3. Substantial Contribution

The Commission considers two primary factors in deciding whether a customer made a substantial contribution to a proceeding. The first is whether the Commission adopted any of the customer's factual assertions, legal contentions, policy proposals, or procedural recommendations. (§ 1802(i).) The second is whether the customer's participation overlapped that of another party and, if so, 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.)

The determination of whether the customer made a substantial contribution is a matter 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

Reid claims that he made substantial contributions in ten areas. First, Reid proposed that the Commission require PG&E to submit Firm Transportation Service Agreements (FTSAs) for Commission approval.⁴ D.08-11-032 adopted his proposal.⁵ We agree that Reid made a substantial contribution on this matter.

Second, Reid asserted that the proposed Ruby Pipeline is a commercially viable project.⁶ D.08-11-032 agreed in Finding of Fact 17.⁷ We find that Reid made a substantial contribution on this matter.

Third, Reid argued that PG&E improperly collaborated with its parent company during negotiations with Ruby LLC.⁸ D.08-11-032 agreed, in part, stating in Finding of Fact 21 that "There was a conflict of interest between PG&E's customers and PG&E's shareholders when PG&E Corporation was offered, and then obtained, an option to acquire an ownership stake in the Ruby Pipeline while PG&E was negotiating with Ruby LLC.⁹" We find that Reid made a substantial contribution on this matter.

Fourth, Reid contended that the Commission should not try to determine the exact cost of the Ruby Pipeline project. Rather, the Commission should determine whether project costs will be so high that Ruby LLC will likely abandon the project.¹⁰ D.08-11-032 agreed, stating in Conclusion of Law 13 that the "reasonableness of Ruby's estimated pipeline construction costs is relevant to this proceeding only to the extent it raises doubts about Ruby's ability to attract sufficient capacity commitments to go forward with the project.¹¹" We find that Reid made a substantial contribution on this matter.

Fifth, Reid asserted that PG&E's Electric Fuels Department independently derived its need for Ruby Pipeline capacity.¹² D.08-11-032 agreed, stating in Finding of Fact 22 that "PG&E maintained a reasonable level of separation between Core Gas Supply and Electric Fuels during negotiations with Ruby LLC.¹³" We find that Reid made a substantial contribution on this issue.

Sixth, Reid states that he opposed PG&E's motion to strike the testimony of Southern California Gas Company and San Diego Gas & Electric Company (SoCalGas/SDG&E). Reid argued that:

The subject testimony is within the scope of this proceeding because the testimony addresses the issue of the overall costs and benefits of the Ruby pipeline project. (Response of L. Jan Reid to PG&E's Motion to Strike the Testimony of SoCalGas/SDG&E, June 7, 2008, p. 2. )

The assigned ALJ effectively agreed with Reid when he ruled that:

SoCalGas/SDG&E's testimony may be divided into two pieces for the purpose of this ruling. The first piece addresses the additional costs that SoCalGas/SDG&E may incur to transport gas on the GTN system if PG&E reduces its capacity on the GTN system. This matter is squarely within the scope of this proceeding, as set forth in Scoping Memo Issue 4(d). Therefore, PG&E's motion to strike this piece of SoCalGas/SDG&E's testimony is denied. (Administrative Law Judge's Ruling Granting In Part and Denying In Part the Motion to Strike Filed by PG&E, June 17, 2008, p. 7.)

We find that Reid made a substantial contribution on the above matter.

Seventh, Reid recommended that the Commission "require El Paso to file an annual compliance report that explains (1) whether El Paso has complied with U.S. Department of Transportation (DOT) pipeline regulations, and (2) any relevant findings by DOT related to DOT regulations.¹⁴" While D.08-11-032 did not adopt Reid's proposal, it did order PG&E to "provide prompt responses to Commission requests for information regarding outages on the Ruby Pipeline.¹⁵" We find that Reid made a substantial contribution to the resolution of this issue.

Eighth, Reid claims he made a substantial contribution to the following highlighted portions of the dicta on page 22 of D.08-11-032 and Finding of Fact 2:

Dicta on p. 22 of D.08-11-032: "We disagree with Reid's assessment that PG&E's justification for the proposed Ruby capacity amounts to speculation in energy markets. The fundamental purpose of the proposed Ruby capacity is to diversify away from PG&E's disproportionate reliance on Canadian gas supplies in order to reduce portfolio risk. Reid's own analysis shows that it is cost effective for PG&E to reduce portfolio risk by acquiring Ruby capacity." (Emphasis added. Footnote in original omitted.)

Finding of Fact 2: "PG&E has a need to diversify away from its heavy reliance on declining WCSB gas supplies. PG&E's proposed gas transportation arrangements on the Ruby Pipeline and PG&E's Redwood path that are described in A.07-12-021 provide a reasonable and cost-effective means for doing so.¹⁶" (Emphasis added.)

We find that Reid did not make a substantial contribution in this area. The dicta on page 22 of D.08-11-032, quoted above, notes a contradiction in Reid's presentation. The noted contradiction does not constitute a substantial contribution to D.08-11-032. In addition, the Commission's determination in Finding of Fact 2 that PG&E's proposed gas transportation arrangements are reasonable and cost effective is based briefs and evidence submitted by PG&E, Ruby LLC, the Division of Ratepayer Advocates (DRA), and The Utility Reform Network (TURN).¹⁷ Reid opposed the gas transportation arrangements described in Finding of Fact 2,¹⁸ and his participation was not a factor in the development of Finding of Fact 2.

Ninth, Reid alleged that PG&E's motivation for acquiring Ruby capacity was PG&E's belief that Rocky Mountain gas will be cheaper than Canadian gas. Reid saw this as improper speculation in energy markets with ratepayer funds.¹⁹ Reid states that although the Commission did not agree with him on this issue, he nevertheless made a substantial contribution. We disagree. The Commission held in D.08-11-032 that there was no evidence of the market speculation alleged by Reid.²⁰ Consequently, we find that Reid did not make a substantial contribution on this matter.

Finally, Californians for Renewable Energy (CARE) argued in its opening brief that "The transcripts of the cross examination of PG&E's witnesses concerning their conduct in negotiating the agreement with Ruby should not be included in the record....²¹" Reid opposed CARE's suggestion.²² Reid claims that he made a substantial contribution on this issue because the Commission did not strike portions of the transcript as requested by CARE. We disagree. The Commission never addressed CARE's recommendation in D.08-11-032 or elsewhere. Consequently, there is no basis to conclude that Reid made a substantial contribution on this matter.

In sum, we find that Reid made a substantial contribution to this proceeding in seven of the ten areas claimed by Reid.

³ D.98-04-059, 79 CPUC2d 628 at 653.

⁴ D.08-11-032, p. 107.

⁵ D.08-11-032, Ordering Paragraph 3.i, p. 117.

⁶ D.08-11-032, p. 76.

⁷ D.08-11-032, Finding of Fact 17, p. 114.

⁸ D.08-11-032, pp. 81, 84, and 85.

⁹ D.08-11-032, Finding of Fact 21, p. 113.

¹⁰ Exhibit LJR-1, p. 17.

¹¹ D.08-11-032, Conclusion of Law 13, p. 117.

¹² D.08-11-032, p. 90.

¹³ D.08-11-032, Finding of Fact 22, p. 114.