Reasonableness of Requested Compensation

TURN requests $84,824.72 for its participation in this proceeding, itemized as follows:

Attorneys Fees: Matthew Freedman Michel P. Florio Daniel Edington Robert Finklestein	155.25 hours @ $250 6.75 hours @ $125 22.50 hours @ $435 14.00 hours @ $190 1.25 hours @ $365 3.25 hours @ $182.50	$38,812.50 843.75 9,787.50 2,660.00 456.25 593.13	$53,153.13
Expert Witness Costs: JBS Energy, Inc. William Marcus Expenses Woodruff Expert Services Kevin Woodruff Expenses	27.91 hours @ $185 122.5 hours @ $200	5,163.35 58.80 24,500.00 171.60	29,893.75
Other Costs: Photocopying expense Postage Facsimile/Phone/FedEx Legal Research (LEXIS)		1,503.25 133.67 32.92 108.00	1,777.84
TOTAL CLAIM			$84,824.72

The components of this 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.

Also, 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.

TURN 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.³ Given the scope of TURN's participation and the work products prepared, the number of claimed hours is reasonable. Since we find that TURN's efforts made a substantial contribution to the decision, we need not exclude from TURN's award any compensation for specific issues. We note, however, that TURN did generally document its work by issue (i.e., cost-effectiveness, jurisdictional and affiliate transaction issues, and specific terms of the PPA). Had we needed to eliminate certain issues from this award, TURN's breakdown would have facilitated the process.

Although we adopted almost all of TURN's recommendations, it is difficult to attribute specific quantifiable benefits to TURN's participation. Over the life of the project, however, net financial savings in many areas recommended by TURN will most likely exceed the intervenor compensation claim, e.g., reduced capital cost contingency, higher operating availability benchmark, clarification of heat rate incentive to prevent unnecessary ratepayer costs, measure to reduce future cost escalation, provision to prevent the pass-through to ratepayers of option payments in the event the transaction was not consummated, and a provision to protect bundled service customers from the risk of stranded costs. Thus, we find that TURN's efforts have been productive.

Finally, in determining compensation, we take into consideration the market rates for similar services from comparably qualified persons. In this proceeding, TURN used four attorneys and two expert witnesses. Of the attorneys, three of the four persons have had their hourly rates recently approved by the Commission, and TURN asks that these rates be applied to the work they conducted in this proceeding. TURN requests an hourly rate of $435 for Michel Florio, which is the rate approved by the Commission for his 2003 work in D.04-02-017, and $365 for Robert Finkelstein, which is the rate approved by the Commission for his 2003 work in D.03-08-041. Both these rates remain reasonable.

In D.04-02-017, the Commission approved an hourly rate of $225 for Matthew Freedman for legal work in 2003. Due to his extensive and skillful work in this proceeding, also concluded in 2003, TURN takes the unusual step of requesting an increase in Freedman's hourly rate to $250. TURN justifies this request by documenting Freedman's role as the TURN lead attorney in this proceeding, the proportion of time (80%) he spent on the case as compared to the other TURN lawyers, his substantive work prior to joining TURN in 2000 (Senior Energy Policy Analyst for Public Citizen's Critical Mass Energy Project, Policy Analyst for Massachusetts Public Interest Group), and his increasing responsibilities in representing TURN in Commission proceedings. Additionally, TURN offers the Of Counsel Annual Survey of the Nation's 700 Largest Law Firms 2002/2003. For San Francisco Bay and Southern California law firms that responded to the survey, the average associate's time was billed at $253 per hour. Since this proceeding was filed in the last half of 2003 and most of the legal work was performed during the last quarter, we believe it is appropriate to make an end-of-year 2003 adjustment to Freedman's hourly rate. We find that the hourly rate of $250 is reasonable. Since this sizeable increase is determined for work preformed late in 2003, we expect that if any 2004 hourly rate increase is requested it will be modest by comparison.

The Commission has not previously approved an hourly rate for Daniel Edington, who is a recent law school graduate (2002) and joined TURN in 2003. TURN requests an hourly rate of $190. Using the same Of Counsel survey, TURN argues that the average billing rate at major California law firms for recent graduates was $176 for 2002/2003. This is generally consistent with our prior decisions for new attorneys awarding compensation at between $165-$175 per hour (see, e.g., D.02-05-05, D.03-01-075). TURN asks that this amount be increased by 7.5% to justify a $190 hourly rate since the Of Counsel survey was based on January 2002 data. While also noting that we previously adopted hourly rates of $180 (2000; D.02-09-005) to $190 (2001; D.02-10-056) for Freedman shortly after he completed law school, we conclude that $190 per hour is reasonable compensation for Edington based on market information.

TURN also claims compensation for two expert witnesses: William Marcus of JBS Energy and Kevin Woodruff of Woodruff Expert Services. We have recently awarded compensation at $185 per hour for Marcus' services in D.03-10-011. This rate is reasonable in this proceeding.

We have not previously awarded compensation for Kevin Woodruff. In evaluating the proper hourly rate, we look to the experience of a particular expert, relevant market rate data, and the rates awarded to peers practicing before the Commission. TURN seeks $200 per hour. Woodruff graduated from the University of California, Berkeley, with a degree in economics in 1976. He obtained a MBA from California State University, Sacramento, in 1990. He has worked on the economic analysis of energy policy, and his expertise is in power market analysis. He worked for 15 years for Henwood Energy Services, a national firm in power market analysis. He started his own firm in 2002. TURN justifies its hourly rate claim by arguing that this is the rate that Woodruff charges other clients and that the proposed rate falls within the approved hourly rate range for other experts such as William Marcus ($185; TURN argues that this rate is below market) and James Weil ($220, beginning in 2000). For comparison purposes, we note that we awarded an hourly rate of $190 (2000) to a policy expert with more education, some experience with the Commission, and less involvement in the pertinent proceeding than Woodruff had here (see D.02-11-024) (Boothe).

Woodruff's role in the development of TURN's presentation is demonstrated by his billing records. From September 17 to December 15, 2003, Woodruff performed some work almost every day on this proceeding. He helped the attorneys prepare for the examination of witnesses and advised on the briefs. He testified at the evidentiary hearing. Woodruff undoubtedly shares much of the credit for TURN's constructive role in this proceeding. However, Woodruff lacks the experience of appearing before the Commission shared by Marcus and Weil, and TURN does not indicate whether he has been an expert witness in other court or contested administrative proceedings. Given Woodruff's role in this proceeding, his education and experience, and the rates awarded to experts of similar experience, we find his circumstance most similar to Boothe. Since we awarded Boothe $190 for work done in 2000, conservative escalation results in an hourly rate of $200 for Woodruff's work in 2003. Thus, we award that rate.

The incidental costs for TURN's participation in this proceeding, including reproduction, facsimile, and other office costs, are modest, well-documented, and reasonable.