6. Underrepresentation, Fair Determination, and Duplication of Effort

The Eligibility Ruling directs TURN, GL/LIF and PA to address the issues of underrepresentation, fair determination, and duplication of effort in subsequent requests for compensation.

Underrepresentation:

The Commission has previously stated that an NOI must contain information that enables the presiding officer to make a preliminary assessment of whether an intervenor will represent customer interests that would otherwise be underrepresented. Additional assessment of this issue is to occur in response to any request for compensation. If the intervenor is a "customer" who represents interests that would otherwise be underrepresented, and who meets the significant financial hardship criteria, the intervenor may be eligible for an award of compensation. (D.98-04-059, p. 27-28, Finding of Fact 13.) Section 1801.3(f) allows intervenor compensation only for those customer interests which would otherwise be underrepresented. (Id., p. 25.)

TURN submits that it represented the interests of residential and small commercial customers. TURN's focus was the maximization of benefits subject to sharing under Section 854, and insuring that the sharing mechanism delivered a fair portion of those benefits to residential and small commercial customers. We agree with TURN that these interests were distinct from the broader interests represented by the Office of Ratepayer Advocates (ORA), and from the differently focused interests represented by GL/LIF and PA. On the issue of the CCA there may have been some overlap of representation of interests between these parties. Nonetheless, because the bulk of TURN's participation, as regards with the CCA and other issues, raised customer concern not addressed by these other parties, we conclude that the interests represented by TURN would have been "underrepresented" if TURN had not participated. For example, TURN had unique positions on certain issues related to the CCA, and provided distinct contributions resulting in conditions which significantly improved the CCA. Similarly, on the issue of whether residential basic exchange service should be included in the merger surcredit, TURN represented interests of customers who make few or no toll calls and who have few competitive options, which is an interest that would otherwise have been underrepresented.

The issue of underrepresentation is more complex with regard to the participation of GL/LIF and PA. GL/LIF state that they represented nearly 40 groups, and that their representation was entirely on behalf of low-income, language minority, inner-city, immigrant and other communities who are disproportionately without basic telephone service or access to advanced technologies. PA states that it represents nine organizations (who in turn represent Latino, Filipino, Korean, Indian, and Asian-Pacific community interests), as well as those with limited-English speaking ability, immigrants and low-income persons. We find the customer interests represented by GL/LIF and PA would have been underrepresented if they had not participated. While some of the customers represented by GL/LIF and PA may fall into the categories of customer represented by both ORA and TURN (residential and small business customers), it is clear that the interests of those customers would not have been fully represented by ORA and TURN. Specifically, the interests of low-income, language minority, immigrant and other communities that were advanced by GL/LIF and PA on the CCA issue would have been underrepresented if ORA and TURN had been the only participants on behalf of residential and small business customers. The participation of ORA and TURN did not focus on the same CCA related issues (or did not focus with the same level of detail) that these two intervenors addressed.

What is not clear is whether there would have been underrepresentation of interests if only GL/LIF, or only PA, had participated. GL/LIF indirectly address this issue in their Request, which states "only one other intervenor, Public Advocates, appeared on behalf of this large group of underserved, who collectively constitute California's new majority. Intervenors [GL/LIF] and Public Advocates alone advocated for allocation of Section 854(b)(2) ratepayer benefits to fund the Community Collaborative...Jointly, Public Advocates and Intervenors represented a broad spectrum of underserved California consumers..." (GL/LIF Request, p. 23.)

It is not our intent to discourage a broad range of participation in our proceedings. We defer to the judgment of participants as to whether parties with different constituencies are best served by jointly representing a set of shared interests. The issue that we must consider remains, under Section 1801.3(f), whether duplication in the representation of interests resulted. The issue of duplication of representation of interests goes to whether ratepayers should be required to fund the full participation of both intervenors. Where multiple parties choose to jointly represent overlapping interests, they do so at risk of receiving reduced compensation if they do not coordinate their participation so as to prevent duplication of effort in representing the same interests on the same issues. While we do not reduce the award to either GL/LIF or PA because of the duplication of representation of customer interests, GL/LIF and PA both chose to represent substantially the same customer interests. Although these particular customer interests would have been underrepresented if neither GL/LIF nor PA had participated, we find that this overlap is a factor that substantiates our conclusion, discussed below, that there was duplication in the efforts of these two parties that warrants a reduction in the award to each.

Fair Determination:

The Commission has previously stated that only participation that is necessary for a fair determination of the proceeding is compensable. Where a customer argues issues that are irrelevant or outside the scope of the proceeding, or beyond the Commission's jurisdiction, compensation may be denied. (D.98-04-059, p. 31.) We conclude that the participation of TURN, GL/LIF, and PA was limited to issues that were central to the proceeding, and as such that the participation of each meets the "fair determination" standard.

Duplication of Effort:

The intervenor compensation statute expresses an intent that the program be administered in a manner that avoids "unnecessary participation that duplicates the participation of similar interests." (Section 1801.3(f).) The governing statute envisions some participation that is duplicative may still make a substantial contribution and therefore be compensable; however, participation which is duplicative may be unnecessary and therefore an award may be subject to a discount for duplication, or may not be compensable at all. (See D.98-04-049, pp. 49-50.) Intervenors were put on notice by the Eligibility Ruling that to the extent their efforts merely duplicated those of other parties, they were at risk of receiving reduced or no compensation for such efforts.

We agree with TURN that no discount to the award we grant TURN should be made for duplication. TURN made a number of contributions that were clearly distinct from the efforts of other parties. These contributions include analyses of the economic benefits resulting from the merger, inclusion of residential basic exchange service in the merger surcredit billing base, and conditions applied to the CCA. To the extent that there may have been overlap between some of TURN's positions and those of ORA and other intervenors, we find that the duplication materially supplemented the presentations of other parties. Thus no reduction in award is appropriate.

Both GL/LIF and PA argue that no duplication of effort occurred between them, and that no reduction in the fee award is appropriate. We find the arguments unpersuasive. These parties participated on identical issues and took virtually the same positions on those issues. As discussed above, these intervenors represented essentially identical consumer interests. While the organizations they represent have different names and presumably different memberships, their concerns in this proceeding appear identical. Neither GL/LIF nor PA has identified any position asserted by one intervenor that was not advocated by the other. Both parties participated in the negotiation efforts with Applicants that resulted in the CCA. Much of their time appears to have been spent in similar activities seeking similar or identical results. The substantial overlap of effort between GL/LIF and PA is illustrated by PA's Response to the GL/LIF Request, and the GL/LIF Reply. In these pleadings the parties dispute which of them took the lead in initiating and negotiating the CCA. We need not conclude which party took the lead. It is clear that both parties engaged in similar efforts and there was duplication of effort.

PA does not identify any issues on which the positions of PA and GL/LIF were distinguishable from each other, nor does it identify any activity in which it alone engaged. GL/LIF argues that it did engage in two activities distinct from PA. First, it asserts that it was the only party to conduct a customer survey related to the CCA. Second, GL/LIF argues that it presented two witnesses to testify on behalf of the CCA. With regard to the customer survey, GL/LIF is correct that this activity did not duplicate the efforts of any other party. However, the Commission stated that the survey results were not relied upon in the decision (D.00-03-021, p. 59). Therefore, while there was no duplication, this effort did not make a substantial contribution to the decision. With respect to the presentation of two witnesses at hearing, we agree with GL/LIF that no duplication of effort occurred. For this reason, while we conclude that a discount in the awards of GL/LIF and PA is appropriate for duplication of effort, it is not appropriate to apply the discount to that portion of GL/LIF's request that pertains solely to presentation of the two witnesses.

We find that the duplication warrants a 40% reduction in the award for both GL/LIF and PA. This reduction is reasonable in light of the substantial duplication of effort. We have in the past applied discounts from 26% (in D.88-12-085) to 10% (see, for example, D.93-06-022), depending upon the extent of duplication. It could be argued in this case that a 50% discount would be appropriate since the full effort of either GL/LIF or PA may have been sufficient to adequately represent the interests that their overlapping efforts championed. A 50% discount to each would result in ratepayers paying once for the representation of this set of interests, instead of paying twice (if both were given an award without duplication discount.) We do not adopt a 50% discount for two reasons. First, because some of the duplication occurred during settlement negotiations, we cannot rule out the possibility that positions of GL/LIF and PA were not concurrent at all times, and that on at least some issues consumers were better served by the efforts of one intervenor over the other, or by the participation of two intervenors. Second, in D.00-03-021 we cite to some arguments made individually by GL/LIF and PA that we relied upon (see, for example, pp. 65-66).

The 40% discount that we adopt means that a full 60% of the participation of both GL/LIF and PA is compensated despite the evidence of substantial duplication.⁸ One could argue that it also means that ratepayers pay 120% for a 100% job. In other litigation contests, clients expect to pay only once (i.e., 100%) for representation. We will, as discussed above, require ratepayers to pay what amounts to 120% because of the possibility that the participation of these two intervenors representing the same interests on the same issues and in support of the same positions may have provided some extra benefit to ratepayers. To require ratepayers to pay even more is not consistent with the intent of the intervenor compensation statutes.

We have reviewed the documentation provided by GL/LIF in support of its Request in order to identify the number of hours that are not subject to the 40% discount for duplication of effort. We have identified a total of 102.45 hours that relate to presentation of the two witnesses.⁹