4. Reasonableness of Requested Compensation

Aglet requests $113,100.13, as follows:

Professional Fees

James Weil 360.4 hours @ $250 per hour = $ 90,100.00

142.7 hours @ $125 per hour = 17,837.50

Subtotal $107,937.50

Other Costs

Copies $ 2,182.96

Postage and overnight delivery 1,121.02

FAX Charges 218.00

Bridge Tolls 90.00

Parking 290.50

Vehicle Mileage 1,260.15

Subtotal $ 5,162.63

TOTAL $113,100.13

4.1 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. (Mimeo. at 31-33, and Findings of Fact 42). 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.

We did not attribute our adopted positions in D.01-03-081, D.01-03-082, D.01-04-005 and D.01-05-064 to specific parties, although we have discussed their various contributions throughout. Furthermore, we have considered the substantial contributions of Aglet through its cross-examination, briefs, and other participation in this proceeding. We believe that Aglet's participation was productive and assisted us in making decisions on certain disputed issues. The results of these decisions provided savings to ratepayers.

While we did not adopt the arguments presented by Aglet on holding companies and limiting rate relief, we profited by Aglet's arguments, its opposition to ending the rate freeze, and its support for the accounting changes, proposed by TURN, which we did adopt. The ratepayer savings on these two adopted recommendations exceed the amount of Aglet's requested compensation.

As discussed in D.01-03-081 and D.01-04-005, we adopted Aglet arguments that the four categories of costs in § 360.5 do not include some of the items requested by the utilities. Overall, the value of the disallowed items as recommended by Aglet are greater than the requested compensation on these issues.

Finally, we note that Aglet's note design recommendation were valuable for the surcharge revenue requirement adopted in D.01-05-064. Aglet and TURN recommended that the revenue shortfall, estimated at $400 million each for Edison and PG&E, created by exempting residential usage up to 130% of baseline, be allocated to all non-exempt classes. Furthermore, Aglet proposed a proportionality in residential rate tiers above Tier 2, and opposed commercial rate tiering. Our adopted decision included both of these recommendations. The difference between the revenues proposed by the utilities and those in our adopted rate design for residential customers exceed $500 million each for Edison and PG&E, which is far greater than Aglet's request either overall or with regard to this portion of the proceeding.

4.2 Hours Claimed

Aglet documented its claimed hours through detailed records of time spent in the different phases of this proceeding. The records indicate both the professional hours and the activities associated with the hours. In its request, Aglet has included 29.6 hours pertaining to issues in those phases of the proceeding (A.00-11-038 et al.) which were deferred from an earlier request filed March 5, 2001 and which we have included in our adopted compensation award. The hourly breakdowns and allocation of hours reasonably support the claimed hours for Aglet.

4.3 Hourly Rates

Aglet requests an hourly rate of $250 per hour and a travel compensation rate of $125 per hour for work done during 2001. These rates include its request for a risk premium.

We do not agree with Aglet's request either for a "risk premium" or for a requirement that utilities make compensation payments within five days of the effective date of this order. We understand Aglet's concern that as a potential creditor of PG&E and Edison, it may be uncertain when payment of any compensation award would be realized. However, we are reluctant to begin increasing compensation awards on the basis of payment uncertainty by utilities. To do so would open up many financial issues and arguments and unnecessarily delay our consideration of the many compensation requests of customers. We believe that § 1807 which provides for timely payment within 30 days, adequately addresses this issue, as well as our provision for the accrual of interest beyond the 75^th day of the request as adopted in this order.

Therefore, we have reduced these rates to a professional hourly rate of $220 per hour and a travel compensation rate of $110 per hour. These rates were previously awarded by the Commission in D.00-11-002. We find these hourly rates to be reasonable and consistent with past hourly rates for comparable work.

4.4 Other Costs

Aglet requests $ 5,162.63 for other costs (photocopying, postage, fax, bridge tolls, parking and vehicle mileage). These costs have been itemized by date, amount and activity. Based on the scope of Aglet's work, documents needed, the number of phases of the proceeding and the size of the service list (238), these costs appear reasonable.