California



ALJ/RMD/sf3

Decision PROPOSED DECISION Agenda#16421

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

|Application of Southern California Edison | |

|Company (U338E) for Approval of the Results | |

|Of Its 2013 Local Capacity Requirements Request |Application14-11-012 |

|For Offers for the Western Los Angeles Basin. | |

DECISION GRANTING INTERVENOR

COMPENSATION CLAIM OF SIERRA CLUB

|Intervenor: Sierra Club |For contribution to Decision (D.) 15-11-041 |

|Claimed: $83,488.98 |Awarded: $83,758.47 |

|Assigned Commissioner: Picker |Assigned ALJ: Regina DeAngelis |

PART I: PROCEDURAL ISSUES

|A. Brief description of Decision: |D.15-11-041 resolved Southern California Edison Company’s (SCE) application for approval |

| |of contracts to meet need identified in both Track 1 (D.13-02-015) and Track 4 |

| |(D.14-03-004) of the 2012 Long Term Procurement Plan proceeding as a result of retirements|

| |of once-through-cooling facilities and the San Onofre Nuclear Generating Station. The |

| |Decision approved the bulk of the proposed contracts, many of which were uncontested. The|

| |Decision rejected SCE’s request for 70 MW of contracts for natural gas back-up generation |

| |that SCE sought to meet part of its preferred resource procurement requirement on the |

| |grounds that fossil-fueled back-up generation is not a preferred resource. Although SCE’s|

| |Application was short of meeting its preferred resource procurement minimum and the 70 MW |

| |of rejected contracts added to this shortfall, D.15-11-041 determined that SCE |

| |substantially complied with its preferred resource procurement requirements but remained |

| |authorized to procure additional preferred resources under the residual LTPP need or other|

| |approved procurement mechanisms. |

B. Intervenor must satisfy intervenor compensation requirements set forth in Pub. Util. Code §§ 1801-1812:

| |Intervenor |CPUC Verified |

|Timely filing of notice of intent to claim compensation (NOI) (§ 1804(a)): |

| 1. Date of Prehearing Conference (PHC): |01/28/2015 |Verified |

| 2. Other specified date for NOI: |n/a | |

| 3. Date NOI filed: |02/25/2015 |Verified |

| 4. Was the NOI timely filed? |Yes |

|Showing of customer or customer-related status (§ 1802(b)): |

| 5. Based on ALJ ruling issued in proceeding number: |R.14-02-001 |Verified |

| 6. Date of ALJ ruling: |July 25, 2014 |Verified |

| 7. Based on another CPUC determination (specify): | | |

| 8. Has the Intervenor demonstrated customer or customer-related status? |Verified |

|Showing of “significant financial hardship” (§ 1802(g)): |

| 9. Based on ALJ ruling issued in proceeding number: |R.14-02-001 |Verified |

|10. Date of ALJ ruling: |July 25, 2014 |Verified |

|11. Based on another CPUC determination (specify): | | |

|12. 12. Has the Intervenor demonstrated significant financial hardship? |Verified |

|Timely request for compensation (§ 1804(c)): |

|13. Identify Final Decision: |D.15-11-041 |Verified |

|14. Date of issuance of Final Order or Decision: |11/24/2015 |Verified |

|15. File date of compensation request: |12/11/2015 |Verified |

|16. Was the request for compensation timely? |Yes |

PART II: SUBSTANTIAL CONTRIBUTION

A. Did the Intervenor substantially contribute to the final decision (see § 1802(i), § 1803(a), and D.98-04-059).

|Intervenor’s Claimed Contribution(s) |Specific References to Intervenor’s Claimed Contribution(s) |CPUC Discussion |

|1. Back Up Generation: Sierra Club argued that |“ORA and Sierra Club argue that these seven NRG contracts do |Verified |

|SCE’s proposed contracts for 70 MW of |not meet the definition of either Demand Response or | |

|fossil-fueled back-up generation as part of its |Distributed Generation. Both ORA and Sierra Club conclude | |

|preferred resource minimum neither qualify as |that the Commission must reject these contracts as not | |

|demand response nor distributed generation and |qualifying toward the minimum Preferred Resources procurement| |

|must be rejected. Sierra Club issued data |requirement in D.13-02-015 and D.14-03-004.” (Decision p. | |

|requests, conducted cross-examination, and |14) | |

|significantly briefed this issue. (See, e.g., |“According to Sierra Club and ORA, all seven of these | |

|Sierra Club Opening Br. 4-10; Sierra Club Reply |contracts fail to qualify as Demand Response contracts or | |

|Br. 2-4). D.15- 11-041 agreed with Sierra Club |even Preferred Resources contracts on the basis that total | |

|arguments and rejected these contracts. |load reduction is not achieved and fossil fuel is relied | |

| |upon.” (Decision p. 15) | |

| |“Sierra Club further states that the contracts do not qualify| |

| |as Demand Response or Preferred Resources because they rely | |

| |on reciprocating engines to support load during a | |

| |curtailment.” (Decision p. 15) | |

| |“We find that these contracts fail to constitute Preferred | |

| |Resources because they rely on natural gas-fired BTM | |

| |generation to reduce the amount of energy served by the | |

| |grid.” (Decision p. 17.) | |

|2. 100 MW Storage Cap and Resulting Procurement |“As part of the RFO for the Western LA Basin, SCE did not |Verified |

|of 98 MW Stanton Peaker Plant. Sierra Club |consider bids for in front of the meter (IFOM) Energy Storage| |

|opposed SCE’s decision to cap in-front-of-meter |above 100 MW. ORA, Powers Engineering, and Sierra Club argue | |

|(IFOM) energy storage at 100 MW and as a result |the cap is unjustified and arbitrary.” (Decision p. 18) | |

|of that cap, procure a more costly peaker plant.|“Sierra Club further suggests it is unreasonable, unsupported| |

|Sierra Club submitted expert testimony on this |by facts, and results in the proposed procurement that | |

|issue following several data requests, conducted|violates the Loading Order. Sierra Club further asserts | |

|significant cross examination, and briefed the |that, as a direct result of the artificial 100 MW cap on IFOM| |

|issue, arguing that SCE’s procurement of Stanton|Energy Storage, SCE selected the gas-fired Stanton Energy | |

|was unreasonable, unsupported and violated the |Reliability Center (Stanton), a choice which was inconsistent| |

|Loading Order and Least Cost/Best Fit |with the loading order and prevented lower-cost better-fit | |

|requirements. D.15-11-041 ultimately approved |options from being chosen.” (Decision p. 18) | |

|the Stanton Peaker but acknowledged Sierra |“In response to claim that the 100 MW cap did not limit | |

|Club’s arguments, which were heavily referenced |Energy Storage procurement, Sierra Club notes that if the | |

|in the Decision, were “strong.” (See e.g. |Commission never expected SCE to procure much Energy Storage,| |

|Testimony of Robert Fagan on Behalf of Sierra |the Commission would not have authorized up to 1500 MW of | |

|Club; Sierra Club Opening Br. 10-17; Sierra Club|potential Energy Storage to meet LCR need.” (Decision p. 19) | |

|Reply Br. 5-6; Sierra Club Opening Comments |“Sierra Club also concludes SCE has failed to justify this | |

|PD/APD 3-6). |departure from its least-cost best-fit local capacity | |

| |modeling. ORA agreed with Sierra Club, noting that SCE | |

|Sierra Club notes that it is well established |cannot justify a 100 MW cap as reasonable when it has done no| |

|that a party may make a substantial contribution|studies above 100 MW. Sierra Club notes that full ancillary | |

|to a Commission decision even if its positions |services are a small fraction of overall value for Energy | |

|are not adopted, as long as the party assisted |Storage, and that Energy Storage also provides energy, | |

|the decision-making in a proceeding and its |capacity, and ancillary services.” (Decision p. 21.) | |

|contributions enriched the record and enabled |“SCE further justifies its cap by stating that an overvalued | |

|fuller deliberation. (See, e.g., D.10-06-046). |IFOM Energy Storage lease might receive debt equivalence | |

|The extent of citation to Sierra Club arguments,|treatment, resulting in a credit downgrade for SCE. On the | |

|the in depth discussion of the storage issue and|other hand, Sierra Club argues that since the overvaluation | |

|the Decision’s acknowledgement that Sierra Club |has not been justified, such treatment is equally unlikely. | |

|arguments were “strong” make clear that Sierra |SCE provides no analysis to support how this RFO would lead | |

|Club assisted the Commission’s deliberative |to such a changed opinion from the current rating: stable.” | |

|process and enabled more robust decision-making.|(Decision pp. 22-23.) | |

| |“The arguments presented on both sides of this issue are | |

| |strong ones.” (Decision p. 23.) | |

| |“Sierra Club argues that the contract with Stanton is not a | |

| |prudent investment.” (Decision p. 23). “In arguing against | |

| |approval of the Stanton project, Sierra Club points out that | |

| |SCE does not control the dispatch rights of Stanton under the| |

| |contract and does not receive any energy or ancillary | |

| |benefits. Sierra Club further states that, since Stanton | |

| |would be online from 2020-2040, SCE will be promoting a | |

| |fossil fueled plant just as California needs to make progress| |

| |toward 50 percent renewables. Sierra Club also criticizes | |

| |Stanton, as it will not be able to help with the projected | |

| |over-generation issues incumbent with higher renewables, as | |

| |would Energy Storage. Sierra Club suggests that the | |

| |Commission reject Stanton as not fitting its least cost/best | |

| |fit procurement.” (Decision p. 24.) | |

| |“Sierra Club comments upon the newly-created battery for | |

| |Stanton, noting that the offer does not mention either the | |

| |battery or the synchronous condenses touted in SERC’s brief. | |

| |By choosing Stanton over additional Energy Storage, Sierra | |

| |Club argues that SCE is prioritizing a polluting technology | |

| |of limited grid value over a highly flexible resource that | |

| |will be increasingly needed to cost effectively achieve | |

| |California’s GHG and clean energy objectives.” (Decision p. | |

| |25.) | |

| |“While Sierra Club raises strong arguments, we find that | |

| |under the circumstances as they existed at the time SCE made | |

| |its selections this contract was a reasonable means of | |

| |meeting the Commission’s procurement directive.” (Decision | |

| |p. 26.) | |

|3. Procurement inconsistent/should account for |“Sierra Club argues that SCE procured GHG based on the |Verified |

|higher RPS/California decarbonization |requirement of 33 percent renewable but that a higher | |

|trajectory. In assessing the value of its |percentage is warranted based on the current political | |

|proposed contracts SCE assumed that the RPS |movement toward 50 percent renewables. More specifically, | |

|would remain at 33% despite California’s |Sierra Club argues that either the Alamitos or the Huntington| |

|aggressive GHG targets and indications (now |Beach GFG plants providing approximately 640 MWs of capacity | |

|law), that the RPS would increase to 50 percent |each should be rejected, and that SCE should procure a | |

|by 2030. Sierra Club argued that the value of |smaller 360 MW facility in their place. Sierra Club, as | |

|the fossil fuel resources SCE planned to procure|addressed above, also requests the Commission to reject | |

|would be worth significantly less under a 50% |Stanton.” (Decision p. 26.) | |

|RPS scenario (only ½ way through the contract |“Sierra Club’s argument is based on the fact that SCE’s | |

|life) and that SCE should therefore procure only|procurement assumed future requirements at 33 percent RPS, | |

|its fossil fuel minimum. Decision 15-11-051 |and did not study the sensitivity of the resource value for | |

|ultimately found it reasonable for SCE to rely |GFG at higher renewable levels. Therefore, according to | |

|on 33% RPS given that was in place at the time |Sierra Club, the economic benefit of a combined cycle was | |

|of contracting. (Testimony of Robert Fagan on |overstated in the SCE RFO process and the economic value of | |

|Behalf of Sierra Club; Sierra Club Opening Br. |in front of the meter Energy Storage was understated. It | |

|17-18) |would make more sense, states Sierra Club, given the state’s | |

| |increasing interest in a higher requirement for renewables | |

| |resources, to procure the minimum required GFG or 1,000 MW.” | |

| |(Decision pp. 26-27.) | |

| |“Regardless of whether circumstances have changed since the | |

| |issuance of D.13-02-015 and D.14-03-004, and even if the | |

| |political landscape is solidly looking toward 50 percent | |

| |renewables, we find SCE acted reasonably in relying on a 33 | |

| |percent scenario and contracting for the proposed amount of | |

| |GFG.” (Decision pp. 28-29.) | |

B. Duplication of Effort (§ 1801.3(f) and § 1802.5):

| |Intervenor’s Assertion |CPUC Discussion |

|a. Was the Office of Ratepayer Advocates (ORA) a party to the proceeding? | Yes |Verified |

|b. Were there other parties to the proceeding with positions similar to yours? | Yes |Verified |

|c. If so, provide name of other parties: ORA (issues 1 and 2), Powers Engineering (issue #3) |Verified |

|d. Intervenor’s claim of non-duplication: Duplication in this proceeding was minimal given the few active parties |Verified |

|to the proceeding. Indeed, Sierra Club was the only party to file a timely notice of intervenor compensation. | |

|Sierra Club coordinated closely with ORA, which had a similar position on rejection of the BUG contracts and | |

|Stanton. Sierra Club brought added value though its own testimony, non-duplicative cross examination that delved | |

|into a number of technical areas on the energy storage cap that ORA did not address, and commensurate with its | |

|environmental mission, Sierra Club’s focus on the Loading Order and climate implications of SCE’s proposed | |

|procurement. Sierra Club believes this case is an example of non-duplicative synergies that can occur when | |

|ratepayer and environmental advocates provide their views on issues before the Commission. | |

PART III: REASONABLENESS OF REQUESTED COMPENSATION

A. General Claim of Reasonableness (§ 1801 and § 1806):

|a. Intervenor’s claim of cost reasonableness: |CPUC Discussion |

|Sierra Club’s participation helped secure rejection of contracts for 70 MW of back-up generation. Because SCE |Sierra Club’s claimed cost |

|did not seek a rate increase in conjunction with its application, it is difficult to quantify the ratepayer |reasonableness is valid for the |

|savings from avoiding this contractual cost but based on past rate increases for past capacity resources (300 |work produced during this |

|MW Pio Pico gas plant at $1.6 billion, 600 MW Carlsbad gas plant at $2.6 billion), Sierra Club conservatively |proceeding. |

|estimates ratepayer savings of at least $100 million. Sierra Club also notes the significant health benefits | |

|from preventing the disbursement of fossil-fired generation in the LA Basin, already one of the most polluting | |

|air basins in the country. | |

| | |

|b. Reasonableness of hours claimed: |Sierra Club’s hours claimed are |

|With few other intervenors in this proceeding, Sierra Club played a lead role in advocating to minimize the |reasonable for the work produced |

|carbon intensity of SCE’s proposed suite of resources. Sierra Club’s hours include work from multiple data |during this proceeding. |

|requests, negotiations with SCE over confidentiality designations to maximize transparency in this proceeding, | |

|preparation of testimony, cross examination of highly technical issues that required significant preparation, | |

|briefing, PD/APD comments and a motion to strike. Sierra Club’s total hours, and the results of its advocacy, | |

|rejection of 70 MW of BUGs and recognition of “strong arguments” in the case of the energy storage cap are | |

|highly reasonable. | |

| | |

|While Mr. Vespa’s total hours are higher than estimated in Sierra Club’s notice, total requested compensation | |

|is less due to fewer estimated hours from Sierra Club’s expert Mr. Fagan. In addition, this proceeding came | |

|roughly in parallel with SCE’s Moorpark Application, to which Sierra Club was also a party. When it became | |

|clear that the Moorpark Application had several active environmental intervenors, Mr. Vespa concentrated time | |

|to fully develop issues in this proceeding to maximize effectiveness and minimize duplication over the two | |

|procurement applications. | |

|c. Allocation of hours by issue: |Verified |

|1) BUGs: 18.3% | |

|2) IFOM ES Cap/Stanton: 53.97% | |

|3) 50% RPS/Consistency with decarbonization trajectory: 13.76% | |

|4) General: 13.97% | |

B. Specific Claim:*

|Claimed |CPUC Award |

|ATTORNEY, EXPERT, AND ADVOCATE FEES |

|Item |Year |

|OTHER FEES |

|Describe here what OTHER HOURLY FEES you are Claiming (paralegal, travel **, etc.): |

|Item |Year |

|INTERVENOR COMPENSATION CLAIM PREPARATION ** |

|Item |Year |

|COSTS |

|# |Item |Detail |Amount |Amount |

|1 |Travel |Robert Fagan Travel Costs from Boston to Testify at |1,174.98 |$1,136.47[2] |

| | |Evidentiary Hearings | | |

| TOTAL REQUEST: $83,488.98 |TOTAL AWARD: $83,758.47 |

| **We remind all intervenors that Commission staff may audit their records related to the award and that intervenors must make and retain adequate |

|accounting and other documentation to support all claims for intervenor compensation. Intervenor’s records should identify specific issues for |

|which it seeks compensation, the actual time spent by each employee or consultant, the applicable hourly rates, fees paid to consultants and any |

|other costs for which compensation was claimed. The records pertaining to an award of compensation shall be retained for at least three years from |

|the date of the final decision making the award. |

|**Travel and Reasonable Claim preparation time typically compensated at ½ of preparer’s normal hourly rate |

|ATTORNEY INFORMATION |

|Attorney |Date Admitted to CA BAR[3] |Member Number |Actions Affecting Eligibility |

| | | |(Yes/No?) |

| | | |If “Yes”, attach explanation |

|Matthew Vespa |2002 |222265 |No |

|Alison Seel |2014 |300602 |No |

C. Attachments Documenting Specific Claim and Comments on Part III:

|Attachment or Comment |Description/Comment |

|# | |

|Comment # 1 |Sierra Club seeks an hourly rate of $180 for first time representative Alison Seel. This rate is in the middle of the range |

| |permitted by Resolution ALJ-308, for attorneys with zero to 2 years of experience. Ms. Seel holds a J.D. from the University of|

| |California, Berkeley School of Law and a Master’s of Science from the Energy and Resources Group at the University of |

| |California, Berkeley. Ms. Seel has studied and worked in the area of energy law and policy in various capacities for the past |

| |six years. Over that time, Ms. Seel has gained experience in the design of renewable energy policies, utility regulation, and |

| |quantitative evaluation of energy-related matters. In addition to her legal education, Ms. Seel studied electrical engineering |

| |and the operation electric power systems as part of her curriculum at the Energy and Resources Group. During that time, she |

| |worked for a number of organizations practicing before the Commission, including the Office of Ratepayer Advocates, NRG Energy, |

| |and Vote Solar. Sierra Club requests the first 5% step increase for the 2015 rate. |

|Comment # 2 |Sierra Club seeks an hourly rate of $225 for first time representative Bob Fagan. Sierra Club seeks this rate, which is the |

| |lower end of the range for an expert of Mr. Fagan’s experience, because this is the hourly rate Mr. Fagan charged Sierra Club |

| |for his services. |

| |Mr. Fagan has represented the Office of Ratepayer Advocates in proceedings before the PUC, including the 2010, 2012, and 2014 |

| |LTPP. Mr. Fagan is a mechanical engineer and energy economics analyst who has analyzed energy industry issues for more than 25 |

| |years. Mr. Fagan is expert in the complexities of, and the interrelationships between, the technical and economic dimensions of|

| |the electric power industry in the United States and Canada. His areas of focus include: electric power system operation, |

| |including transmission system operation and energy dispatch patterns; wholesale energy and capacity provision under market‐based|

| |and regulated structures; transmission use pricing, encompassing congestion management, losses, LMP, and alternatives; financial|

| |and physical transmission rights; transmission asset pricing (e.g., embedded cost recovery tariffs); integration of renewable |

| |energy onto the transmission grid; and energy efficiency and other demand‐side resource implementation. Mr. Fagan holds an MA |

| |from Boston University in energy and environmental studies and a BS from Clarkson University in mechanical engineering. |

|Attachment 1 |Certificate of Service |

|Attachment 2 |Resume for Alison Seel |

|Attachment 3 |Resume for Robert Fagan |

|Attachment 4 |Time Sheets for Matt Vespa |

|Attachment 5 |Time Sheets for Alison Seel |

|Attachment 6 |Time Sheets for Robert Fagan |

|Attachment 7 |Compilation Chart of Percentages of Time by Issue for All Attorneys/Experts |

|Attachment 8 |Travel Receipts for Robert Fagan Supporting Cost Request #1 |

D. CPUC Disallowances and Adjustments:

|Item |Reason |

|Rates |This decision establishes a 2015 rate for Robert Fagan of $225 based on his experience and in accordance with |

| |Resolution ALJ-308 and Decision 08-04-010. |

| | |

| |The rate for Alison Seel used in this decision was taken from D.17-01-021 which approved a rate of $190 for |

| |work done by Ms. Seel in the year 2015. |

|Travel Expenses |Sierra Club has already deducted travel expenses for most meals incurred during Mr. Fagan’s travel from this |

| |claim. A further slight deduction was made to Mr. Fagan’s travel expenses as receipts submitted to the |

| |Commission documented additional non-compensable expenses. |

PART IV: OPPOSITIONS AND COMMENTS

Within 30 days after service of this Claim, Commission Staff

or any other party may file a response to the Claim (see § 1804(c))

|A. Opposition: Did any party oppose the Claim? |No. |

|B. Comment Period: Was the 30-day comment period waived (see Rule 14.6(c)(6))? |Yes. |

FINDINGS OF FACT

1. Sierra Club has made a substantial contribution to D.15-11-041.

2. The requested hourly rates for Sierra Club’s representatives, as adjusted herein, are comparable to market rates paid to experts and advocates having comparable training and experience and offering similar services.

3. The claimed costs and expenses, as adjusted herein, are reasonable and commensurate with the work performed.

4. The total of reasonable compensation is $83,758.47.

CONCLUSION OF LAW

1. The Claim, with any adjustment set forth above, satisfies all requirements of Pub. Util. Code §§ 1801-1812.

ORDER

1. Sierra Club shall be awarded $83,758.47.

2. Within 30 days of the effective date of this decision, Southern California Edison Company shall pay Sierra Club the total award. Payment of the award shall include compound interest at the rate earned on prime, three-month non-financial commercial paper as reported in Federal Reserve Statistical Release H.15, beginning February 24, 2015, the 75th day after the filing of Sierra Club’s request, and continuing until full payment is made.

3. The comment period for today’s decision is waived.

4. This decision is effective today.

Dated _____________, at San Francisco, California.

APPENDIX

Compensation Decision Summary Information

|Compensation Decision: | |Modifies Decision? |No |

|Contribution Decision(s): |D. 15-11-041 |

|Proceeding(s): |A.14-11-012 |

|Author: |ALJ DeAngelis |

|Payer(s): |Southern California Edison Company |

Intervenor Information

|Intervenor |Claim Date |Amount Requested |Amount Awarded |Multiplier? |Reason Change/Disallowance |

|Sierra Club |12/11/2015 |$83,488.98 |$83,758.47 |N/A |Unapproved expenses, rate adjustment |

Advocate Information

|First Name |Last Name |Type |Intervenor |Hourly Fee Requested |Year Hourly Fee |Hourly Fee Adopted |

| | | | | |Requested | |

Matt

|Vespa |Attorney |Sierra Club |$330 |2015 |$330 | |Alison |Seel

|Attorney |Sierra Club |$180 |2016 |$190 | |Robert |Fagan |Expert |Sierra Club |$225 |2017 |$225 | |

(END OF APPENDIX)

-----------------------

[1] See CPUC Disallowances and adjustments, Comment 1. Rates

[2] See CPUC Disallowances and adjustments, Comment 2. Travel Expenses

[3] This information may be obtained through the State Bar of California’s website at .

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