IV. Substantial Contribution to Resolution of
Issues
A. Introduction
The next issue is whether TURN made "a substantial contribution to the adoption, in whole or in part, of the commission's order or decision." (Pub. Util. Code § 1803(a).) The term "substantial contribution" is defined in subdivision (h) of § 1802 as follows:
" `Substantial contribution' means that, in the judgment of the commission, the customer's presentation has substantially assisted the commission in the making of its order or decision because the order or decision has adopted in whole or in part one or more factual contentions, legal contentions, or specific policy or procedural recommendations presented by the customer. Where the customer's participation has resulted in a substantial contribution, even if the decision adopts that customer's contention or recommendations only in part, the commission may award the customer compensation for all reasonable advocate's fees, reasonable expert fees, and other reasonable costs incurred by the customer in preparing or presenting that contention or recommendation."
If the person requesting compensation is found to have made a substantial contribution, then the Commission must describe the substantial contribution and determine the amount of compensation to be paid. (Pub. Util. Code § 1804(e).)
TURN's notice of intent stated the following about its planned participation in this proceeding:
"TURN is interested in most of the unresolved issues listed by ALJ Wong during the prehearing conference, especially issues that affect the quantity and price of relinquished or expansion capacity held by PG&E's Core Procurement Department on behalf of core customers. TURN thus intends to participate in this proceeding to the fullest extent possible, though TURN cannot at this time determine the extent of our participation if evidentiary hearings are ordered."
The various issues discussed at the prehearing conference were set forth in the February 26, 2002 scoping memo and ruling. The scoping memo issues were further refined in ALJ rulings dated September 30, 2002, and February 14, 2003.
B. D.02-08-070
1. TURN's Position
TURN's request for compensation, as amended on April 22, 2004, states that it made a substantial contribution to D.02-08-070 in the following manner.
"TURN participated in settlement negotiations conducted after PG&E filed A.01-10-011, and TURN did not oppose the `Joint Motion For Approval Of Gas Accord II Settlement Agreement And Request For Shortened Comment Time' filed on May 20, 2002. The Commission granted the joint motion to approve the Gas Accord II Settlement Agreement on August 22, 2002 in D.02-08-070. Pursuant to the settlement agreement, the market structure, rates, and terms and conditions of service for PG&E, which were adopted in D.97-08-055 and modified in D.00-02-050 and D.00-05-049, were extended through December 31, 2003 for gas transmission, and through March 31, 2004 for gas storage. The procedures and guidelines for contracting for gas transmission and storage services, as agreed to in the Gas Accord II Settlement Agreement, were also approved."
TURN is requesting full compensation for the time it spent for litigation preparation and settlement negotiations prior to the issuance of D.02-08-070. This includes the work that TURN undertook in connection with A.01-06-020, which resulted in the issuance of D.01-09-016, as well as its work related to settlement activities which led to the issuance of D.02-08-070. TURN's request for compensation states that 7.90 hours were spent on A.01-06-020, and 36.95 hours were spent in settlement negotiations which resulted in D.02-08-070.
TURN's request states that prior to the filing of A.01-10-011, PG&E invited parties to a number of settlement meetings to discuss issues about PG&E's gas market structure and rates before the expiration of the Gas Accord. These talks, however, were overtaken by the energy crisis, and did not lead to any proposed settlement. TURN contends that these negotiations addressed many of the issues that were later settled or litigated in A.01-10-011. TURN requests full compensation for the 36.95 hours spent in settlement negotiations in 2000.
Citing D.00-07-046 and D.00-07-015, TURN notes that the "Commission has held that active participation in settlements justifies compensation, especially when it contributes to the development of a record that assists the Commission." (TURN Request For Compensation, p. 5.) TURN also notes that its participation leading up to D.02-08-070 is similar to the negotiations and settlement concerning PG&E's operational changes in I.99-07-003, in which the Commission granted TURN full compensation in D.01-03-030 for its participation. TURN also cites D.95-08-024 and D.98-11-014 in support of its request that these settlement negotiations be compensated.
As for the work that TURN performed in connection with A.01-06-020, TURN is requesting that it be compensated for 7.90 hours of work. TURN states that A.01-06-020 was the direct antecedent of this proceeding, although it was later withdrawn. TURN contends that compensation for the work that it performed in A.01-06-020 is appropriate, and that the Commission has awarded compensation in similar circumstances in D.02-03-035 and D.00-10-007.
2. Discussion
The Commission has recognized in prior decisions that:
"The requirement that an intervenor's participation substantially assist the Commission in the making of its order is a tool the Commission applies in ensuring that compensated participation provides value to ratepayers. In assessing whether the customer meets this standard, the Commission typically reviews the record, composed in part of pleadings of the customer and, in litigated matters, the hearing transcripts, and compares it to the findings, conclusions, and orders in the decision to which the customer asserts it contributed." (D.01-03-030, p. 6; D.00-07-046, p. 5.)
The assessment as to whether TURN made a substantial contribution to D.02-08-070 is made more difficult because a settlement was adopted in that decision. The use of an alternative to litigation, such as a settlement, makes it harder to determine whether a particular intervenor contributed to a proceeding. When settlements are used instead of, or as a supplement to paper proceedings and/or evidentiary hearings, the paper trail may be minimal or non-existent. If a paper trail exists, it may not consist of party-specific pleadings, but rather multi-party products.
We have stated in the past that:
"We do not believe that participation in settlement negotiations, in and of itself, is sufficient participation to bring value to ratepayers, warranting compensation. However, we also recognize that the intervenor compensation program is intended to encourage the participation of all customers in Commission proceedings by helping them overcome the cost barriers to effective and efficient participation. [Footnote omitted.] In this manner, the record is made more complete and the decision making process is improved. Although we sometimes find difficulty in evaluating the contribution of a customer in a settlement setting, we expect to continue to use our judgment and the discretion the Legislature has afforded us to award compensation to a party who participated in settlements when we find that party's contribution to our order or decision was substantial." (D.01-03-030, p. 7; D.00-07-046, p. 6.)
TURN acknowledges in its request for compensation that "It is difficult in the present situation to define the benefits of TURN's participation based on the individual settlement provisions." (TURN Request for Compensation, p. 5.) TURN points out that since Rule 51.9 precludes disclosure of settlement discussions, and because there was no testimony or hearings held in advance of the filing of the settlement, there is no record to identify the positions of the parties. Notwithstanding this lack of a record, TURN asserts:
"TURN believes that its participation assisted the Commission by providing information regarding the benefits of the settlements for core customers. TURN participated in order to ensure that there were no negative consequences for core customers and to assure positive effects were possible. TURN consistently promoted its policy position that a temporary extension of the Gas Accord was the most appropriate policy course. TURN also supported requiring PG&E to file a cost of service study to support any rate changes. ... Decision 02-08-070 generally agreed with both of these policy recommendations." (TURN Request for Compensation, p. 5.)
TURN is seeking compensation for its work associated with A.01-06-020, and for its work related to the settlement which led up to the adoption of D.02-08-070 in A.01-10-011. Based on the filings in A.01-06-020, and the settlement negotiations in A.01-10-011 which led to the adoption of D.02-08-070, we conclude that TURN made a substantial contribution to D.02-08-070. We reach this conclusion based on two considerations.
First, TURN filed comments on the draft decision and the alternate draft decisions in A.01-06-020, and made two ex parte filings. TURN had argued that PG&E's open season application should be dismissed because the expiring Gas Accord structure should be evaluated prior to the holding of an open season. D.01-09-016 allowed PG&E to withdraw its open season application, and directed PG&E not to file a new open season application until PG&E filed an application proposing a gas market structure and rules for the period beginning January 1, 2003. In D.02-08-070, the Commission essentially adopted TURN's procedural recommendation by extending the Gas Accord for one year, allowing existing transmission contracts to be extended, and to hold an open season for any remaining transmission capacity. (See D.02-08-070, App. A, § V.)
Second, although TURN was not a signatory to the May 20, 2002 "Joint Motion For Approval Of Gas Accord II Settlement Agreement And Request For Shortened Comment Time," TURN did file a reply on June 17, 2002 to the comments on the proposed Gas Accord II settlement agreement. In its reply at pages 2 and 3, TURN stated that it did "not object to a one year extension as a realistic means of providing some market certainty and not wasting resources prior to resolution of related issues in Bankruptcy Court." D.02-08-070 extended the Gas Accord structure by one year, and recognized that none of the commenting parties voiced any opposition to extending the terms and conditions of the Gas Accord by one year. D.02-08-070 also stated that the extension of the Gas Accord will provide participants in the gas market in PG&E's service territory with "commercial certainty" over PG&E's gas transmission and storage, and will "provide certainty as to the gas market structure for PG&E while the Bankruptcy Court decides which plan of reorganization is to be adopted." (D.02-08-070, pp. 18-19.) Thus, the Commission adopted TURN's contention that the extension of the Gas Accord for one year would provide market certainty while PG&E's bankruptcy proceeding continued. We conclude that TURN made a substantial contribution to D.02-08-070.
C. D.03-12-061
1. TURN's Position
D.03-12-061 adopted a gas market structure for PG&E's gas transmission and storage system for two years beginning January 1, 2004, and adopted rates for 2004. TURN states that it substantially participated in A.01-10-011 by submitting the testimony of two witnesses, and making "recommendations in the areas of policy, ratemaking treatment for unbundled backbone rates, ratemaking treatment for local transmission rates, as well as proposing disallowances to both the capital and O&M components of the revenue requirement." (TURN Request For Compensation, p. 6.) TURN also notes that it was the only party that provided an analysis that attacked the financial benefits of the unbundled backbone structure.
TURN points out that although D.03-12-061 did not adopt all of TURN's recommendations, the Commission did agree with the majority of TURN's recommendations. According to TURN, these key recommendations included "adopting only a one-year extension, not allowing any roll-in of Line 401 costs into core rates, and not adopting PG&E's local transmission rate design modifications...." (TURN Request For Compensation, p. 6.)
In Table 1 of TURN's Request For Compensation, TURN included a summary of its contentions and recommendations on the various issues, together with the Commission's disposition of those issues. TURN contends that the record in this proceeding "amply illustrates" that TURN made a substantial contribution to D.03-12-061.
2. Discussion
Several of TURN's proposals or analyses substantially assisted the Commission in the development of D.03-12-061. The proposals or recommendations of TURN that were adopted by the Commission in D.03-12-061 are reflected in Table 1 of TURN's Request for Compensation.
TURN acknowledges that some of TURN's policy positions were identical to those of other parties, including the Office of Ratepayer Advocates and the City of Palo Alto. TURN points out, however, that it provided significant independent legal and factual analysis on the various issues, such as the roll-in of Line 401, and the policy and factual issues concerning the costs and rates for backbone and local transmission service. TURN contends that § 1802.5 allows the Commission to award full compensation even when a party's participation overlaps in part with the showings made by other parties.
We agree with TURN that although some of its positions overlapped with other parties, TURN provided significant input supplementing or complementing the showings of other parties on the various issues. TURN's input is in our resolution of the issues. Based on TURN's activities in A.01-10-011 following the adoption of D.02-08-070, and our discussion of TURN's positions in D.03-12-061, we conclude that TURN made a substantial contribution to D.03-12-061.
