9. Labor Costs and Incentive Compensation

SDG&E incurred labor costs of $10.076 million to restore services after the Wildfires. ORA performed test procedures and in its opinion verified that this expenditure is supported by payroll records and was credibly incurred. ORA's testimony notes no exceptions to SDG&E's labor costs.⁴⁷

SDG&E made the assumption that all "straight-time" cost of employee labor was not an incremental cost: it was essentially already included in rates, available to restore service, and therefore was not includable in the Wildfire Account. We agree with SDG&E that this is a reasonable convention for catastrophic event cost recovery. SDG&E identifies $726,000 of "time-and-a-half" and $5,581,000 of "double-time" labor costs as both incremental and allocable to California-jurisdictional gas and electric service, because these costs were incurred solely due to the Wildfires.

In addition to the direct costs of $10.076 million for labor, SDG&E also recorded $726,000 for incentive compensation, and allocated $470,000 as incremental costs to be recovered in the Wildfire Account.⁴⁸

Labor	Cost	Incentive	Percent
Union	$8,209,536	$380,838	4.64%
Non-Union & Non-Management	269,579	44,724	16.59%
Cash Awards & Other	15,000	0	-
Management	1,583,304	300,881	19.00%
Total	$10,077,422	$726,443

Discussion

We find that SDG&E has justified its request to recover both the direct and incentive labor costs in the Wildfire Account.

⁴⁷ Ex. ORA-1, p. 3-4, and Transcript, pp. 130-131.

⁴⁸ Ex. SDG&E-4, attached Exhibit J, p. 3.