6. Productivity

D.98-04-059 directed customers to demonstrate productivity by assigning a reasonable dollar value to the benefits of their participation to ratepayers. The costs of a customer's participation should bear a reasonable relationship to the benefits realized through their participation.

Quantification of benefits is often difficult in rulemaking proceedings. Because this rulemaking does not establish specific rates or involve disputes over particular dollar amounts, identification of precise monetary benefits is not possible. However, the rulemaking is not rate-neutral: Phase II of the proceeding should address the ratemaking mechanism to implement the JP's cost proposal; and D.06-07-029 directs the IOU, to charge the benefiting customers the net cost of capacity, and establishes principles for determining the net cost. (See D.06-07-029, p. 30.)

Aglet provides several observations which demonstrate that the level of effort by the intervenors in this proceeding was reasonable and productive. For example, as we mentioned previously, Aglet recommended that the Commission determine IOU capacity needs before allowing IOUs to sign additional capacity contracts. The Commission has used values of $40 per kilowatt-year (kw-yr) for unbundled capacity products and $73/kw-yr for bundled capacity products.¹¹ Thus, a single unbundled capacity contract for one MW of power will cost ratepayers at least $40,000 per year, or almost twice the award requested by Aglet. Because IOU contracts will greatly exceed one MW, a tiny contribution to the efficiency of the adopted contracting process will exceed Aglet's costs of participation. We therefore find that Aglet's participation was efficient and that Aglet's substantial contributions to D.06-07-029 were productive in that the benefits to ratepayers of its participation outweigh the costs.

Similarly, WEM's stress on the need to address energy efficiency first, while difficult to quantify in this proceeding, is productive since, generally, energy efficient resources are less costly for the ratepayers and more beneficial for the environment than fossil-fuel energy.

¹¹ See D.06-06-064, pp. 4 and 73.