In 1992 the Legislature substantially amended the intervenor compensation statutes and substantially broadened the legislative authorization9 for compensation for customer participation or intervention in commission proceedings. Stats. 1992, Ch. 942 (AB 1975 (Moore)).

AB 1975 added three new sections to the statute -- Pub. Util. Code sections 1801.3, 1802.5 and 1812; repealed a section - Pub. Util. Code section 1805; and made a number of amendments to the remaining Public Utilities Code sections.


The commission may award reasonable advocate's fees, reasonable expert witness fees and other reasonable costs of participation or intervention in a hearing or proceeding for the purpose of modifying a rate or establishing a fact or rule that may influence a rate to any customer who complies with section 1804 and satisfies all of the following requirements:


(a) The customer's presentation makes a substantial contribution to the adoption, in whole or in part, of the commission's order or decision.


(b) Participation or intervention without an award of fees or costs imposes a significant financial hardship.

AB 1975 rewrote the section as follows:


1803. The commission shall award reasonable advocate's fees, reasonable expert witness fees and other reasonable costs of preparation for and participation in a hearing or proceeding to any customer who complies with section 1804 and satisfies both of the following requirements:


(a) The customer's presentation makes a substantial contribution to the adoption, in whole or in part, of the commission's order or decision.


(b) Participation or intervention without an award of fees or costs imposes a significant financial hardship.

By making the award mandatory for any customer who makes a substantial contribution and meets the financial hardship requirement, the Legislature eliminated any other obstacles to participation, and to compensation for the costs of participation. There is no qualification of a complying customer's right to be compensated on the face of this statute, or in any other substantive provision of the statutes governing participant compensation.10

The Legislature specifically provided for multifarious, overlapping and duplicative participation by customers in all manner of Commission proceedings. Repealed section 1805 authorized the commission to designate a common legal representative for multiple parties, notwithstanding their desire for separate representation. That provision was replaced by Section 1802.5, which provides:


1802.5. Participation by a customer that materially supplements, complements, or contributes to the presentation of another party, including the commission staff, may be fully eligible for compensation if the participation makes a substantial contribution to a commission order or decision, consistent with Section 1801.3.

This section anticipates customer activity in Commission proceedings that overlaps with the activity of other customers and parties, including ORA and CSD. This activity is compensable if it makes a substantial contribution "..., consistent with section 1801.3." The evident purpose is to "encourage" participation by groups that might be broadly aligned around common positions and proposals, but who have distinct constituencies or distinct abilities to contribute to the conduct of a proceeding at the commission. The only requirement is that they have a stake in the process - 1801.3(b) - and that they make a substantial contribution in the judgement of the commission - 1801.3(d).

Section 1801.3 is a codified intent section that instructs the Commission to administer the statutory program so as to "encourage the effective and efficient participation of all groups that have a stake in the ...process...." 1801.3(b), and to compensate intervenors "...for making a substantial contribution to proceedings of the commission" without qualification. 1801.3(d).

Notwithstanding these provisions, the Commission has purported to narrow the effect of the statute by elevating one subdivision of 1801.3 to an additional set of "standards" for administration.


(f) This article shall be administered in a manner that avoids unproductive or unnecessary participation that duplicates the participation of similar interests otherwise adequately represented or participation that is not necessary for a fair determination of the proceeding.

This subdivision seeks to avoid two types of participation:

(1) unproductive or unnecessary participation that duplicates...[or]

(2) participation not necessary for a fair determination

The second type of participation to be avoided describes participation that is literally irrelevant because the participation addresses issues outside the scoping memo or application. C.f.,D.98-04-059, 79 CPUC2d 628, 649. By definition it cannot make the substantial contribution required for compensation, and is easily avoided without trenching into the positive objective of encouraging effective and efficient participation of all groups. It is the first type of participation to be avoided - unproductive participation that duplicates -- that raises the legal and policy difficulties.

Ignoring the plain language of the subdivision and the other provisions of section 1801.3, D.98-04-059 purported to convert the subdivision into a substantive provision and interpreted section 1801.3(f) as establishing "three standards for program administration (productive, necessary, and needed for a fair determination)...." 79 CPUC2d 628, 649 and 674, Finding of fact 13. The "necessary" standard is described as entailing "nonduplication of effort." D.98-04-059 recognizes that multi-party proceedings will involve situations where "parties' positions likely will overlap." Id. At 649-50. However, D.98-04-059 also appears to create a presumption that overlapping presentations will justify a refusal to fully compensate a participating customer who makes a substantial contribution, through the imposition of a duplication penalty or discount.11 The Proposed Decision in this case applies that presumption to impose a substantial "duplication" discount on two parties, despite the fact that no party advocated such a penalty and all affected parties made compensable substantial contributions.

This is misreading of the plain language of the statute, and is impermissible. People ex rel. Wood v. Sands, 102 C. 12 (1893); Trafficschoolonline, Inc. v. Superior Court, 89 Cal. App. 4th 222 (2001). It both misreads the plain language of 1801.3(f) and misses the other substantive and intent provisions of the statute. It creates additional barriers to compensation awards that are not found in the mandatory substantive provisions of 1803 and 1802.5.12

Section 1801.3(f) does not say that intervenor compensation administration should avoid all participation "that duplicates the participation of similar interests otherwise adequately represented." Only duplicative participation that is "unproductive or unnecessary" is to be avoided. The plain language of the subdivision establishes two distinct elements for describing the first type of participation to be avoided: (1) unproductive or unnecessary and (2) duplicative of similar interests otherwise adequately represented. Unless both elements are present, the participation to be avoided does not appear and a substantial contribution is to be compensated.

Any participation that results in a substantial contribution is by definition not "unproductive or unnecessary," because the commission must find, in its judgement, that the participation "has substantially assisted the commission...." Contrary to D.98-04-059 and the Proposed Decision, the intervenor compensation statute does not permit a duplication discount based on 1801.3(f), once a substantial contribution has been made.

Subdivision 1801.3(f) does not seek to avoid all "unproductive" participation either, but only "unproductive" participation that "duplicates the participation of similar interests that are otherwise adequately represented." Since the statute permits compensation for hearing preparation that may supplement, complement or support other parties, participation that only indirectly contributes to the commission decision - such as facilitating turn-out for public hearings or inciting participation in the public portion of commission meetings - and might therefore potentially be considered "unproductive" in that it is informal, could be compensable. The Legislature clearly has that as an objective. 1801.3(b).

The duplication language contained in the first dependent clause requires the compensation opponent to establish three elements - duplication, similar interests, and adequate representation. However, D.98-04-059 converts this element of the compensation opponent's showing in avoidance to a requirement of an affirmative showing by the participant that he/she represents interests that are otherwise un- or under-represented. This is not consistent with the plain language of the subdivision, or with the provisions of 1801.3(b) and (d). This additional "eligibility requirement" is confected by D.98-04-059 and inappropriately maintained in the Proposed Decision out of thin air.

Pub. Util. Code section 1804(b)(2) authorizes an assigned administrative law judge to issue an advisory ruling on "matter[s] that may affect the customer's ultimate claim for compensation" including "similar positions" and "areas of potential duplication." However, the ruling is expressly made merely advisory on all matters it addresses except for the "significant financial hardship" determination. Pub. Util. Code 1804(b)(1). Such a ruling may have real value for customers in assisting them to be both effective and efficient in their participation. However, this procedural provision cannot be read to impliedly create additional substantive conditions for an award over and above what is in Pub. Util. Code section 1803, and thus limit the substantive standard contained in section 1803 for a compensation award to a customer whose participation makes a substantial contribution.

For all of these reasons, D.98-04-059 is partially over-ruled and the concept of a duplication penalty or reduction will henceforth not be a part of the Commission's administration of intervenor compensation.

8 On the so-called "duplication adjustment" point D.98-04-059 referred to continuing an established practice, as reflected in several cited decisions. Id. At 658, 675 (Finding of Fact 24). These referenced decisions included decisions in proceedings that preceded the effective date of extensive amendments to the intervenor compensation statutes enacted by Stats. 1992, Ch. 942. These decisions did not survive the statutory amendment, but if they did, they are also disapproved and over-ruled. They are San Diego Gas and Electric Company, D.88-12-085, 30 CPUC 2d 299 (1988) issued in A.87-12-003 (1987), at pages 337-339, Findings of Fact, Conclusions of Law, and Ordering Paragraphs relating to UCAN compensation; Pacific Gas and Electric Company, D.93-06-022 (June 1993) issued in R.91-08-003/I.91-08-002 (August 1991), 49 CPUC2d 478. Other pre-1992 "duplication penalty" cases not cited in D.98-04-059, such as Gas Utility Procurement Practices, D. 91-12-055 in R.09-02-008 (TURN compensation), are also over-ruled if they survived the 1992 amendments. None of these cases considered that the less-than-fully compensated intervenors had supplemented, complemented, or contributed to the presentations of other parties, which would have entitled them to compensation under the 1992 amendments. D.98-04-059 also referred to the intervenor compensation decisions in the Electric Restructuring Docket, D.96-08-040 (July 1996), in R.94-04-001/I.94-04-002. 79 CPUC2d 628, 658. This decision explicitly refused to apply a duplication penalty. However, Competition for Local Exchange Service, D.96-06-029 (June 1996) in R.95-04-043/I.95-04-044 did apply a duplication penalty to TURN and is disapproved and over-ruled to the extent that it is authority for applying a duplication penalty for a party who makes a substantial contribution as part of a coalition. 9 In enacting intervenor compensation legislation in 1984, the Legislature eliminated pre-1984 limitations on intervenor compensation after January 1, 1985 derived from older CPUC programs, and established a purely legislative program. Stats. 1984, Ch. 297 (SB 4 (Montoya)). Section 1 of that statute provides: "It is the intent of the Legislature in enacting this act ...to require that for proceedings commenced on and after January 1, 1985, awards to customers shall be made pursuant to this act." This renders nugatory and of no effect statements such as "The requirement that a contribution assist the Commission in promoting a public purpose was very in keeping with the common fund theory at the root of our program. It compensates the participation of intervenors when other, nonparticipants, derive a benefit from that participation." 79 CPUC2d 628 at 638. The fiction of a perpetuation of the Commission's old "common fund" theory underlies the notion that a participating customer must confer some monetary benefit on non-participants as the "consideration" for an award of compensation. 79 CPUC 628, 650. 10 AB 1975 also amended section 1802(h), which defines "substantial contribution," by specifically authorizing compensation for substantial contributions that involve the commission's partial adoption of a customer's presentation or positions. 11 Routine reductions that were justified by their relatively small size may have been the norm during the deregulation era. Compare D.96-06-029 with D.96-08-040, above footnote 3. . 12 The Proposed Decision also purports to find a additional eligibility requirement - representation of an otherwise under-represented class - in D.98-04-059, relying on dicta at 79 CPUC2d 628 at 648 to the effect that "[W]e agree with ORA/CSD that the intent of the statute is that we compensate only those customer interests that would otherwise be under-represented." This dictum is not reflected in any findings, conclusions or ordering paragraphs and is so clearly unsupported by the plain language of the statute that we dismiss it. Since it did not affect the outcome of this proceeding, it is unnecessary to specifically disapprove or over-rule it, but we caution parties and administrative law judges for the future that it is erroneous dictum and of no force and effect. It should have no place in our administration of participant compensation going forward.

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