4. Substantial Contribution
In evaluating whether a customer made a substantial contribution to a proceeding, we look at several things. First, we look at whether the Commission adopted one or more of the factual or legal contentions, or specific policy or procedural recommendations put forward by the customer. (§ 1802(i).) Second, if the customer's contentions or recommendations paralleled those of another party, we look at whether the customer's participation unnecessarily duplicated or materially supplemented, complemented, or contributed to the presentation of the other party. (§§ 1801.3(f) and 1802.5.)
As described in § 1802(i), the assessment of whether the customer made a substantial contribution requires the exercise of judgment.
In assessing whether the customer meets this standard, the Commission typically reviews the record, composed in part of pleadings of the customer and, in litigated matters, the hearing transcripts, and compares it to the findings, conclusions, and orders in the decision to which the customer asserts it contributed. It is then a matter of judgment as to whether the customer's presentation substantially assisted the Commission.3
With this guidance in mind, we turn to the claimed contributions NRDC and TURN, respectively, made to the proceeding.
4.1. NRDC's Claim of Substantial Contribution
NRDC claims that its participation was instrumental in precipitating this consolidated proceeding which ultimately resulted in D.07-12-050. NRDC claims that it actively and meaningfully participated in both the proceeding that resulted in that decision and other related and precipitating EE proceedings, R.06-04-010 and A.05-06-004 et al.
NRDC contends its success is largely reflected in its efforts that precipitated this consolidated proceeding as well as its efforts that shaped the participatory process that ultimately resulted in D.07-12-050. As the lone environmental advocacy group in this consolidated proceeding, NRDC also asserts that its arguments were successful and clearly reflected in the rulings issued, the course that the proceeding took, and D.07-12-050 issued.
NRDC and its scientists brought to the proceeding a unique environmental perspective coupled with its vast policy expertise gained through its historic participation in related proceedings and in the studies to minimize the environmental effects associated with Californian's energy consumption.4 Thus, their active participation and input in this proceeding provided invaluable technical and policy foundation which set the stage for the meaningful discussion.
Our review of the record in this case confirms that NRDC's participation was active throughout this consolidated proceeding and judges that NRDC's contribution to the proceeding substantially assisted the Commission. NRDC participated in PHCs, hearings, meetings with Commissioners' offices, organized workshops, prepared and submitted four sets of comments, and reviewed numerous rounds of comments, testimony, and other filings.
NRDC claims it made substantial and meaningful contributions during the formative stages of this consolidated proceeding, during which the energy utilities and other parties discussed and debated many aspects of the energy utilities' applications leading up to the energy utilities' July 2007 revised applications.
During the initial stage of this proceeding, NRDC claims it played an active role during the workshops in setting the stage for this proceeding by presenting NRDC's technical insight into the potentials of energy savings in water conservation, the concept of embedded energy. Thereafter, NRDC contends it participated in the discussions with the utilities and other parties outlining the multitude of data deficiencies associated with the applications which had set forth the conceptual pilot proposals. Ultimately, those discussions helped shape and led to the filing of supplemental testimony and revised applications answering fundamental questions about water-embedded energy as a demand side resource for energy utilities.
During the subsequent debates and discussions concerning the pilot program design, NRDC played an active role in designing the embedded water energy calculator and the various factors/assumptions that go into the calculation, by pointing out, in its reply comments, the flaw in the cost-effectiveness calculator proposed in the applications and noted how, as proposed, the calculator undervalues the embedded energy savings and that the Commission needed to "understand the full range of associated energy savings" attributable to the reform of water transportation, use, and treatment practices.
The Final Decision reflects some of NRDC's concerns, although it does not incorporate all of its explicit recommendations. First, the Proposed Decision was silent regarding whether and how the ongoing 18 months of water-energy efficiency programs and studies authorized by the Commission in this proceeding would receive oversight, review, and input from the parties, the general public, and other stakeholders. Following NRDC's meetings with the Commissioners' offices and its opening and reply comments on the Proposed Decision wherein NRDC stressed the need to create opportunities for ongoing oversight, review, and input of the utilities' pilot programs and the various studies authorized by the Commission, the Final Decision acknowledged the importance of that oversight and public review as recommended by NRDC and noted "We agree that public vetting of the draft study plans is necessary and likely beneficial."
In addition, the Proposed Decision was also silent on the explicit linkage between the results of the two foundational studies to be completed by the Energy Division and the cost-effectiveness calculator that will ultimately be used to evaluate the economics of prospective energy-water efficiency proposals. Further, the Proposed Decision did not contain a commitment to undertake further development of calculator, stating only that this would be explored. Following NRDC's meetings with the Commissioners' offices and its opening and reply comments on the Proposed Decision wherein NRDC stressed the centrality of the cost-effectiveness calculator to determining whether and what full-scale programs might be authorized by the Commission in the future, the Final Decision made explicit the Commission's commitment to linking the foundational studies to the further development of the calculator as follows:
The Energy Division will consider revisions to the calculator based on the outcome of the studies and work with the Commissioner assigned to the energy efficiency rulemaking proceeding to establish a procedure for public review of and comment on the study results and calculator revisions.
While the Commission did not specifically adopt NRDC's recommendation to develop another cost-effectiveness calculator, its endorsement was significant in the Commission's concern that the current cost-effectiveness calculator incorporate information derived from the pilot programs. The Commission therefore approved two embedded energy foundational studies to address the added information required to perform cost-effectiveness calculations. This action was taken in large part because of NRDC's advocacy.
As set forth in the Final Decision, NRDC recommended that the Commission not base its pilot program approval decisions on formal cost-effectiveness evaluation by the utilities proposed cost-effectiveness calculator, since the calculator, as proposed, is not capable of comprehensively addressing the statewide energy implications of saving water within individual utility service areas. D.07-12-050 effectively adopted that recommendation, since none of the utility-proposed pilot programs ultimately approved by the Commission were found to be cost-effective by the current calculator.
In its reply comments on the Proposed Decision, NRDC recommended that the Commission not approve at this time a recommendation that the four utility applicants in A.07-01-024 et al. enter into pilot programs with Commission-regulated water utilities. D.07-12- 050 effectively adopted this recommendation.
In addition to the foregoing participation, NRDC further complemented the discussion and recommended, and SCE agreed, that the study included an assessment of greenhouse gas emission reduction potential from water management options.
While NRDC's cooperation with other parties was exemplified by the show of minimal duplication in its work product, when appropriate, NRDC contributed by taking an active and complementary role.
4.2. TURN's Claim of Substantial Contribution
TURN claims and the record reflects, that TURN actively participated in every aspect of this consolidated proceeding, including the work in R.06-04-010 that preceded the filing of A.07-01-024 et al.
Our review of the record shows TURN attended the water-embedded energy savings workshop in Downey, filed post-workshop opening and reply comments, and actively participated in the Water-Energy Consortium. Once the energy utilities filed their applications, TURN filed a PHC statement, attended the PHC, persuaded the Commission to deny the motion of SDG&E and SoCalGas for premature spending authorization,5 filed a consolidated protest of the four applications, assisted the Commission in planning workshops for the proceeding,6 participated in every workshop, engaged in productive discussions and negotiations with the energy utilities and other intervenors, filed comments on the energy utilities' proposed pilot programs (as supplemented and amended, pursuant to the negotiations), and filed comments and reply comments on the proposed decision.
TURN has included in its request for compensation for its work during the summer and fall of 2006 related to water-embedded EE. TURN also notified the Commission of its intention to include these hours in this request for compensation when it filed NOI on March 1, 2007. Such work is formally associated with R.06-04-010; however, it is logical for TURN to seek compensation for its time and expenses in this consolidated proceeding which resulted in D.07-12-050, where the Commission considered the energy utilities' proposed water-embedded energy pilot program applications.
Our review of the record indicates that TURN raised the following six categories of issues in this proceeding: 1) ratepayer benefits/cost-effectiveness; 2) appropriateness of pilot program and study designs; 3) design of low-income element of the pilots, in particular; 4) administration of the evaluation, measurement, and verification (EM&V) component of the pilots; 5) counting savings from the pilots towards the EE goals adopted in D.04-09-060; and 6) pilot funding mechanisms. For each of these issues, either the energy utilities changed their proposals in response to TURN's position (and had those proposals ultimately adopted in D.07-12-050), or the Commission agreed with TURN in rulings or D.07-12-050.
First, in its protest and PHC statement, TURN asserted that each application lacked essential information, without which the Commission could neither assess potential ratepayer benefits from the pilots nor evaluate whether the pilots would help answer fundamental questions about water-embedded energy as a demand side resource for energy utilities. TURN therefore recommended that the Commission issue a ruling clarifying the Commission's expectations regarding the purpose of the pilot programs, as well as the quality and quantity of supporting data that the applications should contain, and then require the energy utilities to update their applications to remedy the myriad of data deficiencies. On April 23, 2007, the Assigned Commissioner Ruling and Scoping Memo adopted TURN's recommendations, clarified the objectives of the pilots, and directed the energy utilities to provide supplemental testimony proposing program revisions necessary to meet the Commission's objectives, including information needed to determine cost-effectiveness of the proposed pilots. Then in D.07-12-050, the Commission also adopted TURN's position that the pilots must produce information about whether water conservation efforts can be cost-effective for energy ratepayers, and if so, which measures and strategies might warrant inclusion in the utilities' 2009-2011 EE portfolios. Finally, the Commission found the energy utilities' proposals insufficient, and in D.07-12-050, the Commission set forth a more comprehensive study strategy than those energy utilities proposed, and authorized only those programs likely to produce meaningful data about water-embedded energy savings.
Next, in its protest, TURN argued that the applications did not appear to satisfy the Commission's directive regarding low-income customers because low-income customers would not necessarily receive direct benefits from the proposed pilot programs. TURN pointed out that tenant households who do not receive a water bill will not receive economic benefits from water conservation and advocated targeting low-income customers of both the energy and water utility partners to increase direct economic benefits for low-income people from the pilot. Thereafter, PG&E modified its pilot proposal to target low-income customers of both PG&E and the water utility partner specifically addressing that concern. The Commission approved this aspect of PG&E's low-income program in D.07-12-050.
Likewise, in its protest, TURN objected to the proposal that the energy utilities, and not Energy Division, would administer impact-related evaluations. The Commission agreed in D.07-12-050 that Energy Division, and not the energy utilities, should oversee such studies conducted as part of the water-embedded energy pilot, and directed that Energy Division play a central oversight role with the pilot programs. TURN also recommended, in its reply comments to the proposed decision, that Energy Division obtain public input on draft study plans using procedures similar to those in place for the 2006-2008 EE studies it administers, rather than through a more cumbersome and formal process like an ongoing EM&V advisory group (as proposed by some parties). In the final decision, the Commission agreed with TURN's recommended informal approach to receiving public input, and ordered Energy Division to follow the procedures used for soliciting input on 2006-2008 EE program draft evaluation plans.
Also in its protest, TURN opposed the energy utilities' requests to count embedded energy savings from pilot activities towards meeting their EE goals. TURN argued that allowing embedded energy savings to count would conflict with existing Commission EE policies and recommended that this issue be addressed only after pilot results become available. The Commission agreed with TURN in D.07-12-050.
Finally, TURN also protested PG&E's proposed funding mechanism. PG&E alone proposed to increase its electric and natural gas revenue requirements to fund water-embedded energy pilot program activities. TURN argued that PG&E should use existing, pre-2006 unspent, uncommitted EE electric funds and no gas funds, since no benefits would accrue to gas customers. PG&E revised its proposed funding mechanism in its June 14, 2007, Supplemental Testimony to reflect TURN's recommendation. TURN also successfully objected to SDG&E and SoCalGas' request for pre-pilot approval spending authorization. D.07-12-050 found that all utilities, including PG&E, should fund pilot activities exclusively from unspent EE funds from prior years.
4.3. Determinations of NRDC's and TURN's Claims of Contribution
The Commission has awarded full compensation even where the intervenor's positions were not adopted in full, especially in proceedings with a broad scope. (D.98-04-028, 79 CPUC2d 570, 573-574.) Here, NRDC and TURN each achieved a high level of success on the varying issues each raised. NRDC made a significant contribution to initiate and facilitate meaningful public discussion on this issue of high public importance which ultimately resulted in the final decision. Likewise, TURN made a significant contribution in shaping and leading the public discussion concerning numerous significant issues which led to the final decision.
In the areas where we did not adopt NRDC's or TURN's position in whole, or in part, we nonetheless benefited from their respective analysis, input and discussion of all of the issues which each raised.
3 D.98-04-059, 79 CPUC2d 628 at 653.
4 See, e.g., Audrey Chang, Natural Resources Defense Council, Energy Efficiency Implementation through Utility-Based Programs: A Focus on California Policy (July 26, 2007).
5 See Assigned Commissioner and Administrative Law Judge's Ruling Discussing Pilot Program Objectives, Setting a Schedule for Initial Workshops, and Denying Motions Related to Pre-Approval Expenditures, 2-15-2007, p. 6.
6 See D.07-12-050, pp. 10-11.
