4. The Reasonableness of Requested Compensation

API seeks compensation for all of its professional time, travel expenses and compensation request time, for a total of $98,686.09.

For professional time, Ron Knecht claims 403.7 hours at an hourly rate of $220 for a total of $88,814.00, and 73.0 hours of travel and compensation-request time at an hourly rate of $110 for a total of $8,030.

Direct expenses totaled $1,842.09, mostly mileage, postage and copying costs.

4.1 Hours Claimed

The requested time includes professional time incurred in initial review, discovery, preparation of testimony, pleadings, hearings, briefs and comments. The compensation requested is greater than that estimated in the NOIs ($70,600) but is justified by API on the fact that the hearings in these two cases stretched far beyond the scope and duration set out in the Scoping Memos. We agree with this assessment. API appropriately breaks down time spent on various issues and activities. We have reviewed the detailed showing of professional time expended, and we find that the hours claimed are reasonable.

4.2 Hourly Rates

Section 1806 requires the Commission to compensate eligible parties at a rate that reflects the "market rate paid to persons of comparable training and experience who offer similar services.

API seeks compensation for Knecht of $220 an hour for professional work and one-half that amount for travel time and for preparation of the compensation request. In the most recent cost-of-capital case before the Commission, Knecht was awarded $190 per professional hour, although the Commission recognized that a rate of $210 might be justified had the compensation request been more complete. (See, D.01-10-024, at 12-13.) During 1998, when Knecht worked as a consultant to R. J. Rudden Associates, Inc., Knecht's time was billed to and paid by the California Independent System Operator at the $210 hourly rate. Finally, Knecht's resume shows experience and achievement corresponding to that of other experts receiving rates in this range.

We believe that API has justified an hourly rate of $210 per hour, or $20 more per hour than Knecht was awarded by this Commission last year. However, the showing for a further increase to $220 for work in 2001 is not persuasive in light of conditions prevailing in the economy, including the legal system, for most of 2001. While API seeks to show that the $220 rate is comparable to that paid another intervenor in other proceedings, API has not shown that the comparison reflects comparable training and experience. With the adjustment in Knecht's hourly rate for 2001 to $210 (and $105 for travel and preparation of the compensation request), the amount of compensation awarded to API is reduced by $4,402 (i.e., to $94,284.09) from the amount requested.

4.3 Other Costs

API claims $8,030 for 73 hours of travel time and time devoted to preparation of this compensation request, along with $1,842.09 for automobile mileage (at 31 cents per mile), postage and copying. No compensation is requested for facsimile reproduction of documents, which was extensive. As noted, we have reduced the hourly rate for travel and preparation of this compensation request to $105, rather than $110. With that adjustment, we find these costs reasonable.