Rules Amendments
1. Summary
Most of the proposed rules stem from the interrelationship and tension between the four determinations that must be made in assessing a request for an award of intervenor compensation: customer status, significant financial hardship, the issues on which a substantial contribution to a Commission decision is ultimately made, and the reasonableness of the requested compensation.
Pub. Util. Code § 1804(a)(2) requires an intervenor to file a notice of intent within 30 days of a prehearing conference (PHC), if any is held, stating the nature and extent of the customer's planned participation, and itemizing the compensation that the customer expects to request; the notice of intent may also include the intervenor's showing that the participation would pose a significant financial hardship.1 Section 1804(a)(1) anticipates that parties might be unable to identify the scope of their planned participation and budget within this timeframe, and provides that the Commission may determine procedures for accepting new or revised notices of intent.
Our experience shows that it can be difficult for intervenors to realistically anticipate the scope of their planned participation so early in the proceeding. On the other hand, intervenors may want to have some indication of eligibility before undertaking a significant amount of work in the proceeding. Similarly, the Commission benefits from an early indication of the range of parties intending to take an active part in a proceeding, the interests those parties would represent, and at least a tentative list of the issues those parties would raise. We therefore propose to allow intervenors to seek earlier preliminary determinations of eligibility.
We note, however, the tension between an early preliminary determination of eligibility and the concern that intervenors may be unable to identify issues, and propose realistic budgets, early in the proceeding. We therefore propose to allow intervenors to amend their notices of intent after the issues in the proceeding have been identified. This will provide a better basis for the Commission to comment on the intervenor's expectation for compensation under § 1804(b)(2).
We also address the relationship between the determination of customer status and the other prerequisites to intervenor compensation. Section 1802(b) is somewhat ambiguous, defining the term "customer" by reference to that very term: "customer" is defined as a participant representing "customers," a representative authorized by a "customer," or a representative of a group or organization authorized to represent the interest of residential "customers." However, while virtually all California citizens and entities are subscribers of utilities subject to the Commission's jurisdiction, the intervenor compensation statutes are not reasonably interpreted to confer "customer" status on all subscribers. Rather, we interpret § 1804 to require that the intervenor's participation in the proceeding be on behalf of its interest as a customer.2
We therefore propose to require intervenors to identify their economic interest in the proceeding, so that we can fairly evaluate the intervenor's customer status as well as financial hardship. This rule codifies a long line of decisions assessing customer status and financial hardship by reference to the intervenor's economic interest in the proceeding. (See, e.g., D.04-06-002, D.05-01-006, and D.05-02-054.)
Even if an intervenor is ultimately found to meet the requirements of customer status and significant financial hardship, the intervenor is only entitled to compensation for reasonable costs that were incurred in the course of making a substantial contribution to a Commission decision. We propose to require intervenors to account for their costs specifically by reference to the issues to which they claim to have made a substantial contribution. However, we also recognize that issues in a proceeding may not be fully identified until after an intervenor has begun to incur costs to participate. Some of those costs may be general and not attributable to a particular issue. We propose to permit compensation for such costs.
These proposed rules provide additional guidance to intervenors on the scope of compensable participation, while reflecting the practical constraint that a final determination of compensability cannot be made until the conclusion of a proceeding.
2. Time for Filing Notice of Intent
Section 1804(a)(2) requires an intervenor to file a notice of intent to claim compensation within 30 days after the prehearing conference, if any, is held. We propose to allow the notice of intent to be filed any time before the prehearing conference as well. This will allow intervenors to obtain an earlier preliminary determination of eligibility in advance of committing significant resources to participation in the proceeding.
We also propose a time for filing the notice of intent in petitions for rulemakings and in proceedings where it has been preliminarily determined that a hearing is not needed (and a PHC is not required under Rule 6.2). Specifically, we propose that notices of intent in such proceedings shall be 30 days after the time for filing responsive pleadings in the proceeding (e.g., protests, responses, answers, or comments.) If, notwithstanding the preliminary determination, a PHC is nevertheless held, our proposed rule regarding amended notices of intent will provide the opportunity to amend the notice of intent after the issuance of the scoping memo.
3. Amended Notice of Intent
As discussed above, although intervenors as well as the Commission may benefit from a determination of scope of participation and eligibility early in a proceeding, the scope of a proceeding and the issues on which intervenors intend to participate may not be fully identified until later. We propose to permit intervenors to file an amended notice of intent after the determination of issues in a proceeding.
Specifically, Rule 6.3 of the Commission's Rules of Practice and Procedure, which was adopted after the enactment of the intervenor compensation statutes, now requires the Assigned Commissioner to rule on a scoping memo to finally determine the issues to be addressed in a proceeding. Our proposed rule would permit intervenors to file an amended notice of intent by no later than 15 days after the issuance of the scoping memo.
4. Contents of Notice of Intent
Section 1804(a)(2) requires the notice of intent to state the nature and extent of the planned participation, and an itemized estimate of the expected compensation for that participation. We propose to require, more specifically, that the intervenor provide the itemized estimate with reference to the specific issues upon which the intervenor intends to participate. This will facilitate the ALJ's ability, under § 1804(b)(2), to provide guidance regarding the intervenor's realistic expectation for compensation.
Only customers, as defined in § 1802(b), are eligible for intervenor compensation. However, the statute does not describe the showing to verify customer status. We propose to require the intervenor to provide specific documentation of customer status.
Finally, as discussed earlier, we propose to require a statement of the intervenor's economic interest in the proceeding, for purposes of evaluating both customer status and financial hardship.
5. Notice of Intent Regarding Costs of Judicial Review
Pursuant to § 1804(a), intervenors who intend to seek a compensation award must file a notice of intent, early in the proceeding, identifying the issues upon which they intend to participate and an estimated budget for that participation. As defined in § 1802(a), compensable costs include the fees and costs of obtaining judicial review, if any. However, it is neither the practice nor practicable for intervenors to identify and estimate the budget for obtaining judicial review at the start of a Commission proceeding, when they must give notice of intent to claim compensation. As a result, requests for compensation for judicial review costs may be made to the Commission well after a proceeding has been closed, and with no prior notice of the estimated costs or the issues to be litigated.
We propose to require intervenors who intend to seek a compensation award for costs of judicial review to file a notice to that effect within a reasonable period after the start of judicial review. This will provide the notice required by § 1804(a) with respect to compensation for costs of judicial review, and will afford the Commission the opportunity to point out, in ruling on the notice, "similar positions, areas of potential duplication in showing, unrealistic expectation for compensation, and any other matter that may affect the customer's ultimate claim for compensation" as anticipated in § 1804(b)(2).
We will not require an intervenor that has previously been found to meet the statutory definition of "customer," or to have demonstrated significant financial hardship, to renew its showing with respect to these eligibility requirements. The proposed rule does, however, require the intervenor to identify the issues upon which it intends to participate in judicial review and to make an itemized estimate of the compensation that the intervenor expects to request, as required by § 1804(a)(2)(A). In addition, the proposed rule requires an intervenor that intends to support the Commission to show why it expects that its participation in judicial review will supplement, complement or contribute to the Commission's defense of its decision upon judicial review. (See §§ 1801.3(f) and 1802.5.)
6. Costs Prior to Start of Proceeding
We recognize that parties may incur costs associated with participation in a proceeding before the start of the proceeding. For example, parties may participate in workshops or briefings by utilities regarding an impending application, or begin case planning on a proceeding that has been scheduled but not yet filed. (See, e.g., D.05-05-046 and D.04-08-025.) We propose to codify the principle that such costs, if reasonable, are compensable.
7. Accounting of Costs
Eligible intervenors are entitled to compensation for the reasonable costs of substantially contributing to a Commission decision. Specifically, compensability consists of the following elements: a recommendation by the intervenor that is adopted by the Commission in resolving a procedural or substantive issue in the proceeding. Intervenors' requests for compensation must contain an accounting that links all costs claimed (hours worked and miscellaneous expenses) with all of these elements, so that the requests are fully auditable. We propose to require intervenors to maintain and include in their requests for compensation an account of the costs that references them to issues in the proceeding. This requirement is necessary in order to enable the Commission to identify the costs associated with those issues which are the subject of the intervenor's substantial contribution, and to conduct the requisite reasonableness analysis.
In addition, we propose to require that, in a proceeding with multiple intervenors, the request include a showing and detailed accounting that the participation for which the intervenor requests compensation was efficiently coordinated with the participation of any party with similar interests. The statute is clear that an intervenor may receive compensation for participation that materially supplements, complements or contributes to the participation of other parties, including Commission staff. However, the burden will be on the intervenor to establish the materiality of its participation. This proposed rule will assist the Commission in making that necessary determination. (See §§ 1801.3(f) and 1802.5.)
1 Subsequent statutory references are to be Public Utilities Code unless otherwise indicated.
2 Pub. Util. Code § 1802(g) reflects this principle by defining "significant financial hardship," with respect to groups, by reference to the economic interest of its members.
