rule as currently written, the ALJ may set a different deadline for filing notices of intent to address special circumstances such as where new issues emerge later in the proceeding. These situations do not prompt us to modify the proposed rule. To the extent that an intervenor has cause to file a notice of intent outside of the statutory time period, the intervenor may state that cause in a motion to file a late notice of intent. If an ALJ finds it appropriate to set a different deadline for filing notices of intent to address special circumstances such as where new issues emerge later in the proceeding, Rule 1.23 provides the authority to do so.
California-American Water Company (Cal-Am) does not oppose the amendments regarding the timing of the notices of intent, but seeks clarification that the time to respond to them runs from when they are filed. Although our current rules do not reflect the statutory provision, Cal-Am's proposal is consistent with § 1804(a)(2)(C). For consistency and completeness, we modify the proposed rule to reflect the statutory requirement regarding the time for responding to notices of intent.
B. Amended Notice of Intent
Section 1804(a)(1) anticipates that parties might be unable to identify the scope of their planned participation and budget within 30 days after the PHC, and provides that the Commission may determine procedures for accepting new or revised notices of intent. The proposed rule amendments provide the opportunity for intervenors to file an amended notice of intent after the issuance of the scoping memo, which determines the issues in a proceeding.4
No party opposes this rule amendment. However, Cal-Am recommends that updates to notices of intent be strictly limited to the scope of issues defined in the scoping memo. Giving notice of an intent to claim compensation for work that is beyond the scope of a proceeding does not give rise to a right to compensation. It is unnecessary to modify the proposed rule in order to enforce this premise.
C. Estimated Cost of Participation
Section 1804(a)(2) requires the notice of intent to state the nature and extent of the planned participation, and an itemized estimate of the expected compensation for that participation. Our proposed rule requires, more specifically, that the intervenor provide the itemized estimate with reference to the specific issues upon which the intervenor intends to participate (except that the notice of intent may include a category of general costs not attributable to a particular issue). This will facilitate the ALJ's ability, under § 1804(b)(2), to provide guidance regarding the intervenor's realistic expectation for compensation.
The Joint Parties assert that intervenors' issue-specific cost estimates will be too sketchy at the NOI-filing stage to serve any purpose. To reflect this "reality," the Joint Parties propose modifying the rule to clarify that the estimate should be the intervenor's "best estimate" or "best effort." We reject the proposed modification. The statute and the rule implementing it serve the purpose of enabling the Commission to provide guidance to the intervenor before the intervenor has incurred significant costs that are likely not to be compensable. The Joint Parties offer no reason why it is more difficult to estimate the cost of participation on an issue-specific basis as opposed to an aggregate basis. Indeed, we would expect that a conscientious estimate of the total cost of participation will take into account the cost of participating on specific issues. In any event, the plain language of the statute and the plain meaning of the word sufficiently convey that the "estimate" is not expected to be a certainty.
San Diego Gas & Electric Company and Southern California Gas Company (jointly) recommend modifying the proposed rule to state that the general costs should be reasonably related to the issues identified in the notice of intent. We decline to modify the rule to define what is reasonable and what is not; our decisions provide our interpretation of what constitutes "reasonable" costs under the statute.
D. Economic Interest
Our proposed rule requires intervenors to identify their economic interest in the proceeding for purposes of determining the intervenor's customer status, which is a prerequisite for eligibility for intervenor compensation. This rule reflects a long line of decisions that have denied customer status under § 1802(b) to intervenors who participate in proceedings in order to advance their own business interests, as opposed to the interests of utility ratepayers as a group. (See, e.g., D.04-06-002, D.05-01-006, and D.05-02-054.)
The Joint Parties object to this requirement because it could be read to deem ineligible groups, such as environmental groups and Disability Rights Advocates, whose interest in the proceeding may not be strictly economic as utility ratepayers. The Joint Parties propose modifying the rule to clarify that public interest groups who do not stand to gain financially from their participation in the proceeding, irrespective of whether or not they are primarily representing customers' interests in lower bills, will always be eligible.
We do not adopt new standards of eligibility for intervenor compensation in this rulemaking. We have granted customer status to organizations, such as environmental groups, that represent ratepayer interests that are not solely economic, recognizing that participation in Commission proceedings by parties representing the full range of affected interests is important. The proposed rule does not create or change existing substantive standards. Rather, it merely requires the presentation of information which the Commission, in a long line of decisions, has found to be relevant to a determination of customer status.5
The Joint Parties also object that the proposed rule may conflict with the governing statute by creating an additional standard for the determination of customer status beyond that required by the definition in § 1802(b)(1). We disagree. As we explained in the OIR:
We also address the relationship between the determination of customer status and the other prerequisites to intervenor compensation. Section 1802(b) is somewhat ambiguous, defining the term "customer" by reference to that very term: "customer" is defined as a participant representing "customers," a representative authorized by a "customer," or a representative of a group or organization authorized to represent the interest of residential "customers." However, while virtually all California citizens and entities are subscribers of utilities subject to the Commission's jurisdiction, the intervenor compensation statutes are not reasonably interpreted to confer "customer" status on all subscribers. Rather, we interpret § 1804 to require that the intervenor's participation in the proceeding be on behalf of its interest as a customer.6
In addition, the Joint Parties object that the proposed rule may conflict with the governing statute by requiring a showing of significant financial hardship in the notice of intent, contrary to § 1804(a)2)(B) which permits the showing to be made in the request for compensation. There is no such conflict. Section 1802(g) sets forth alternate definitions of "significant financial hardship," neither of which are the equivalent of a statement of economic interest.7 The first definition makes no reference to an intervenor's economic interest in the proceeding. The second definition requires a group or organization, not simply to state its economic interest, but to quantify the economic interest of its individual members relative to the costs of participation. In contrast, the proposed rule merely requires a qualitative statement of economic interest without regard to the customer's financial ability to participate in the proceeding.
E. Notice of Intent Regarding Costs of Judicial Review
Pursuant to § 1804(a), intervenors must file a notice of intent, early in the proceeding, which includes an estimate of the costs for which they may seek compensation. Although costs of obtaining judicial review are compensable, it is neither the practice nor practicable for intervenors to identify and estimate the budget for obtaining judicial review at the start of a Commission proceeding, when they must give notice of intent to claim compensation. As a result, requests for compensation for judicial review costs may be made well after a proceeding has been closed, and with no prior notice of the estimated costs or the issues to be litigated. Our proposed rule requires intervenors to provide this notice within 30 days after the commencement of any judicial review. This will provide the notice required by § 1804(a) with respect to compensation for costs of judicial review, and will afford the Commission the opportunity to point out, in ruling on the notice, "similar positions, areas of potential duplication in showings, unrealistic expectation for compensation, and any other matter that may affect the customer's ultimate claim for compensation" as anticipated in § 1804(b)(2).
The Joint Parties seek two clarifications of the term "commencement." First, for purposes of judicial review in state courts, the Joint Parties recommend that the time for filing the notice run from the date that a writ is filed. Second, for an action filed in federal court, the Joint Parties recommend that the time for filing the notice of intent run from the date of an action of which the intervenor is likely to be aware. We appreciate the point that intervenors may not necessarily receive notice of the commencement by a third party of a federal court action involving the Commission.8 Accordingly, we modify the proposed rule to require that the time for filing the notice of intent run from the date that the intervenor first appears or files a pleading in the judicial action.
The Joint Parties do not oppose the requirement that the supplemental notice of intent identify issues and estimate costs of participation so long as there is no dispute that it is subject to § 1804(b)(2) and the statute's provision that a failure to identify an issue or precisely estimate costs in the notice of intent would not preclude an award of reasonable compensation. We confirm that the supplemental notice of intent is subject to § 1804(b)(2).
The Joint Parties object to the proposed rule's required showing that the intervenor's work on judicial review would "supplement, complement or contribute to the Commission's defense of its decision" as unnecessary and providing no value. Specifically, the Joint Parties assert that this showing may be met by merely quoting the Court of Appeal's statement in Southern California Edison Co. v. CPUC (2004) 117 Cal.App.4th 1039, 12 Cal.Rptr.3d 441, 449-450, that "it is important that the customer perspective be fully represented when a matter shifts to a judicial forum." The Joint Parties also assert that this showing may be met by merely stating that participation is necessary to ensure that the customer interest continues to be defended in the event that the Commission "changes its mind" by settling the complaint or "abandoning a previously issued agency decision."
The Joint Parties' objections to the rule appear to miss its purpose and the purpose of § 1804, which is to reduce intervenors' risk of incurring costs that will not be compensated. Section 1804(b)(2) outlines a process for the Commission to give a non-binding assessment of whether intervenors have a realistic expectation for compensation. The proposed rule requires intervenors to present sufficient information to allow the Commission to provide this assessment. There is no argument that the Joint Parties' hypothetical showing in response to the rule is of little value: The fact that it is important for the customer perspective to be fully represented and the possibility that the Commission may settle a judicial complaint do not provide any insight into whether an intervenor might realistically expect to be compensated. As the Court of Appeal noted, an intervenor is not necessarily entitled to compensation where its presentation in court adds nothing to the claims already presented by the Commission.9 In the interest of those intervenors who might want a realistic assessment of whether their costs of participation in judicial review are likely to be compensated, the rule provides direction as to what is required to enable that assessment.
F. Costs Prior to Start of Proceeding
The proposed rules provide that the request for compensation may include reasonable costs of participation that were incurred before the start of the proceeding. This provision codifies the principle that costs associated with participation in a proceeding before the start of the proceeding, if reasonable, are compensable. For example, parties may participate in workshops or briefings by utilities regarding an impending application, or begin case planning on a proceeding that has been scheduled but not yet filed. (See, e.g., D.05-05-046 and D.04-08-025.)
San Diego Gas & Electric Company and Southern California Gas Company (jointly) recommend modifying the proposed rule to provide that preliminary costs incurred before the start of a proceeding should be compensable if reasonably related to the issues which the intervenor identified in the notice of intent. Pacific Gas and Electric Company supports this recommendation, and further recommends that the rule provide examples of preliminary work eligible for compensation. We decline to modify the rule to define what is reasonable and what is not; our decisions provide our interpretation of what costs are "reasonable" under the statute.
G. Accounting of Costs
Section 1804(c) requires the filing of requests for an award of compensation within 60 days following issuance of a final order or decision, and that they include a detailed description of services and expenditures, and a description of the customer's substantial contribution. Our proposed rule requires, more specifically, that intervenors maintain and provide an account of the costs that references costs to tasks performed and issues in the proceeding. This requirement will enable the Commission to identify the costs associated with the intervenor's substantial contribution, and to conduct reasonableness analysis.
The Joint Parties request that the Commission clarify if the record-keeping and allocation reflected in the records generally submitted by TURN in its intervenor compensation requests satisfy the new rules; if not, the Joint Parties request that the Commission issue a template illustrating the identification of task and issue that would satisfy the new rules. We confirm that TURN's requests for compensation have usually met our expected standard under the rule. Because the appropriate level of identification of task and issue will depend on the complexity of the proceeding, we decline to adopt a template at this time.
The Greenlining Institute (Greenlining) opposes the rule. Greenlining asserts that the proposed accounting requirements are more difficult for organizations that do not derive a major portion of their funds from the Commission, as compared to organizations that receive most of their funding through the intervenor compensation program. We are not aware of any basis for this assertion. We also see no statutory basis for imposing lesser accounting standards on an intervenor, depending on the source of most of its funds.
As we understand its further objection, Greenlining also objects that preparing a detailed account of costs is a waste of time (and money) if the request for compensation is denied on the basis that the intervenor did not make a substantial contribution to a Commission proceeding. Greenlining's objection actually goes to the statutory requirement that the request for compensation include a showing of both substantial contribution and reasonableness of costs. Given the statutory requirement, any intervenor that hopes to be compensated for its efforts must plan from the very start of a proceeding both the positions it expects to advocate and the costs it expects to incur.
H. Participation by Multiple Intervenors
The statute is clear that an intervenor may receive compensation for participation that materially supplements, complements or contributes to the participation of other parties, including Commission staff. (See §§ 1801.3(f) and 1802.5.) In order to assist the Commission in making that necessary determination, the proposed rule requires that, in a proceeding with multiple intervenors, the request include a showing and detailed accounting that the participation for which the intervenor requests compensation was efficiently coordinated with the participation of any party with similar interests.
The Joint Parties recommend modifying the proposed rule to require this showing only in circumstances where the intervenors' presentations overlapped. The Joint Parties point out that often, in proceedings with a number of intervenors, each addresses distinct issues with no overlap. To clarify the proposed rule, we modify it to permit, in the alternative, a showing that the intervenor's presentation did not overlap the presentation of other intervenors.
I. Other Comments on the Rules as Originally Proposed
Greenlining and Public Advocates, Inc. (Public Advocates) recommend that the Commission consider the adoption of multipliers for calculating intervenor compensation awards.
Greenlining, Public Advocates, and Latino Issues Forum recommend that the Commission use this rulemaking to explore how to encourage greater and more effective intervention from underserved communities.
Public Advocates recommends that the Commission adopt the provisions of Code of Civil Procedure § 1021.5 for purposes of determining awards of intervenor compensation in Commission proceedings, and points out that under this private attorney general fees practice, there is no need to account for costs by reference to particular issues.
These comments raise issues that are beyond the scope of this rulemaking.
2 Subsequent statutory references are to the Public Utilities Code unless otherwise indicated.
3 "Old" Rule 84.
4 See Rule 7.3.
5 In Order Instituting Rulemaking on the Commission's Intervenor Compensation Program; Order Instituting Investigation on the Commission's Intervenor Compensation Program, D.98-04-059, the Commission reasoned: "With respect to environmental groups, we have concluded they were eligible in the past with the understanding that they represent customers whose environmental interests include the concern that, e.g., regulatory policies encourage the adoption of all cost-effective conservation measures and discourage unnecessary new generating resources that are expensive and environmentally damaging. (D.88-04-066, mimeo. at 3.) They represent customers who have a concern for the environment which distinguishes their interests from the interests represented by Commission staff, for example." (D.98-04-059, 1998 Cal. PUC LEXIS 429 at *49, fn. 14.)
6 Pub. Util. Code § 1802(g) reflects this principle by defining "significant financial hardship," with respect to groups, by reference to the economic interest of its members.
7 "Significant financial hardship" means either that the customer cannot afford, without undue hardship, to pay the costs of effective participation, including advocates fees, expert witness fees, and other reasonable costs of participation, or that, in the case of a group or organization, the economic interest of the individual members of the group or organization is small in comparison to the costs of effective participation in the proceeding.
8 In contrast, notice is uniformly required in state court proceedings where, pursuant to California Rule of Court 58(a)(1), the writ is served on parties to the underlying proceeding.
9 Southern California Edison, supra at 1052 n.13.
