5. Reasonableness of Requested Compensation

Having determined the scope of a customer's substantial contribution, we consider whether the requested compensation is reasonable. The components of a 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.

5.1 TURN

TURN requests $81,742.48 for its participation in this proceeding, as follows:

Attorney Fees	Hours	Rate (Year)	Total for Year
Hayley Goodson	141.00 hrs	$ 190.00 (2003)	$ 26,790.00
	77.75 hrs	$ 190.00 (2004)	$ 14,772.50
	25.75 hrs	$ 95.00 (2004)	$ 2,446.25
			$ 44,008.75	Subtotal
Marcel Hawiger	56.25 hrs	$ 250.00 (2003)	$ 14,062.50
	3.75 hrs	$ 250.00 (2004)	$ 937.50
			$ 15,000.00	Subtotal
Robert Finkelstein	1.25 hrs	$ 365.00 (2003)	$ 456.25
	1.25 hrs	$ 365.00 (2004)	$ 456.25
	2.00 hrs	$ 182.50 (2004)	$ 365.00
			$ 1,277.50	Subtotal
Expert Witness Costs
Cynthia Mitchell, E3 Consulting	151.75 hrs	$ 115.00 (2003)	$ 17,451.25
	24.25 hrs	$ 115.00 (2004)	$ 2,788.75
Expenses (airfare)			$ 492.00
			$ 20,732.00	Subtotal
Other Costs (TURN)
FAX			$ 5.60
LEXIS			$ 73.52
Photocopying			$ 584.20
Postage			$ 11.30
Telephone			$ 33.60
Miscellaneous			$ 16.00
			$ 724.23	Subtotal

TURN argues that because D.03-08-067, D.03-12-060, and D.04-02-059 address policy matters and do not establish specific rates or involve disputes over particular dollar amounts, the value of TURN's participation to ratepayers eludes precise quantification. However, as TURN contends, energy efficiency investments, designed as they are to displace supply side resource procurement such as generation, have a "direct and lasting impact on customer rates" (TURN request, p. 14). We agree with TURN that "appropriate energy efficiency (and integrated resource planning) policies and prudent planning practices will be essential to maintaining both low and stable rates." (Ibid.) TURN's efforts in this proceeding have informed our efforts toward those goals. Moreover, TURN successfully worked to ensure its efforts complemented or contributed to the efforts of other parties. We note that the Commission's Office of Ratepayers Advocates participated very little in the proceedings that resulted in these three decisions and TURN was often the only party representing the interests of all residential and small commercial customers.

Even where a customer's efforts in a proceeding result in substantial contributions to Commission decisions, we must assess whether the hours claimed are reasonable. TURN has documented its claimed hours by presenting a daily breakdown of the hours of its attorneys, accompanied by a brief description of each activity. The hourly breakdown reasonably supports the claim for total hours.¹⁴ Since we found that TURN's efforts made a substantial contribution to the delineated decisions, we need not exclude from TURN's award compensation for certain issues. However, we note that TURN has broken down its efforts by issue; had we needed to eliminate certain issues from the award, this breakdown would have facilitated the process.

Finally, in determining compensation, we take into consideration the market rates for similar services from comparably qualified persons. The rates TURN requests for Hawiger, Finkelstein, and Mitchell have previously been approved and are reasonable here.¹⁵

TURN seeks an hourly rate of $190 per hour for attorney Hayley Goodson (Goodson) for her work in 2003 and 2004. TURN has not previously requested compensation for Goodson since she became an attorney. Goodson is a 2003 graduate of the University of California, Berkeley's Boalt Hall School of Law and a 1996 graduate of Brown University. Goodson joined TURN's staff as a legal assistant in 1998 and worked for TURN as a summer law clerk between her second and third years of law school. She joined TURN's attorney staff in 2003. In D.03-10-080, we awarded Goodson $80 per hour for her work as a paralegal in 1999 and 2000, and in D.03-05-065 and D.04-05-048 we awarded $95 per hour for work in 2002.

TURN claims $190/hour is reasonable based on comparable market rates for new law school graduates. TURN notes that "[i]n recent compensation decisions, the Commission has adopted hourly rates of $165 to $175 for work performed in 2001 by attorneys who appear to have graduated from law school in the prior year [citing D.02-05-005, mimeo., pp. 9-10; D.03-01-075, mimeo., p. 10]. Increasing these rates by 7.5% per year yields a 2003 of $190-202 per hour."¹⁶ TURN explains that a 7.5% per year increase is justified because a survey of attorney hourly rates, the Of Counsel survey, reflects average low-end associate attorney hourly rate increases of 16.5% from 2002 to 2003.¹⁷

The Of Counsel survey TURN relies on shows that rates for junior associate attorneys in San Francisco in 2000-01 ranged from $110 per hour (Lillick & Charles) to $200 per hour (Townsend and Townsend). Unfortunately, the survey only lists these two San Francisco firms. Other firms in the San Francisco Bay Area show rates for 2002-03 for junior associates ranging from $170 (Fenwick & West - Palo Alto), to $190 (Cooley Godward - Palo Alto) to $195 (Gray Cary Ware - Palo Alto).

In D.03-01-075, we awarded $190/hour to Shawna Parks for work in 2001. Parks had two years of experience at the time, in contrast to Goodson, who was in her first year of practice in late 2003 and 2004, when she billed the hours at issue here. In D.02-09-040, we awarded TURN's attorney Marcel Hawiger $190 per hour for work he performed in 2001. Hawiger joined TURN in August 1998 and obtained his law degree from New York University School of Law in 1993. He has bachelor's and master's degrees in geology and environmental engineering, and has worked on energy-related cases at the Commission, focusing on issues related to natural gas and demand side management. At the time we issued D.02-09-040, Hawiger had been TURN's lead attorney on two Biennial Cost Allocation Proceedings, the Gas Industry Restructuring Proceeding, the Interruptible Rulemaking, and several energy efficiency proceedings.

On the basis of the foregoing information, we find the hourly rate TURN claims for Goodson to be too high. It is at the high end of the range for private firms in San Francisco and Palo Alto, and is the same as the rate we awarded both Parks and Hawiger, who each had more experience at the time they put in their efforts. While our awards to Parks and Hawiger were for work performed prior to 2003-04, we find that a fairer hourly rate for Goodson for 2003 and 2004 is $180 and award her that rate for her work on this case.

5.1.1 Other TURN Costs

TURN includes a detailed itemization of its claim for other expenses, such as LEXIS and photocopying. These expenses and the airfare for Mitchell generally appear reasonable. We adjust these costs only to deduct $16.00 for meals during the workshop, since such costs generally are not compensable through the intervenor compensation program, and TURN offers no explanation for them.

5.2 WEM

WEM originally requested $147,789.94. It increased its request in a supplement e-mailed to ALJ Michelle Cooke (and available in the correspondence file for this proceeding), to total $155,190.87, as follows:

	Year	Rate	Hours	Total
George (professional)	2002	$150	167.25	$ 25,087.50
George (travel)	2002	$75	16.0	$ 1,200.00
George (professional)	2003	$150	582.3	$ 87,337.50
George (travel/comp)	2003	$75	47.75	$ 3,581.25
Fenn (professional)	2003	$120	86.0	$ 10,320.00
George (professional)	2004	$150	88.0	$ 13,200.00
George (travel/comp)	2004	$75	124.3	$ 9,318.75
			Subtotal Advocate Fees	$150,045.00
			Expenses	$ 5,145.87
			Total	$155,190.87

WEM does not attempt to quantify the benefits of its participation to ratepayers, however, as we described for TURN, the issues involved in this proceeding did not deal with adoption of rates. WEM's participation that we found made a substantial contribution focused on ensuring programs were administered fairly and cost-effectively, and that participation was productive.

Because not all of a customer's efforts in a proceeding result in substantial contributions to Commission decisions, we must assess whether the hours claimed are reasonable. WEM has documented the hours claimed by Barbara George and WEM's consultant, Paul Fenn, by presenting a daily breakdown of those hours and an accompanying brief description of each activity. As described in Section 4.2, WEM has provided an allocation of its professional time among various issues for which it claims compensation, and given our finding that certain aspects of WEM's activity did not result in a substantial contribution, this allocation allows us to modify the number of hours for which we award compensation with more ease.

5.2.1 EM&V

In the area of EM&V,¹⁸ we have examined WEM's July 22, 2004 timesheets and find the 48.5 hours claimed¹⁹ for George to be compensable.

5.2.2 FYP

WEM seeks 12.5 hours for George in 2002 for activities related to the FYP campaign. We have reviewed the timesheets and find this time reasonable.

5.2.3 Energy Efficiency Pilot Program

WEM claimed the following time for George's efforts related to the pilot:

We have not addressed compensation for community organizing in great detail in many previous decisions. Under § 1802(d), advocate fees must be "reasonable" and be incurred as "preparation for and participation in a proceeding." The Commission has generally not awarded intervenor compensation for community organizing activities. For example, in D.03-10-056, we denied an intervenor significant costs related to community organizing, noting that the organizing was aimed at sustaining the intervenor's existence as a community organization.²⁰ In contrast, one decision, D.03-03-031, did award intervenor compensation where the intervenor, among other things "educated and mobilized local community groups to urge Commission approval of" a utility's promise to engage in community collaboration that became a condition of Commission approval of a large corporate merger.

Here, we find that most of WEM's costs attributable to the pilot are not compensable. There is no clear precedent for recovery of community organizing expenses when the Commission decision does not directly endorse the collaboration or when the link between that organizing effort and the issues in the proceeding are so tenuous. Section 1801.3(f) denies compensation for "participation that is not necessary for a fair determination of the proceeding." In D.98-04-059, we found that this test means that "the Commission should not award compensation where the customer has argued issues that are, e.g., irrelevant, outside the scope of the proceeding, or beyond the Commission's jurisdiction to resolve."²¹ Closure of the Hunters Point Power Plant is not within the scope of this proceeding, nor is work to implement the pilot program necessary to a Commission decision, since the Commission had already approved the program.

Moreover, we have denied compensation where a party's fees are excessive. In D.04-02-026, we deducted 30% of a claimed award on the ground that "Pub. Util. Code § 1801 only allows parties `reasonable' advocates' fees. In the past, we have reduced a party's award where it reflects inefficiency. . . . [I]n 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."²²

WEM' request for almost $70,000 for work on one $16 million program is excessive, especially considering that the Commission awarded close to $1 billion in energy efficiency program funding over the period during which WEM made its efforts. WEM's expenditures are out of proportion to the importance of the issue, and excessive in light of the fees incurred by other intervenors in the proceeding, such as TURN's work that we address today. Similarly, in D.04-02-016, the Natural Resources Defense Council (NRDC) received approximately $23,500 for its contribution to five decisions issued in this proceeding, one-sixth of the approximately $150,000 WEM seeks here.

WEM's fees in this area are excessive, both in and of themselves and by comparison to the fees we have awarded TURN and NRDC in this proceeding. For all of the foregoing reasons, we reduce WEM's claimed hours in the "pilot" category by 80%. This reduction is an approximation of the time associated with work on issues outside of the scope, work performed after the program was occurred, and WEM's application for rehearing. We award WEM 20% of its claimed hours for work on the pilot, because that amount is the approximate amount of time (derived from its time sheets), that WEM spent on matters that resulted in its substantial contribution to D.03-04-055.

5.2.4 Third Parties

WEM seeks the following amounts for George's work in the "third parties" category:

We find WEM is entitled to the most of the compensation it seeks related to third parties. We note, however, that several of WEM's entries in 2003 and 2004, reflect community organizing rather than input to the Commission.²³ We therefore deduct 10% of WEM's total hours, an amount that approximates the amount WEM spent on work that did not make a substantial contribution to the Commission's decisions, from the 2003 hours for this category.

5.2.5 2004-05 Solicitation

WEM seeks the following amounts for George related to the Commission's solicitation and choice of providers to offer energy efficiency programs in the 2004 and 2005 program years. The Commission addressed the solicitation in D.03-08-067 and D.04-02-059.

We find that WEM is entitled to all but 29.25 hours for its work on the 2004-05 solicitation.²⁴

5.2.6 Community Choice

WEM seeks 41.75 hours for George related to the AB 117 community choice issue. With the exception of the one hour claimed in 2004 for a civil lawsuit, all of George's time spent on community choice issues is reasonable.

5.2.7 Intervenor Compensation

WEM seeks 26.0 hours in 2003 and 20.0 hours in 2004 for George related to its request for intervenor compensation. Although this number of hours is fairly high, given that this was WEM's first time filing a request, and the number of decisions and length of time involved, we find them reasonable.

5.2.8 Travel

WEM seeks the following amounts for George's travel:

We do not compensate WEM for travel required to file documents (when a messenger service could be employed more cheaply), or for items that are not explained, relate to items that have no relationship to this proceeding, or are connected to community organizing.²⁵ We find the reasonable number of hours of travel to be 13.0 in 2002, 15.25 in 2003, and 2.5 in 2004.

5.2.9 Fenn's Time

WEM also requested compensation for its expert, Fenn, but did not break Fenn's time down by subject areas. A review of the invoice included for Fenn allows us to assess the topics on which he worked. With the exception of the 17.0 hours spent on the application for rehearing of D.03-07-034, we find that Fenn's time is compensable because it was associated with the issues for which we have found WEM made a substantial contribution. The compensable time totals 69.0 hours.

We note that Paul Fenn is listed as an appearance representing Local Power in this proceeding. We have no reason to doubt WEM's statement that Fenn had a contractual relationship and worked as a consultant for WEM in this proceeding. We remind Local Power, however, that to the extent it appears on its own behalf in a proceeding, it must file its own notice of intent to claim compensation and ultimately, request for compensation, if it seeks eligibility for intervenor compensation on its own behalf.

5.2.10 Hourly Rates

Finally, in determining compensation, we take into consideration the market rates for similar services from comparably qualified persons.

WEM seeks an hourly rate of $150 for work performed by Barbara George, Executive Director of WEM, in 2002-2004. George has worked on energy policy issues at the local, state and national levels for 25 years. Although WEM does not compare George's experience to that of other experts appearing before us, we note that other experts with similar or fewer years of experience on energy matters have been awarded similar hourly rates (Jody London, $160/hour in 2003 with 13 years relevant experience (D.03-06-065); Gelly Borromeo, $160/hour in 2003 with 12 years relevant experience (D.04-08-020)). The rate requested for George is reasonable.

WEM also employed the services of Paul Fenn of Local Power. Fenn has worked on energy issues since 1993, first in the Massachusetts Legislature and then as Executive Director of Local Power. WEM requests $120/hour for Fenn's services in 2003. WEM did not compare this rate to others offering similar services that appear before us but based on our review of hourly rates, the requested rate for Fenn is reasonable.

In an e-mail to ALJ Cooke on June 10, 2004, WEM stated that "All driving and intervenor compensation entries are billed at half rate," as the Commission requires. We can see from the time records submitted on July 22, 2004 that these hours were billed at $75/hour, half the claimed rate of $150.

5.2.11 Other Costs

WEM includes a detailed itemization of its claim for other expenses, such as telephone, photo copying, and travel. We adjust the travel to remove 46% of the travel expenses (mileage and lodging), consistent with the amount of travel time we did not approve, resulting in reasonable expenses of $3,289.31.