10. Fines
Both Suburban and DRA snipe at each other's conduct in this proceeding (DRA Opening Brief and Sub Reply Brief) and DRA proposes fining Suburban for three alleged transgressions. DRA alleges that Suburban:
1) failed to fully support its application as required by the water rate case plan;
2) failed to "facilitate Informal Communications" in order to create a better understanding of the position of the parties and to avoid and resolve discovery disputes and eliminate unnecessary litigation;" and
3) failed to provide DRA access to its affiliates' relevant books and records.
These allegations were first raised in DRA's direct testimony (Ex. DRA-1 at 8-65 - 8-68.) DRA proposes a fine of $10,250 for each of the three allegations.7 DRA equates this to a fine imposed on another company in D.07-05-062. Suburban had an opportunity in its rebuttal and briefs to address these claims. These allegations highlight a continual tension in rate cases: the limited time available to DRA and the disincentive for the utility to cooperate.
DRA argues, for example, that Suburban witnesses "hard wired" data8 in spreadsheets which made it more difficult to use those worksheets later. (DRA Opening Brief at 33.) Suburban argues DRA failed to sufficiently examine the advance version of the application as a part of the "deficiency review process." In other words, because DRA did not catch Suburban soon enough it somehow becomes DRA's fault. We also note that in preparing this decision, the Division of Water and Audits also confronted hurdles with hard wired data as it prepared rate tables for the proposed decision. This is a very cynical attitude and is not conducive to efficient regulation. We will therefore order Suburban to avoid all possible usage of hard wired data in work papers for its next general rate case and all other applications or advice letters and it must distinguish or highlight all unavoidable hard wired data. We expect DRA in turn to thoroughly review the next advance copy of the next general rate case application and work papers to more fully identify deficiencies. The rate case plan clearly envisions DRA reviewing application material before filing precisely to avoid disputes over adequate data, modeling, and spreadsheet calculations delaying or distracting parties during the active litigation phase of a proceeding.
As noted in most scoping memos, we encourage parties to raise discovery issues early and here the parties did engage in constructive dialogues. In this proceeding the assigned Judge conducted several unrecorded discovery conferences. It is our belief that these conferences tended to expedite the proceeding, but the discovery problems were rooted in the deficiencies of the application which should have been identified before the application was filed. We will not fine Suburban for communication issues at this time.
Finally, DRA argues that Suburban failed to provide access to all affiliates' relevant books and records. DRA has the authority to audit Suburban and, if necessary, to travel to the parent company facilities if the utility does not provide all relevant data in California, to audit the relevant records of Suburban's parent related to all affiliated transaction. DRA did not do so.
It is clear that DRA was frustrated in its dealings with Suburban. Suburban needs to re-examine it regulatory relationship with DRA and establish a more cooperative attitude. DRA needs to ensure that it is thorough and timely in reviewing the draft rate case application for deficiencies and continue to use the discovery procedures to facilitate access to data.
We will not impose any fine at this time.
7 (Ex. DRA-1 at 8-66 and footnote 104.) $10,250 is the mid-point of the $500 to $20,000 per event range of fines allowed under the Public Utilities Code.
8 In a series of Excel spreadsheets, when a piece of data is computed on one sheet, and is then used on another, that data can either be "linked" or "hard wired." Linked data automatically updates for any changes in the first sheet so all subsequent linked sheets cascade to reflect those changes. "Hard wired" data points, however, must be individually identified and changed to correctly make all subsequent calculations.
