STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

July 20, 2004 Agenda ID 3739

Quasi-Legislative

TO: PARTIES OF RECORD IN RULEMAKING 03-02-035

This is the draft decision of Administrative Law Judge (ALJ) Econome. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the Assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

ANG:hl2

Attachment

ALJ/JJJ/hl2 DRAFT Agenda ID #3739

Quasi-Legislative

Decision DRAFT DECISION OF ALJ ECONOME (Mailed 7/20/2004)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking for the Purpose of Amending General Order 156.

Rulemaking 03-02-035 (Filed February 27, 2003)

OPINION GRANTING INTERVENOR COMPENSATION

TO THE GREENLINING INSTITUTE FOR SUBSTANTIAL CONTRIBUTION

TO PETITION 02-10-035 AND DECISION 03-11-024

This decision awards the Greenlining Institute (Greenlining) $31,450.44 in compensation for its substantial contribution to Petition (P.) 02-10-035 and to Decision (D.) 03-11-024 in the above rulemaking. This decision makes reductions to Greenlining's requested amount of $57,339.19 because (a) some hours claimed were for work performed (or that Greenlining expects to perform) outside of the proceeding; (b) several of Greenlining's requested hourly rates exceed the market rate for the work of persons of comparable training and experience; (c) Greenlining fails to adequately support its requested multiplier; and (d) Greenlining fails to discount its requested compensation for travel time consistent with past Commission decisions.

Background

Starting in 1986, the California Legislature enacted a series of statutes to ensure that a fair proportion of total utility contracts and subcontracts for products and services are awarded to women, minority, and disabled veteran business enterprises (WMDVBE). (See generally Pub. Util. Code §§ 8281-8286.)¹ The purpose of these statutes is to (a) encourage greater economic opportunity for WMDVBEs; (b) promote competition among suppliers to regulated public utilities to enhance economic efficiency; and (c) clarify and expand the program for the utilities' procurement of products and services from WMDVBEs (See § 8281 (b)(2).)

In April 1988, the Commission adopted General Order (GO) 156 in order to implement §§ 8281 et seq. (See D.88-04-057, 28 CPUC2d 36.) GO 156, § 8.2 requires utilities to establish minimum long-term goals for each major category of products and services a utility purchases from outside vendors. The goals must be not less than 15% for minority-owned business enterprises and not less than 5% for women-owned business enterprises. The goal for disabled veteran business enterprises is 1.5%, effective January 1, 1997.

Prior to this rulemaking, Section 8.5 of GO 156 provided that a utility can create an "excluded category" of products or services where it was clearly evident that WMDVBEs do not provide such services or that sole source procurement is the only available procurement method. The utility had the burden of demonstrating the unavailability of WMDVBEs that could supply such products and services and of justifying in its annual report the continued existence of any excluded category.

On October 28, 2002, Greenlining and Latino Issues Forum² filed a petition for rulemaking pursuant to Pub. Util. Code § 1708.5 ³ to amend GO 156. Petitioners requested that the Commission institute a rulemaking in order to eliminate the exclusions from the base of procurement dollars the utilities use to establish the monetary value of the WMDVBE procurement goals. Petitioners also requested that the Commission (a) conduct a study showing how much in dollars, as well as in percent of dollars, each major utility has excluded each year since the initiation of GO 156; (b) conduct an audit to ensure that each utility's WMDVBE verification and reporting process is accurate and reliable; and (c) require the utilities to standardize their WMDVBE reporting and verification. The petition did not include specific suggested amendments to GO 156 in order to implement the requested changes.

The Commission did not hold a prehearing conference before issuing a decision responding to the petition. On February 27, 2003, the Commission issued Rulemaking (R.) 03-02-035, which granted the petition in part. Specifically, the rulemaking would determine whether to amend GO 156 to eliminate the exclusions currently permitted, and whether to refine certain aspects of GO 156 verification and reporting. The rulemaking also required the utilities subject to GO 156 to file a report with the Commission summarizing their historic use of exclusions in their WMDVBE reporting, and to provide the Commission with certain data regarding vendors the utilities had contracted with in 2002.

The Commission held a prehearing conference in R.03-02-035 on June 25, 2003, and determined that the proceeding could be resolved by notice and comment, without the need for a hearing. (See August 25, 2003 Scoping Memo.) Greenlining's representatives attended the prehearing conference. Greenlining did not file a notice of intent (NOI) to claim compensation with respect to the petition or rulemaking.

The Commission issued D.03-11-024 on November 13, 2003. Greenlining timely filed its request for an award of compensation for its work in the petition and rulemaking within 60 days of the issuance of D.03-11-024. Pacific Bell Telephone Company, SBC California (SBC) and Verizon California, Inc. (Verizon) oppose portions of Greenlining's request.