V. The Reasonableness of Requested Compensation

SSRC seeks compensation for its attorneys, law clerks and costs as depicted in the following three tables:

Table 1. Total number of hours for which SSRC seeks compensation

Attorneys	Total
M. Mihaly	20.1
O. Armi	204.8
J. Schue	33.1
Law clerks	16.8
TOTAL	274.8

Table 2. Breakdown of hours for which SSRC seeks compensation

	Applications for Rehearing Decision 03-05-038	Petition for Modification Decision 03-06-030
Attorneys
M. Mihaly	9.6	10.5
O. Armi	72.9	131.9
J. Schue	21.2	11.9
Law clerks	15.3	1.5
TOTAL	119.0	155.8

Table 3. Summary Table of SSRC's Fees and Expenses

	Hours	Rate	Amount
Decision 03-05-038
M. Mihaly	9.6	$325/hr	$ 3,120.00
O. Armi	72.9	$230/hr	16,767.00
J. Schue	21.2	$175/hr	3,710.00
Law clerks	15.3	$ 60/hr	918.00
Attorney Subtotal			$24,515.00
Expenses			569.98
TOTAL			$25,084.98
Decision 03-06-030
M. Mihaly	10.5	$325/hr	$ 3,412.50
O. Armi	131.9	$230/hr	30,337.00
J. Schue	11.9	$175/hr	2,082.50
Law clerks	1.5	$60/hr	90.00
Attorney Subtotal			$35,922.00
Expenses			1,244.77
TOTAL			$37,166.77
GRAND TOTAL			$62,251.75

In accordance with Commission requirements, SSRC is seeking compensation for only half of its attorney travel time and half of the time spent preparing its request for intervenor compensation.

A. Overall Benefits of Participation

In D.98-04-059, the Commission adopted a requirement that a customer must demonstrate that its participation was "productive," as that term is used in § 1801.3, where the Legislature gave the Commission guidance on program administration. In that decision, we discuss the requirement 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. Customers are directed 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.

SSRC does not discuss the productivity requirement in its request. While it should have done so, it is not difficult to find that its efforts were productive in this case. According to D.02-12-066, the underlying decision denying the Valley-Rainbow Project and the decision SSRC was trying to protect with its opposition to the applications for rehearing and petition for modification, the Project cost estimate was in excess of $341 million.⁵ Had the Commission granted SDG&E's application, ratepayers would have borne this expense. By contrast, SSRC spent approximately $62,000 on opposing motions that would have changed the outcome of D.02-12-066, a fraction of the amount it saved ratepayers by helping convince the Commission that the Project was not needed. We find SSRC's work was productive.

B. Hours Claimed

1. Excessive Hours

SDG&E questions why it took SSRC approximately seven weeks of time - 274.8 hours - to draft one response to SDG&E's rehearing application, one response to SDG&E's petition for modification comments on two short draft decisions, and associated lobbying.

SSRC states that its counsel was principally responsible for preparing a comprehensive 49-page brief addressing each of the legal and factual issues raised by SDG&E and the ISO in their applications for rehearing. It also filed a 20-page brief, which attached documentary evidence, addressing SDG&E's petition for modification. SSRC also filed reply comments on ALJ Cooke's draft decision denying SDG&E's petition for modification, and comments on Commissioner Peevey's draft decision granting SDG&E's petition for modification.

Because of SSRC's earlier participation much of the content in these four filings derives from facts and arguments SSRC had made earlier in the proceeding. Organizing these facts and arguments, and doing the modest amount of new work needed to respond to SDG&E's petition and application for rehearing, should not consume seven weeks of attorney time. For this reason, we agree with SDG&E that a charge of $60,000 for fees for two briefs and two sets of comments seems excessive. As SDG&E notes, Pub. Util. Code § 1801 only allows parties "reasonable" advocates' fees. In the past, we have reduced a party's award where it reflects inefficiency. For example, in D.02-07-030, we reduced an intervenor's award by 30% because it was far out of line with the awards requested by other intervenors.

For the foregoing reasons, we reduce SSRC's attorneys' fee request by 30%, and award SSRC $42,305.90 for fees, as set out in the table below. This amount is still generous given that SSRC is seeking time here only for post-decision briefing and comments.

Table 4: Reduction for Inefficiency

Fees in D.03-05-038	$24,515.00
Fees in D.03-06-030	$35,922.00
Subtotal	$60,437.00
Less 30% for inefficiency	($18,131.10)
Total fee award	$42,305.90

2. Compensation for Press/Lobbying Time, Other Matters

In our decision addressing the majority of SSRC's compensation request related to this proceeding, we disallowed SSRC's request for compensation for time spent communicating with the press or lobbying other governmental officials. SDG&E again opposes such charges, and we again disallow them. As we stated in D.96-06-029, "Communicating with the news media does not constitute participation in our proceedings within the meaning of Section 1801 et seq. Accordingly, we shall not grant compensation for time spent on these activities."

In our decision on SSRC's first request for compensation, we also disallowed SSRC compensation for time spent on lobbying non-CPUC officials. Such conduct does not meet the definition of "participation" or "intervention" in Commission proceedings.

With respect to time spent communicating with the press, SSRC filed a supplemental brief explaining that its total time used for this purpose was 1.1 hours of Armi's time.⁶ We therefore reduce its award by this amount. SSRC clarified in its supplemental brief that it spent no time communicating with non-Commission officials and that the entry SDG&E identified (for May 22, 2003) related to time Armi spent attending the Commission's May 22, 2003 hearing, at which a non-Commission official made public remarks. SSRC also clarified that the entries SDG&E identified that appeared to relate to other cases refer to Armi's review of pleadings and transcripts of other proceedings in order to identify issues relevant to this proceeding. We thus make no adjustment for time spent communicating with non-Commission officials or time spent on other proceedings.

We reduce SSRC's award as follows:

O. Armi

1.1 hours (comm. with press)

$230.00/hr

($253.00)

C. Hourly Rates

1. Attorneys

All of the attorneys' work leading up to D.03-05-038 and D.03-06-030 occurred in 2003. SSRC notes that we set hourly rates for its attorneys in 2001 of $315 per hour for Marc Mihaly, $220 per hour for Osa Armi, and $165 per hour for Janette Schue.

For 2003, SSRC requests small increases for each attorney on the grounds that SSRC's law firm raised its rates modestly after 2001, the new rates are more reflective of rates charged by other firms in the same practice areas, and the attorneys gained substantial additional experience. SSRC seeks a $10 per hour rate increase for each attorney, to $325 per hour for Mihaly, $230 per hour for Armi, and $175 per hour for Schue. SDG&E does not oppose these increases. As discussed below, we find the increases reasonable based on hourly rates we have awarded in 2002 and 2003 to attorneys with comparable education and experience.

With regard to Mihaly, we look to hourly rates awarded to a comparably qualified senior lawyer to determine the reasonableness of the requested increase. We awarded attorney Randy Wu $385 per hour for his 2002 work before this Commission. As we explained in D.02-09-040, Wu was admitted to the California bar in 1977 after receiving his law degree from Boalt Hall at the University of California, Berkeley. From 1977 through 1981, Wu served as staff counsel at the Commission. In 1981, he became an ALJ at the Commission, serving in that role until 1988, and presiding over a variety of gas and electric matters. In 1988, Wu joined El Paso Natural Gas, representing that company before state and federal regulatory agencies. From 1997 through 2000, Wu engaged in merchant plant development for El Paso Merchant Energy, focusing on the development and financing of two plants in Massachusetts and Connecticut. He joined TURN in an of-counsel role in 2001.

Mihaly is a partner at the law firm of Shute, Mihaly & Weinberger, LLP. He received his law degree in 1974 from Boalt Hall, and was admitted to the California bar. Before co-founding his law firm, Mihaly worked for the Legal Aid Society of San Mateo County for two years (1974-76), and as a California Deputy Attorney General in the Environmental Unit from 1976-80. He has practiced predominantly in the fields of administrative, land use, and environmental law since co-founding his firm in 1980. He has specialized experience in development agreements and planning issues related to complex developments; air quality permitting and litigation; all aspects of growth limitation; and the California Environmental Quality Act.

While Mihaly does not have the same level of experience before this Commission as Wu,⁷ this difference is made up in the difference between Wu's approved hourly rate of $385 and Mihaly's requested rate of $325. We find that SSRC has justified a $10 increase in Mihaly's rate for 2002-03 from $315 to $325.

As for Armi, who requests an increase from $220 to $230, we also find the new rate to be justified. In D.03-04-050, we compared Armi's experience to that of two other attorneys, Itzel Berrio and Enrique Gallardo, and found the three to have comparable experience.⁸ Armi, like Berrio and Gallardo, is a 1997 law school graduate. Because we increased the 2002 rate for Berrio and Gallardo to $235, Armi's requested increase to $230 is also justified and we thereby adopt it.

SSRC requests that we increase Schue's rate from $165 to $175. We also find this request reasonable based on the $175 hourly rate we approved for Caroline Jacobs in D.03-01-075. Both Schue and Jacobs graduated from law school in 2000. Schue has been with the Shute, Mihaly firm since 2000, and has focused on litigation and non-litigation matters involving state and federal environmental laws, administrative law, state planning and zoning law, and regulatory matters. She has practiced before this Commission in three proceedings in addition to this one. We find the requested increase to $175 for 2002-03 to be reasonable.

2. Law Clerks

SSRC seeks compensation for law clerk time in 2003 at $60 per hour. SSRC explains that its law clerks are generally second-semester second- or third-year law students selected through a highly competitive application process. While SSRC does not identify the law clerks by name, the Commission has allowed a range of rates for law student interns from $55⁹ to $85¹⁰ per hour. Shute, Mihaly bills clients $100 per hour for law clerk work. Based on our precedent and the fact that SSRC has significantly discounted its law clerk rate, we find SSRC's $60 per hour request reasonable.

D. Costs

SSRC requests $1,814.75 for costs - $569.98 for D.03-05-038 and $1,244.77 for D.03-06-030. The costs represent charges for photocopies, facsimile transmission, Lexis-Nexis computerized legal research, postage, telephone and messenger service. The costs are reasonable and we award SSRC full recovery of them.