5. Reasonableness of Requested Compensation

Aglet and TURN request $49,997.53 for their joint participation in this proceeding, as follows:

TABLE 1

COMPENSATION REQUEST

ITEM	AMOUNT
Aglet
124.3 hours of Weil's professional time at $250 per hour	$31,075.00
48.0 hours of travel and compensation time at $125 per hour	6,000.00
Aglet copies	146.93
Aglet postage, overnight delivery	41.58
Aglet FAX charges	40.00
Aglet travel (bridge tolls, parking, vehicle mileage)	596.75
Aglet Subtotal	$37,900.26
TURN
4.25 hours of Finkelstein's professional time at $280 per hour	$ 1,190.00
4.00 hours of Finkelstein's professional time at $395 per hour	1,580.00
2.00 hours of Goodson's professional time at $190 per hour	380.00
TURN copies	32.40
TURN postage	0.55
TURN LEXIS charges	4.32
TURN Subtotal	$ 3,187.27
Financial Consultant
40.5 hours of Czahar's professional time at $220 per hour	$ 8,910.00
TOTAL REQUEST	$49,997.53

The components of this request must constitute reasonable fees and costs of the customer's preparation for and participation in a proceeding that resulted in a substantial contribution. Thus, only those fees and costs associated with the customer's work that the Commission concludes made a substantial contribution are reasonable and eligible for compensation.

To assist us in determining the reasonableness of the requested compensation, 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. This showing assists us in determining the overall reasonableness of the request.

We conclude that the effect of the participation of Aglet and TURN far exceeded their requested fees and other costs. That is, even the slightest contribution on the part of Aglet and TURN to the rejection of $36 million now, and $30 million more in 2007, greatly exceeds the compensation request of less than $50,000. The record demonstrates, however, that Aglet and TURN made more than a slight contribution. They participated actively through protests, discovery, hearings, cross-examination, settlement discussions, and joint sponsorship of the Settlement Agreement. Thus, we find that the joint efforts of Aglet and TURN have been productive.

Next, we must assess whether the hours claimed for the customer's efforts that resulted in substantial contributions to Commission decisions are reasonable. Aglet and TURN documented their claimed hours by presenting a daily breakdown of the hours spent by Weil, Finkelstein and Goodson, accompanied by a brief description of each activity. They similarly included a copy of the invoice of financial consultant Czahar, showing the date for billed hours with a description of each activity. Aglet and TURN state that they seek no compensation for administrative time, in accordance with Commission practice, citing D.99-06-002, mimeo., at pp. 8-10 (86 CPUC2d 591, 595-6.)

We conclude that the hourly breakdown reasonably supports the claim for total hours. The bulk of the work in this proceeding occurred in 2004, with a small amount at the time of the original application in 2000. This proceeding involved complex questions and issues of law, policy, fact and expert opinion regarding industry restructuring beginning in 1996; the intent and interpretation of a settlement that led to establishing ERCA in 1999;⁶ the effect, if any of the end of rate freeze in 2001 on ERCA cost recovery;⁷ the effect, if any, on ERCA cost recovery of the Modified Settlement Agreement regarding PG&E's reorganization from voluntary bankruptcy in 2003; accounting; and the reasonableness of capital and operating costs. The claimed total hours are reasonable given the scope, complexity and timeframe of this proceeding.

Finally, in determining compensation, we take into consideration the market rates for similar services from comparably qualified persons. Aglet seeks an hourly rate of $250 for professional work performed by Weil in 2004, and $125 for travel time in 2004 and preparation of the compensation request in 2005. The Commission has previously approved $250 per hour for professional work and $125 per hour for compensation request preparation time for work performed by Weil in 2004.⁸ We find these rates reasonable for professional time and travel in 2004, and compensation preparation time in 2005, as requested by Aglet.

TURN seeks an hourly rate of $280 for professional work performed by Finkelstein in 2000, and $395 in 2004. We previously approved a rate of $280 per hour for professional work performed by Finkelstein in 2000, and we find this rate reasonable.⁹

We previously approved a rate of $365 per hour for professional work performed by Finkelstein in 2003.¹⁰ We also recently found that it is reasonable to use an 8% escalation rate to set hourly rates for work performed in 2004.¹¹ Upon applying that escalation rate, we find the requested rate of $395 per hour for Finkelstein's professional work in 2004 is reasonable.¹²

TURN seeks an hourly rate of $190 for professional work performed by Goodson in 2004. We previously approved a rate of $190 per hour for Goodson's 2004 professional work, and we find this rate reasonable.¹³

Aglet and TURN seek an hourly rate of $220 for professional work performed by Czahar in 2004. We previously awarded compensation for Czahar's professional work in 2002 at a rate of $220 per hour.¹⁴ Aglet and TURN seek no increase here. We find a rate of $220 per hour for Czahar's professional work in 2004 reasonable.

Finally, Aglet and TURN note that hourly rates for intervenors are subject to adjustment in 2005¹⁵ and, even though they seek no increase in hourly rates from 2004 to 2005 here, they do not waive the opportunity to do so in other proceedings. We accept this qualification.¹⁶

The itemized direct expenses submitted by Aglet and TURN include costs for travel, bridge tolls, parking, photocopying, postage, fax and LEXIS. These expenses total $862.53 (1.7% of the total compensation request). The cost breakdown included with the request shows the miscellaneous expenses to be commensurate with the work performed. We find these costs reasonable.

Consistent with our expectations, Aglet and TURN allocated their hours to various issue and cost categories. We would use this allocation if we disallowed certain categories of work effort. None are disallowed here.