6. Reasonableness of Requested Compensation

In general, the components of these intervenor compensation requests must constitute reasonable fees and costs of each customer's preparation for and participation in a proceeding that resulted in a substantial contribution. In order to determine reasonableness, we first assess whether the hours claimed for the customer's efforts that resulted in substantial contributions to Commission decisions are reasonable by determining to what degree the hours and costs are related to the work performed and necessary for the substantial contribution. We next take into consideration whether the claimed fees and costs are comparable to the market rates paid to experts and advocates having comparable training and experience and offering similar services. We next consider productivity. D.98-04-059 directed customers to demonstrate productivity by assigning a reasonable dollar value to the benefits of their participation to ratepayers. The costs of a customer's participation should bear a reasonable relationship to the benefits realized through their participation. This showing assists us in determining the overall reasonableness of the request. Lastly, we consider the reasonableness of direct expenses such as travel, photocopying, postage, telephone/fax, and messenger services.

6.1. Aglet

Aglet requests $87,982.71 for the participation of James Weil, its director, in this proceeding, as follows:

6.1.1. Hours and Costs Related to and Necessary for Substantial Contribution

Aglet documented its claimed hours by presenting a daily breakdown of Weil's hours accompanied by a brief description of each activity. The hourly breakdown, including the 50% reduction of time on E&BD issues, reasonably supports the claim for total hours.

6.1.2. Market Rate Standard

Aglet seeks an hourly rate of $250 for work performed by Weil in 2005. We previously approved this rate in D.05-10-009, and adopt it here. For 2006 Aglet requests a rate of $262 for Weil which represents a 4.8% increase over the 2005 rate of $250. Aglet cites a 4.2% increase in the CPI- All Urban Consumers, and the 5.3% three-month commercial paper rate that California utilities apply to short term balancing accounts as justification. We decline to adopt the requested 4.2% increase. Consistent with the guidance provided in the Order Instituting Rulemaking (R.) 06-08-019, we instead adopt an hourly rate of $260 for Weil in 2006, which represents an increase of 3% over the 2005 rate, rounded to the nearest $5 increment.

6.1.3. Productivity

Aglet's participation was productive in that the impact of that participation far exceeded fees and other costs. In its request, Aglet details cost savings due to its efforts and estimates total rate case cycle revenue requirement savings of approximately $34,400,000. This includes $17,500,000 for reduced costs related to four SONGS refueling outages, $6,300,000 due to the adoption of a lower uncollectible factor, $1,500,000 for energy center cost reductions, $5,800,000 for customer deposits and $3,300,000 related to the effects of the lower adopted attrition year capital escalation. We find that Aglet's efforts have been productive.

6.1.4. Direct Expenses

The itemized direct expenses submitted by Aglet include costs for travel, photocopying, postage, telephone/fax, and messenger services and total $1,741.71. The cost breakdown included with the request shows these miscellaneous expenses to be commensurate with the work performed. We find these costs reasonable.

6.2. Greenlining

Greenlining requests $141,484.35⁶ for its participation in this proceeding, as follows:

6.2.1. Hours and Costs Related to and Necessary for Substantial Contribution

With one exception, Greenlining documented its claimed hours by presenting a daily breakdown of each advocate's hours accompanied by a brief description of each activity.

The one exception relates to Berrio's time. In its July 17, 2006 compensation request, Greenlining estimated a total of 150 hours for her time in this proceeding. Greenlining was unable to determine Berrio's exact hours because she was no longer employed by Greenlining and was then currently traveling. On August 25, 2006, Greenlining filed a supplement to its request that revised Berrio's total hours to 120. The supplement contained statements from Greenlining's Special Projects Director (Vaeth) and General Counsel (Gnaizda), but still did not precisely identify the number of total hours for Berrio.

We have no specific documentation of the exact number of hours that Berrio spent on this proceeding. From the available information, it is evident that she participated in the review of SCE's testimony, represented Greenlining at the first prehearing conference, reviewed Greenlining's prepared testimony, met with Greenlining's general counsel and witnesses on related matters, and cross examined SCE's main policy witness Fohrer. Greenlining should be reasonably compensated for her time on these activities. However, Berrio did not participate in Greenlining's cross examination of SCE witnesses Grigsby, Quevedo, Aldrete or Cogan and she did not prepare the briefs, prepare comments on the proposed decision, present oral argument, or prepare the intervenor compensation request, all of which were performed by other counsel for Greenlining.

Documentation in the form of a log of time spent on specific activities is generally done as a matter of course and is the starting point for determining the reasonableness of requested compensated hours. Greenlining's situation in this case is unusual in that this information is not available due to the circumstances of Berrio's departure. Greenlining's original estimate of 150 hours of time for Berrio appears high considering the extent of her participation and the fact that she incurred 173.7 hours for full participation in the prior SCE GRC proceeding (test year 2003) wherein essentially the same issues were litigated. While Greenlining subsequently reduced its request for Berrio to 120 hours, that number is also not substantiated by logs or similar documentation. Whether it reasonably represents the time that Berrio spent on this proceeding is not clear.

In the absence of more precise information, we determine the number of compensable hours for Berrio in this GRC by assuming a total level of Greenlining attorney time that is equal to that incurred in SCE's test year 2003 GRC, noting that Greenlining's issues and activities are similar in both cases. A review of the available information indicates the activities performed by Gnaizda and Berrio in SCE's test year 2003 GRC are comparable to the activities performed by Gnaizda, Berrio, and Camarena in the test year 2006 GRC. For the test year 2003 GRC, Gnaizda and Berrio logged a total of 280.3 hours.⁷ Use of that number results in 97.6 hours for Berrio,⁸ which we will consider a reasonable proxy for this proceeding.

6.2.2. Market Rate Standard

Greenlining seeks an hourly rate of $490 for work performed by Gnaizda in 2005 and 2006. We previously approved this rate in D.06-09-011, and adopt it here.

Greenlining seeks an hourly rate of $325 for work performed by Berrio in 2005. We previously approved this rate in D.05-08-015, and adopt it here

Greenlining seeks an hourly rate of $275 for work performed by Camarena in 2006. We previously approved a rate of $250 for Camarena for 2005 work in D.06-09-008. Consistent with the guidelines provided in R. 06-08-019, we adopt an hourly rate of $260 for Camarena for 2006 work, an increase of 3% above the 2005 rate, rounded to the nearest $5.

Greenlining seeks an hourly rate of $180 for work performed by Vaeth in 2005. We previously approved a rate of $150 for Vaeth for 2005 work in D.06-09-008, and adopt that rate here

Greenlining seeks an hourly rate of $150 for paralegal work performed by Abastillas in 2005. We previously adopted a rate of $110 for Abastillas for 2005 work in D.06-09-011, and adopt that rate here.

Greenlining seeks an hourly rate of $125 for paralegal work performed by Lapidario in 2005 and 2006. We previously approved this same rate in D.06-09-008 for 2005 work, and adopt it here for both years.

Greenlining seeks an hourly rate of $360 for work performed by both Gamboa and Phillips in 2005. For Gamboa, we previously approved this rate in D.06-09-008, and adopt it here. In the same decision, we adopted a 2005 rate of $335 for Phillips and adopt that rate here.

6.2.3. Productivity

Greenlining has not attempted to quantify savings related to the issues that it addressed in this proceeding. Due to the nature of its issues, such an exercise would be difficult at best, if not impossible. Certainly a more diverse base of suppliers will ultimately result in reduced costs of materials and services that will be reflected in rates. Appropriate diversity in management and transparency in reporting may ultimately result in reduced costs, but at least as important, all four of the issues addressed by Greenlining have policy implications that we feel should be addressed on a periodic basis. We therefore find that the substantial contributions by Greenlining in these areas were productive.

6.2.4. Direct Expenses

Greenlining requests minimal direct expenses amounting to $102.60 for photocopying. We find these costs reasonable.

6.3. TURN

TURN requests $495,060.29 for the participation in this proceeding of its own staff, and for representatives from two consulting firms (JBS Energy, Inc. (JBS), and Snavely King Majoros O'Connor & Lee, (Snavely/King)), it engaged, as follows:

6.3.1. Hours and Costs Related to and Necessary for Substantial Contribution

TURN documented its claimed hours by presenting a daily breakdown of its representatives' hours accompanied by a brief description of each activity. The hourly breakdown reasonably supports the claim for total hours.

6.3.2. Market Rate Standard

We have previously approved all of the 2004 and 2005 rates TURN requested for its own staff, and for JBS consultants Marcus, Nahigian and Schilberg (D.06-04-012, D.06-04-065, and D.06-06-018), and adopt those rates here.

For 2006 work, TURN requests for its own staff a general 4% increase from previously adopted 2005 rates. Instead, consistent with the guidance provided in R.06-08-019, we adopt hourly rates for 2006 for TURN's staff of 3% above previously approved 2005 rates, rounded to the nearest $5. The 2006 rate for attorney Freedman is based on the $270 rate adopted in D.06-04-012 for 2005.

For JBS consultant Helmich, TURN requests a rate of $160 for work performed in 2005. We previously approved this same rate in D.05-06-049 for his 2004 work, and adopt it here for 2005.

TURN requests an hourly rate of $155 for JBS consultant Ruszovan for 2005, the same rate JBS billed TURN. While D.06-04-012 adopted a 2005 hourly rate of $135 for Ruszovan for 2005, TURN requests we reconsider the appropriateness of such a rate in light of the following:

· JBS rarely bills TURN for the time Ruszovan devotes to CPUC-related work, since his work is typically for other clients of the firm. Prior to 2006, the last award of intervenor compensation that addressed his hourly rate covered 2001 work. In 1999, 2000 and 2001 the Commission awarded intervenor compensation for his work using the same hourly rate approved for Jeff Nahigian's work during the same periods -- $95, $100 and $115, respectively. The Commission approved new rates for Nahigian's work in 2003, 2004 and 2005 -- $125, $140 and $155. TURN states it seems fair to assume that had TURN also sought fees for Mr. Ruszovan's work during those same years, they would have continued tracking the approved rates for Mr. Nahigian. Instead, because there was no decision adopting an hourly rate for Mr. Ruszovan in 2002 or 2003, the decision in the PG&E Phase 2 proceeding (D.06-04-012, in A.04-06-024) awards $130 for his work in 2004 and $135 for 2005, using the 3% escalator applied to the $115 rate from 2001.⁹

· Ruszovan is the firm's Senior Energy Analyst, with over 16 years of experience in energy conservation, advanced computer analysis, database programming and utility production simulation modeling. Since joining JBS in 1989, he has performed energy-related computer analysis of utility operations, energy data analysis, and major utility customer data base design and development. He has designed and developed a multi-relational database, including a customized data entry program for each major utility, to process and analyze individual facility energy use data. He has built models to integrate analysis of hourly market pricing data and hourly load data for individual customers or customer classes.  He has provided consulting services on computer systems, both in hardware design and software operation, for a variety of clients and for the internal operations of JBS.

We agree with TURN and adopt a 2005 hourly rate of $155 for Ruszovan.

For depreciation related issues, TURN engaged the services of Snavely/King, a consulting firm of economists, accountants, engineers and cost analysts. We have not established previous hourly rates for Snavely/King representatives. TURN's request is based on the actual rates billed by Snavley/King.

TURN seeks an hourly rate of $240 for work performed by Majoros in 2005 and 2006, and King in 2005.

Majoros is the Vice President and Treasurer of Snavely/King. He has more than two decades experience with the firm, specializing in accounting, financial and management issues. He has testified as an expert witness or negotiated on behalf of clients in more than 130 federal and state regulatory proceedings involving telephone, electric, gas, water, and sewerage companies, on a wide array of complex issues including taxation, divestiture accounting, revenue requirements, rate base, nuclear decommissioning, plant lives, and capital recovery. Majoros has been responsible for developing the firm's consulting services on depreciation and other capital recovery issues into a major area of practice.

King is another partner and the firm's President. He has more than 30 years experience in regulatory economics. He has appeared more than 300 times as an expert witness in more than 30 states, and before federal regulatory agencies in both the United States and Canada. In this proceeding, he devoted a few hours to consulting with Majoros about the development of his testimony and recommendations in this proceeding.

Majoros's and King's qualifications and experience compare favorably with the most senior and principal consultants relied upon by the utilities or intervenors to address such issues. In D.05-11-031, the Commission established an hourly rate range of $110 to $360 for experts for 2005 work. Majoros's and King's rate of $240 falls near the mid-point of that range. In light of their qualifications and experience, a rate of $240 is reasonable and we adopt that rate here.

TURN seeks an hourly rate of $160 for work performed by Kenney and Geissler in 2005. Kenney was recently made a Senior Consultant and Analyst at Snavely/King, after approximately ten years at the firm. Kenney provides project management, analytical, litigation and operations support. Her responsibilities include cost modeling, operations simulation, financial analysis and reporting, database management and research. Kenney also provides analytical support for company witnesses and prepares exhibits for use in the depreciation aspects of regulatory proceedings. This includes analysis of plant lives, retirement patterns, net salvage and reserves. In addition, Kenney has analyzed fuel and power purchases, storm damages, and other revenue requirement issues.

Like Kenney, Geissler is a Senior Consultant with Snavely/King. He joined the firm in 2001 with nearly 20 years experience in software development and system engineering. Geissler is an information technologies expert, who has developed and implemented telecommunications upgrades, database management systems, and data tracking software. He assisted in the upgrade of Snavely King's depreciation software and provides assistance in the firm's depreciation engagements.

Kenney's and Geissler's qualifications and experience compare favorably with other experts with comparable experience. The $160 requested for Kenney's and Geissler's work in 2005 is consistent with the low end of the range of rates outlined in D.05-11-031, and we adopt that rate here.

TURN seeks an hourly rate of $75 for work performed by Kelly in 2005. Kelly provided technical and analytical assistance in the development of expert testimony. TURN states that the range of rates described in D.05-11-031 includes work performed in a "witness support" or "analyst" function similar to the work in an entry-level position similar to Kelly. The $75 rate is below the $110 rate that is the bottom of the range deemed reasonable in D.05-11-031. The $75 hourly rate requested for Kelly is reasonable, and we adopt it here.

6.3.3. Productivity

TURN's participation was productive in that the impact of that participation far exceeded fees and other costs. In its request, TURN details cost savings due to its efforts on 26 separate issues and estimates total revenue requirement savings of approximately $99,507,000 for test year 2006. This includes $69,054,000 in expense related reductions and $203,024,000 in adjustments to capital related expenditures. We find that TURN's efforts have been productive.

6.3.4. Direct Expenses

The itemized direct expenses submitted by TURN include costs for travel, photocopying, postage, telephone/fax, messenger services, and research and total $2,195.29. The cost breakdown included with the request shows these miscellaneous expenses to be commensurate with the work performed. We find these costs reasonable.

⁶ In its July 17, 2006 filing, Greenlining requested $151,234.35. That amount was reduced in the August 25, 2006 supplemental filing.

⁷ D.05-06-031, mimeo., p. 34, shows 106.6 hours for Gnaizda and 173.7 hours for Berrio.

⁸ For the test year 2006 GRC, Greenlining has provided documentation that substantiates 164.70 hours for Gnaizda and 18.00 hours for Camarena for a total of 182.70 hours. 280.3 hours less 182.70 hours equals 97.60 hours.

⁹ TURN indicates that did not seek formal Commission review of this aspect of D.06-04-012 because the impact was relatively small in that decision (about $500). The impact here would also be quite small. However, according to TURN, using a lower rate will likely have a large impact on upcoming requests for compensation because Mr. Ruszovan has put in a large number of hours on TURN-related work in 2006 (mostly on the PG&E AMI and PG&E billing proceedings, to date).