XIII. True Labor Cost Balancing Account
(TLCBA)

The estimate in many accounts for labor costs, including both the monetary levels and forms of compensation, as well as the number of positions included in the estimates, was in dispute between the applicants and all active intervenors. As shown by the range of estimates and the variance in the number of positions in the litigated phase, and also in the final mix in the partial settlements, it is clear that we cannot estimate these costs with any degree of certainty on the record before us. This uncertainty is discussed in detail elsewhere in this decision as we consider the individual accounts and programs that compose the 2004 test year revenue requirement. If, for example, we adopt either the applicants' or ORA's litigation estimates, we would be almost certain to either over- or under-estimate the reasonable costs for sufficient labor, or at least the actual labor as incurred by SoCalGas and SDG&E, to provide ratepayers with safe and reliable service. SoCalGas and SDG&E argue that the Commission should include in revenue requirement the requested budget without regard to vacancies:


"Regardless of the actual vacancy level at any point in time, the fact remains that the labor budget associated with any vacancy is necessary to perform the work for which the position was authorized." (Sempra opening litigation brief, p. 251 - electronic version.)

We cannot agree that the utility needs the money even if the position is vacant. As FEA pointed out SDG&E had a significant number of unfilled positions in its application that it expects the Commission to assume to be filled in the test year.56 Dollar bills do not perform work; people do. The true cost is the cost of labor that is actually paid in wages or salaries and associated benefits to real employees actively engaged in providing utility service.

The partial settlements do not persuade us that the included labor estimates are right, only that they are compromises made by the parties in the face of assessing their respective litigation risks. The partial settlements do not promise to actually employ all the people represented by the dollars allowed for labor. Therefore, we will adopt a balancing account mechanism, the TLCBA, to provide SoCalGas and SDG&E an assured method to recover the true cost incurred in Test Year 2004 and in subsequent attrition years.57

TURN proposed a generic allowance for vacancies, realizing that it was highly unlikely that SoCalGas and SDG&E would have all positions filled all of the time and colorfully concluded that:


"Sempra's dog - in the form of its new fancy HR computer program - has eaten its homework. Despite our obvious interest, the Sempra utilities have lost the ability to tell us how many vacancies they have at any given time, past or present."58

Based on this asserted inability to report true vacancy counts, TURN proposed a 1.5% reduction factor to labor costs, payroll taxes, workers' compensation, and benefits (medical, dental, vision, etc.). However, TURN did not provide any basis for 1.5% compared to any other allowance.

The companies will be allowed to collect in rates for Test Year 2004, subject to refund, a maximum of $371,939,000 for SoCalGas and $175,246,000 for SDG&E, which is the labor component in the litigated proceedings as modified herein59 by account, as shown in the adopted Test Year 2004 results of operations. This is less than SoCalGas and SDG&E's litigation positions.60

This balancing account mechanism gives the companies sufficient discretion to hire and pay real employees as necessary. It protects SoCalGas and SDG&E from not collecting the true cost of labor, and it also protects the ratepayers from paying for costs that are never incurred.

SoCalGas and SDG&E offered testimony that they did not always recover all labor costs in the past. But it is also possible that by selectively choosing not to fill authorized Test Year 2004 positions, the companies can bolster future earnings by pocketing the savings. Labor costs are more than just numbers in arcane Commission decisions; labor costs included in retail rates should be real jobs that affect peoples' lives and the local economies in the service territories of SoCalGas and SDG&E. We need to ensure that all the dollars we take from ratepayers for labor costs equal all of the dollars that go to pay the employees who are necessary to provide safe and reliable service.

We do not want or intend to manage the thousands of individual hiring and compensation decisions necessary to operate SoCalGas and SDG&E, and we do not do that here. It is SoCalGas and SDG&E's responsibility to make those decisions and this balancing account mechanism gives them sufficient discretion and the funding to make the right decisions. For added flexibility, we will adopt a process where SoCalGas and SDG&E may shift labor funds between accounts for unforeseen needs. This is similar but less formal than the fund-shifting mechanism concepts that have been in place for the energy efficiency public purpose programs where SoCalGas and SDG&E can reallocate funds based upon changed circumstances. The funds reallocation process, as adopted elsewhere, will serve both the ratepayers and applicants well.61 If SoCalGas or SDG&E perceive a need to reallocate funding (within each company, not between companies) it shall record the transfer of unspent fund in a separate sub-accounts to track the movements between FERC accounts from where there is unspent funding to those FERC accounts that require more funding. This will allow the Commission to review these operating differences from Test Year 2004 as a part of the next test year forecast process where there will be likely a new base year escalated and adjusted to forecast the new test year. Normally, the advice letter process is a reasonable and expeditious mechanism to ensure that the companies can respond to changing conditions in a timely and responsible fashion. We believe that the advice letter process, though viable, is too slow and unnecessary here. The objective is to track by sub-account any under-spending and the discretionary shift of funding between accounts. We expect that SoCalGas and SDG&E management will only move funds when there is a genuine need to augment labor and when there are otherwise unused funds available without harming service or safety. SoCalGas and SDG&E normally could file an application for authority to increase funding for any activity outside of the routine filing for general rate case and attrition proceedings. But in this situation, the time to file an application or advice letter would hinder the operating discretion of SoCalGas and SDG&E. A series of sub-accounts that track the decisions to shift funding should provide an adequate record.

This balancing account mechanism does not apply to labor costs that are adopted as a component of capital expenditures in the rate base section of this decision. Although the applicants may briefly benefit if the actual expenditures are lower than those presumed in rate base (because a return is included in rates based on those estimates), they also bear the risk of capital expenditures exceeding the forecast.62 This is a normal rate case forecast risk. Additionally, rate base is adjusted to actual costs every time we re-examine the companies in a general rate case. Therefore, it is reasonable to follow traditional ratemaking forecast practices for rate base related expenditures in these proceedings.

A. SoCalGas and SDG&E Incentive Compensation

ORA proposed a disallowance of $10.954 million based on adjusting SoCalGas' forecast and $17.850 million for SDG&E, of total eligible positions at the full-target amount of all incentives.63 ORA eliminated 50% of the incentives, which we have already rejected, and adjusted for the vacant positions (317 positions for SoCalGas and 717 for SDG&E) that ORA does not expect to be filled in the test year. We repeat here, briefly, that we reject this disallowance too; SoCalGas and SDG&E may recover actual labor costs in the TLCBA up to the adopted labor cost forecasts for all expense accounts. Incentives are a part of the total compensation package and we have found that package to be within the normal bounds of market rates for SoCalGas and SDG&E. The only other labor adjustment adopted (apart from escalation) is found within the individual accounts.

SoCalGas and SDG&E may not record in the TLCBA more than the total full-target incentives for the authorized positions. We assume that not all employees will earn their full target incentive, if any, and others may earn more. In the event that the aggregate of all paid incentives exceeds the total target for positions that are both authorized and filled, then SoCalGas and SDG&E cannot recover from ratepayers beyond the cap of the full-target incentive.

B. Maturing Work Force

SoCalGas and SDG&E forecast, as a fairly consistent factor in expense accounts, an allowance for the phenomena of the "maturing work force," where the companies claimed that an increased and disproportionate percentage of the employees are now entering their retirement-eligible days. And, much like the "aging infrastructure" also discussed in many accounts, there is a need to train and replace experienced people. The intervenors did not address this factor systemically; instead, their reaction was spread through all accounts. ORA summarized its position in its opening litigation brief as disallowing $2.4 million for SoCalGas but it did not quantify the SDG&E total. The record shows $1.022 million in SDG&E's estimates in Accounts 586 and 887.

ORA argued that as a part of its analysis it asked for support substantiating the requested increases for a maturing workforce, any analyses performed by SoCalGas and SDG&E for industry comparison purposes, and any historical data showing how this affected SoCalGas and SDG&E in the past. ORA concluded applicants only provided some internal studies and responses to ORA's questions that failed to persuade ORA that the concern was justified. ORA argued that it found the historical trend for SoCalGas for the years 1993, 1995, 1997, 1999, 2001, 2002, and year to date 2003 only demonstrated that the number of employees actually retiring does not show an upward trend,64 and in fact the trend has been decreasing from 316 FTE's in 1993 to 99 FTE's in 2002.

More disconcerting is the SDG&E situation where it too claimed the workforce is rapidly maturing and extra costs will result. ORA pointed out that SDG&E made the same claim in A.91-11-021, for its 1993 Test Year rate proceeding, and that in this instance, the witness for SDG&E testified the problem began 1998, and was, moreover, unaware of the same SDG&E claim in 1991.65 Applicants' testimony argued that the issue was here and now, and that employees could take as long as 15 years to be fully proficient.66 We will not consider now whether there is another problem if the workforce in general has a 15-year learning curve, but it does strain our credulity.

ORA asked the correct question and SoCalGas and SDG&E avoided discussing the right question: regardless of age-range, how many people are likely to retire? ORA correctly used a trend as an indicator of retirements. ORA did not provide in testimony a correlation between eligible-to-retire and actual retirements over time, but SoCalGas and SDG&E provided us even less usable information and did not acknowledge SDG&E's past ratemaking assertions of the maturing workforce phenomena. (They did up-date their language from aging to maturing.) Under cross-examination, the witness acknowledged that the applicants had not analyzed the percentage of eligible-to-retire employees who actually retire.67 In view of this fact, we find that the SoCalGas and SDG&E presentation on the impacts of maturing workforce is not persuasive.

Adjusting for the effects of maturing workforce is complicated because SoCalGas and SDG&E appear to have embedded a presumption of lower productivity of replacement workers and increased training costs beyond the necessary training to maintain or improve competence. It is a doubtful and totally unsupported assertion, one could just as easily argue, anecdotally, that as workers near retirement they slow down, even without intending to do so whereas new workers would be enthusiastic and highly productive.

TURN also argued that the maturing workforce arguments of SoCalGas (and therefore SDG&E too, given the similarity of the applications) were not convincing and the arguments are not new, having been an issue in 1991.68

The maturing workforce issue also compounds the question of filling all vacancies as forecast by both SoCalGas and SDG&E. Our resolution there was to impose the TLCBA so that only actual labor costs are recovered in rates. To the extent that this forecast element exaggerates the labor forecast, where more positions compensating for lost productivity are included in the estimates, we adopt the ORA blanket adjustment to disallow the maturing workforce increase. We will use the figures in ORA's opening litigation brief, and disallow $2.444 million for SoCalGas and $1.022 million for SDG&E.69

C. Pension and Benefits (Account 926)

Pension and benefit expenses can be addressed as a joint issue for SoCalGas and SDG&E and any unique circumstances identified in the test year estimates. In total, the litigation differences between applicants and ORA are $17.976 million, and $20.112 million, for SoCalGas and SDG&E, respectively.70 We will also address the issues as litigated by the other parties.

D. Pension (Account 926.206)

Pension expense in a ratesetting environment is the current cost necessarily recoverable in rates that the utility contributes to a fund to benefit eligible employees when they retire. The testimony in this proceeding focused on the expected costs based on the number of employees, the nature of the benefits, the earnings performance of the pension funds, and the legal requirements to make contributions to the pension funds. At the end of litigation, SoCalGas and SDG&E requested $4.3 million and $25.1 million subject to balancing account treatment based upon contributing the minimum required contributions as required by Internal Revenue Service (IRS) Code Section 412 (Minimum Funding Standards) as amended by the Employee Retirement Income Security Act of 1974 (ERISA-minimum contributions).71

Several recent changes were also of concern to parties. For example, the utilities changed from a "defined benefit" plan to a "cash benefit" plan. ORA was also concerned that the effects of the reorganizations that have occurred following the Sempra merger and the shuffling of functions back and forth between the parent and the utilities gave may have resulted in cost shifting between regulated and unregulated activities.

First, we will adopt a balancing account for both SoCalGas and SDG&E in order to ensure that ratepayers only pay the minimum necessary pension contributions. As we discuss below, with the benefit of balancing accounts we can adequately resolve the issues surrounding the correct test year estimate.

1. Conversion to a Cash Benefit Plan

SoCalGas and SDG&E argued that neither ORA or FEA demonstrate that the conversion to a Cash Benefit adversely affects pension contributions.72 The applicants argued there are two benefits from the conversion, employees "enhanced visibility of the status of their individual retirement accounts" and their benefits are portable, they go with an employee who leaves SoCalGas or SDG&E before retirement.73 SoCalGas and SDG&E argued the conversion had a lower cost compared to retaining the old plan. ORA argued that the conversion required Commission approval, and until we approve the conversion, the plan and the related test year forecast, should be rejected.74 ORA cited no precedent or other statutory requirement for this position. ORA argued that it objected in the last SDG&E proceeding, but as SoCalGas and SDG&E pointed out in their brief, that rate case was settled and so the positions of the parties were not evaluated by the Commission and can add no value to this proceeding's record. We reject the suggestion that we must approve a plan change before it can go into effect, certainly the plan may change for various reasons, as a result of legislation or collective bargaining, for example. We do have the obligation to determine that the expense included in the test year is reasonable and necessary. ORA raised no valid criticism of the plan conversion.

ORA proposed a lower contribution based upon its lower labor cost (lower total number of employees). We agree as discussed elsewhere, that the true cost of labor is not to be found in this record, and so we adopt the TLCBA. The pension balancing accounts proposed by SoCalGas and SDG&E will correctly compensate for both the actual number of employees and the actual contributions made to the funds. We find that by limiting the recovery to the lowest legally required funding, the companies are made whole and the ratepayers are protected from the vagaries of forecasting.

2. Reorganization Impacts on Pension Expense

ORA expressed a fear, which it did not explore, that as a result of the reorganization of company operations after the merger and between regulated and non-regulated affiliates, the pension fund assets and obligations are not adequately segregated.75 ORA may pursue this issue in the next proceeding but we make no finding now that SoCalGas and SDG&E have done anything inappropriate.

3. Other Pension Issues

As a result of adopting the balancing account for actual pension contributions, except for the specific issues we discuss in this decision, we reject all other pension-related disallowance recommendations.

4. Recoverability of Pension Expenses in Rates

UCAN argued that SDG&E had not justified as reasonable why ratepayers should bear in rates the costs of pension contributions, and argued that no contributions had been made in recent years, therefore this was new expense and its benefits are unrelated to current customers. UCAN also argued that pension funds had a recent "financial boon" (the trust fund had performed well earning good returns) and will rebound again so no funding is needed now.76 SDG&E argued that it is entitled to all of its reasonable costs and expenses77 and that includes any pension expenses it may incur in 2004.

SoCalGas and SDG&E demonstrated that in recent years they did not need to make contributions but in 2004 they expect a minimum contribution to be required. No party argued mismanagement of the pension funds, and except for the other issues already addressed, the test year estimate for both companies is reasonable, subject to the balancing account. Therefore, it is reasonable to allow SoCalGas and SDG&E to recover the minimum contributions in retail rates as a part of the cost of providing service to customers.

5. Supplemental Pension Requests

SoCalGas and SDG&E both requested funding for a "supplemental" program described as necessary to "restore pension benefits to key management employees that would otherwise be lost due to statutory limits under the regular pension plans."78 TURN and UCAN opposed a benefit limited to a select group of employees, and argued it was discretionary and excessive. SoCalGas and SDG&E responded that 320 active and retired employees at both companies and Sempra corporate center participate. SoCalGas and SDG&E cited D.88-08-061 (29 CPUC 2d 63, 139) as an example of the Commission's longstanding practice of authorizing a reasonable request for supplemental (executive) retirement plan costs.

We find that TURN and UCAN have not shown the expense forecast to be in error nor is this forecast in excess of fair market compensation levels when examined in conjunction with other components of the compensation package, and so we will adopt the forecasts of $1.165 million and $0.554 million for SoCalGas and SDG&E, respectively. We will require SoCalGas and SDG&E to include these costs in the minimum contribution pension balancing accounts already adopted in this decision.

6. Corporate Center Pension Expenses

SoCalGas and SDG&E requested $1.092 million and $725,000 in pension costs, and $1.87 million and $1.24 million in supplemental pension costs, for Corporate Center employees. ORA opposed any recovery of Corporate Center pension expenses, asserting it could not reconcile the allocation of costs.79 We address recovery of Corporate Center costs in another section, but we will allow actual costs in the minimum contribution pension balancing accounts to the extent the cost is based on the allowance of other Corporate Center costs. By limiting recovery to the legally necessary minimum contribution for the entire company, we have a reasonable proxy for the allocation of costs between Corporate Center and other utility operations.

7. Conclusion

We adopt for ratemaking purposes $4.3 million and $25.1 million, respectively for SoCalGas and SDG&E, subject to balancing account treatment in the adopted minimum contribution pension balancing accounts and limited to actual costs based upon contributing the minimum required contributions as required by IRS Code § 412 Minimum Funding Standards as amended by the Employee Retirement Income Security Act of 1974, the ERISA-minimum contributions. This is not an upper limit; if the actual minimum contributions and other actual costs are greater, SoCalGas and SDG&E may seek recovery subject to the standard reasonableness review requirements for a balancing account. This differs from the TLCBA that does have an upper limit.

E. Medical Benefits

After pension expenses, ORA's largest benefit adjustment was for medical expenses. First, we will adjust the expense allowance to reflect actual employees in coordination with the TLCBA so that SoCalGas and SDG&E recover their reasonable costs, recognizing that we do not expect all authorized positions to be filled given the levels of existing vacancies and new positions as previously discussed.

The companies argued that they have kept costs low in recent years as a result of negotiating rate caps with their health care insurance providers. The last contracts expired in 2003. SoCalGas and SDG&E negotiated new contracts with Blue Cross, Kaiser and PacifiCare so that their revised Test Year 2004 estimates are $39.075 and $26.2 million, respectively.80

ORA argued that the new rates (as originally forecast at $44.534 million and $29.014 million) essentially reflect the deferral of costs from the prior capped years representing "an inter-generational cross-subsidy for Blue Cross 2000 - 2003 deficits and may constitute retroactive ratemaking."81 ORA argued the caps were artificially low in 2001 through 2003, citing actuarial reports which indicated the actual costs (for Blue Cross) were higher than premiums, thus leading directly to large increases for 2004. ORA concludes "if SoCalGas had not negotiated rate caps and had paid the true increase in actual costs during 2001 - 2003, then it would be proposing a dramatically less increase for 2004." ORA recommended that expenses should only reflect the increase over 2003 actual costs.82 The arguments are the same with respect to SDG&E.

SoCalGas and SDG&E responded that 2004 premiums only reflect market rates as paid by other subscribers, and that Blue Cross' plans for 2004 are the low-cost provider and no higher than others without prior year caps.83 SoCalGas argued its 2002 costs were $4,304 per employee while a national average was $5,508.84 We note that this comparison (made for the higher original estimates) is mid-cap for SoCalGas and does not address Southern California health care costs specifically nor does it provide comfort with respect to the current contract and 2004 market rates. It tends in fact to support ORA's position more than it does their own. ORA did not update its own position. Reluctantly, we look to the Proposed Settlement Agreement and we find that after allowing for other adjustments to employee numbers (to the extent they are or are not delineated and justified) ORA accepted the updated contract rates.

TURN proposed to link benefit costs to the payroll specifically as a proxy for full-time employee equivalents.85 As discussed already, TURN argued these costs are directly tied to how many people are really on the payroll at SoCalGas and SDG&E. Their error, according to applicants was to tie the estimate to the dollar costs rather than body count. SoCalGas and SDG&E point out an employee's medical costs to the companies are set amounts driven by how many dependents (which are probably predictable in the large pool of employees for both companies) and do not vary by wages.86 We agree that TURN's linkage is too simple to be adequate.

Because of the limitations we find with respect to the likely true number of employees in the test year, we have adopted both the TLCBA and the minimum contribution pension balancing accounts. Because the costs in question here appear to be contract rates that are directly driven by the number of employees (and the related number of dependents included in their coverage) we find that the ratepayers will be better served by allowing actual costs subject to refund. We therefore adopt for revenue requirement purposes, subject to refund, the SoCalGas and SDG&E revised Test Year 2004 estimates of $39.075 and $26.2 million, respectively. We direct both utilities to establish a standard two-way balancing account to ensure recovery of actual medical expenses.

F. Dental and Vision Care Benefits

ORA proposed adjustments to the expense forecast to provide dental and vision care benefits that are a direct result of its proposed adjustments to the total labor force for both SoCalGas and SDG&E. The adjustments were based on escalation rate differences and later contract rates not in the original testimony of SoCalGas.87 We will adopt the later end-of-litigation estimates for SoCalGas and SDG&E, as reflective of the latest benefit provider contracts as shown in rebuttal Exhibits 102 and 103. We will forgo burdening the regulatory process with another balancing account even though the labor force (for whom dental and vision care are provided) might be smaller than forecast and adopted.

G. Other Benefits

There were several miscellaneous adjustments proposed by ORA for both SoCalGas and SDG&E in Ex. 301-E and Ex. 302-E, Tables 15.1 and 17.1, respectively:

SoCalGas

These totaled $2.254 million and $1.042 million, respectively. ORA offered no explanation why it recommended these disallowances beyond the barest declaratory statement without any tangible support. For example, the entire testimony on employee assistance, Account 926.241 for SoCalGas was: "There are no developments in the area of Employee Assistance requiring more training."88 And there was nothing in Ex. 302 for SDG&E.

We decline to make any arbitrary adjustments without a reasonable presentation of any factual basis and supporting analysis to justify a disallowance.

H. Supererogatory Benefits

The title itself was ORA's justification for its recommendation that SoCalGas' request for $1.774 million for employee social, cultural, and charitable activities is unnecessary, or supererogatory,89 so ORA proposed a complete disallowance. ORA cited among other cases, D.96-01-01190 and Edison rate case where, in a settlement, Edison conceded, "they might not provide a ratepayer benefit." The SoCalGas amounts are found in Ex. 301, Table 15-1 as follows:

SoCalGas responded that ORA's position is "an overwrought concern" for programs that recognize long service and retirements, and ORA was overly concerned about conflicts of interest and subjectivity, points not expanded in Ex. 301. SoCalGas argued that these programs are good for morale, and are not cash incentives. SoCalGas suggested the Commission precedent "can and should change."91

For SDG&E, ORA proposed a parallel disallowance found in Ex. 302 at Table 17.1 as follows:

For SoCalGas, Account 926.244 is the Employee Wellness program as described for SDG&E. The companies argue this latter program's cost in particular is insignificant compared to avoided medical costs.

We find that ORA has not shown any ratepayer harm results from these programs and we believe SoCalGas and SDG&E may well engender a benefit to employee morale. We will allow these costs in Test Year 2004.

56 FEA opening litigation brief, p. 6, citing 235 vacant positions as of June 2003. FEA would disallow these vacant positions.

57 Attrition years is used to refer to any post-test years. This does not prejudge Phase Two issues on how to adjust rates beyond Test Year 2004.

58 Ex. 501, pp. 35 -36. TURN cites to UCAN DR 10-8, TURN DR 5-5 and 5-8 regarding SoCalGas.

59 By comparison, in the Proposed Settlements, after escalation, SoCalGas' 2004 labor costs would be $351,720,000 and SDG&E's would be $156,641,000. Source: Response 2 filed January 16, 2004 to the December 13, 2003 ALJ First Request for Information on the Proposed Settlements.

60 SoCalGas asked for $342,745,000 before escalation (i.e., in 2001 dollars) at the end-of-hearings compared to the settlement's $318,011,000 and SDG&E asked for $159,628,000 compared to $141,628,000. Source: Response 2 to ALJ First Request for Information.

61 See D.03-12-060 related to statewide and local energy efficiency programs for a two-year period beginning in 2004 (mimeo., pp. 35- 36). See D.02-12-019 related to a rapid deployment strategy for the low-income assistance programs (mimeo., pp. 21-22) and D.01-05-033 related to the rapid deployment of low-income assistance programs during the energy crisis (mimeo., p. 61). See D.02-03-056 for the statewide energy efficiency programs for 2002 (mimeo., p. 53). See D.01-01-060 related to approving the utilities' Program Year 2001 energy efficiency programs and proposed budgets. (Mimeo., p. 9-10.) See D.00-07-017 related to Energy Efficiency Programs, Budgets, Performance Incentive Mechanisms, and MA&E studies (mimeo., pp. 196-197).

62 To the extent that some labor is capitalized as a result of crediting (reducing) an expense account, SoCalGas and SDG&E are to capitalize the actual labor costs incurred for capital items and expense the appropriate amount of actual labor costs incurred. Any residual in the account is available for expense-related activities or accrues to the TLCBA for a refund to ratepayers.

63 Ex. 301, pp. 14-19 for SoCalGas and Ex. 302, pp. 14-19 for SDG&E. There is no ratemaking impact to the extent these figures changed during litigation we decline to make the proposed adjustments.

64 Ex. 301, footnote 19, p. 8-14; reference to ORA Data request 157, Q. 5.

65 ORA opening litigation brief, pp. 192-193.

66 Transcript, p. 309, lines 8-12.

67 Transcript, p. 318, lines 12 - 19.

68 TURN opening litigation brief, p. 126.

69 ORA opening litigation brief, p. 74, for SoCalGas and ORA never stated a total for its SDG&E maturing work force adjustment.

70 Joint Comparison Exhibits.

71 Sempra opening litigation brief, p. 275.

72 Sempra opening litigation brief, p. 277.

73 Ex. 105, p. JPT-5 and 106, p. JPT-4; an issue not explained in direct testimony, but included in rebuttal. In fact, the quote above is the only description of "enhanced visibility," and there is no use of the term in the transcripts.

74 Ex. 302, pp. 17-3 and 17-7 and Ex. 301, p. 15-8.

75 Ex. 302, p. 15-7.

76 Ex. 604, pp. 21 and 22.

77 Sempra opening litigation brief, p. 281, quoting D.03-02-035, which in turn relied on Pacific Tel. & Tel Co. v. Public Util. Comm'n (1965) 62 Cal.2d 634, 644.

78 Sempra opening litigation brief, p. 281, and citing IRS Code § 401(a)(17)(A).

79 Ex. 301, p. 15-4 and Ex. 302, p. 17-4. Sempra opening litigation brief at p. 282 reverses the citations.

80 Ex. 103 and Ex. 102, pp. GJR-16 - GJR-20 in both exhibits. These estimates assume 5,711 current and 1,302 new employees for SoCalGas, and 4,094 current and 717 new employees for SDG&E.

81 Ex. 301, p. 15-9.

82 Ex. 301, p. 15-11.

83 Ex. 103 and Ex. 102, p. GJR-17.

84 Ex. 12, p. 21.

85 Ex. 501, p. 35.

86 Sempra opening litigation brief, p. 251.

87 Ex. 301, p. 15-14, and Ex. 303 provides no explanation for a 20.7% reduction to dental and 19.2% to vision care in Table 17.1.

88 Ex. 301, p. 15-15.

89 A supererogatory activity is something that is observed or performed to an extant not enjoined or required. See Webster's Third International Dictionary, 1976.

90 D.99-01-011, 62 CPUC 2d 421 at 333.

91 Ex. 103, pp. GJR-28 - GRJ-29.

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