4. Substantial Contribution to Resolution of
Issues
Pursuant to Pub. Util. Code § 1802(h), a party may make a substantial contribution to a decision in one of several ways. It may offer a factual or legal contention upon which the Commission relied in making a decision or it may advance a specific policy or procedural recommendation that the ALJ or Commission adopted. A substantial contribution includes evidence or argument that supports part of the decision even if the Commission does not adopt a party's position in total.3 Where a party has participated in settlement negotiations and endorses a settlement of some or all issues, the Commission uses its judgment and the discretion conferred by the Legislature to assess requests for intervenor compensation.4
As we explain below, we find that Joint Intervenors' efforts in response to the MOU yielded a substantial contribution to D.02-01-063. However, we find that the Commission's action on SDG&E's proposed settlement of claims in the California Court of Appeals regarding certain power procurement contracts was not an "order or decision" within the meaning of Section 1802 (h), and that Joint Intervenors' request for compensation for their efforts with respect to those contracts is premature.
4.1 Contribution to D.02-01-063
On July 16, 2001, as part of its efforts to implement the MOU, SDG&E filed a petition for modification of D.96-04-059. That decision established ratemaking treatment for San Onofre Nuclear Generating Station Units Nos. 2 and 3 (SONGS 2&3) for both SCE and SDG&E. (SDG&E owns 20% of the SONGS units.) In its petition, SDG&E sought to commit its share of SONGS 2&3 generation to the benefit of bundled customers from 2004 through 2010, return SONGS 2&3 to cost-based ratemaking, and create a $133 million regulatory asset called the "SONGS Equalization Adjustment" to reduce the Assembly Bill (AB) 265 balancing account undercollection.
Joint Intervenors filed a joint response in opposition to SDG&E's petition. While they supported the return of SONGS 2&3 to cost of service ratemaking, they argued that with the enactment of ABX1 6, this would occur notwithstanding the MOU. Therefore, they argued, SDG&E overstated the ratepayer benefit of the MOU, and the MOU was not an appropriate basis for approving SDG&E's proposed changes. Joint Intervenors also opposed retention of the Incremental Cost Incentive Procedure through 2003 as well as the proposed SONGS Equalization Adjustment.
On September 11, 2001, Commissioner Duque issued for comment a draft decision that agreed in several respects with the arguments raised by Joint Intervenors in their joint response to SDG&E's petition. TURN filed comments and reply comments opposing the draft decision's proposal to create an AB 265 Regulatory Account, which was similar to SDG&E's proposed SONGS Equalization Adjustment.5 TURN argued that adoption of the regulatory account would constitute legal error because the AB 265 undercollection was not related to SONGS ratemaking. In December 2001, a revised draft decision changed the earlier draft to reject without prejudice the proposed SONGS Equalization Adjustment. On January 4, 2002, Joint Intervenors filed joint comments in support of the revised draft decision, and recommended one minor revision. The Commission's final decision, D.02-01-063, adopted the revised draft decision with the minor revision proposed by Joint Intervenors.
D.02-01-063 adopted Joint Intervenors' contentions and recommendations in response to SDG&E's petition; thus, Joint Intervenors made a substantial contribution to D.02-01-063 and are entitled to compensation for the reasonable costs of their joint participation leading to issuance of the decision.6
4.2 Contribution to Commission Action Regarding Settlement of Litigation
Another major component of the MOU was SDG&E's request that the Commission approve a proposed settlement agreement that would resolve all issues related to SDG&E's pending petition for writ of review of D.01-01-061 and D.01-05-035, filed in the Court of Appeal, Fourth Appellate District, Division One, D038064. In those decisions the Commission held that utility-retained generation, including certain SDG&E IT contracts, should be used to serve the utility's customers at cost-based rates. The proposed settlement provided that the IT contracts would be treated as shareholder assets of SDG&E, and that SDG&E would write off, and would not collect from customers, $219 million of the current balance in its Energy Rate Ceiling Revenue Shortfall Account (ERCRSA).
Because the Commission voted against adopting the proposed settlement of the IT contract issue pending before the Court of Appeal, Joint Intervenors argue that ratepayer will benefit by $144 million, the difference between the $363 million value of the IT contracts and the $219 million balance in the ERCRSA, until the court case is resolved. Joint Intervenors maintain that their participation in response to the MOU resulted in a substantial contribution to the Commission's vote to reject the IT contract settlement.
Section 1802(h) requires that the Commission determine whether a customer seeking a compensation award substantially assisted the Commission in the making of its order or decision because the order or decision adopted in whole or in part one or more of their factual or legal contentions or policy or procedural recommendations. This raises the question of whether the Commission's vote to reject the proffered settlement was an "order or decision" within the meaning of the intervenor compensation statutes. We conclude that it was not such a decision because the Commission did not issue a written order or decision within the meaning of Pub. Util. Code §§ 311 or 1731. Therefore, with respect to the IT contracts, we cannot reasonably determine that Joint Intervenors' participation substantially assisted the Commission in making any order or decision. Joint Intervenors' request for compensation for their participation related to the IT contracts is premature because it precedes the Commission's "order or decision" on the issues for which they claim compensation.
However, this negative determination does not prevent Joint Intervenors from seeking an award of compensation for their efforts in A.00-10-045/A.01-01-044. Because the Commission rejected the settlement involving the IT contracts, on March 28, 2002, three days after Joint Intervenors filed their compensation request, the Assigned Commissioner issued a ruling that lifted the procedural suspension of this proceeding and updated the scope of issues to be considered. As stated in that ruling, "[a]ccounting for the [IT contracts] is an important part of the determination of [the] balancing account balances" at issue in this proceeding. (Ruling, p. 6.) The work performed by Joint Intervenors as it relates to the settlement should be viewed in the context of the history which led up to an examination of the IT contracts. The question of compensation for that work may be revisited once the issues are heard and a Commission decision is rendered on the IT contracts in A.00-10-045/A01-01-044.7
4.3 Overall Benefits of Participation
In D.98-04-059, the Commission adopted a requirement that a customer demonstrate that its participation was "productive," as that term is used in § 1801.3, where the Legislature provided guidance on program administration. (See D.98-04-059, mimeo. at 31-33, and Finding of Fact 42.) D.98-04-059 explained that participation must be productive in the sense that the costs of participation should bear a reasonable relationship to the benefits realized through such participation. D.98-04-059 directed customers to demonstrate productivity by assigning a reasonable dollar value to the benefits of their participation to ratepayers. This exercise assists us in determining the reasonableness of the request and in avoiding unproductive participation.
Joint Intervenors submit that the value to ratepayers from denial of SDG&E's proposed rate of return on SONGS is approximately $4.9 million per year. Joint Intervenors state that the effect of eliminating the SONGS sharing mechanism is dependent on future plant performance and electricity market prices. Based on past shareholder earnings under the SONGS sharing mechanism, Joint Intervenors estimate that ratepayers will receive $16 million to $32 million per year in benefits from the elimination of the sharing mechanism.
All of these factors lead us to conclude that the participation of Joint Intervenors related to D.02-01-063 was productive, avoided unreasonable duplication with other parties, and yielded ratepayer benefits substantially in excess of the costs incurred (less than $14,000). We do not consider the productivity of Joint Intervenors efforts as it relates to A.00-10-045/A.01-01-044.
3 The Commission has provided compensation even when the position advanced by the intervenor is rejected. D.89-03-063 awarded San Luis Obispo Mothers For Peace and Rochelle Becker compensation in Diablo Canyon Rate Case because their arguments, while ultimately unsuccessful, forced the utility to thoroughly document the safety issues involved). (See also, D.89-09-103, Order modifying D.89-03-063 which stated that in certain exceptional circumstances, the Commission may find that a party has made a substantial contribution in the absence of the adoption of any of its recommendations. Such a liberalized standard should be utilized only in cases where a strong public policy exists to encourage intervenor participation because of factors not present in the usual Commission proceeding. These factors must include (1) an extraordinarily complex proceeding, and (2) a case of unusual importance. Additionally, the Commission may consider the presence of a proposed settlement.) 4 See D.98-04-0590, mimeo. at 41. 5 TURN filed without UCAN and Aglet due to unexpected workload pressures and difficulty in coordinating a joint response. 6 Although Aglet, TURN, and UCAN generally made joint filings regarding participation in A.93-12-025/I.94-02-002, Joint Intervenors only seek compensation for TURN's efforts related to D.02-01-063. 7 At this time, the Commission has held evidentiary hearings in this portion of the proceeding and a proposed decision is expected by the end of 2002.
