COM/GFB/eam Mailed 4/25/05

Decision 05-04-049 April 21, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (E 338-E) for Authority to Institute a Rate Stabilization Plan with a Rate Increase and End of Rate Freeze Tariffs.	Application 00-11-038 (Filed November 16, 2000)
Emergency Application of Pacific Gas and Electric Company to Adopt a Rate Stabilization Plan. (U 39 E)	Application 00-11-056 (Filed November 22, 2000)
Petition of THE UTILITY REFORM NETWORK for Modification of Resolution E-3527.	Application 00-10-028 (Filed October 17, 2000)

OPINION GRANTING AND DENYING INTERVENOR COMPENSATION

TABLE OF CONTENTS

Title Page

OPINION GRANTING AND DENYING INTERVENOR COMPENSATION 22

A. Background 22

B. Requirements for Awards of Compensation 55

C. Procedural Issues 66

D. Substantial Contribution 77

1. Contribution to the Settlement with Edison 88

2. Contribution to the Commission's Decisions on TURN's
Initial Compensation Request 1313

E. Reasonableness of Requested Compensation 1414

1. Overall Benefits of Participation 1616

2. Hours Claimed and Allowed 1717

3. Hourly Rates 1818

a) Litigation Staff 1818

b) Rates for Litigation Staff Work on the Requests
for Compensation 2222

4. Multiplier 2323

5. Other Costs 2424

6. Retroactive Adjustment 2424

7. Award 2525

F. Comment Period 2727

G. Assignment of Proceeding 2727

Findings of Fact 2727

Conclusions of Law 2828

ORDER 2929

OPINION GRANTING AND DENYING INTERVENOR COMPENSATION

This decision awards The Utility Reform Network (TURN) $389,119.68 in compensation for (1) its further participation in the federal district court proceedings in which Southern California Edison Company (Edison) and Pacific Gas and Electric Company (PG&E) challenged the Commission's jurisdiction to limit the utilities' recovery of increased wholesale procurement costs, and (2) its efforts in the judicial review of Decision (D.) 02-06-070, which awarded TURN intervenor compensation for its earlier participation in those federal proceedings. However, the decision denies TURN compensation for its judicial litigation costs of challenging the Commission's settlement in resolution of the Edison federal district court proceeding.

A. Background

These consolidated proceedings include the Post-Transition Ratemaking dockets (A.99-10-016 et al.) in which we addressed post-rate freeze recovery of rate freeze costs, and the Rate Stabilization Plan dockets (A.00-11-038 et al.) in which we addressed PG&E's and Edison's applications for emergency relief from the skyrocketing wholesale electricity prices in 2000. In the Post-Transition Ratemaking dockets, we determined that Pub. Util. Code § 368 bars utilities from recovering, through post-rate freeze rates, costs incurred during the rate freeze. (D.99-10-057, as modified by D.00-03-058.) (Subsequent statutory references are to the Public Utilities Code unless otherwise indicated.) In the Rate Stabilization Plan dockets, however, we ultimately authorized and implemented a rate increase of four cents/kWh in recognition of Edison's and PG&E's increased costs due to the extraordinary circumstances in California's wholesale power markets. (D.01-03-082.)

In November 2000, Edison and PG&E filed separate federal court actions challenging the Commission's jurisdiction to limit the utilities' recovery of their increased wholesale procurement costs.¹ TURN intervened in those actions.

The two federal lawsuits followed different procedural paths. PG&E filed for bankruptcy in April 2001, and the Commission entered into a settlement of the bankruptcy in December 2003. (See D.03-12-035.) Pursuant to the terms of the bankruptcy settlement, PG&E's federal court action will be dismissed.²

The Commission and Edison entered into a Joint Stipulation in settlement of Edison's federal lawsuit on October 2, 2001. TURN appealed the District Court's judgment affirming the settlement to the Ninth Circuit Court of Appeals. On September 23, 2002, the Ninth Circuit affirmed the District Court's judgment in part and certified several questions to the California Supreme Court regarding whether the agreement violated state law.³ On August 21, 2003, the Supreme Court answered the Ninth Circuit, concluding that the Stipulated Judgment did not violate state law.⁴

As these events were unfolding, TURN in July 2001 filed a request for compensation for the costs, among others, of the first six months of its participation in Edison's and PG&E's federal court actions. The Commission granted TURN's request 11 months later in D.02-06-070, finding that TURN had made a substantial contribution to the various decisions affecting the utilities' ability to recover their costs of wholesale power during the energy crisis. Because the federal lawsuits sought to challenge the Commission's authority to make those decisions, the Commission found that the costs of TURN's federal court work were reasonably incurred in order to make its substantial contribution to the adopted decisions.

Edison and PG&E each applied for rehearing of D.02-06-070 on the issue of compensation for TURN's federal district court work. We denied rehearing of our order, as modified. (See D.03-04-034.) Edison petitioned the Second Appellate District of the California Court of Appeal for writ of review of those orders. On October 8, 2003, the court issued the writ granting review. The court ultimately rejected Edison's appeal on April 19, 2004.⁵ Sixty days after the court's decision upholding D.02-06-070 and D.03-04-034,⁶ TURN filed this request for compensation. Edison opposes TURN's request only insofar as TURN seeks an award enhancement, full compensation for time spent preparing this request, and compensation for time spent on media and outside lobbying. TURN has replied to Edison's opposition.

² PG&E v. Lynch remains an open docket, pending resolution of an appeal of the Commission's decision approving the settlement (D.03-12-035) and of the confirmation order approving the settlement in bankruptcy court (In re Pacific Gas and Electric Company, Debtor, United States Bankruptcy Court, Northern District of California, San Francisco Division, Case No. 01-30923 DM, Confirmation Order, dated December 22, 2003).