R.11-09-011 ALJ/ALJ-Division/lilPROPOSED DECISION (Rev. 1)

ALJ/ALJ-Division/lilPROPOSED DECISIONAgenda ID #15748 (Rev. 1)

Ratesetting

9/14/2017

Decision PROPOSED DECISION OF ALJ DIVISION (Mailed 5/15/2017)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission’s Own Motion to improve distribution level interconnection rules and regulations for certain classes of electric generators and electric storage resources. / Rulemaking 11-09-011
(Filed September 22, 2011)

DECISION GRANTING COMPENSATION CLAIM TO INTERSTATE RENEWABLE ENERGY COUNCIL, INC. FOR
CONTRIBUTION TO DECISION 16-06-052

This decision awards The Interstate Renewable Energy Council, Inc. (IREC) $31,809.25, plus interest, for contributions to Decision 16-06-052. This is a 32% reduction from the requested amount of $46,562.00.

1.Background

The Commission initiated Rulemaking (R.) 11-09-011 on September 22, 2011 to review and, if necessary, revise the rules and regulations governing interconnecting generation and storage resources to the electric distribution systems of Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company. Decision (D.) 16-06-052 instituted cost certainty, granted joint motions to approve proposed revisions to Electric Tariff Rule 21, and provided smart inverter developmenta pathway forward.

2.Requirements for Awards of Compensation

The California Public Utilities Commission’s intervenor compensation program requires California jurisdictional utilities to pay the reasonable costs of an intervenor’s participation ifall of the following procedures and criteria are satisfied[1]:

  1. The intervenor must satisfy certain procedural requirements including the filing of a sufficient notice of intent (NOI) to claim compensation within 30 days of the Prehearing Conference, or at other appropriate times that we specify. (§1804(a).)
  2. The intervenor must be a customer or a participant representing consumers, customers, or subscribers of a utility subject to our jurisdiction. (§ 1802(b).)
  3. The intervenor should file and serve a request for a compensation award within 60 days of the Commission’s final order or decision in a hearing or proceeding. (§ 1804(c).)
  4. The intervenor must demonstrate “significant financial hardship.” (§§ 1802(g), 1804(b)(1).)
  5. The intervenor’s presentation must have made a “substantial contribution” to the proceeding, through the adoption, in whole or in part, of the intervenor’s contention or recommendations by a Commission order or decision. (§§1802(i),1803(a).)
  6. The claimed fees and costs are reasonable (§ 1801), necessary for and related to the substantial contribution (D.98-04-059), comparable to the market rates paid to others with comparable training and experience (§ 1806), and productive (D.98-04-059).

We discusswhether Interstate Renewable Energy Council, Inc (IREC) has met these requirements below.

3.Customer Status and Significant Financial Hardship

Background

IREC timely filed its NOI in the first phase of this proceeding on October 27, 2011.[2] Pursuant to §1802(h), IREC asserted significant financial hardship by stating that the costs of participation exceeded the benefits to IREC’s individual members.[3] IREC filed its first request for compensation on November 16, 2012. In D.13-10-017, we found that IREC had demonstrated significant financial hardship. This finding was based on IREC being an organization with open membership and voting members.[4]

On October 31, 2014, IREC filed a second NOI accompanied by amended bylawsin R.11-09-011. Among other things, the NOI stated: “IREC is no longer a membership organization.”[5] On December 17, 2014, IREC filed an amended version of its second NOI in R.11-09-011. Both NOIs asserted that IREC cannot afford, without undue hardship, to pay the costs of participation.[6] On March 12, 2015, the Administrative Law Judge (ALJ) issued a ruling on the NOIs (March 12th Ruling). In light of the changes to IREC’s organizational structure, the ruling found IREC’s showing of significant financial hardship deficient, and directed IREC to supply additional information in a subsequent intervenor compensation claim. On April 1, 2015, IREC filed another Amended NOI (2nd Amended NOI) in response to the March 12th ruling, and provided financial statements. This NOI again asserted that IREC could not afford, without undue hardship, to pay the costs of participation. IREC filed the instant compensation claim on August18, 2016, providing updated financial statements. On May 15, 2017, a Proposed Decision was issued denying IREC compensation due to insufficient showing of customer status and significant financial hardship. IREC filed reply comments on June 05, 2017, alleging that the proposed decision was in error and in contravention to D.13-10-017, which had granted them compensation in an earlier phase of this proceeding.

Discussion

Under Commission Rule of Practice and Procedure 17.2, “A party found eligible for an award of compensation in one phase of a proceeding remains eligible in later phases … in the same proceeding.” IREC was found eligible for compensation in an earlier phase of this proceeding (see D.13-10-017). IREC therefore remains eligible for intervenor compensation in this proceeding. When an intervenor’s eligibility stems from a prior finding in a proceeding, no new analysis need be conducted regarding an intervenor’s finding of customer status or significant financial hardship for the remainder of that proceeding. However, section §1804(b)(2) grants the ALJ the ability to “issue a ruling addressing issues raised by the notice of intent to claim compensation” in any event, including where there is a rebuttable presumption in effect. Here, IREC filed a second NOI on October 31, 2014, with bylaws that differed from those filed in the past. The second NOI raised questions about IREC’s eligibility for intervenor compensation when it noted IREC’s change to a non-membership organization, IREC’s receipt of sponsorships from industry groups, and IREC’s participation in activities that provide economic benefits to the regulated industry.

IREC’s second NOI afforded the ALJ the discretion to review IREC’s eligibility to receive intervenor compensation, irrespective of IREC’s existing rebuttable presumption of eligibility. However, sucha review is not always in order. IREC’s second NOI raises eligibility questions that relate to larger policy issues. Indeed, it appears other intervenors may have engaged in work on behalf of the renewable energy industry, or received funding from industry groups and other sources whose interests may conflict with those of the ratepayers these intervenors claim to represent. Rather than address this issue at this time, a full review of IREC’s eligibility will be deferred until after its current presumption of eligibility lapses, to allow the Commission to develop additional guidelines on the appropriate bounds of ancillary intervenor funding.

Pursuant to Commission Rule of Practice and Procedure 17.2, IREC is eligible for intervenor compensation in this proceeding.

4.Substantial Contribution Standard

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.[7]

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 contributions made by IREC.

A.Substantial Contribution Analysis

IREC asserts that it actively participated in the proceeding, including participation in workshops and filing of comments, as well as contributions directly cited in D.1606052.

IREC contributed to this proceeding in a number of ways. It was an early proponent of the utilization of a cost envelope, both in its comments and at workshops. The cost envelope was ultimately adopted by the Commission. IREC also supported the use of a singular cost certainty mechanism, and proposed the application of cost envelopes to Fast Track, Supplemental Review, and Independent Study projects; both ideas were adopted. IREC also argued for more specific cost estimates, and for greater availability of data to continuously review these cost estimates for accuracy.

Thus, we find that IREC provided a substantial contribution to D.1606052.

B.Avoidance of Duplicative Efforts

Section 1801.3(f) requires an intervenor to avoid unnecessary participation that duplicates that of similar interests otherwise adequately represented by another party, or unnecessary for a fair determination of the proceeding. Section1802.5, however, allows an intervenor to be eligible for full compensation if its participation materially supplements, complements, or contributes to that of another party if that participation makes a substantial contribution to the commission order.

IREC states that it represents customer interests that would otherwise be underrepresented in this proceeding, and that it contributed to this proceeding in a manner that did not repeat the work of other parties. To the extent that IREC’s participation was similar to that of other parties, that participation materially supplemented, complemented and contributed to the contributions of those other parties.

5.Reasonableness of Requested Compensation

IREC requests $46,562.00 for its participation in this proceeding, as follows:

Item / Year / Hours / Rate / Basis for Rate / Total
Sky Stanfield / 2014 / 24.1 / $320 / ALJ-329 / $7,712.00
Sky Stanfield / 2015 / 54.3 / $330 / ALJ-329 / $17,919.00
Erica McConnell / 2014 / 18 / $250 / ALJ-329 / $4,500.00
Erica McConnell / 2015 / 35.2 / $300 / ALJ-329 / $10,560.00
Sara Baldwin / 2016 / 11.5 / $225 / ALJ-329 / $2,587.50
Subtotal: $43,278.50
Item / Year / Hours / Rate / Basis for Rate / Total
Sky Stanfield / 2016 / 19.9 / 165 / ALJ-329 / $3,283.50
Subtotal: $3,283.50
TOTAL REQUEST: $ 46,562.00

In general, the components of this request must constitute reasonable fees and costs of the customer’s preparation for and participation in a proceeding that resulted in a substantial contribution. The issues we consider to determine reasonableness are discussed below.

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

In order to assess whether the hours claimed for IREC’s efforts are reasonable,we analyze to what degree the claimed hours and costs were necessary for the substantial contribution. We find that a portion of these hours were inefficient, excessive, or unsupported by the record.

  1. Clerical and Administrative Tasks

IREC requests hours for Stanfield’s work performing some clerical and administrative tasks. Professional fees assume overheads and are set accordingly. We therefore deny additional recovery for clerical and administrative work. Examples of such clerical and administrative matters are matters of scheduling meetings, filings, and expert hiring. We disallow 0.8 hours (or $528.00, at the requested rate) in 2014 and 1.5hour (or $412.50) in 2015 as spent on non-compensable clerical and administrative tasks.

  1. Excessive and InefficientCommunications

At least 50% of Stanfield hours were spent on communications with California Energy Storage Alliance, BioEnergy Association, Clean Coalition, SolarCity Corporation, Stem, Inc., and other industry and market participants. We disallow a portion of the hours spent on these communications as excessive and unproductive. We allow a reasonable reimbursement for the working group and workshop process, and for communications undertaken to avoid duplication of efforts with other similarly situated parties. The activities that we disallow include, for example, filing coordination where no joint pleadings were filed and coordinating strategy with renewable energy companies. The NOI explains that much of the discussion and development of the joint motion on energy storage occurred during working group phone calls in the spring of 2015, and that IREC facilitated discussion regarding Rule 21 changes between solar developers and the utilities. However, according to the timesheets, IREC’s communications with other parties went beyond working group calls, and many of these communications took place before the spring of 2015. In 2014, IREC spent approximately 11.9 hours (out of 24.10) of Stanfield’s hours of work and in 2015 – approximately 14.7 hours (out of 54.30) on these communications. We disallow 5.95 hours or 50% of the hours spent on these external communications in 2014, and 7.35 or 50% of the hours spent on these activities in 2015. Additionally, a significant number of hours were spent coordinating with utilities. Where IREC assumes the role of an off-the-record intermediary between renewable energy companies and utilities on the issues of significant economic interest to the former, it calls into question its ability to provide single-minded representation to utility ratepayers.

Moreover, IREC must describe with greater specificity the contributions of each of its attorneys and experts. IREC’s makes the assertion that Baldwin Auck “provided critical strategic guidance to IREC’s attorneys.” IREC also does not satisfactorily explain how roles between Stanfield, McConnell and Baldwin Auck were distributed or what specific contributions Baldwin Auck made to IREC’s participation. The request shows a large amount of internal communications and duplicative work. We find this effort inefficient and excessive.[8] We therefore reduce Stanfield’s hours by 2.3 in 2014 and 3.6 in 2015. We reduce McConnell’s hours by 2.0 in 2014 and 2.0 in 2015.[9]

  1. Tasks not supported by the record and other errors

We disallow 0.5 hour from Stanfield spent on December 19, 2014 for review ofa draft ex-parte filing not submitted into the record.

We also disallow 18 hours for McConnell in 2015, as only 17.2 hours are supported by timesheets. A likely error was made adding both McConnell’s 2014 and 2015 hours to net the requested 2015 hours.

Commission Rule of Practice and Procedure 17.4 requires that intervenors provide time records that identify “the specific task performed” in order to receive compensation. IREC’s time records combine, in one entry, two or more tasks. IREC in future requests must take care to properly delineate its activities.

B.Attorney and Expert Rates

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.

i.Stanfield

IREC seeks an hourly rate of $320 per hour for work in 2014 and $330 per hour for work in 2015. Stanfield had entered her 8th year of experience in 2014 working in energy and regulatory law; we therefore find reasonable a rate of $320 per hour for work completed in 2014. No Cost of Living Adjustment was applied in 2015 – therefore her rate for 2015 remains $320 per hour. A Cost of Living Adjustment is applied to Stanfield’s 2016 rate, pursuant to Res. ALJ- 329 – the rate for 2016 is therefore $325 perhour.

ii.McConnell

IREC seeks an hourly rate of $250 per hour for work in 2014 and $300 per hour for work in 2015. McConnell had just barely entered her 4th year of experience in 2014 working in energy law; we therefore find reasonable a rate of $215 per hour for work completed in 2014. Mconnell entered the five to seven-year experience bracket in 2015 – we therefore find reasonable a rate of $300 per hour for her work in 2015.

iii.Baldwin Auck

IREC seeks an hourly rate of $225 per hour for work in 2016. McConnell had entered her 12th year of experience in 2016 working in energy law and policy; we therefore find reasonable a rate of $225 per hour for work completed in 2016. This rate is in the middle of the range for 7-12 years of experience for experts.

C.Productivityand Reasonableness

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.

IREC stated its contributions were productive and will result in benefits to ratepayers statewide that exceed the costs of its participation. Although no examples were provided, IREC’s contribution to the adoption of the mechanism by which shareholders will be liable for faulty cost estimates is alone likely to save ratepayers an amount of money greater than their cost of participation.

We agree with IREC’s statement that its contributions exceed the costs of its participation. Thus, we find that IREC’s efforts have been productive and its proposed fees are reasonable, after the proper deductions are taken.

6.Award

As set forth in the table below, the Commission awardsIREC $31,809.25.

Claimed / CPUC Award
ATTORNEY, EXPERT, AND ADVOCATE FEES
Item / Year / Hours / Rate / Basis for Rate / Total / Hours / Rate $ / Total $
Sky Stanfield / 2014 / 24.1 / $320 / ALJ-329 / $7,712.00 / 14.55 / $320 / $4,656.00
Sky Stanfield / 2015 / 54.3 / $330 / ALJ-329 / $17,919.00 / 41.85 / $320 / $13,392.00
Erica McConnell / 2014 / 18 / $250 / ALJ-329 / $4,500.00 / 16 / $215 / $3,440.00
Erica McConnell / 2015 / 35.2 / $300 / ALJ-329 / $10,560.00 / 15 / $300 / $4,500.00
Sara Baldwin / 2016 / 11.5 / $225 / ALJ-329 / $2,587.50 / 11.5 / $225 / $2,587.50
Subtotal: $43,278.50 / Subtotal: $28,575.50
INTERVENOR COMPENSATION CLAIM PREPARATION **
Item / Year / Hours / Rate / Basis for Rate / Total / Hours / Rate / Total $
Sky Stanfield / 2016 / 19.9 / 165 / ALJ-329 / $3,283.50 / 19.9 / $162.50 / $3,233.75
Subtotal: $3,283.50 / Subtotal: $3,233.75
TOTAL REQUEST: $ 46,562.00 / TOTAL AWARD: $31,809.25

7.Comments

IREC filed comments in response to the earlier Proposed Decision, as discussed above. In response to these comments, the Commission now grants compensation.

8.Assignment of Proceeding

Michael Picker is the assigned Commissioner, and ALJ Division is the assigned ALJ in this proceeding.

FINDINGS OF FACT

  1. IREC has made a substantial contribution to D.16-06-052.
  2. The requested hourly rates for IREC’s representatives, as adjusted herein, are comparable to market rates paid to attorneys and experts having comparable training and experience and offering similar services.
  3. The claimed costs, as adjusted herein, are reasonable and commensurate with the work performed.
  4. The total of reasonable compensation is $31,809.25.

CONCLUSION OF LAW

  1. The claim of IREC, with any adjustment set forth above, satisfies all requirements of Public Utilities Code Sections 1801-1812.

ORDER