IX. SCE Motion Regarding DRA Consultant
Costs
On August 30, 2006, SCE filed a motion regarding reimbursement of DRA consultant expenses. SCE asks the Commission to do the following:
1. Find that SCE should reimburse DRA up to $375,000 for consultant expenses incurred for this proceeding, consistent with § 631;
2. Authorize SCE to capitalize the reimbursed consultant costs as project costs, and adjust the adopted cost cap by the final amount;
3. Allow SCE to provide the final amount in a filing it would make after the issuance of the CPCN in this proceeding;
4. Account for DRA consultant costs related to the DPV2 project separately from those consultant costs related to I.05-06-041; and,
5. If the Commission deems it appropriate to have DRA reimbursed for its consultant costs related to I.05-06-041, order that such consultant costs be allocated to PG&E and SDG&E as well as SCE.
DRA filed a response to SCE's motion. Regarding SCE's first request, DRA does not believe a Commission finding is required, since SCE does not dispute that it must reimburse DRA's consultant costs related to this case. DRA does not object to SCE's proposal that reimbursed costs be included in the cost cap and capitalized.
DRA takes issue with SCE's assertion that some of DRA's consultant work related solely to I.05-06-041 and therefore is not reimbursable pursuant to § 631. DRA states that its consultants were engaged to provide expert testimony on the need for DPV2 and that all prepared testimony fell within that scope. DRA states that, since the Phase 1 hearings were held jointly in A.05-04-015 and I.05-06-041, the hearing time could be considered a joint activity. It maintains, however, that DRA's consultants attended the hearings only to address the need for DPV2. DRA concludes that its consultant costs should not be separated into two categories as SCE suggests, and instead should all be reimbursed pursuant to § 631.
PG&E responded in opposition to SCE's suggestion that a portion of DRA's consultant costs could be allocated to PG&E. PG&E argues that there is no basis for it or its ratepayers to assume any of the costs associated with DRA's consultants.
We agree with SCE that DRA consultants' evaluation of DPV2 assisted in the Commission's concurrent consideration in I.05-06-041 of methodologies for the economic evaluation of transmission lines. However, a review of the consultants' testimony confirms, as DRA indicates in its response, that their evaluation focused on need for DPV2. We find that the issues addressed by DRA's consultants are inextricably linked to the Commission's review of DPV2. For this reason, SCE should reimburse all of DRA's consultant costs in this proceeding, pursuant to § 631. We will not place a $375,000 limit on the reimbursable amount, as SCE requests.
We reject SCE's request that the cost cap for DPV be increased to reflect DRA's consultant costs. SCE has included an allowance for contingency costs in its DPV2 cost estimates, which we include in the maximum cost adopted in Section III.A.5.b pursuant to § 1005.5(a). SCE may treat the reimbursed consultant costs as DPV2 project costs for purposes of determining compliance with the approved maximum cost. If needed, SCE may seek an increase in the approved maximum cost as provided in Section 1005.5(b).
DRA notes that, at the time of its response to SCE's motion, the Commission had presented SCE five invoices and eight late notices for costs related to DRA's consultants, in amounts exceeding $300,000. SCE should pay all outstanding Commission invoices for DRA consultant expenses within five days of the effective date of this order.
