7. Assignment of Proceeding
This proceeding is assigned to Commissioner Michael R. Peevey, and Administrative Law Judges Steven Kotz and Kenneth Koss.
1. The initial purposes of this rulemaking were to refine the process for setting hourly rates for intervenor representatives and to determine the hourly rates to be used in calculating intervenor compensation awards for work performed in 2006.
2. Interim D.07-01-009 expanded the scope of this rulemaking to include intervenor rates for 2007.
3. The Assigned Commissioner's Scoping Memo on September 18, 2007, expanded the scope of this rulemaking again to include a determination of rates for intervenors for 2008, among other matters.
4. Cost-of-living data readily available to the public from several federal agencies show the general rate of inflation for 2007 to be approximately 3%.
5. For work performed in 2008, a 3% COLA above rates adopted for 2007 is reasonable.
6. In addition to COLAs, we find that continuing to allow individuals an annual "step increase" of 5%, twice within each experience level and capped at the maximum of that level, as authorized in D.07-01-009, is reasonable.
7. The existing intervenor rate ranges, based on levels of experience, have been in place for the last four years (2005-2008).
8. It is reasonable generally to restrict intervenor rates to the established range of rates for any given level of experience.
9. It is reasonable to continue our policy that in no event shall any generally applicable increase in intervenor rates result in rates above the highest rate adopted rate for any given level of experience, in a given year.
10. The rate levels established herein, and the limited procedure for considering rates above the established levels, are consistent with the intervenor compensation statutes (§§ 1801-1812).
11. Beginning in 2006, the state's largest utilities, pursuant to D.05-11-031, have been required to serve annual data sets regarding the hourly rates they paid to their attorneys and expert representatives, both in-house and outside, for participation in our proceedings for the previous two-year period, for the purpose of assisting the Commission, intervenors and others in determining and calculating hourly rates to be used in awards of intervenor compensation.
12. The results of the utility data reports have been inconclusive, and we have found little use for the first two data sets (2006 and 2007) in light of adopted COLAs.
13. The data sets contain very few data points for several experience levels, even when the data from all utilities are aggregated.
14. Comparing the data sets to intervenor rates does not support meaningful conclusions regarding the escalation of hourly rates in the market for representatives in regulatory proceedings.
15. The data sets do not validate the results from using COLAs to update hourly intervenor rates.
16. A comprehensive study of market rates will be necessary in order to ensure compliance with the "market rate standard" described in § 1806.
17. We previously rejected a proposal to retain an outside consultant to perform the market rate study.
18. It is reasonable to conduct a market rate study periodically, perhaps once every five years.
19. Based on our previous experiences, we now see advantages of having an outside consultant with specific compensation expertise perform the market rate study.
20. It is reasonable to authorize a COLA for work performed in 2009, by future Commission Resolution, and in subsequent years in the absence of a market rate study, to be effective on January 1 of each year.
1. For work performed in 2008, intervenors should be authorized an hourly rate COLA of 3% (rounded to nearest $5) above rates adopted for 2007, as set forth in the table in Section 4.1 of the foregoing opinion.
2. The Assigned Commissioner's Scoping Memo of September 18, 2007, should be affirmed.
3. The 5% step increases authorized in D.07-01-009 should be continued.
4. We should develop a procedure to consider hourly rates, in specific limited circumstances, above the generally adopted rate ranges.
5. The requirement that the utilities submit annual data reports on hourly rates should be discontinued.
6. A comprehensive market rate study of hourly rates should be conducted in order to ensure compliance with the "market rate standard" described in § 1806.
7. We should conduct a market rate study periodically, perhaps once every five years.
8. We should direct the Chief ALJ to designate staff from the ALJ Division who will work in consultation with interested utilities and intervenors on a market rate study to be conducted and concluded within the next two to three years, if feasible.
9. The working group should consider the use of an outside consultant to conduct the study.
10. A COLA adjustment should be authorized, by future Commission Resolution, for work performed in 2009, and in subsequent years in the absence of a market rate study, to be effective on January 1 of each year.
11. The Chief ALJ, in consultation with the Commission President, should prepare a proposed resolution recommending the 2009 COLA, and subsequent years if necessary, using the same federal inflation indexes used to compute the 2008 COLA, with the resolution prepared, if feasible, in time for consideration by the Commission on or before its last business meeting of the year prior to the effective date of the COLA.
12. This proceeding should be closed, and today's order should be made effective immediately.
FINAL ORDER
IT IS ORDERED that:
1. For work performed in 2008, intervenors are authorized an hourly rate Cost-of-Living-Adjustment (COLA) of 3% (rounded to the nearest $5) above rates adopted for 2007, as set forth in the table in Section 4.1 of the foregoing opinion.
2. The Assigned Commissioner's Scoping Memo and Ruling of September 18, 2007, is affirmed.
3. The requirement that the utilities submit annual data reports on hourly rates, as set forth in Decision (D.) 05-11-031, is discontinued.
4. Annual hourly rate adjustments shall continue on a calendar year basis.
5. The 5% step increases authorized in D.07-01-009 shall continue in 2008, and subsequent years. The step increases shall be administered, and are subject to the limitations, as set forth in Section 4.4 of the foregoing opinion and in Finding of Fact 6.
6. Beginning with work performed in 2008, a procedure is adopted, as described in the foregoing opinion, to consider requests for approval of hourly rates above the generally adopted rate ranges.
7. In order to ensure compliance with the "market rate standard" described in Pub. Util. Code § 1806, the Chief Administrative Law Judge (ALJ) shall designate staff from the ALJ Division who will work in consultation with interested utilities and intervenors on a market rate study to be conducted and concluded within the next two to three years, if feasible, and consider the use of an outside consultant to conduct the study.
8. A COLA adjustment shall be authorized, by future Commission Resolution, for work performed in 2009, and subsequent years in the absence of a decision based on a market rate study, to be effective on January 1 of each year.
9. The Chief ALJ, in consultation with the Commission President, shall prepare a proposed resolution recommending the 2009 COLA, and subsequent years if necessary, using the same federal inflation indexes used to compute the 2008 COLA, with the resolution prepared, if feasible, in time for consideration by the Commission on or before its last business meeting of the year prior to the effective date of the COLA.
10. Rulemaking 06-08-019 is closed.
This order is effective today.
Dated April 10, 2008, at San Francisco, California.
APPENDIX A
Comparison of Inflation Indexes
(Percent Increase from previous year)
2002-2008
|
SSA COLA9 |
BLS CPI10 |
BLS |
Intervenor |
Commission Order13 |
2002 |
2.6 |
1.6 |
0.8 |
N/A |
|
2003 |
1.4 |
2.9 |
5.0 |
N/A |
|
2004 |
2.1 |
2.7 |
3.4 |
8% |
Resolution ALJ-184 |
2005 |
2.7 |
3.4 |
5.7 |
0% |
D.05-11-031 |
2006 |
4.1 |
3.2 |
5.4 |
3% |
D.07-01-009 |
2007 |
3.3 |
2.9 |
N/A |
3% |
D.07-01-009 |
2008 |
2.3 |
N/A |
N/A |
3% |
Today's order |
(END OF APPENDIX A)
9 SSA COLA issued in prior year (i.e., 2008 COLA issued in October 2007).
10 BLS - average Consumer Price Index.
11 BLS - average wage increase for legal profession in the Bay Area.
12 Before 2004, the Commission increased rates for individual representatives based on a showing specific to the individual seeking an increase, and only in response to individual requests. Thus, the timing and amount of adopted increases were subject to wide variation among intervenors.
13 Commission order authorizing the intervenor rate increase.
N/A = not available
