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 §§1801.3(f) 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 claimed contributions Felton FLOW made to the proceeding.
Felton FLOW participated actively throughout the proceeding and while it focused its participation on issues pertaining primarily to the Felton District, it also raised issues affecting the Monterey district as well as general office allocations affecting all California districts.
In its request for compensation, Felton FLOW asserts it made a significant contribution through Commission adoption of its recommendations and Commission adoption of alternative approaches for addressing issues raised by Felton FLOW in each of the following areas:
1. The Commission's rejection of Cal-Am's request for a leverage adjustment to the authorized return on equity for the Monterey and Felton Districts;
2. The Commission's finding that the costs incurred by Cal-Am on the Highway 9 main replacement project were excessive and its exclusion of $50,000 in such costs from rates;
3. The Commission's finding that Cal-Am improperly included political lobbying expenses in its operations and maintenance (O&M), administrative and general (A&G) and General Office expenses and its reduction of employee related costs in these accounts by 5%;
4. The Commission's finding that significant problems exist with Cal-Am's customer service, and order of additional tracking and reporting regarding customer service issues;
5. The Commission's finding that Cal-Am's A&G expenses have increased significantly since 2003 without sufficient justification and reduction in A&G expenses included in rates;
6. The Commission's finding that Cal-Am failed to sufficiently explain its General Office expenses and its order that additional information in justification of these expenses be provided in Cal-Am's next general rate case;
7. The Commission's finding that Cal-Am's justification for including in rates an acquisition premium for AWW's acquisition of Citizens' facilities was "weak" and its order that additional justification be provided in Cal-Am's next general rate case;
8. The Commission's finding that additional investment by Cal-Am in capital projects in the Felton District may unnecessarily increase the cost to the public of acquiring the Felton District facilities and its order prohibiting Cal-Am from investing in additional capital projects in the Felton District without prior review by the Commission through an advice letter filing; and
9. The Commission's finding that even with the reductions in revenue requirement ordered by the Commission, absent mitigation, the Commission's decision would result in rate shock in the Felton District and its order deferring of a portion of the increase for one year in order to mitigate rate shock.4
In addition to the above, Felton FLOW also asserts that its participation contributed to the following additional concessions made by Cal-Am during the course of the proceeding and reflected in the Commission's decision:
1. Cal-Am's agreement to defer further work on the Bull Creek project, as advocated by Felton FLOW; and
2. Cal-Am's agreement to forgo recovery of $100,000 in costs incurred to complete the compliance audit ordered by the Commission as a result of errors and inconsistencies in Cal-Am's application and testimony.5
We find that Felton FLOW made a substantial contribution on each issue it cites and generally it was the only party raising the issue. On the issue of Cal-Am's request for a leverage adjustment, the DRA also advocated this position, however, in D.06-11-050, we cite the specific contribution Felton FLOW made that is separate from DRA's in our discussion of the leverage adjustment.6 In the matter of Cal-Am forgoing recovery of $100,000 in costs incurred to complete the compliance audit ordered by the Commission, the formal record does not attribute Cal-Am's decision to the advocacy of any specific party.
The issues on which Felton FLOW made a substantial contribution resulted in significant savings to Cal-Am ratepayers in Felton, Monterey, and other districts, as will be discussed in detail in a later section.
3 D.98-04-059, 79 CPUC2d 628 at 653.
4 January 29, 2007 request, pages 10-11.
5 Id. at 12.
6 See D.06-11-050, mimeo. at 18.
