ALJ/KOT/hl2 Mailed 8/29/2006
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Set Hourly Rates for Purposes of Calculating Intervenor Compensation Awards Pursuant to Public Utilities Code Section 1801 and Following, for Work Performed in Calendar Year 2006. |
FILED RULEMAKING 06-08-019 |
Today, we commence the process for updating the hourly rates used in computing awards of compensation to intervenors who make substantial contributions to Commission decisions. The guidelines and principles we plan to adopt will update, and modify where appropriate those adopted Rulemaking (R.) 04-10-010. (See Decision (D.) 05-11-031.) The new hourly rates will apply to work performed by intervenors' representatives in 2006.
Background
The intervenor compensation program is governed by statute. Among other things, the hourly rates used in our awards must reflect the "market" rates, as described in Pub. Util. Code § 1806:1
The computation of compensation awarded pursuant to Section 1804 shall take into consideration the market rates paid to persons of comparable training and experience who offer similar services. The compensation awarded may not, in any case, exceed the market rate for services paid by the commission or the public utility, whichever is greater, to persons of comparable training and experience who are offering similar services.
Until R.04-10-010, we generally set hourly rates piecemeal, by which we mean that for each proceeding, each intervenor, and indeed each appearance by a particular representative of an intervenor, we might revisit the reasonableness of that representative's hourly rate. We used this rate-setting approach, in part, because of the inherent difficulty in trying to coordinate all compensation requests that might cover work done in a given time period. Gradually, however, the need for greater coordination became clear.
Chiefly, we encountered difficulty in ensuring that representatives with comparable training and experience, and performing similar work, received hourly rates falling within a reasonable range of each other. We also had not systematically gathered the data on compensation paid by the utilities and by the State to our own staff and other representatives. We determined that we could better implement § 1806 by establishing, through periodic rulemakings or other appropriate processes allowing for full and fair participation, the rates to be paid to all intervenors' representatives for work done in specified time periods. These rates would be based on the best information we could get on rates paid to utility and Commission representatives, including employees and representatives used in specific proceedings.
The first such rulemaking was R.04-10-010. We found, after examining the compensation we collected from the utilities and the Commission's own fiscal officers, that the current hourly rates for intervenor representatives, as of 2004, were in compliance with the market rate standard of § 1806. We further found that the hourly rates paid by the utilities and the Commission had stabilized, such that we should not authorize any general increase to intervenor hourly rates for work performed in 2005. We recognized, however, that special circumstances, particular to an individual representative, might justify an increase for that representative. We stated these circumstances as follows:
1. Where a representative's last authorized rate was for work done before 2004, an increase is reasonable, but we will limit the increase to 3% per year, which is roughly the recent rate of inflation as reported by various government agencies.
2. Where additional experience since the last authorized rate would move a representative to a higher level of qualification (e.g., from intermediate to senior), an increase is reasonable to bring the representative's hourly rate within the range of the representative's peers at the higher level.
3. Where a representative's last authorized rate is below that of the range of rates shown in the tables above for representatives with comparable qualifications, an increase is reasonable to bring the representative's rate to at least the bottom level of the rate range. Here, we have in mind certain representatives who have historically sought rates at or below the low end of the range of rates for their peers. We emphasize, however, that for any given level of qualifications, there will always be a range of rates in the market, so this increase is intended to narrow but not necessarily eliminate perceived disparities.
D.05-11-031, mimeo., pp. 17-18 (tables and footnotes omitted).
In general, we are satisfied that the guidelines and principles adopted in D.05-11-031 have served us well. At the same time, we need to revisit those guidelines and principles, and to update the hourly rates to consider the new data submitted by the utilities on April 30, 2006, and subsequently by staff.2 As directed by D.05-11-031, the Chief Administrative Law Judge (ALJ) convened two preliminary meetings, at which parties discussed the process for this update and also refined the compensation reporting format to enable more detailed comparisons.3 The current rulemaking follows the preliminary meetings and offers several proposals.
1 All statutory citations are to the Public Utilities Code.
2 The Commission's Fiscal Office records show, for Fiscal Years 2002-2005, that average annual employee salaries increased by: 1.6% for Attorneys; 1.6% for Regulatory Analysts; and 3.6% for Engineers.
3 The preliminary meetings were held on March 29 and June 1, 2006, before and after the utilities submitted their new data sets.
