4. Substantial Contribution

In evaluating whether a customer made a substantial contribution to a proceeding we look at several things. First, did the ALJ or Commission adopt one or more of the factual or legal contentions, or specific policy or procedural recommendations put forward by the customer? (See § 1802(i).) Second, if the customer's contentions or recommendations paralleled those of another party, did the customer's participation materially supplement, complement, or contribute to the presentation of the other party or to the development of a fuller record that assisted the Commission in making its decision? (See §§ 1802(i) 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.⁴

Should the Commission not adopt any of the customer's recommendations, compensation may be awarded if, in the judgment of the Commission, the customer's participation substantially contributed to the decision or order. For example, if a customer provided a unique perspective that enriched the Commission's deliberations and the record, the Commission could find that the customer made a substantial contribution. With this guidance in mind, we turn to the claimed contributions Aglet and TURN made to the proceeding.

TURN and Aglet point out that either separately or together they participated actively throughout this proceeding. For example, TURN filed a protest on August 18, 2000 to PG&E's original ERCA application. The proceeding was then interrupted by California's energy crisis in 2000-2001. When the proceeding was reactivated in 2004, Aglet and TURN agreed to participate jointly.

Aglet and TURN jointly participated in prehearing conferences and conducted discovery. They served joint testimony in opposition to applicant's request. They actively participated in five days of evidentiary hearing (including cross-examining witnesses, presenting their own joint testimony subject to cross-examination, and participating on a panel in support of the Settlement Agreement). They actively participated in settlement discussions and, with other parties, collectively prepared the settlement document and joint motion for adoption of the Settlement Agreement. In addition, TURN's attorneys Finkelstein and Goodson spent time coordinating TURN's efforts with Aglet and ORA.

Applicant here requested approximately $116 million in capital and operating costs booked to ERCA. Aglet and TURN jointly recommended applicant recover no costs. ORA also recommended that applicant recover no costs. All active parties settled upon applicant recovering $80 million over one year beginning January 1, 2005, with applicant also agreeing to remove approximately $30 million in capital costs from rate base effective January 1, 2007.

The adopted Settlement Agreement results in a $36 million (31%) reduction from applicant's request, plus an additional reduction in rate base of about $30 million beginning in 2007. Taken as a whole, the active participation by Aglet and TURN made a substantial contribution to D.04-12-017.

Moreover, Aglet and TURN specifically state that they made conscious efforts to avoid duplication with ORA. For example, Aglet and TURN assert that they focused on regulatory goals and the regulatory asset created in D.03-12-035,⁵ exclusion of ERCA revenues from financial projections PG&E presented in the Commission's proceeding on PG&E's bankruptcy, intentions of parties in a 1998 settlement regarding electricity restructuring costs, and interest charges on claims by ERCA vendors against the bankruptcy estate. On the other hand, Aglet and TURN say that ORA addressed ERCA costs in relation to AB 1890 and the end of the rate freeze, cash flows associated with PG&E's bankruptcy settlement, reasonableness of ERCA costs, and accounting issues.

We conclude that the cooperation of Aglet and TURN in their joint showing reduced duplication of effort between Aglet and TURN. Their directed focus similarly reduced duplication of effort with ORA. While Aglet, TURN, and ORA all made the same initial recommendation on ERCA cost recovery, their advocacy was coordinated so as to supplement, complement, or contribute to their respective recommendations.

Aglet and TURN made a substantial contribution as described above. After we have determined the scope of a customer's substantial contribution, we then look at whether the compensation requested is reasonable.