E. Reasonableness of Requested Compensation

TURN requests $1,935,013.19 for its participation in this proceeding, as follows:

	Year	Hours	Rate	Amount
TURN staff counsel
Robert Finkelstein	2001	107.510	$310	$33,325.00
	2002	229.7511	$340	$78,115.00
	2003	4012	$365	$14,600.00
	2004	6413	$395	$25,280.00
Michel P. Florio	2001	59.5	$350	$20,825.00
	2002	7614	$385	$29,260.00
	2003	72.515	$435	$31,537.50
Randy Wu	2001	46.5	$350	$16,275.00
	2002	89.5	$385	$34,457.50
Matthew Freedman	2001	12	$190	$2,280.00
	2002	15	$200	$3,000.00
Hayley Goodson	2002	46.25	$125	$5,781.25
Total TURN staff counsel				$281,826.30 16
Outside counsel
Michael J. Strumwasser	2001	306	$459	$140,454.00
	2002	444.7	$482	$214,345.40
	2003	521.8	$513	$267,683.40
	2004	121.7	$550	$66,935.00
Fredric D. Woocher	2001	9.6	$459	$4,406.40
	2002	1.4	$482	$674.80
	2003	1.7	$513	$872.10
Johanna Shargel	2001	178.1	$333	$59,307.30
	2002	26.6	$350	$9,310.00
	2003	180.8	$375	$67,800.00
Daniel J. Sharfstein	2001	201.6	$225	$45,360.00
	2002	117	$225	$26,325.00
Lea Rappaport Geller	2001	5.4	$225	$1,215.00
	2002	6.1	$225	$1,372.50
	2003	62.2	$255	$15,861.00
	2004	5.9	$295	$1,740.50
Lamar W. Baker	2002	50.3	$225	$11,317.50
	2003	0.3	$255	$76.50
Becky L. Monroe	2003	1	$255	$255.00
	2004	6.8	$295	$2,006.00
Joshua C. Lee	2002	37.3	$140	$5,222.00
	2003	3.5	$140	$490.00
Total outside counsel				$943,029.40
Total all counsel				$1,224,855.70
TURN expenses				$6,838.86
Outside counsel expenses				$43,503.35
D.02-06-070 adjustment				$67,190.50
Total (baseline)				$1,342,388.41
Enhancement requested				$592,624.78
TOTAL REQUESTED				$1,935,013.19

3. Overall Benefits of Participation

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. This showing assists us in determining the overall reasonableness of the request. TURN's litigation of its earlier intervenor compensation request provides the social benefit of promoting effective customer participation in the public utility regulation process. That benefit, though hard to quantify, we find to be substantial.

4. Hours Claimed and Allowed

TURN documented its claimed hours by presenting a daily breakdown of the hours of its attorneys, accompanied by a description of each activity. With the limited exceptions discussed below, the hourly breakdown reasonably supports the claim; however, for reasons set forth earlier, we will compensate only TURN's work in the judicial review of D.02-06-070 and D.03-04-034. Consequently, we remove from the claim those hours associated with TURN's challenge to the Commission's settlement with Edison.

Edison opposes compensation for TURN's costs associated with its media and legislative work. Consistent with our prior decisions, we will disallow them. As we stated in D.96-06-029, "Communicating with the news media does not constitute participation in our proceedings within the meaning of Section 1801 et seq. Accordingly, we shall not grant compensation for time spent on these activities." Likewise, time spent lobbying non-CPUC officials does not meet the definition of "participation" or "intervention" in Commission proceedings. TURN asks that we conclude here, as we did in D.95-08-051, that its legislative work is compensable. The legislative work at issue and compensated in D.95-08-051 was participation in legislative hearings that served to inform the Commission's eventual decision. In contrast, the legislative work for which TURN requests compensation here does not appear to be part of an open legislative hearing and did not inform our decisions.

TURN asks that we compensate it for its media work regarding the federal court proceedings, notwithstanding our prior decisions denying compensation. TURN suggests that, to the extent our previous rulings were motivated by our desire to restrict the influence of the media on our decision-making, there is less concern that the media will influence the court's decision-making. TURN argues that its media activity should be compensated because ratepayers pay for the utility's lawyer's time for spent on media activity. We reject TURN's argument; our prior rulings are based squarely on the costs that are compensable under the governing legislation. We deny compensation for media work because it is not a necessary adjunct to participating in, or obtaining judicial review of, Commission proceedings.

Accordingly, we will disallow 21.7 hours¹⁷ as follows:

11/9/01	Shargel	4.7 hr.*
1/6/02	Strumwasser	1.3 hr.*
1/7/02	Shargel	0.1 hr.*
1/8/02	Shargel	0.1 hr.*
1/11/02	Strumwasser	0.1 hr.*
1/29/02	Strumwasser	0.3 hr.*
10/24/02	Strumwasser	1.0 hr.
5/14/03	Shargel	1.7 hr.
5/2/03	Strumwasser	11.1 hr.
1/31/03	Strumwasser	1.3 hr.

5. Hourly Rates

a) Litigation Staff

TURN seeks an hourly rate of $310 for work performed in 2001, $340 for work performed in 2002, and $365 for work performed in 2003 by attorney Robert Finkelstein. The Commission has previously approved these rates for work performed by Finkelstein, and we find them reasonable.¹⁸ TURN seeks $395 for work performed in 2004 by Finkelstein. In Resolution ALJ-184, adopted August 19, 2004, the Commission indicated that rates requested for 2004 that were as much as 8% greater than adopted 2003 rates would be considered reasonable. The requested $395 is just slightly higher than an 8% adjustment, but we will accept it.

TURN seeks an hourly rate of $350 for work performed in 2001, $385 for work performed in 2002, and $435 for work performed in 2003 by attorney Michel Peter Florio. The Commission has previously approved these rates for work performed by Florio, and we find them reasonable.¹⁹

TURN seeks an hourly rate of $190 for work performed in 2001, and $200 for work performed in 2002 by attorney Matthew Freedman. The Commission has previously approved these rates for work performed by Freedman, and we find them reasonable.²⁰

TURN seeks an hourly rate of $350 for work performed in 2001, and $385 for work performed in 2002 by attorney Randy Wu. The Commission has previously approved these rates for work performed by Wu, and we find them reasonable.²¹

TURN seeks an hourly rate of $125 for work performed in 2002 by Hayley Goodson as a summer law clerk. TURN notes that this is above the $95 hourly rate approved in D.03-05-065 for her work in that year, but asks us to reconsider this figure. TURN asks us to consider revising the rate by reference to D.00-02-044, where we adopted an hourly rate of $100 for law clerk work in 1998. We will not revise the approved rate for Goodson's summer law clerk work. D.03-05-065 adopted the $95 hourly rate by reference to D.03-04-050, where we adopted an $85 hourly rate for summer law clerk work by a law student in 2001. In contrast, the $100 rate adopted in D.00-02-044 appears to apply to a permanent position.

TURN seeks hourly rates for the services of its outside counsel, Strumwasser & Woocher, that it states are comparable to the rates for services paid by PG&E to its outside counsel Heller Ehrman for their work in the federal court litigation, but which are higher than the actual rates charged by Strumwasser & Woocher to TURN. Section 1806 establishes the comparable market rate for services as the maximum that shall be used to compute the compensation award, "tak[ing] into consideration the market rates paid to persons of comparable training and experience who offer similar services." When we earlier considered the question of compensation rates for TURN's outside counsel in the federal filed rate doctrine cases, we declined to set task-by-task compensation rates and instead compensated TURN's outside counsel on the same basis of experience and training as we compensate practitioners before this Commission. (D.02-06-070.) We will not deviate from that practice, as discussed below.

TURN points out that insufficient internal resources or expertise may drive the need to retain outside counsel. However, an intervenor's lack of sufficient internal resources is not a reason to upwardly adjust the rates that the Commission has found appropriate.

It may be that outside counsel's expertise is so specialized that a higher rate is justified. However, TURN has not made that showing. As we stated in D.02-06-070, Strumwasser and Woocher have training and experience levels comparable to Florio's. TURN's in-house counsel can claim many of the credentials that TURN cites as evidence of the high level of their training and experience, for example, successful representation of consumers and regulators in agencies and before the California Legislature, and recognition for command of technical issues. Other credentials that TURN cites are not necessarily relevant to the issues litigated, for example, experience in legal issues of insurance-industry regulation, antitrust, governmental ethics, election law, hazardous substances regulation, First Amendment protections, and civil rights cases. TURN's description of its outside counsel's junior and senior associates' educational backgrounds and work experience does not demonstrate that they possess special expertise germane to this litigation.

In D.02-06-070, we found that Woocher and Strumwasser have training and experience levels comparable to Florio's. Accordingly, they will be compensated at Florio's hourly rate for 2002 and 2003. Based on Resolution ALJ-184, we will escalate the 2003 rate to $470 for 2004.

In D.02-06-070, we found that Shargel had energy litigation experience comparable to Freedman. Accordingly, Shargel will be compensated at the same level as Freedman for 2001 and 2002. Based on record before us, we will carry over the 2002 rate to work performed in 2003.

Sharfstein graduated in 2000 from Yale Law School, Geller graduated from Stanford Law School in 2000, Baker graduated in 2001 from Yale Law School, and Monroe graduated from Yale Law School in 2002. All four of these junior associates joined Strumwasser & Woocher after a year of clerking for a federal judge. TURN does not provide the record with compensation rates adopted by the Commission for junior attorneys with less than three years of experience. We will compensate the work performed by the junior associates at $190 per hour for work performed in their fifth year of experience (comparable to the rate paid for Freedman and Shargel for work performed at that level of experience in D.02-06-070), and $180 per hour for work performed in their fourth year of experience; we will discount that rate by 5%, to $170, for work performed in their second and third years of experience.

TURN requests an hourly rate of $140 for analyst Lee. TURN states that Lee joined Strumwasser & Woocher in 2001. TURN's description of Lee's prior experience does not demonstrate other legal work. We will compensate Lee at $100 per hour, the rate approved for permanent law clerk work in D.00-02-044.

b) Rates for Litigation Staff Work
on the Requests for Compensation

TURN seeks the full hourly rates for work performed on rehearing and judicial review of D.02-06-070, which granted TURN's earlier compensation request, as well as for work performed preparing this request for compensation. We agree that the work performed on rehearing and judicial review of TURN's earlier compensation request involved legal analysis deserving of compensation at its full rates.

We are not persuaded that TURN's preparation of the request itself required complex or technical legal analysis. While the request addresses the legal issue of the compensability of its judicial review work, TURN's discussion of this legal issue is essentially limited to summarizing its procedural history and resolution. TURN makes a thorough showing in support of the rates it requests for its outside counsel, but this is essentially a market showing that is required under the statute; it is not especially legalistic or complex. While TURN's discussion in support of its request for a multiplier (a request we reject below) arguably entailed legal analysis and drafting, it is not possible to distinguish how many hours were spent on this discussion, and we will not compensate all of the preparation hours at the full attorney rate on the basis of this limited effort.

TURN asks the Commission to revisit its practice of awarding compensation for the work associated with preparing the request for compensation at half the hourly rate. (See D.98-04-059.) TURN states that court-awarded attorney fees are typically based on the full hourly rate for the attorney working on the request, and points out that PG&E's outside counsel in the bankruptcy proceeding was fully compensated for its work on its fee applications. We considered this issue in Rulemaking 97-01-009/Investigation 97-01-010, and we decline to revisit this aspect of our intervenor compensation program outside of our generic examination of intervenor compensation.

Accordingly, we will apply one half the attorneys' rates to time spent preparing the compensation request.

6. Multiplier

TURN requests a multiplier of 2.0²² for compensation for professional time spent on its federal litigation work and on the work before the Commission and the District Court of Appeal related to the compensation awarded in D.02-06-070. According to TURN, a multiplier is merited because of the substantial risk that that it would not be able to recover its federal litigation costs, and because nearly all of the factors the Commission has previously cited in favor of awarding multipliers apply to TURN's federal litigation work. We deny TURN's request.

As a matter of policy, we exercise restraint in enhancing hourly rates, and grant enhancement only in exceptional cases. (See D.95-05-018.) Some of the factors that we consider in assessing whether an enhanced fee is justified include the novelty and difficulty of the issues presented, the importance of the issue, the skill required to participate effectively, the degree of success, the efficiency of the presentation, and whether the fee is fixed or contingent. (See D.96-08-029.)

With respect to TURN's work on its earlier compensation award, on balance we do not find this case to be so exceptional as to justify a multiplier. The issue of whether an intervenor can be compensated for its participation in judicial review does not, in our judgment, rise to the level of importance that justifies fee enhancement. We do not consider the issue to be exceptionally complex, either legally or technically, or requiring exceptional litigation skill.

7. Other Costs

TURN requests $50,342.21 for expenses (e.g., airfare, photocopying, postage, fax, parking). These expenses cover approximately a two-year period. By way of comparison, the Commission's previous award granted TURN $16,342.86 for expenses over a period which included approximately six months of the federal litigation. These costs appear reasonable. However, for reasons set forth earlier, we will compensate only TURN's work in the judicial review of D.02-06-070 and D.03-04-034. Consequently, we remove from the claim those costs associated with TURN's challenge to the Commission's settlement with Edison.

8. Retroactive Adjustment

TURN requests a retroactive adjustment to the hourly rates used in D.02-06-070 to calculate TURN's initial compensation for the costs of its outside counsel in 2000 and 2001, using the actual rates Strumwasser & Woocher charged its clients in those years. TURN requests an adjustment of $67,190.50, as follows:

Attorney	Requested Rate	Awarded Rate	Difference	Hours Awarded	Adjustment
Strumwasser	$425	$315	$110	104.1	$11,451.00
	$425	$350	$ 75	352.7	$26,452.50
Woocher	$425	$315	$110	5.9	$ 649.00
	$425	$350	$ 75	3.8	$ 285.00
Pollak	$250	$180	$ 70	87.3	$ 6,111.00
	$250	$190	$ 60	368.7	$22,122.00
Shargel	$250	$190	$ 60	2	$ 120.00
TOTAL					$67,190.50

As discussed earlier, we adopted rates for Strumwasser & Woocher based on comparable training and experience. Accordingly, no retroactive adjustment is required.

9. Award

As set forth in the table below, we award TURN $288,402.18.

	Year	Hours	Rate	Amount
TURN staff counsel
Robert Finkelstein	2001	8.25	$310	$2,557.50
	2002	144	$340	$48,960.00
(request preparation)	2002	18.25	$170	$3,102.50
	2003	35.25	$365	$12,866.25
	2004	18.5	$395	$7,307.50
(request preparation)	2004	42.25	$197.50	$8,344.40
Michel P. Florio	2001	3	$350	$1,050.00
	2002	42.75	$385	$16,458.75
	2003	7.5	$435	$3,262.50
Randy Wu	2001	46.5	$350	$16,275.00
	2002	89.5	$385	$34,457.50
Matthew Freedman	2001	0	$190	0
	2002	15	$200	$3,000.00
Hayley Goodson	2002	46.25	$95	$4,393.75
Total TURN staff counsel				$162,035.65
Outside counsel
Michael J. Strumwasser	2001	36.6	$350	$12,810.00
	2002	210.6	$385	$81,081.00
(request preparation)	2002	8.1	$192.50	$1,559.25
	2003	80.2	$435	$34,887.00
(request preparation)	2003	6.4	$217.50	$1,392.00
	2004	83.2	$470	$39,104.00
(request preparation)	2004	38.5	$235.00	$9,047.50
Fredric D. Woocher	2001	0	$350	0
	2002	0.4	$385	$154.00
	2003	1.7	$435	$739.50
Johanna Shargel	2001	13.9	$190	$2641.00
	2002	0	$200	0
	2003	0	$200	0
Daniel J. Sharfstein	2001	16.1	$170	$2737.00
	2002	54.8	$170	$9,316.00
Lea Rappaport Geller	2001	0	$170	0
	2002	0	$170	0
	2003	2.9	$180	$522.00
	2004	5.9	$190	$1,121.00
Lamar W. Baker	2002	50.3	$170	$8,551.00
	2003	0.3	$170	$ 51.00
Becky L. Monroe	2003	0	$170	0
	2004	6.8	$170	$1,156.00
Joshua C. Lee	2002	37.3	$100	$3,730.00
	2003	1.8	$100	$180.00
Total outside counsel				$115,046.75
Total all counsel				$277,082.40
TURN expenses				$5,337.24
S&W expenses				$10,967.54
TOTAL				$389,119.68

The Commission proceeding and both of the associated federal lawsuits affected both utilities. We find it appropriate to assess responsibility for payment equally among PG&E and Edison, as we did in D.02-06-070.

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 Federal Reserve Statistical Release H.15) commencing the 75th day after TURN filed its compensation request and continuing until full payment of the award is made.

We remind TURN that Commission staff may audit its records related to this award and that intervenors must make and retain adequate accounting and other documentation to support all claims for intervenor compensation. TURN's records should identify specific issues for which it requested compensation, the actual time spent by each employee, the applicable hourly rate, fees paid to consultants, and any other costs for which compensation was claimed.