VI. Reasonableness of Requested Compensation

Aglet-TURN requests $73,558⁴ for their joint participation in this proceeding. To assist us in determining the reasonableness of the requested compensation, 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.

Aglet-TURN attempted to determine the numeric impact of their joint showing in this proceeding regarding debt equivalence; however, they could not do so. They did quantify the most observable dollar benefit of their participation regarding SCE and PG&E's ROE. In regards to SCE, Aglet-TURN were the only parties recommending a reduction in SCE's requested 11.60% ROE. The reduction of SCE's 2005 ROE to 11.40% from 11.60% resulted in a $14.7 million revenue requirement savings. In regards to PG&E, ORA and Aglet-TURN recommended a reduction in PG&E's requested 11.60% ROE. The reduction of PG&E's requested ROE to 11.22% ROE resulted in a $42.2 million annual revenue requirement benefit to ratepayers.

The annual ratepayer revenue requirement benefit identified by Aglet-TURN substantiates that the costs of their joint participation are reasonable in relationship to the benefits ratepayers will realize through that participation.

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.

Aglet-TURN documented their claimed hours by presenting a daily breakdown of the hours, major activity, and description of work their attorneys and advocates devoted to the proceeding. To facilitate a detailed review of their fee request, Aglet-TURN provided a summary of requested professional hours by major issues and professionals as follows.

	Weil	Czahar	Finkelstein	Marcus
Activity					Total
General Work	25.7	-	3.5	-	29.20
Quantitative	65.7	66.0	-	-	131.70
Qualitative	68.8	-	-	-	68.80
Debt Equivalence	40.6	-	-	2.25	42.85
Other Issues	8.6	-	-	-	8.60
Travel & Comp.	28.8	-	-	-	28.80
TOTAL	238.2	66.0	3.5	2.25	309.95

Aglet-TURN believe that the total number of their claimed hours is reasonable given the scope of this proceeding. Our prior discussion of Aglet-TURN's substantial contribution and productivity substantiate that Aglet-TURN's hours are reasonable. We make no adjustment to the requested hours of Weil, Czahar, Finkelstein, and Marcus.

Finally, in determining compensation, we take into consideration the market rates for similar services from comparably qualified persons. Aglet-TURN seeks an hourly rate of $250 for work performed by Weil in 2004 and half the rate for his travel time and work on the compensation request in 2004 and 2005; $220 for Czahar in 2004; $395 for Finkelstein in 2004; and $195 for Marcus in 2004. The Commission has previously approved these rate for work performed by Weil and Czahar.⁵ We find these rates reasonable.

Aglet-TURN seeks a $395 hourly rate for work performed by Finkelstein in 2004, which represents a $30 increase over the $365 hourly rate approved for work undertaken by Finkelstein in 2003.⁶ Finkelstein, TURN's Director, reviewed and provided input into the Aglet-TURN joint draft opening and reply briefs and on the issue of debt equivalence to ensure that TURN's position was adequately represented in the joint Aglet-TURN briefs. In Resolution ALJ-184, adopted August 19, 2004, the Commission indicated that hourly rates requested for 2004 that were as much as 8% greater than adopted 2003 rates would be considered reasonable. The requested 2004 hourly rate of $395 for Finkelstein is consistent with that guideline and should be adopted.

Aglet-TURN seeks a $195 hourly rate for work performed by Marcus in 2004, which represents a $10 increase over the $185 hourly rate approved for work undertaken by Marcus in 2003.⁷ In support of the $10 increase in Marcus's hourly rate for his work in 2004, Aglet-TURN summarized his educational accomplishments that included Marcus' 1974 graduation from Harvard College with an A.B. magna cum laude in economics and a 1974 M.A. in Economics from the University of Toronto. In regards to work experience, Marcus has been involved in the field of energy policy and utility regulation for the past 20 years, first as an economist with the California Energy Commission and, since 1984, as a Principal Economist supervising the work of five analysts with responsibility for all utility issues for JBS Energy, Inc. Marcus has also appeared before this Commission as an expert witness on several occasions. Based on the these accomplishments and experience of Marcus, Aglet-TURN represents that a $10 per hour increase in Marcus' 2003 hourly rate of $185 will keep the hourly rate for Marcus within reasonable bonds for consulting services of professional economists and is reasonable given his credentials and work record. The requested $10 per hour increase is within the parameters of ALJ-184 and should be adopted. Marcus should be awarded a $195 hourly rate for his 2004 work in this proceeding.

Aglet-TURN also seek recovery of their office costs incurred as a result of their participation in this proceeding. These costs totaling $1,266 consist of reproduction (copy) cost, postage, and travel costs. These costs represent less than 1.7% of their total compensation request. Aglet-TURN adequately substantiated their office costs and should be compensated for the full $1,266.