V. Reasonableness of the Requested Compensation

A. Amount Requested

Having found that TURN made a substantial contribution to D.02-08-070 and D.03-12-061, the next step is to determine the amount of compensation that should be paid. (Pub. Util. Code § 1804(e).)

TURN requests $79,658.61 for work performed in this proceeding, consisting of $72,038.50 for attorney and staff time, $4,517.70 for professional consulting, and $3,102.41 for direct expenses. TURN submitted logs showing the time and work performed by TURN's staff and its consultant, and the direct expenses that TURN incurred.

As mentioned above, TURN is requesting compensation for work related to A.01-06-020 and A.01-10-011. For A.01-06-020, TURN is requesting 7.9 hours of attorney time in the total amount of $1661. Although TURN incurred $48.77 in expenses in A.01-06-020, TURN did not include that amount in its request for compensation.

For work related to A.01-10-011, TURN is requesting 293.48 hours of attorney time in the total amount of $70,377.50.⁵ In addition, TURN is requesting 24.42 hours of professional consulting, which resulted in a fee of $4517.70. TURN also incurred direct expenses totaling to $3102.41.

TURN's request for compensation also allocates the costs and fees by issue and task as shown in the Request For Compensation at pages 12 and 13, and in Appendix A and Appendix B.

B. Hours Claimed and Hourly Rates

Although TURN incurred a total of 308.50 hours of attorney time, TURN is seeking compensation for 301.38 hours due to the discounting by 50% of the time related to the preparation of the intervenor compensation documents. TURN contends that the number of hours it is requesting is reasonable because this proceeding was "tantamount to a general rate case," and involved both revenue requirement and cost allocation issues. (TURN Request For Compensation, p. 14.)

Assessing the reasonableness of the number of hours that an intervenor devoted to a proceeding may be difficult where the proceeding was resolved through settlement, as here. Hours spent in the hearing room are generally easier to document than those spent at the negotiating table. Considering the extent of TURN's activities that are documented, as discussed in preceding sections, the hours claimed bear a reasonable relationship to those activities. Further, as we discuss in Section V.C below, TURN's participation clearly benefited ratepayers far beyond the total costs TURN is claiming. In light of these factors, we find that TURN has adequately supported the attorney time incurred for this proceeding.

TURN also asserts that the hourly rates that it is requesting for its attorney and staff time are reasonable, or have been adopted previously by the Commission. The hourly rates that TURN is requesting are shown in Table 5 of the Request For Compensation. As shown in that table, the 2003 rates that TURN is requesting for two of its attorneys have not yet been adopted by the Commission. The other hourly rates that TURN is requesting have been previously adopted by the Commission in prior intervenor compensation decisions, as cited by TURN in that table.

1. Marcel Hawiger

TURN is requesting an hourly rate of $250 for Marcel Hawiger for 2003. We have not yet adopted a 2003 hourly rate for Hawiger. TURN notes that the requested hourly rate of $250 is an increase of $50 per hour, a 25% increase, over the hourly rate that was approved for his work in 2002. TURN recognizes that this is a very substantial increase when viewed on a year-to-year basis, and that this exceeds the typical 10 to 15% annual increments that the Commission usually applies.

TURN contends that Hawiger's hourly rate has not kept pace with market rates. Hawiger's hourly rate in 1998 was $160 per hour, and in 2002 was $200 per hour. On an annual basis, the increase in Hawiger's hourly rate averaged just over 5% per year. Had Hawiger's hourly rate in 1998 been increased on an annual basis by 10%, his rate would have exceeded $250 in 2003.

TURN also contends that the requested hourly rate of $250 is reasonable in light of the outstanding work that he performed in this proceeding, and compares favorably to the market rates paid to persons of comparable training and experience who offered similar services in 2003.

According to TURN's Request For Compensation, Hawiger joined TURN in August 1998. He has worked exclusively on energy-related cases, and has been TURN's lead attorney on all major gas proceedings over the past four to five years, as well as lead counsel in several other proceedings. In his lead counsel role, Hawiger has supervised the work of less-experienced attorneys. Hawiger graduated from law school in New York in 1993, worked as a staff attorney for legal services in Washington State from 1994 to 1996, and was the Executive Director of a non-profit fair housing organization in Palo Alto from 1996 to 1998. Hawiger was admitted to the California bar in January 1998.

According to TURN, the request of $250 per hour for Hawiger for work in 2003 reflects a conservative market rate for attorneys with similar training, experience, and skill. Based on the "Of Counsel" attorney fee surveys, which TURN summarized in its request, associate rates for San Francisco area and Southern California area firms for 2000 to 2001 ranged from $110 to $375 per hour, and in 2002 to 2003 from $150 to $605 per hour.⁶ Based on the survey, and excluding the lowest and highest rates in the survey, TURN states that the average hourly associate rate was $253 for the 2002-2003 period. TURN also notes that the "Of Counsel" surveys reflect a 17% increase in rates between the two survey periods.

Based on Hawiger's past experience, and his five years of energy regulatory practice before the Commission, TURN contends that Hawiger should be considered at least the equivalent of a mid-range associate in a law firm, and that the appropriate mid-range hourly rate should be $250 to $265. TURN requests that the Commission adopt $250 as a reasonable hourly rate for Hawiger's work in 2003.⁷

In D.03-10-062, we awarded a 2002 rate of $265 to Itzel Berrio and Enrique Gallardo, who are 1997 law school graduates with several years less legal experience than Hawiger. Based upon Hawiger's experience, his work performed in this proceeding, and a comparison of the market rates for attorneys of similar experience and qualifications, we award Hawiger a rate of $250 per hour for his work performed in 2003, and for his 17 hours of work in 2004 in this proceeding.

2. Daniel Edington

The hourly rate requested by TURN for Daniel Edington's time in 2003 is $190. TURN made the same request for Edington's 2003 hourly rate in its Request For Compensation filed in A.03-07-032 on February 23, 2004.

According to the request for compensation, Edington graduated from law school in 2002 and joined TURN at the beginning of 2003. TURN points out that in recent compensation decisions, D.02-05-005 and D.03-01-075, the Commission adopted hourly rates of $165 to $175 for work performed in 2001 by recent law school graduates. Increasing these rates by 7.5% per year results in a 2003 rate of $190 to $202 per hour.

Based on the "Of Counsel" survey, and excluding the lowest and highest rates, the average reported low-end associate rate for 2000/2001 was $151 per hour. For 2002/2003, excluding the lowest and highest rates, the average reported low-end associate rate increased by approximately 16.5% to $176 per hour. Applying a conservative 7.5% increase to the $176 hourly rate, TURN calculates that a low-end associate hourly rate for 2003 should be $190.

Based on Edington's experience, his work performed in this proceeding, and a comparison of the market rates for attorneys of similar experience and qualifications, we award Edington a rate of $190 per hour for the work performed in 2003.

3. Other Attorney and Staff

TURN requests that the hourly rates for Michel Florio for work performed in 2001, 2002, and 2003 be compensated at an hourly rate of $350, $385, and $435, respectively. These hourly rates were previously adopted for Florio's work in other proceedings, and we adopt them for Florio's work as reasonable for the work he performed in this proceeding.

TURN requests that the hourly rate for Randy Wu for work performed in 2002 be compensated at an hourly rate of $385. This hourly rate was previously adopted for Wu's work in another proceeding, and we adopt this rate for Wu's work in 2002 in this proceeding.

TURN requests that the hourly rate for Hayley Goodson for work performed in 2002 be compensated at an hourly rate of $95. This hourly rate was previously adopted for Goodson's work in another proceeding, and we adopt this rate for Goodson's work in 2002 in this proceeding.

4. Professional Consulting

TURN's compensation request includes 24.42 hours of consulting time for the work of William Marcus of JBS Energy, Inc. in 2003. Marcus' hourly rate of $185 for work performed in 2003 in another proceeding was previously approved in D.03-10-011. We adopt this rate requested for Marcus' consulting work in 2003 in this proceeding.

5. Costs

TURN's request for its direct expenses of $3,102.41 is reasonable.

C. Benefits To Ratepayers

In D.98-04-059 [79 CPUC2d 628], the Commission adopted a requirement that the customer must demonstrate that its participation was "productive," as that term is used in § 1801.3. D.98-04-059 states that "the participation must be productive in the sense that the costs of participation should bear a reasonable relationship to the benefits realized through such participation," and to "demonstrate productivity, a customer should try to assign a reasonable dollar value on the benefits of its participation." (79 CPUC2d at p. 650.) The purpose of such an exercise ensures that: "(1) ratepayers receive value from the compensated intervention; and (2) only reasonable costs are compensated." (79 CPUC2d at p. 669.)

TURN points out that the adoption of its positions on the roll-in of the Line 401 costs and local transmission rate design resulted in a reduction of the annual core revenue by about $26.6 million as compared to PG&E's proposal. (See D.03-12-061, pp. 270, 338-339.) In addition, TURN points out that the rejection of PG&E's proposed winter reliability criterion directly reduced the capital cost for 2004 by $2 million. (See D.03-12-061, pp. 36-37.)

As demonstrated by the savings to core customers, and in comparison to the amount of compensation that TURN is requesting in this proceeding, we find that TURN's participation was productive, and bears a reasonable relationship to the benefits ratepayers realized through TURN's participation.

D. Award

We have reviewed the number of hours spent by TURN's attorneys in this proceeding and the associated direct expenses. We find that the direct expenses, the number of hours billed, and the hourly rates to be reasonable. TURN should be awarded compensation in the amount of $79,658.61. PG&E should be ordered to pay this amount to TURN.

Consistent with previous Commission decisions, we will order that interest be paid on the award amount (at the rate earned on prime, three-month commercial paper, as reported in the Federal Reserve Statistical Release H.15), commencing the 75^th day after TURN filed its amended compensation request and continuing until full payment of the award is made.

As with all intervenors seeking compensation, TURN is reminded that it is subject to audit or review by the Commission staff. Therefore, adequate accounting records and other necessary documentation must be maintained and retained in support of all claims for intervenor compensation. These records should identify specific issues for which TURN requested compensation, the actual time spent by each person, the applicable hourly rate, fees paid, and any other costs claimed.