4. Substantial Contribution
In evaluating whether a customer made a substantial contribution to a proceeding we look at several things. First, did the ALJ or Commission adopt one or more of the factual or legal contentions, or specific policy or procedural recommendations put forward by the customer? (See § 1802(i).) Second, if the customer's contentions or recommendations paralleled those of another party, did the customer's participation materially supplement, complement, or contribute to the presentation of the other party or to the development of a fuller record that assisted the Commission in making its decision? (See §§ 1802(i) and 1802.5.) As described in § 1802(i), the assessment of whether the customer made a substantial contribution requires the exercise of judgment.
In assessing whether the customer meets this standard, the Commission typically reviews the record, composed in part of pleadings of the customer and, in litigated matters, the hearing transcripts, and compares it to the findings, conclusions, and orders in the decision to which the customer asserts it contributed. It is then a matter of judgment as to whether the customer's presentation substantially assisted the Commission.3
Should the Commission not adopt any of the customer's recommendations, compensation may be awarded if, in the judgment of the Commission, the customer's participation substantially contributed to the decision or order. For example, if a customer provided a unique perspective that enriched the Commission's deliberations and the record, the Commission could find that the customer made a substantial contribution. With this guidance in mind, we turn to the contributions TURN claims it made to the proceeding.
TURN allocated its hours to five categories, rather than individual issues. Category 1, General, includes hours spent on such things as review of the application and rulings, initial review of testimony and pleadings, and attending the prehearing conference and evidentiary hearings. Category 2, Westinghouse, includes hours spent addressing the reasonableness of PG&E's actions regarding Westinghouse Electric Corporation (Westinghouse). Category 3, Rate, includes hours spent on ratemaking treatment, standards for rate recovery, and proposals for guaranteed savings. Category 4, Cost-Effectiveness, includes hours spent evaluating of the cost-effectiveness of the SGRP, and the need to replace the steam generators. Lastly, Category 5, Compensation Request, includes hours spent on preparation of the intervenor compensation request. We will address whether TURN made substantial contributions regarding Categories 2, 3 and 4. Categories 1 and 5 do not relate to specific issues or recommendations.
4.1 Category 2, Westinghouse
TURN alleged that PG&E should have filed a law suit against Westinghouse regarding the original steam generators and recommended a disallowance of $56-70 million. The Commission determined that the question of whether PG&E should be ordered to file a suit against Westinghouse was moot. The Commission also determined that if PG&E had filed suit in the past and received something from Westinghouse as a result, the appropriate result would be a reduction to ratebase, or future operations and maintenance expenses (O&M). The Commission determined that it was precluded from making an adjustment to the rate base for the original steam generators by D.03-12-035. The Commission also found that future O&M expenses were beyond the scope of this proceeding except as they relate to the cost-effectiveness of the SGRP, and inclusion of an O&M reduction would not adversely affect the cost-effectiveness of the SGRP. In addition, the Commission found that such a suit would not affect the need for, or the cost of, the SGRP. Therefore, TURN's recommendation was not adopted.
This issue was not critical to the determination of whether the SGRP should be approved. Indeed, since TURN opposed the SGRP unless savings were guaranteed to ratepayers, adoption of its recommendations would have improved the cost-effectiveness of the SGRP, thus undermining its position. Therefore, we find TURN did not make a substantial contribution regarding this category.
4.2 Category 3, Rate
PG&E requested authority to recover the costs, up to $706 million, without further reasonableness review. TURN recommended that the Commission should conduct a reasonableness review of the SGRP regardless of the resulting actual costs. The decision stated the Commission's intention not to require a reasonableness review if SGRP costs do not exceed $706 million. However, the Commission made the entire project cost subject to a reasonableness review if the project costs exceed $706 million, or the Commission later finds that it has reason to believe the project costs may be unreasonable regardless of the amount. Therefore, TURN's recommendation was adopted in major part, and we find TURN made a substantial contribution regarding this recommendation.
· Aglet Consumer Alliance (Aglet) Proposal of Guaranteed Savings
TURN generally supported Aglet's proposal of guaranteed savings as an alternative to implementing its recommendations regarding the cost-effectiveness analysis.4 Aglet's proposal was not adopted, and we find that TURN did not make a substantial contribution regarding this recommendation.
In its comments on the proposed interim decision, TURN requested that the customers who are currently on bundled service, and who subsequently leave for direct access be required to pay any stranded costs associated with the SGRP for no less than the first ten years after the SGRP is completed. TURN's recommendation was not adopted, and we find that TURN did not make a substantial contribution regarding this recommendation.
Overall, we find TURN made a substantial contribution regarding one of its three recommendations in this category.
4.3 Category 4, Cost-Effectiveness
TURN recommended that if the SGRP is approved for Diablo, and also approved for San Onofre Nuclear Generating Station in Application (A.) 04-02-026, the Commission should have a consolidated phase of both proceedings to determine whether the risks of capacity shortages, when compared to the costs of project delays, warrant a change in the steam generator replacement schedule for one or both facilities. This recommendation was not adopted.
TURN represented that the statutory prohibition on customers leaving bundled service will expire before 2014, and that the lifting of this prohibition could lead to the reduction of bundled loads served by PG&E. Therefore, TURN recommended that PG&E should be ordered to change its model inputs accordingly. This recommendation was not adopted.
TURN performed cost-effectiveness calculations using its model that yielded results generally similar to PG&E's model when similar inputs were used. The Commission relied on these model runs, in part, to reach its conclusion that PG&E's model was appropriate for use in this proceeding. Therefore, TURN's modeling was adopted in part.
TURN recommended the Commission review the results of all bids received for the procurement and installation contracts to determine the reasonableness of PG&E's cost estimates. This recommendation was not adopted.
TURN opposed the use of PG&E's cost estimate as an assumed reasonable cost. This recommendation was not adopted. However, TURN recommended consideration of a higher SGRP cost in the cost-effectiveness analysis. This recommendation was adopted.
TURN recommended that the O&M costs should have an escalation rate 1% or 2% higher than that used by PG&E. This recommendation was adopted.
TURN stated that PG&E's base capital additions amount was not sufficient, and supported Aglet's proposal for an increase. Aglet's proposal was adopted for the years after 2015.
TURN asserted that $117 million in capital expenditures associated with a low-pressure turbine rotor replacement project be included in the cost-effectiveness analysis. This recommendation was not adopted.
TURN recommended a one-year outage be included in the cost-effectiveness analysis for the period after the replacement of the steam generators. This recommendation was not adopted for the Commission's base case on which the cost-effectiveness was decided. However, it was adopted for the purpose of testing the sensitivity of the SGRP's cost-effectiveness to such an outage.
TURN recommended consideration of a low-case assumption of a 75-85% capacity factor in the cost-effectiveness evaluation. This recommendation was not adopted for the Commission's base case on which the cost-effectiveness was decided. However, it was adopted, in part, for the purpose of testing the sensitivity of the SGRP's cost-effectiveness to reduced capacity factors.
TURN recommended the use of a lower gas price forecast. The Commission included TURN's recommended gas price forecast as one of the forecasts used in its cost-effectiveness evaluation. Thus, this recommendation was adopted in part.
TURN recommended a 30-year combined cycle generation facility life for use in this proceeding. This recommendation was adopted.
TURN recommended a different wind power cost than used by PG&E. This recommendation was not adopted.
· Recovery of Capital Costs in the Event of an Early Shutdown
TURN recommended, in the event of an early shutdown of Diablo, the ratemaking treatment of capital costs adopted in D.92-08-036 and D.85-08-046 be used. This recommendation was not adopted.
TURN observed that PG&E's cost-effectiveness analysis failed to consider the possibility that the NRC would not extend the Unit 1 license life as assumed by PG&E, and recommended that this error be corrected. The Commission found PG&E's analysis did address this possibility. This recommendation was not adopted.
· The Risk of a Nuclear Accident and the Resulting Shared Costs
TURN represented that PG&E's cost-effectiveness analysis failed to consider the risk of a nuclear accident and the resulting shared costs. The Commission did not adopt this representation.
TURN was the only party to address this category comprehensively. TURN addressed almost every issue related to cost-effectiveness and, though it did not prevail on every issue, contributed substantially to the development of the record and the Commission's decisions regarding this category. We find TURN made a substantial contribution regarding this entire category.
3 D.98-04-059, 79 CPUC2d, 628 at 643.
4 Aglet was an intervenor in this proceeding.
