4. Substantial Contribution

To evaluate whether a customer made a substantial contribution, we look at whether the decision adopted, in whole or in part, one or more of the customer's factual or legal contentions, or specific policy or procedural recommendations. (§1802(i).) The customer need not prevail by having its proposed outcome wholly adopted. To the contrary, a substantial contribution is also made if the Commission adopts, even in part, any factual or legal contention presented by the customer. There are several ways that such a contention can be adopted. For example, a customer's cross-examination of a utility witness might expose faulty assumptions and lead the Commission to reject the utility's request for a given topic. Finally, as already noted, a substantial contribution can be made when a customer's participation materially supplements, complements, or contributes to the presentation of another party. (§ 1802.5.) With these statutory provisions in mind, we turn to the intervenors' claims regarding their contributions to the proceeding as well as SCE's responses.

4.1 Aglet

Aglet identifies seven categories of issues for which it claims to have contributed to the Commission's decision: (1) policy issues, (2) electric transportation, (3) uncollectibles, (4) economic and business development, (5) post-test year ratemaking, (6) outside counsel and GRC expenses, and (7) other issues. SCE disputes each of Aglet's claims of substantial contribution. We will address each of these categories.

4.1.1 GRC Policy Issues

Relying on evidence and argument presented by Aglet, the Commission declined to accept the ratemaking implications of SCE's suggested linkage of its credit rating with its ability to provide the distribution system infrastructure needed to meet customer service obligations. The Commission also relied on Aglet's arguments in rejecting SCE's contention that capital costs of the Infrastructure Replacement Program were not included in rates during the term of the Performance-Based Ratemaking mechanism. In addition, the Commission accepted Aglet's contention that, with the expected return to cost-of-service ratemaking, SCE had an incentive to defer capital expenditures. The Commission therefore explicitly heeded Aglet's call for applying particular care in reviewing capital costs of deferred projects.

While SCE does not dispute Aglet's contention that it made these contributions, SCE nevertheless contends that Aglet did not make a substantial contribution because it failed to show that "any conclusion by the Commission concerning `policy issues' raised by Aglet led to any rate impact or any other result in this case." (SCE Response to Aglet request, p. 6.) SCE ignores § 1802(i)'s provision that a substantial contribution is made when the Commission adopts one or more of the intervenor's factual or legal contentions, or specific policy or procedural recommendations presented by the customer. That is precisely what the Commission did with respect to Aglet's policy showing. The fact that the Commission did not calculate the rate impacts or articulate "any other result" of Aglet's contributions to the Commission's policy determinations in D.04-07-022 is of no import. SCE's attempt to concoct a new "rate impact" standard for determining whether a substantial contribution is made is unsupported by statute, and in fact is contrary to the statute. Aglet clearly made a substantial contribution on these policy issues.

4.1.2 Electric Transportation

Aglet opposed SCE's request for $6.0 million in expenses related to electric transportation projects. Aglet proposed instead a disallowance of approximately $1.9 million based on the theory that SCE should only purchase enough electric vehicles to perform technology studies and maintain an electric vehicle presence in SCE's fleet. The proposed decision accepted this position. D.04-07-022 denied the proposed adjustment, but the Commission agreed with Aglet's contention that D.95-11-035 did not prescribe exclusive use of electric vehicles. Moreover, as a result of the issues raised by Aglet, the Commission directed SCE to present in its next GRC cost comparisons for alternative fuel vehicles besides electric vehicles.

SCE claims that Aglet failed to substantially contribute on this issue because Aglet's proposed disallowance was rejected. Again implying that we should apply a strict "results" test for substantial contribution rather than the statutory test in § 1802(i), SCE ignores Aglet's contributions with respect to the adopted interpretation of D.95-11-035 and the showing required of SCE in its next GRC. Even though Aglet's specific recommendation for a disallowance was rejected, the Commission clearly adopted contentions that Aglet made regarding electric transportation. Aglet therefore substantially contributed to D.04-07-022 with respect to this issue.

4.1.3 Uncollectibles

The Commission accepted Aglet's contention regarding the uncertain relationship between corporate bankruptcies and uncollectibles, developed by Aglet during cross-examination. The Commission stated that it is "not persuaded that corporate bankruptcies are as explanatory [of uncollectibles] as SCE assumes." (D.04-07-022, p. 127.) Aglet also noted that SCE's proposed uncollectibles "adder" of 0.007% required adjustment if SCE's proposed service charges were not adopted. Because it approved SCE's proposed late payment charge but not its proposed Field Assignment Charge, the Commission adopted an uncollectibles adder of 0.005% in lieu of 0.007%. Finally, Aglet joined SCE in noting an error in the uncollectibles factor as applied in the results of operations tables supporting the proposed decision.

SCE contends that Aglet failed to contribute substantially with respect to uncollectibles because (a) Aglet's recommended factor was rejected and (b) Aglet simply agreed with adjustments proposed by the Office of Ratepayer Advocates (ORA) and SCE itself. Once again SCE is focusing on adopted results while ignoring the equally important question of whether the Commission adopted one or more of the intervenor's contentions. In addition, SCE would have us determine that Aglet's substantial contribution is nullified simply because another party also addressed the issue by making the same or similar recommendations. SCE's position is contrary to § 1802.5.

We conclude that Aglet contributed substantially to the Commission's decision because the Commission adopted one or more of its contentions regarding uncollectibles.

4.1.4 Economic and Business Development Costs

SCE requested recovery of approximately $2.5 million in expenses for its Economic and Business Development (E&BD) program. Aglet opposed this request on the asserted grounds that SCE's Rate Impact Measure (RIM) analysis did not demonstrate ratepayer benefits of the program as required by § 740.4. The proposed decision accepted this position, but the Commission found that SCE established that its RIM test analysis provides a demonstration of ratepayer benefit in one aspect and therefore approved SCE's funding request. The Commission also expressed concerns about the limitations of the RIM test and ordered SCE to supplement the ratepayer benefit showing for this program in its next GRC.

Aglet maintains that it made a substantial contribution because (a) the Commission adopted Aglet's contention that the RIM test should measure the effect of the E&BD program on total bills, and (b) the Commission ordered SCE to produce supplemental information on E&BD benefits in the next GRC. SCE notes, as Aglet itself does, that Aglet's primary recommendation for disallowance of the E&BD program expenses was rejected. SCE also claims that the Commission adopted no other recommendation by Aglet, but this claim ignores the Commission's adoption of Aglet's contention regarding the specification of the RIM test in Finding of Fact 121. It also ignores the linkage between Aglet's advocacy on this issue and the Commission's decision to require a supplemental showing in the next GRC. Because the Commission adopted certain of Aglet's contentions regarding E&BD expenses, Aglet contributed substantially on this topic.

4.1.5 Post-Test Year Ratemaking

Aglet opposed several aspects of SCE's post-test year ratemaking (PTYR) proposal and offered alternative proposals for PTYR. Among other things, Aglet (1) opposed a revenue requirement adjustment for 2004; (2) proposed using the Consumer Price Index to make a revenue adjustment for 2005, or, alternatively, an adjustment based on ORA's escalation factors for expenses, historical average plant additions, San Onofre Nuclear Generation Station (SONGS) outage adjustments, and a limited "Z factor" adjustment; (3) faulted SCE's PTYR proposal because it did not include a productivity adjustment; (4) proposed that SONGS outage expenses be limited to a single planned outage in 2004 and schedule outages in 2005; (5) opposed SCE's capital budget approach for capital additions; (6) faulted SCE's escalation methodology; (7) opposed SCE's Z factor proposal as overly broad; and (8) proposed that annual PTYR filings be made by application rather than by advice letter filings.

Although the Commission rejected Aglet's specific PTYR proposals, Aglet contends that it nevertheless contributed substantially on certain PTYR issues. Aglet notes that the Commission adopted a hybrid approach to capital additions based on concerns that it raised regarding the problems with using SCE's capital budgets. In particular, Finding of Fact 225, which addresses this point, relies on language from Aglet's brief. Aglet also notes that the Commission adopted a hybrid approach to PTYR filings. This approach, which allows advice letters for requests below a threshold of 5% or $150 million and requires applications for other filings, was based explicitly on analysis presented by Aglet.

SCE argues that because the adopted hybrid approach to incorporating capital additions in PTYR adjustments was conceived by the ALJ and not by Aglet, Aglet did not substantially contribute with respect to this issue. In making this argument, SCE apparently contends that the ALJ developed the hybrid approach in a vacuum, without reference to the record. The ALJ's proposed decision and the Commission's final decision demonstrate otherwise. The decisions clearly developed the hybrid approach in response to concerns raised by Aglet as well as ORA.

While Aglet presented several PTYR contentions and recommendations that were not adopted by the Commission, Aglet contributed substantially with respect to PTYR issues as described above.

4.1.6 Outside Counsel and GRC Expenses

Aglet claims that it contributed substantially to findings regarding bankruptcy litigation costs and efficiency in the preparation of the next GRC. However, we do not find that any relevant Aglet contention or recommendation was adopted by the Commission with respect to these expenses. We determine that Aglet did not contribute substantially with respect to outside counsel and GRC expenses.

4.1.7 Other Issues

Aglet identifies several additional issues for which it claims to have made a substantial contribution under the category "Other Issues." These are: (1) Aglet recommended a $340,000 disallowance of internet site maintenance expenses, which was adopted by the Commission; (2) Aglet supported ORA's recommended disallowance of public affairs and corporate communications expenses, which was adopted in part; (3) Aglet recommended a "mobilization adjustment" to reduce nuclear refueling expenses, which was denied; (4) Aglet recommended no performance incentives, which recommendation was rejected; (5) Aglet submitted testimony on the utility role in resource planning in response to an Assigned Commissioner's ruling; (6) Aglet joined ORA and TURN in a motion to strike update testimony, which was granted; (7) Aglet supported an ORA petition to reopen the proceeding to consider certain employee misconduct issues, which was granted; and (8) the Commission adopted several minor corrections and revisions identified by Aglet in comments.

SCE contends that Aglet failed to make a substantial contribution on any of these eight issues. However, apart from its summary claim of no substantial contribution, SCE does not address Aglet's claims regarding internet expenses, the motion to strike update testimony, employee misconduct issues, and minor corrections.

We conclude that Aglet contributed to these issues as follows: (1) the Commission adopted Aglet's recommendation for internet site maintenance expenses; (2) in response to the Assigned Commissioner's request Aglet submitted testimony on the utility role in resource planning and thereby contributed to the ongoing dialogue on procurement issues;⁵ (3) the Commission adopted the procedural recommendation of Aglet and other parties that certain portions of SCE's update testimony should be stricken; and (4) the Commission adopted numerous editorial improvements to the proposed decision that were recommended by Aglet.

4.2 Greenlining

Greenlining identifies four topics in D.04-07-022 for which it claims to have made a substantial contribution: (1) executive compensation, (2) workforce diversity, (3) supplier diversity, and (4) philanthropy. Sections 4.2.1 through 4.2.4, respectively, address Greenlining's claims for these topics.

4.2.1 Executive Compensation

D.04-07-022 adopted a Greenlining proposal that SCE be required to report annually on the total compensation packages of each of the company's top ten executives, including the value of stock options and retirement plans.⁶ Although Greenlining made recommendations and contentions regarding executive compensation issues that were rejected, Greenlining made a substantial contribution with respect to its "top ten executives" proposal.

4.2.2 Workforce Diversity

In response to rulings by the Assigned Commissioner issued on April 8 and May 5, 2003, SCE submitted post-hearing testimony regarding the diversity of its workforce. D.04-07-022 addresses this testimony in Section 14.4. Although the discussion does not name Greenlining, it is clear from a review of the two rulings that Greenlining contributed to the framing of the workforce diversity issues that were raised by the Assigned Commissioner. We conclude that Greenlining made a substantial contribution on this issue.

4.2.3 Supplier Diversity

Greenlining proposed that the Commission set goals in this GRC for SCE to eliminate the use of exclusions that are permitted under General Order (GO) 156 and to increase procurement from women, minority, and disabled veteran business enterprises. Greenlining also suggested that SCE be encouraged to hold a consortium of minority business enterprises to address SCE's use of exclusions.

In its compensation request, Greenlining acknowledges that D.04-07-022 did not adopt its recommendations for minority contracting. Greenlining nevertheless argues that "the impact of our contributions in this area will reverberate for years to come" and that for purposes of compensation, "the Commission should view the long-term, not short-term, impact of the intervenor's contributions." (Greenlining request, p. 5.) Greenlining goes on to claim that it "persuaded the Commission to encourage Edison to work toward eliminating unnecessary and excessive exclusions in minority procurement reporting." (Id.) Finally, Greenlining contends that we "should not penalize Greenling in this proceeding for its success in [R.03-02-035]," which addressed modifications to GO 156. (Id., 6.)

The Assigned Commissioner invited participation on supplier diversity issues in the August 8, 2002 Scoping Memo. (Assigned Commissioner's Ruling Establishing Scope, Schedule, and Procedures for Proceeding, p. 13.) Supplier diversity issues including GO 156 exclusions were subsequently taken up in R.03-02-035, and the Commission ultimately declined to adopt SCE-specific exclusion rules in this proceeding. We note that at the outset of this proceeding Greenlining could not have known that these supplier diversity issues would be taken up in a contemporaneous rulemaking. We find that Greenlining contributed substantially to the dialogue on this issue in response to the Assigned Commissioner's invitation. We further note that our determination that Greenlining contributed substantially to supplier diversity issues in this proceeding is consistent with the approach we have taken in this decision in connection with Aglet's contribution to the dialogue on utility procurement issues. (See Footnote 4, supra.)

4.2.4 Philanthropy

Greenlining suggested in the GRC that "the Commission may wish to encourage Edison to set its own internal [philanthropy] goals by broadly and prominently noting in its decision Edison's poor philanthropic record, and the fact that the bonuses paid to the top ten executives vastly exceed Edison's contributions to the poor and to non-profits serving communities of color." (Greenlining opening brief, p. 8.) After reviewing its role regarding utility philanthropic practices and determining that it had no relevant jurisdiction, the Commission rejected Greenlining's attempt to link SCE's executive compensation packages and its philanthropy. (D.04-07-022, p. 204.)

Greenlining has not shown that the Commission adopted, even in part, any recommendation or contention that it made with respect to philanthropy issues in this GRC proceeding. We therefore have no basis for finding that Greenlining made a substantial contribution on philanthropy issues.

4.3 TURN

TURN identifies nearly forty issues in D.04-07-022 for which it claims to have made a substantial contribution. The following table, copied from TURN's compensation request, provides the details of TURN's claimed substantial contributions. We have enumerated the issues identified by TURN but made no other changes or corrections to its text.

Table 1: Summary of TURN positions and Commission decision

ISSUE			TURN POSITION	COMMISSION DECISION
Generation (Section 3)
1	SONGS capital cost forecast		Historical capital spending indicates that ratepayers have already paid for Used Fuel Storage and Marine Mitigation projects in ICIP rates. Ex. 231, p. 5-9.	Agrees with TURN policy position that "determining whether it can reasonably be concluded that ratepayers have already paid, in whole or in part, for such expenditures ... is a legitimate inquiry that does not in any way represent an after-the-fact reasonableness review precluded by the ICIP mechanism." D.04-07-022, p. 23.
2	SONGS capital - used fuel storage project		Recommend disallowance of entire project cost ($25.7 million) due to inclusion in ICIP rates. Exh. 231, p. 10.	Disallows 50% of project costs because "it is reasonable to determine that ratepayers have made contributions to the cost of this project." D.04-07-022, p. 25.
3	SONGS capital - marine mitigation project		Recommend disallowance of $17.9 million out of $24.9 million due to inclusion in ICIP rates. Ex. 231, p. 6-9.	Disallows 50% of project costs ($12.45 million) based on assigning equal responsibility for reminaing costs. D.04-07-022, p. 26.
4	SONGS capital - blanket work orders		Recommend disallowance of $1.9 million based on use of historical average. Ex. 231, p. 10.	Agrees that "TURN's analysis is not without merit," but do not adopt recommendation because adopt ORA's forecast methodology, which already includes disallowance. D.04-07-022, p. 27-28.
5	SONGS O&M - Workers' Compensation		Recommends disallowance of $1.71 million because pre-ICIP claims should be treated as stranded costs and ICIP claims should be have been covered in ICIP rates. Ex. 231, p. 4-5.	Rejects TURN's analysis and recommendation. D.04-07-022, p. 41.
6	Palo Verde O&M - forecast methodology		Recommends use of latest APS budget rather than 3-year average. Ex. 231, p. *.	SCE agreed with TURN's method, resulting in a forecast reduction of $1.744 million. SCE Rebuttal, p. **. D.04-07-022, p. 63.
7	Mohave capital - cooling tower replacement		Recommends disallowance of entire project cost ($1.23 million) because not cost effective. Ex. 231, p. 10-13.	Agrees with TURN that SCE's cost effectiveness analysis "may be based on faulty assumptions, and that the economic benefits of the investment are at best questionable," but denies disallowance based on safety and reliability concerns. D.04-07-022, p. 67.
8	Cap Additions 1997-98		TURN recommended disallowance of a number of 1997-98 projects due to failure to establish cost-effectiveness using assumptions consistent with what SCE's management knew or should have known at the time the investment decisions were made. TURN argued that rules for retrospective reasonableness reviews apply.	CPUC imposed no disallowance due to the changed circumstances evidenced by AB-1X 6 and the changes made to Section 377. Decision relies substantially on D.02-11-026, a decision that (to TURN's knowledge) no party cited in briefs, even though it was issued before briefs were filed in this case. D.04-07-022, p.84-85. Decision finds that the general rule for reasonableness reviews is inapplicable under the very limited circumstances here. D.04-07-022, p. 86.
Transmission and Distribution (Section 4)
9	O&M - Wood pole inspections		TURN contends ratepayers funded over 1.5 million intrusive inspections between 1984 and 2002, based on SCE's adopted pole inspection and replacment program, explicit GRC commitments or implicit funding levels. Ex. 258, p. 10-19.	Agrees with TURN that SCE's assumption that GRCs included no commitments for pole inspections is "unreasonable" based on SCE's policies and GRC testimonies. Reduces TURN's estimate of pole inspections by 20% to account for visual-only inspections. Agrees with TURN that GO 165 did not reduce the number of pole inspections committed to in the 1995 GRC testimony for the PBR period. D.04-07-022, p. 98-100.
10	O&M - Wood pole inspections		Recommends a penalty of $48.8-61 million based on deferred maintenance costs caused by SCE performing only about 61% of the 1.5 million intrusive inspections between 1984 and 2002.	Agrees with TURN that management discretion in spending decisions is circumscribed by regulatory policy to prevent duplicate payment by ratepayers. Determines that SCE performed 77% of funded inspections. Rejects imposition of penalty because finds that, except for the 1995 GRC decision, there was no "specific mandate pursuant to a GRC decision [for SCE] to perform a given number of instrusive inspections in a particular time period," and that "too much time has elapsed for us to determine fairly whether a violation has occurred," so that imposing a penalty at this time "is inconsistent with due process." D.04-07-022, p. 102-104.
11	O&M - Wood pole inspections		Recommends disallowance of $1.7 milllion based on reduced number of pole inspections, and shareholder contribution for 30,000 inspections per year	Agrees with TURN that "shareholders should fund a portion of the required number of inpsections ... because it gives effect to the principle that ratepayers should not be required to pay twice for the same authorized expense." Disallows $1.443 million in O&M expenses based on inspections missed in 1996-2002 and reduced forecast of future inpsections. D.04-07-022, p. 104-106.
12	O&M - Wood pole inspections		Recommends annual reporting requirement for pole inspections.	Rejects additional reporting requirement based on existing GO 165 requirements.
13	Capital - Pole replacement unit cost		TURN recommended that SCE's forecast of $7,661 for unit pole replacement cost be decreased 14-20%. TURN argued that SCE's 1995 GRC data and year 2002 recorded costs both justify a 16% decrease, while additional expected cost savings warrant a 20% decrease. Alternatively, TURN recommended a 14% decrease based on PG&E's unit cost. TURN primary recommendation results in a disallowance of $29.718 million for 2002 and 2003.	Rejects TURN's primary comparison to year 2002 recorded costs or comparison to 1995 GRC data, but also rejects SCE's "efforts to show that its rural-urban distriubtion of pole installations relative to that of PG&E explains most of the difference in the two companies' unit costs are neither convincing nor persuasive." Adopts a unit cost of $7,135 based on a comparison to PG&E's costs, as adjusted for additional repair items. Results in a disallowance of $10.224 million. D.04-07-022, p. 112-114.
14	Capital - Wood pole replacement costs due to deferred maintenance		Recommends a penalty of $48.8-61 million based on deferred maintenance costs caused by SCE performing only about 61% of the 1.5 million intrusive inspections between 1984 and 2002.	Adopts TURN's calculation of the effect of missed inspections on current pole replacement costs and thus educes capital replacement forecast over by $3.447 million based on inspections missed in 1996-2002. D.04-07-022, p.107-
15	Capital - Line extension allowance		TURN recommends that the CPUC adopts as a ratemaking principle that ratepayer liability should be capped at the line extension allowance. Exh. 243, p. 10-13.	Rejects notion of a cap applicable "only to SCE" due to commitment to uniform and consistent line extension practices. D.04-07-022, p. 118.
16	Capital - Line extension allowance		TURN recommends that rates be modified based on a review of historical cost overruns.	Rejects TURN's position since conclude SCE has not violated any tariffs or orders. D.04-07-022, p. 117.
17	Capital - Line extension allowance		TURN recommends the Commission order SCE to properly track future line extension costs and cost overruns.	Agrees that "the company may need to modify its record keeping so that it is able to keep track of the data in a manner that would allow calculation of total line extension job costs recorded to rate base, versus total estimated costs and total allowances." D.04-07-022, p. 118-119, COL 20.
Customer Service (Section 5)
18	O&M - Direct Access Costs		TURN recommends one-way balancing account treatment or a disallowance of 20% ($0.76 million) based on closure of direct access to new customers. Ex. 243, p. 8-9.	Agrees with SCE that costs will be relatively fixed irrespective of number of DA customers, but disallows 3% (0.11 million) based on use of 2002 recorded cost level for test year. D.04-07-022, p. 131-132.
19	O&M - Direct Access customer charge		TURN recommends an interim $5/mo fee on DA customers over 20 kW to promote cost-based fees for DA. Ex. 243, p. 10.	Adopt sTURN's proposal and transfer $378,420 to OOR. D.04-07-022, p. 151.
20	O&M - Service Fees - Service Establishment Charge		TURN recommends elimination of the service establishment charge, rather than an increase as proposed by SCE, due to disproportionate impact on low-income ratepayers and lack of behavior modification. Ex. 231, p. 42-45.	Denies TURN's proposal, though agree with TURN's analysis concerning impact on low-income ratepayers. D.04-07-022, p. 150.
21	O&M - Service Fees - residential late payment charge		TURN recommends against adoption of a late payment charge, as proposed by SCE, because recent increases in unemployment data and state budget problems signal declining economic conditions.	Adopts SCE's proposal based on meeting conditions specified in D.96-01-011; state that unemployment level is significantly below levels in 1994-1995, and that SCE has agreed to exempt CARE customers. D.04-07-022, p. 147-148.
22	Capital - real time energy metering		TURN proposes disallowance of $10.8 million not covered by CEC contract. Ex. 243, p.3-6.	Denies TURN's recommendation based on conclusion that "SCE was acting in good-spirit to further the goals of the Legislature" and that "SCE made it well known from the start that the CEC funds would be inadequate." D.04-07-022, p. 156-157. However, does not adopt SCE argument that it was required by statute to install the meters. Moreover, the proposed decision, as well as the alternate PD of Commissioner Wood, both adopted TURN's position on this issue. Wetzell PD, p. 158-160.
23	Service Guarantees		Supported ORA's eight proposed service guarantees, as long as penalties funded by shareholders, but especially emphasized guarantees number 1, 4, 5 and 6. TURN OB, p. 98.	Adopts four guarantees (numbers 1, 6, 7 and 8) with shareholder funding of penalties. D.04-07-022, p. 159-160.
Administrative & General (Section 6)
24	Capitalized P&B - capitalization ratio for Account 926.900 credit		SCE recommended a capitalization ratio of 24% based on 1999 recorded, while TURN recommended a rate of 29.43% based on regression analysis, or alternatively, a rate of 27.8% based on 2000 recorded. TURN's primary recommendation reduced revenue requirement by $18.218 million. Exh. 231, p. 13-19.	Agrees that "TURN's regression methodology is potentially more reliable as a forecast methodology," but determines that "SCE has raised doubts about its validity in this GRC" and thus adopts TURN's alternative recommendation of 27.8%. D.04-07-022, p. 163-164.
25	Shared Service -Account 921 reduction of $323,000 for costs associated with Revenue Enhancement Activities		ORA recommended disallowance as one-time costs, TURN argued in brief that such costs should be excluded from rates consistent with OOR revenue sharing mechanism adopted in D.99-09-070. TURN OB Vol. 1, pp. 104-106. SCE acknowledged error in its reply brief.	Final decision adopted agreed-upon disallowance; also adopted TURN's recommendation to require Edison to certify in an advice filing that none of its GRC requests include expenses that, pursuant to D.99-09-070, are to be borne by shareholders. D.04-07-022, p. 179; FOF 150, COL 34, OP 9.

Audit Issues (Section 7)
26	Edison Select costs	ORA recommended disallowance of $321,000 as an audit adjustment (Ex. 116). TURN pointed out in reply brief that under OOR revenue sharing mechanism adopted in D.99-09-070, such costs must be excluded from rates. TURN RB, pp. 38-39. ORA's testimony and briefs did not mention D.99-09-070.	Denied rate recovery on the basis that ORA's proposed disallowance "is consistent with D.99-09-070." D.04-07-022, p. 241.
Rate Base (Sec. 8)
27	Working cash - Other Accounts Receivable	TURN proposed reduction of $21.112 million due to end of steam power plant O&M contracts. Ex. 231, p. 31-33.	SCE did not rebut TURN's recommendations. D.04-07-022, p. 238-239.
28	Working Cash - Employee withholding and accrued vacation	TURN recommended reduction of $5.166 based onremoving withholding taxes and stock purchase plan. Ex. 231, p. 34.	Unopposed by SCE. Adopts TURN position. D.04-07-022, p. 239.
29	Working cash - arithmetic corrections	TURN recommended reduction of $1.039 million due to arithmetic corrections. Ex. 231, p. 31-31.	Unopposed by SCE. Adopts TURN position. D.04-07-022, p. 239.
30	Working cash - lead lag study	TURN recommended reduction of $2.227 due to increase in labor lag in lead-lag study. Ex. 231, p. 35-37.	Unopposed by SCE. Adopts TURN position. D.04-07-022, p. 239.
31	Working cash - lead-lag study	TURN recommended reduction of $3.930 due to removal of property insurance provisions from lead-lag study.	Rejects TURN position. D.04-07-022, p. 239-240.
32	Customer Advances for Construction	TURN argues that changes in line extension rules caused increased trend in CAC since 1998.	Rejects TURN's argument that change in line extension rules by itself caused recent increase in CAC account.D.04-07-022, p. 241.
33	Customer Advances for Construction	TURN recommends increase of $14.060 million based on most recent recorded data. Ex. 231, p. 27-29.	SCE revised its forecast by using more recent data, resulting in an increase of $9.81 million (70% of TURN's recommendation) from the original forecast. D.04-07-022, p. 240-241.
34	Customer Deposits	TURN recommends that the Commission, as a matter of ratemaking policy, amend the "interest-free" restriction of U-16 for SCE and include customer deposits as a source of working capital. Ex. 231, p. ***.	Adopts TURN's ratemaking proposal. D.04-07-022, p. 244-247.
35	Customer Deposits	Recommends amount of customer deposits counted as working cash should be $117.174 million, based on most recent 13-month average.	Reduces TURN's recommendation to $80 million based on using a historical average from 1996-2001. D.04-07-022, p. 247.
Depreciation (Section 9)
36	Average service lives and net salvage analysis -- overall recommendation	TURN recommended changes to service lives and net salvage values that would have reduced depreciation expense approximately $120 million. Ex. 271	Rejected TURN's and SCE's proposed changes in favor of maintaining existing depreciation rates; directed SCE and ORA to pursue an independently prepared depreciation study for next GRC. D.04-07-022, pp. 261-262; COL 44 and 45. CPUC specifically "recognize[d] the important role fulfilled by TURN with respect to depreciation in this GRC." p. 262.
37	Critique of SCE's proposed changes to ASL and net salvage	TURN urged rejection of Edison's claim that net salvage costs would be more negative due to environmental compliance costs. Ex. 271, pp. 69, 75-77; TURN OB (Vol. 2) pp. 11-14; TURN RB, Sec. 9.3.4.	Rejected SCE's claim: "As just one example, we note that SCE failed to demonstrate that compliance with environmental protection requirements has added substantially to negative net salvage since the last depreciation study." D.04-07-022, p. 261.
		TURN urged rejection of Edison's claim that net salvage costs would be more negative due to reliance on contract labor. Ex. 271, pp. 65-67, TURN OB (Vol. 2) pp. 9-11.	Rejected SCE's claim: "SCE has not adequately demonstrated that its use of contract labor is a significant contributing factor to a multi-billion dollar increase in negative net salvage." D.04-07-022, p. 261.
38	SONGS Useful Life	Base useful life on remaining years of NRC license, reducing depreciation expense by $21.16 million. Ex. 231, pp. 25-27.	Adopted TURN and ORA position that useful life should be based on remaining years of license, rather than life of steam generators. Cited with favor TURN's argument that other nuclear plants had continued to operate after replacement of steam generators. (D.04-07-022, p. 264.

Results of Operations
39	Payroll taxes	TURN recommended reduction of $8.411 million due to different methods for calculation of payroll taxes. Ex. 231, p. 19-25.	SCE accepted all of TURN's proposed method changes as adjusted for a calculation error, thus reducing its payroll tax estimate by $6.2 million. D.04-07-022, p. 257.

For most of these issues, TURN's claimed contributions are both undisputed and amply supported by the record. These topics do not require further discussion. However, SCE takes issues with certain of TURN's claims, most significantly those related to depreciation. In Sections 4.3.1 through 4.3.12 we discuss those topics for which SCE contests TURN's substantial contribution claims and those for which we otherwise find insufficient justification for TURN's claims of substantial contribution. Issue numbers in the headings for each of these sections correspond to the issue numbers we have added to the foregoing table.

4.3.1 SONGS Workers' Compensation (TURN Issue #5)

TURN recommended a disallowance of $1.7 million in workers' compensation claim costs at SONGS based on the theory that these were stranded costs. TURN acknowledges that the proposed disallowance was rejected by D.04-07-022 and it cites to no relevant factual or legal contention that was adopted even in part. In its reply to SCE's response, TURN admits it was unsuccessful on the workers' compensation proposal but notes that it otherwise made a substantial contribution on generation related issues.

We conclude that while TURN contributed for several generation issues that it addressed (see issues 1, 2, 3, 4, 6, and 7 in the foregoing table), it did not contribute substantially on the SONGS workers' compensation issue.

4.3.2 1997-98 Generation Capital Additions (TURN Issue #8)

TURN recommended disallowance of a number of capital projects due to the alleged failure of SCE to demonstrate cost-effectiveness. The Commission rejected the proposed disallowances after determining that the review criteria used by TURN, which are criteria the Commission otherwise accepted, were effectively superseded by energy crisis legislation that established policies for utility retained generation (AB-1X6).

In response to a concern raised by TURN, the Commission directed SCE to demonstrate by advice letter filing that costs associated with 1997-98 capital additions are not double-counted in rate base. (D.04-07-022, p. 86.) TURN contributed substantially with respect to the double counting issue as well as reasonableness review criteria generally.

4.3.3 Wood Pole Inspections (TURN Issue #12)

The Commission rejected TURN's proposal that SCE be directed to report annually on the number of intrusive pole inspections completed in the prior year. We find no relevant TURN recommendation or contention that the Commission adopted.

4.3.4 Line Extensions (TURN Issues #15, 16, & 17)

TURN proposed that revenue-based line extension allowances (deductions from line extension costs paid by applicants for extensions) be applied as a cap on ratepayer cost responsibility, and that cost overruns be paid by either SCE shareholders or applicants. TURN also proposed that rates be subject to refund pending further review of cost overruns. Finally, TURN proposed that SCE be ordered to properly track line extension costs going forward to allow an evaluation of cost overruns. The Commission declined to modify its industry-wide rules by adopting an SCE-specific cap. Noting SCE's inability to provide documentation on this issue, however, the Commission placed SCE on notice that it would need to provide more complete data regarding cost overruns in the event that the Commission further evaluates the line and service extension rules, even if this requires SCE to modify its record keeping system.

While TURN's recommendation for a review and possible refund of historical overruns as well as its proposal for a cap were not adopted, the Commission placed SCE on notice that its recordkeeping may need enhancement in response to a recommendation by TURN. Thus, TURN contributed substantially on line extension issues.

4.3.5 Direct Access Costs (TURN Issue #18)

TURN recommended a one-way balancing account for direct access costs in light of uncertainty about forecasts of the number of direct access customers. TURN alternatively recommended a 20% reduction to SCE's forecast of $3.8 million. The Commission adopted a forecast of $3.69 million based on recorded costs for 2002.

TURN's alternative recommendation for a reduction to this account was adopted in part. Even though the Commission adopted a reduction of approximately 3% rather than 20%, TURN substantially assisted the Commission by contributing to a more thorough analysis of this account.

4.3.6 Service Establishment Charge (TURN Issue #20)

TURN recommended that SCE's service establishment charge be eliminated due to its disproportionate impact on low-income ratepayers and renters. While generally agreeing with TURN's analysis regarding the impact of this charge on low-income ratepayers and renters, the Commission was not persuaded that the impact outweighed its concern for establishing service charges on cost causation principles. Thus, even though the Commission denied TURN's proposal to eliminate the charge, it adopted in part TURN's contentions on this topic. TURN contributed substantially on this issue.

4.3.7 Residential Late Payment Charge (TURN Issue #21)

TURN joined ORA in opposing SCE's proposed late payment charge for residential customers. TURN supplemented ORA's showing by addressing unemployment rates in SCE's service territory. In so doing, TURN was attempting to show that one of the conditions set in D.96-01-011 for establishing a late payment charge-a significantly improved Southern California economy-was not met. TURN also proposed that if a late charge is adopted, it be limited to bills under $40 and waived altogether if the customer is put on a payment plan. The Commission rejected TURN's recommendations and its analysis of unemployment rates. We find no recommendation or contention that was adopted, and determine that TURN did not contribute substantially on this issue.

4.3.8 Real Time Energy Metering (RTEM) (TURN Issue #22)

In D.04-07-022, the Commission rejected TURN's proposed disallowance of $10.8 million in capital expenditures for RTEM. On the other hand, the ALJ's proposed decision as well as the alternate decision of Commissioner Wood would have approved TURN's proposed disallowance. TURN notes that the Commission has repeatedly held that a substantial contribution can be found to exist when an intervenor contributes substantially to a proposed decision, even when the final decision does not adopt the proposed decision's outcome. TURN also points out that the final decision did not adopt SCE's position that it was required by statute to make the disputed RTEM installations.

Since TURN clearly contributed to the proposed decision and alternate decision of Commissioner Wood, and the final decision implicitly adopted TURN's contention regarding the lack of a statutory mandate for the disputed RTEM installations, we conclude that TURN contributed substantially on this issue.

4.3.9 Service Guarantees (TURN Issue #23)

ORA proposed that an eight point service guarantee program be mandated, and TURN supported ORA's proposal. The Commission adopted four of the eight guarantees.

TURN did not merely "me too" ORA's proposed service guarantee program as SCE contends. TURN addressed service guarantees in its direct testimony, and in its reply brief it pointed out that ratepayer funding of the guarantees would undermine incentives for utility performance. Even though the scope of TURN's participation on this issue was limited (and its expenses related to this issue were correspondingly low), TURN contributed substantially within the context of that limited scope.

4.3.10 Working Cash - Insurance (TURN Issue #31)

The Commission rejected TURN's analysis and recommendations with respect to the inclusion of insurance provisions in the working cash/lead-lag study. While TURN in general contributed substantially on working cash issues (see issues 27, 28, 29, and 30 in the foregoing table), it did not do so with respect to this narrow subset of those issues.

4.3.11 Customer Advances for Construction (TURN Issue #32)

TURN proposed that customer advances, which offset rate base, be forecast by using 2002 data. The Commission adopted SCE's proposal to use a five year average, and rejected TURN's contention that changes in line extension rules in 1998 are the sole explanatory factors. TURN did not contribute substantially on this issue.

4.3.12 Depreciation Issues (TURN Issues #36, 37)

TURN and ORA recommended substantially lower depreciation expenses than those requested by SCE for both SONGS and general depreciation. The two most significant factors affecting the parties' depreciation expense estimates were net salvage and service lives. The Commission decided not to accept the general depreciation proposals of either SCE or TURN, and instead preserved existing depreciation factors. The Commission accepted recommendations and contentions by ORA and TURN regarding SONGS' remaining life.

TURN comprehensively addressed depreciation issues through discovery, cross-examination, presentation of expert testimony, briefing, and participation in post-hearing ex parte processes. The Commission explicitly recognized "the important role fulfilled by TURN with respect to depreciation in this GRC." (D.04-07-022, p. 254.)

SCE maintains that TURN did not contribute substantially on depreciation issues because TURN did not sustain its primary recommendations for depreciation. We have repeatedly emphasized in this decision the long-standing statutory principle that an intervenor need not wholly prevail with respect its recommendations on a particular topic. It is sufficient for an intervenor's factual or legal contentions to be adopted, even if only in part. We stress the point here in light of SCE's steadfast insistence that only final results matter.

TURN's contributions on depreciation issues in this GRC were manifold. Significantly, TURN exposed numerous shortcomings in SCE's depreciation study, which in no small part were responsible for the decision to reject SCE's proposed depreciation rates. For example, TURN demonstrated the weaknesses in SCE's argument that environmental compliance costs added substantially to negative net salvage since the last study. TURN also exposed weaknesses in SCE's contention that the use of contract labor is a major causative factor for the increase in negative net salvage. We conclude that TURN contributed substantially on depreciation issues.