California
?BRC/nd3Date of Issuance: 11/23/2020Decision 20-11-041 November 19, 2020BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIAApplication of Southern California Edison Company (U338E) for Authority to Establish Its Authorized Cost of Capital for Utility Operations for 2020 and to Partially Reset the Annual Cost of Capital Adjustment Mechanism.Application 1904014And Related Matters.Application 1904015Application 1904017Application 1904018DECISION GRANTING COMPENSATION TO UTILITY CONSUMERS’ ACTION NETWORK FOR SUBSTANTIAL CONTRIBUTION TO DECISION 1912056Intervenor: Utility Consumers’ Action NetworkFor contribution to Decision (D.) 1912056Claimed: $163,382.65Awarded: $162,940.54Assigned Commissioner: Marybel BatjerAssigned ALJ: Brian StevensPART I: PROCEDURAL ISSUESA. Brief description of Decision: D.1912056 established the Test Year 2020 ratemaking cost of capital for San Diego Gas & Electric (SDG&E), Southern California Gas Company (SoCalGas), Southern California Edison (SCE), and Pacific Gas & Electric (PG&E). This included authorized capital structures for each of the four applicants as well as authorized costs of longterm debt, costs of common equity, costs of preferred equity, and authorized rates of return. (See D.1912056 Tables on p. 2 for ratios and amounts). The Commission had previously set cost of capital ratios and amounts in December of 2012 for Test Year 2013 (See D.1212034 issued 12/26/2012).Intervenor must satisfy intervenor compensation requirements set forth in Pub.?Util. Code §§?18011812:IntervenorCPUC VerificationTimely filing of notice of intent to claim compensation (NOI) (§?1804(a)): 1. Date of Prehearing Conference:June 17, 2019Verified 2. Other specified date for NOI: 3. Date NOI filed:July 17, 2019Verified 4. Was the NOI timely filed?YesShowing of eligible customer status (§?1802(b) or eligible local government entity status(§§?1802(d), 1802.4): 5. Based on ALJ ruling issued in proceeding number:R.1807006Verified 6. Date of ALJ ruling:May 30, 2019See Comment?2 belowVerified 7. Based on another CPUC determination (specify): 8. Has the Intervenor demonstrated customer status or eligible government entity status?YesShowing of “significant financial hardship” (§1802(h) or §1803.1(b)): 9. Based on ALJ ruling issued in proceeding number:R. R.1807006Verified10. Date of ALJ ruling: May 30, 2019 See Comment?2 belowVerified11. Based on another CPUC determination (specify):12 12. Has the Intervenor demonstrated significant financial hardship?YesTimely request for compensation (§?1804(c)):13. Identify Final Decision:D.1912056Verified14. Date of issuance of Final Order or Decision: December 20, 2019Verified15. File date of compensation request:February 18, 2020Verified16. Was the request for compensation timely?YesAdditional Comments on Part I: (use line reference # as appropriate)#Intervenor’s Comment(s)CPUC DiscussionComment?1As noted below, UCAN joined with another local advocacy group, Protect Our Communities Foundation (POC) for this proceeding. UCAN and POC joined together in this proceeding to consolidate resources and utilize each organization’s expertise to strengthen our witness testimony and arguments in briefs in order to better protect the ratepayers of San Diego. All filings (testimony, briefs, and reply briefs, comments on the Proposed Decision (PD) and reply comments on PD) were done jointly between UCAN and POC. Intervenor Compensation claims, however, are being filed separately by each organization, one by UCAN and one by POC. All hours and work done by UCAN are claimed in this intervenor compensation request. All hours and work done by POC are claimed in a separate intervenor compensation request filed by POC. Each organization is filing solely for its own work and time. ConfirmedComment?2UCAN was last found to satisfy the §?1802(g) “significant financial hardship” requirement in R.1807006 (filed 11/8/18; granted May 30, 2019). This was one month after the SDG&E CostofCapital Application was filed on April 22, 2019. UCAN had previously requested a significant financial hardship ruling in its NOI’s filed on 3/20/19 in R.1812005 and on 3/23/18 in A.1712011 but has yet to receive rulings on either of those requests. UCAN’s ruling prior to these requests was granted on April 24, 2017 in A.1701012.ConfirmedPART II: SUBSTANTIAL CONTRIBUTIONDid the Intervenor substantially contribute to the final decision (see §?1802(j), §?1803(a), 1803.1(a) and D.9804059): (For each contribution, support with specific reference to the record.)Intervenor’s Claimed Contribution(s)Specific References to Intervenor’s Claimed Contribution(s)CPUC DiscussionSummary: In this proceeding UCAN joined with another local advocacy group, Protect Our Communities Foundation (POC), who also represent the interests of ratepayers in SDG&E service territory, in order to consolidate resources and make a stronger showing in a more efficient manner. UCAN/POC actively participated throughout the proceeding by sponsoring expert witness testimony, crossexamining SDG&E witnesses at evidentiary hearings, filing briefs and commenting on the proposed decision. The final decision cited to UCAN/POC on most of the major issues examined in the proceeding (see issue section below). As noted above, UCAN and POC are filing separate intervenor compensation claims and each organization is filing solely for its own work and time.This proceeding addressed test year 2020 cost of capital issues for the four major utilities in California. UCAN/POC analyzed the application of SDG&E only.ConfirmedIssues:1. Capital StructureUCAN/POC recommended in testimony and opening briefs that SDG&E’s capital structure be set at 48% longterm debt and 52% common equity rather than the 44%/56% requested by SDG&E. UCAN/POC argued that an increase in its common equity ratio would reward shareholders and not ratepayers because an increase in common equity came at the expense of increasing longterm debt which is a more costeffective financing vehicle than preferred stock and common equity. UCAN also pointed out that SDG&E’s redemption of its preferred stock in 2013 created benefits for its shareholders that should not be continued. UCAN/POC also provided an exhibit at evidentiary hearings showing that of 47 pending rate cases nationally, only four utility applications requested a commonequity ratio of 56% or more with SDG&E being one of the four. UCAN/POC also presented calculations that indicated SDG&E’s requested 56% commonequity ratio was larger than 70.5% of all authorized commonequity ratios for the time period of 2017 through July 2019. UCAN/POC witness Dr.?Marlon Griffing appeared on the stand to explain his findings. Additionally, UCAN/POC demonstrated in evidentiary hearings that SDG&E witness Ms.?Mekitarian, in supporting the theory of higher business risks put forth by Dr.?Morin to justify a higher 56% common equity ratio, had not conducted any independent analysis of SDG&E’s business risk. The Decision agreed with UCAN/POC that the proposed capital structure was unprecedented.The Decision denied SDG&E’s requested modification of its capital structure, noting that an authorized capital structure must be in the public interest of ratepayers of California rather than simply matching the actual recorded capital structure of the IOU. The Decision authorized SDG&E to maintain its current ratios of 45.25% longterm debt, 2.75% preferred equity, and 52% common equity. This was much closer to UCAN/POC’s recommendation (48%/52%) than SDG&E’s requested 44%/56%. UCAN/POC believes the Commission agreed with the underlying substance of UCAN/POC’s testimony and arguments, particularly where the Decision cited to UCAN/POC (see above). Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at pp. 4750.Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 48, fn. 62, citing to Direct Testimony of Ms.?Maritzka Mekitarion, submitted on behalf of SDG&E, MM3:2122.UCAN/POC Opening Brief, September 30, 2019, Sec. IV., at 5255.Exhibit No. UCAN/POC15.See also D.1912056, at 10, fn. 14 and 15, citing to UCAN Exhibit No. UCAN/POC15.Evidentiary Hearings, September 6, 2019; TR Vol. 6 (Dr.?Marlon Griffing/UCANPOC) p. 975986Exhibit No. SDG&E02 (SDG&E Prepared Direct Testimony of Maritza Mekitarian; Authorized Capital Structure; p. MM8Evidentiary Hearings, September 9, 2019, TR Vol. 5 (Mekitarian/SDG&E) 911:16 – 912:7; crossexamination by UCAN representative Jane Krikorian“Instead, SDG&E seeks to increase its authorization of common equity to 56%, an unprecedented level for California…”D.1912056, at 11 “SDG&E suggests it is the policy of the Commission to match the capital structure authorization to the actual recorded capital structure of the IOU. Rather, it is the policy of the Commission for the authorization of an IOU’s capital structure to be in the public interest of the ratepayers of California.” D.1912056, at 11 D.1912056, at 11 VerifiedVerifiedVerifiedVerifiedVerifiedVerifiedVerifiedVerifiedVerified2. Financial Modeling – Discounted Cash Flow (DCF), Capital Asset Pricing Model (CAPM), Allowed Risk Premium (ARP).UCAN/POC witness Dr.?Griffing explained in testimony his approach to ROE analysis by first using the primary analytical DCF modeling tool and then using a CAPM as a check on his DCF results. Dr.?Griffing followed these analyses with an ARP analysis and explained why his result (9.71%) differed from SDG&E witness Dr.?Morin (10.5%). UCAN/POC argued in its Opening Brief that SDG&E witness Dr.?Morin had incorporated data that inflated his ROE outcomes, that his analysis was incomplete and his results extreme. Therefore, his results should be discounted and not adopted.The Decision did not include detailed descriptions of parties’ financial models but did note each party’s results, including UCAN/POC’s, in summary tables (pp.2325).The Decision did not adopt the financial modeling of any one party but did state that the models were helpful as “rough gauges of the realm of reasonableness.” UCAN/POC’s results of its financial models were cited in the summary tables (pp.2325). These results were generally in the low to midrange of all the parties’ results with the utilities being the highest. In its Opening Brief, UCAN/POC cited a previous decision quoting the “realm of reasonableness” language. UCAN/POC believes that its work in Direct Testimony and Opening Briefs helped develop the range of financial modeling results so that the Commission could gauge the reasonableness of its final result. Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at pp. 2226 (DCF analysis); pp. 3136 (CAPM analysis); pp. 3642 (ARP analysis).UCAN/POC Opening Brief, September 30, 2019, Sec. III., at 2636.D.1912056, at 25 (DCF tabulation); at 24 (RPM/ARP tabulation); at 23 (CAPM tabulation). “In the final analysis, it is the application of informed judgment, not the precision of financial models, which is the key to selecting a specific ROE estimate…all these models have flaws…Consistent with that skepticism, we found no reason to adopt the financial modeling of any one party. The models are helpful as rough gauges of the realm of reasonableness.”D.1912056, at 25 (underline added for emphasis)UCAN/POC Opening Brief, September 30, 2019, Sec. III.B, p. 38, and see fns. 98 and 99.VerifiedVerifiedVerifiedVerifiedVerified3. Financial Modeling – comparison (proxy) group:UCAN/POC witness Dr.?Griffing testified at length how he determined his proxy group, the criteria he used, and the reasoning for how his proxy group was assembled, evaluated and analyzed. He also explained the distinguishing factors of his proxy group vs. SDG&E’s witness Dr.?Morin’s proxy group and how he used more updated information and facts than SDG&E witness Dr.?Morin.The Decision agreed that the applicants selectively established a proxy group of companies and the model results should be viewed with this concept in mind. While not citing to UCAN/POC directly in the decision regarding the proxy group analyses (D.1912056, pp.1620), UCAN/POC believes its extensive explanation in testimony about witness Dr.?Griffing’s careful selection and removal of certain companies from the proxy group with detailed support, exhibited a more robust and transparent process. Additionally, UCAN/POC argued in its opening briefs that the “cherrypicking” of a proxy group was used to slant SDG&E’s analyses to reach a predetermined ROE result. UCAN/POC believes its work in testimony and briefs aided the Commission’s understanding of the weight to give utility proxy groups in the model results. Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 1222Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 2122, 5152“Further, we agree that the applicants selectively established a proxy group of companies and will review the model results with this in mind.”D.1912056, at 20 Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 1222, 5152UCAN/POC Opening Brief, September 30, 2019, Sec. III, p. 2731VerifiedVerifiedVerifiedVerifiedVerified4. Utility Financial Risk UCAN/POC argued in its Opening Brief that in setting the utilities’ authorized return on equity, additional risk factors traditionally considered in Cost of Capital proceedings include financial, business and regulatory risks.In noting financial risk for the utilities, the Decision stated that the Commission must ensure that the utilities’ adopted equity ratios are sufficient to maintain reasonable credit ratings and attract capital while also ensuring there are adequate ratepayer protections regarding the costs of the components of capitalization. One component set in this proceeding, and by this decision, is the overall Rate of Return (ROR). UCAN/POC witness Dr.?Griffing provided an ROR analysis in his testimony. His recommendation was 6.96% derived from a calculation that used his capital structure and ROE recommendations, and incorporated SDG&E’s proposed cost of longterm debt of 4.59%.While not citing to UCAN/POC’s ROR analysis (or any other parties’ ROR analysis), the Decision left SDG&E’s ROR at its currently authorized 7.55% stating this percentage was just and reasonable. This figure is slightly higher than UCAN/POC’s recommendation of 6.96% but much lower than SDG&E’s requested 10.03%.UCAN/POC believes that by providing an ROR analysis based on robustly supported capital structure and ROE recommendations, it helped provide a comparison figure so that the Commission could gauge the reasonableness of its final ROR figure for SDG&E. In this way, UCAN/POC believes it made a substantial contribution to the Utility Financial Risk analysis. UCAN/POC Opening Brief, September 30, 2019, Sec. III.B, p. 38, and see fn. 100D.1912056, at 6 Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 50See also Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) Table of Exhibits: MFG8, Schedule 3, Rate of Return (ROR) Analysis UCAN/POC Opening Brief, September 30, 2019, Sec. III, p. 37 D.1912056, at p. 54, Conclusions of Law #24, and at p. 55, Order #3.VerifiedVerifiedVerifiedVerifiedVerifiedVerified5. Utility Business RiskUCAN/POC rebutted SDG&E’s specific allegations that it faced increased business risks due to California’s ambitious clean energy goals, in particular due to California’s Renewable Portfolio Standards (RPS) mandate. UCAN/POC argued that SDG&E witness Dr.?Morin failed to provide any qualitative analysis or specific quantifications of how this clean energy goal (or any other clean energy goals) translated into increased business risks as compared to other jurisdictions with lesser standards. UCAN/POC argued that without any qualitative or quantitative analyses, these claims were purely theoretical. Therefore, UCAN/POC recommended that SDG&E not be allowed to increase its ROE to 10.9% from 9.9 % as claimed by Dr.?Morin due to these alleged risks. The Decision describes Business Risk as pertaining “to new uncertainties resulting from competition and the economy…includ[ing] capital investments, electric procurement, and catastrophic events. Each of these business risks overlap into financial and regulatory risk.” While not citing to SDG&E’s claims, the Decision does cite to SCE’s similar claim of increased risks it perceives as it executes the goals of California in terms of grid modernization, including renewables portfolio standard requirements. The Decision rejected these claims by the utilities of increased business risk due to the many facets of California’s grid modernization saying these risks were already priced into the models. While not citing to UCAN/POC’s specific argument and reasoning, due to the similarities of arguments and outcome, UCAN/POC assumes that the Commission agreed with the underlying substance of UCAN/POC’s brief regarding this issue. UCAN/POC Opening Brief, September 30, 2019, Sec. III.B.2&3, p. 41, 42, and see fns. 114, 115, 116, 117.UCAN/POC Opening Brief, September 30, 2019, Sec. III.B.2&3, p. 42.D.1912056, at 26D.1912056, at 2627“While these activities [clean energy and modernization goals] are highly complex and require significant technical and project management expertise, California has established an extensive and supportive framework for the IOUs that undertake these activities. This risk is already priced into the models.” D.1912056, at 27VerifiedVerifiedVerifiedVerifiedVerified6. Utility Regulatory Risk – cost recovery and balancing accounts UCAN/POC witness Dr.?Griffing provided unique testimony rebutting SDG&E’s witness Dr.?Morin’s claims of higher regulatory risk in California. For example, Dr.?Griffing presented an alternative explanation for Sempra’s high individual DCF ROE’s, testifying that these higher values were not due to it being riskier than other utilities, as claimed by Dr.?Morin.At evidentiary hearings, UCAN/POC crossexamined SDG&E witness Dr.?Morin regarding mitigating risk factors, including balancing accounts. Dr.?Morin admitted he had not taken into account the multitude of balancing accounts into his risk analysis.UCAN/POC argued that the multitude of balancing accounts adopted by the CPUC result in a lower regulatory risk of cost recovery in California. UCAN/POC included questioning of SDG&E witness Mr.?Widjaja by TURN where the witness admits the utility can roll any prudent costs higher than authorized costs, into the next rate case.While not citing to UCAN/POC and balancing accounts, the Decision cites to a similar argument by EPUC/IS. The Decision dismisses the utility arguments for higher ROE returns due to higher regulatory risks reasoning that these risks should already be captured in the financial modeling. UCAN/POC believes its testimony, participation at evidentiary hearings and opening brief aided the Commission in gauging the reasonableness of its ROE ranges adopted in this proceeding. “The factor that leads to Sempra having high individual DCF ROEs are the projected EPS growth rates for the utility. Sempra’s Value Line EPS of 9.5 percent is the highest in that analysis. The EPS projections are evidence of experts believing that Sempra has strong prospects for growth, not that it is riskier than other utilities.”Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 55Evidentiary Hearings, September 4, 2019, TR Vol. 2 (Morin/SDG&E) 236:24 – 239:19; crossexamination by UCAN/POC representative Jane Krikorian on whether Dr.?Morin had taken balancing and memorandum accounts into his risk analysis, using Exhibit No. UCAN/POC02, SDG&E Current Tariff Balancing AccountsUCAN/POC Opening Brief, September 30, 2019, Sec. III, p. 4246UCAN/POC Opening Brief, September 30, 2019, Sec. III, p. 44, quoting TURN attorney questioning SDG&E witness Mr.?WidjajaD.1912056, at 3940VerifiedVerifiedVerifiedVerifiedVerifiedVerified7. Wildfire Risk and AB 1054UCAN/POC rebutted SDG&E assertions that an adder was necessary to account for or mitigate SDG&E’s catastrophic wildfire business, financial and regulatory risk. UCAN/POC argued that the “adoption of AB 1054 eliminates all wildfire risks to SDG&E’s cashflow except the cost of disallowed costs.”UCAN/POC demonstrated how AB 1054 provided a regulatory scheme that “now provides the utilities relief from future wildfire liability . . . .”ALJ Stevens asked questions of UCAN/POC witness Dr.?Pavlovic regarding AB 1054 and regulatory risk.The Decision found, and reaffirmed, that the passage of AB 1054 and other investor supportive policies in California have mitigated wildfire exposure faced by California’s utilities.Prepared Direct Testimony of Karl Richard Pavlovic on Behalf of Utility Consumers’ Action Network and Protect Our Communities (August 1, 2019) (Exhibit UCAN/POC05)UCAN/POC Opening Brief, September 30, 2019, Sec. III, C, at 46.UCAN/POC Reply Brief, October 10, 2019, Sec. II, Sec. A, at 4.Evidentiary Hearings, September 10, 2019, TR Vol. 6 (Pavlovic/UCAN) 1006:13 – 24; question by ALJ Brian Steven and the regulatory environment in California and the effect of AB 1054, using Exhibit No. SDG&E20C.D.1912056, Sec.5.3.3.2, at 3637.VerifiedVerifiedVerifiedVerifiedVerified8. Return on Equity – ROEUCAN/POC recommended a final proposed ROE of 9.15%, arguing that the Commission should use a forwardlooking approach and evaluate current market conditions as it balances investor and consumer interests. This figure was derived from detailed and thorough analyses as shown in issue sections 16 above. The Commission authorized a 10.20% ROE for SDG&E as just and reasonable. This was 1.05 points above what UCAN/POC recommended and 2.18 points below SDG&E’s revised requested amount of 12.38%. SDG&E’s revised its requested ROE amount from 14.30% after the wildfire risk adder argument had been eliminated (see Issue 7 above).UCAN/POC believes its testimony, participation at evidentiary hearings, briefs and comments, aided the Commission in gauging the reasonableness of its ROE ranges adopted in this proceeding.Prepared Direct Testimony of Marlon F. Griffing (August 1, 2019), (Exhibit No. UCAN/POC01) at p. 9, 10 and 50.UCAN/POC Opening Brief, September 30, 2019, Sec. III, A(2), pp. 3437.D.1912056, at p. 54, Conclusions of Law #24, and at p. 55, Order #3.VerifiedVerifiedVerifiedVerifiedDuplication of Effort (§?1801.3(f) and §?1802.5):Intervenor’s AssertionCPUC Discussiona.Was the Public Advocate’s Office of the Public Utilities Commission (Cal Advocates) a party to the proceeding?YesVerifiedb.Were there other parties to the proceeding with positions similar to yours? YesVerifiedc.If so, provide name of other parties: The Utility Reform Network (TURN), Public Advocates Office of the Public Utilities Commission (Cal Advocates), Energy Producers and Users Coalition and Indicated Shippers (EPUC/IS), Environmental Defense Fund (EDF), Thomas R. Del Monte, Federal Executive Agencies (FEA).Verifiedd.Intervenor’s claim of nonduplication: UCAN actively coordinated with other nonutility parties to avoid duplication of effort regarding the multitude of issues in this costofcapital proceeding. For example, in the early stages of this proceeding (July 8, 2019), UCAN participated in discussions with other intervenors regarding joint collaboration and coordination. On July 25, 2019, UCAN joined with POC (see Edward Lopez timesheet 7/25/2019) to coordinate efforts and use resources of both organizations more efficiently and to help avoid duplication of efforts. Additionally, although most of the intervenors covered similar issues, each party offered recommendations and proposals that differed from each other. This is because each party utilized different subjective inputs into their various financial models so that the outputs were slightly different. The variety of recommendations and proposals enhanced and supplemented the record as well as the discussions in the final decision. UCAN/POC urge the Commission to find that any duplication of efforts was minor and therefore reasonable. NotedPART III: REASONABLENESS OF REQUESTED COMPENSATIONGeneral Claim of Reasonableness (§?1801 and §?1806):CPUC Discussiona. Intervenor’s claim of cost reasonableness: As noted above, UCAN and POC are filing separate intervenor compensation claims. UCAN’s costs are reflected in this IComp and POC’s costs are being filed in a separate IComp. Each organization is filing solely for its own work and time.UCAN seeks a total intervenor compensation award of $163,382.65 as the reasonable cost of its participation in this proceeding. This amount includes time for UCAN’s attorneys, experts, and support staff. UCAN urges the Commission to find these costs reasonable in light of its substantial contribution to the record detailed in Part II (A) above as well as the importance of the issues UCAN/POC addressed for the protection of ratepayers (i.e. a capital structure that was in the public interest of ratepayers rather than shareholders and lower ROR and ROE percentages than requested by SDG&E to lessen unreasonable cost increases for ratepayers). UCAN/POC’s expert witnesses provided detailed and comprehensive testimony to support more reasonable capital structure ratios and ROR and ROE percentages. UCAN/POC provided testimony from two expert witnesses and actively participated in multiple days of hearings. UCAN/POC’s attorney and representative completed crossexaminations of SDG&E witnesses in order to supplement and enhance the record. UCAN/POC’s participation helped inform the Commission to “gauge the range of reasonableness” as it determined a just and reasonable capital structure and ROR/ROE percentages for the utilities. For example, the Commission used all of the parties’ financial models and proxy group analyses as a check on the reasonableness of the utilities’ arguments (see issues 2 and 3 in Part II(A) above). Additionally, the final determinations set by the Commission for capital structure and ROR/ROE percentages were closer to the recommendations of UCAN/POC than SDG&E’s requests. For example, the Commission set the final capital structure closer to the recommendations of UCAN/POC than SDG&E (see issue 1 in Part II(A) above), and set the final ROR and ROE closer to UCAN/POC’s recommendation than SDG&E’s request (see issues 4 and 9 in Part II(A) above). Furthermore, UCAN/POC’s analyses on financial, business and regulatory risks helped the Commission give proper weight to the utilities arguments of increased risks in these areas (see issues 4, 5, 6 in Part II(A) above). A critical issue in this proceeding was the use of a wildfire risk adder. SDG&E argued a wildfire risk adder was necessary to account for or mitigate SDG&E’s catastrophic wildfire business, financial and regulatory risk. As demonstrated in Part II(A), issue 7, UCAN/POC provided legal and technical analyses and arguments that assisted the Commission in concluding a separate wildfire risk adder was unnecessary. UCAN urges the Commission to find the costs of its participation reasonable in light of the contribution to the Commission’s final determinations and in particular UCAN/POC’s contribution to the reasonableness of its final results.Additionally, UCAN made a substantial effort to minimize costs where possible. For example, during the evidentiary hearings from September 310, 2019, UCAN/POC representative Jane Krikorian was able to stay with her daughter and avoid lodging expenses. Given the Commission’s final determinations for SDG&E’s capital structure and ROR/ROE percentages were set closer to UCAN/POC’s recommendations than the actual utility requests, thus saving the ratepayers unreasonable cost increases, UCAN believes that the $163,382.65 cost of participation is reasonable. UCAN total amount claimed = $163,382.65NotedNotedNotedb. Reasonableness of hours claimed: As noted above, UCAN and POC are filing separate intervenor compensation claims. UCAN’s hours are reflected in this IComp and POC’s hours are being filed in a separate IComp. Each organization is filing solely for its own work and time.In this proceeding, UCAN is claiming 307.50 total hours of attorney and representative time, 284.5 hours of expert witness time, and 23.25 of legal support time. UCAN’s hours are broken out below; POC’s hours are detailed in a separately filed intervenor compensation claim: UCAN is requesting reimbursement of 149.75 of hours for attorney Mr.?Edward Lopez, 157.75 hours for representative Ms.?Jane Krikorian, 23.25 hours for paralegal Courtney Cook, 130 hours for expert Dr.?Marlon Griffing, and 154.5 hours for expert Mr.?Karl Pavlovic for their substantive work in this proceeding. The amounts listed here are for hours spent examining the issues and exclude hours for travel, NOI and intervenor compensation request preparation. This substantive work included testimony by two UCAN experts in order to understand and analyze the pertinent issues. This work also included three extensive data requests to inform the testimony of UCAN’s experts. Expert testimony included 58 pages and 37 Exhibits for Dr.?Griffing’s Direct Testimony and 12 pages of testimony for Dr.?Pavlovic on the wildfire adjustment. The costofcapital proceeding is important to ratepayers because even small percentage adjustments can have huge impacts on costs for ratepayers. For example, UCAN/POC calculated that had its ROE recommendation of 9.15% been adopted instead of the 10.20 in the Proposed Decision, ratepayers would save 35.4?million dollars. (see Oral Argument Transcript, December 4, 2019, Edward Lopez comments). Given the importance of this proceeding to San Diego ratepayers, UCAN/POC sought a thorough examination of the issues.UCAN and POC joined together in this proceeding to consolidate resources and utilize each organization’s expertise to strengthen our witness testimony and arguments in briefs in order to better protect the ratepayers of San Diego. UCAN’s experts were able to craft informed and sound arguments that aided the Commission in setting just and reasonable capital structures and ROR/ROE percentages. Because of the contribution UCAN/POC believes it made in assisting the Commission in its evaluation of what would be just and reasonable amounts, UCAN believes the total amount of hours requested for reimbursement is reasonable. UCAN total amount of hours claimed = 711.50 (615.25 substantive hours and 96.25 of travel, NOI, intervenor compensation work).(As noted above, while all filings and work were done jointly throughout the proceeding, UCAN and POC are filing separate intervenor compensation claims and each organization is filing solely for its own work and time.)NotedNotedc. Allocation of hours by issue: Cumulative TotalsTotal Hours% of Hours per IssueIssue14.252%1. General Prep (GP)6.51%2. Hearings, Workshops, and Conferences (HWC)172.7528%3. Filings (F)16.253%4. Discovery (D)173.2528%5. Testimony (T)72.512%6. Coordination (C)159.7526%7. Evidentiary Hearings (EH)00%8. Settlement (S)Total Issues615.25100%NotedSpecific Claim:*ClaimedCPUC AwardATTORNEY, EXPERT, AND ADVOCATE FEESItemYearHoursRate $Basis for Rate*Total $HoursRate $Total $Edward Lopez2019149.25$325See Comment?1$48,506.25149.25$325$48,506.25Edward Lopez2020.5$325See Comment?1$162.500.5$325$162.50Jane Krikorian2019157.75$215D.2002020$33,916.25157.75$215$33,916.25Courtney Cook201923.25$170D.2002020$3,952.5023.25$170$3,952.50Marlon Griffing 2019129.50$195See Comment?2$25,252.50129.50$195$25,252.50Marlon Griffing2020.5$195See Comment?2$97.500.5$195$97.50Karl Pavlovic2019154.50$195See Comment?3$30,127.50154.50$195$30,127.50Subtotal: $142,015.00Subtotal: $142,015.00OTHER FEESDescribe here what OTHER HOURLY FEES you are Claiming (paralegal, travel **, etc.):ItemYearHoursRate $ Basis for Rate*Total $HoursRate $Total $Edward Lopez201950$162.50See Comment?1$8,125.0050$162.50$8,125.00Jane Krikorian201916$102.50D.1912050$1,720.00[1]16$102.50$1,640.00 Subtotal: $9,845.00Subtotal: $9,765.00INTERVENOR COMPENSATION CLAIM PREPARATION **ItemYearHoursRate $ Basis for Rate*Total $HoursRate $Total $Edward Lopez20195.5$162.50See Comment?1$893.755.5$162.50$893.75Edward Lopez20206.5$162.50See Comment?1$1,056.256.5$162.50$1,056.25Jane Krikorian2019.25$107.50D.2002020$26.880.25$107.50$26.88Jane Krikorian202016$102.50D.2002020$1,720.00 [2]16$102.50$1,640.00Courtney Cook20202$82.50D.2002020$170.00[3]2$82.50$165.00 Subtotal: $3866.88Subtotal: $3,781.88COSTS#ItemDetailAmountAmount1.Travel and Printing CostUCAN’s Staff and Experts Travel Expenses$7,655.77$7,378.66 [4]Subtotal: $7,655.77Subtotal: $7,378.66TOTAL REQUEST: $163,382.65TOTAL AWARD: $162,940.54 *We remind all intervenors that Commission staff may audit the records and books of the intervenors to the extent necessary to verify the basis for the award (§1804(d)). 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 are typically compensated at ? of preparer’s normal hourly rate ATTORNEY INFORMATIONAttorneyDate Admitted to CA BARMember NumberActions Affecting Eligibility (Yes/No?)If “Yes”, attach explanationEdward Chris LopezDecember 20, 1991157052NoAttachments Documenting Specific Claim and Comments on Part III:(attachments not attached to final Decision)Attachment or Comment #Description/CommentCertificate of ServiceComment?1Through this request UCAN is asking that Edward Lopez have an established rate of $325 for work done in 2019. Mr.?Lopez has been UCAN’s Executive Director since December 2018. Mr.?Lopez, before he joined UCAN, started his career as an attorney in private practice. There, he practiced Government Law and provided General Counsel services to various public entities including local water districts, special districts including Redevelopment and Housing agencies, and local municipalities. His work there included administrative, environmental and eminent domain issues. Mr.?Lopez then moved into Government and Community Relations for Cox Communications and, later, SDG&E and Sempra Energy. There he gained exposure and experience with State and Federal regulatory matters. For the last decade, Mr.?Lopez has worked in nonprofit management which includes, most recently, serving as the principal author of a masterplan for the development of an Advanced Energy Community project funded by the California Energy ment?2Through this request UCAN is asking that Dr.?Marlon Griffing have an established rate of $195 for work done in 2019. Dr.?Griffing holds bachelors, masters, and doctoral degrees in economics. Dr.?Griffing is well versed in microeconomics, cost/benefit analysis and econometric analysis. He has 18 years’ experience as an expert witness and consultant, primarily addressing the cost of capital and capital structure for electric, natural gas, and water utilities. He has also made appearances regarding rate design, competitive effect of mergers, reliability and supply adequacy, and oilpipeline companies in certificate of need cases. In addition, he managed testimony in two oilpipeline certificateofneed cases and arbitrated a telecommunications dispute for the Nebraska Public Service Commission. Dr.?Griffing has appeared more than 40 times in cost of capital dockets before the regulatory agencies of Arkansas, Hawaii, Maine, Maryland, Minnesota, Nebraska, New Jersey, New Mexico, North Dakota, Oklahoma, Pennsylvania, and South Dakota, and the Federal Energy Regulatory Commission. Because of Dr.?Griffing’s 18 years of experience as an expert witness in multiple proceedings regarding cost of capital analysis UCAN believes a rate of $195 is ment?3Through this request UCAN is asking that Dr.?Karl Pavlovic have an established rate of $195 for work done in 2019. Dr.?Pavlovic provides clients with economic and policy analyses of commercial operations and expert testimony in support of litigation, negotiation and strategic planning. His analyses and testimony are distinguished by systematic articulation and testing of assumptions, thorough evaluation of data, innovative application of statistical tools and economic principles, and clarity and precision of presentation. Dr.?Pavlovic has provided expert testimony on the operations, costs and revenues of gas and electric utilities, the impacts of restructuring wholesale and retail electric markets, effects of mergers, the operation and competitiveness of petroleum and electric markets, the market valuation of crude oil, electric and gas reliability, and the performance of energy efficiency, renewable energy, and peak reduction programs. Major projects directed by Dr.?Pavlovic have included: analytical assistance to counsel and testimony on all aspects of the restructuring of wholesale and retail electric markets in the Eastern Interconnection; technical representation of the District of Columbia People’s Counsel on the DC PSC's Pepco Productivity Improvement Working Group and various PJM working groups; impact evaluation study of pilot energy efficiency and renewable energy programs in the District of Columbia; analysis of petroleum markets, expert testimony, and coordination of technical testimony in the TransAlaska Pipeline quality bank litigation; Independent Technical Review of the economic models used by the US Army Corps of Engineers for the Ohio River System Investment Plan; assistance to a major independent telephone company in the formulation and implementation of corporate strategic plans, applications for longdistance authority, and settlement negotiations with major domestic and foreign carriers. By education and professional experience Dr.?Pavlovic has expertise in formal and mathematical logic, statistics, economics, financial analysis, econometrics, and computer modeling. With 33 years’ experience as a consultant and expert witness, Dr.?Pavlovic has indepth knowledge of commercial and industrial operations in the energy, transportation, and telecommunications industries and is familiar with a wide range of experimental and investigative methods in science and engineering. Because of Dr.?Pavlovic’s 33 years of experience as an expert witness in multiple proceedings regarding cost of capital analysis UCAN believes a rate of $195 is justified.D. CPUC Comments, Disallowances, and Adjustments ItemReason[1] There is a mathematical error in UCAN’s computation of the total; 16 hours x $102.50 = $1,640.00 (not $1,720.00).[2]There is a mathematical error in UCAN’s computation of the total; 16 hours x $102.50 = $1,640.00 (not $1,720.00).[3]There is a mathematical error in UCAN’s computation of the total; 2 hours x $82.50 = $165.00 (not $170.00).[4]Total of $277.11 in travel costs (for Uber, Lyft, and BART) are disallowed given distance between Commission and starting point of travel.[5]While UCAN substantially contributed to D.1912056, their contribution was limited to the San Diego Gas & Electric Company (SDG&E) application. As such, it is reasonable that the total award amount for UCAN’s intervenor compensation claim be absorbed by SDG&E. PART IV: OPPOSITIONS AND COMMENTSWithin 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?NoB. Comment Period: Was the 30day comment period waived (see Rule 14.6(c)(6))?YesFINDINGS OF FACTUtility Consumers’ Action Network has made a substantial contribution to D.1912056.The requested hourly rates for Utility Consumers’ Action Network’s representatives are comparable to market rates paid to experts and advocates having comparable training and experience and offering similar services.The claimed costs and expenses, as adjusted herein, are reasonable and commensurate with the work performed. The total of reasonable compensation is $162,940.54.CONCLUSION OF LAWThe Claim, with any adjustment set forth above, satisfies all requirements of Pub.?Util. Code §§?18011812.ORDERUtility Consumers’ Action Network shall be awarded $162,940.54.Within 30 days of the effective date of this decision, San Diego Gas & Electric Company shall pay Utility Consumers’ Action Network the total award. Payment of the award shall include compound interest at the rate earned on prime, threemonth nonfinancial commercial paper as reported in Federal Reserve Statistical Release H.15, beginning May?3,?2020, the 75th day after the filing of Utility Consumers’ Action Network’s request, and continuing until full payment is made.The comment period for today’s decision is waived.This decision is effective today.Dated November 19, 2020, at San Francisco, California.MARYBEL BATJERPresidentLIANE M. RANDOLPHMARTHA GUZMAN ACEVESCLIFFORD RECHTSCHAFFENGENEVIEVE SHIROMACommissionersAPPENDIXCompensation Decision Summary InformationCompensation Decision:D2011041Modifies Decision? NoContribution Decision(s):D1912056Proceeding(s):A1904014, A1904015, A1904017, A1904018Author:ALJ StevensPayer(s):San Diego Gas & Electric CompanyIntervenor InformationIntervenorDate Claim FiledAmount RequestedAmount AwardedMultiplier?Reason Change/DisallowanceUtility Consumers’ Action NetworkFebruary 18, 2020$163,382.65$162,940.54N/ADisallowance of selected travel costs.Hourly Fee InformationFirst NameLast NameAttorney, Expert, or AdvocateHourly Fee RequestedYear Hourly Fee RequestedHourly Fee AdoptedEdwardLopezAttorney$3252019$325EdwardLopezAttorney$3252020$325JaneKrikorianAdvocate$2152019$215JaneKrikorianAdvocate$2152020$215CourtneyCookAdvocate$1702019$170CourtneyCookAdvocate$1702020$170KarlPavlovicExpert$1952019$195MarlonGriffingExpert$1952019$195MarlonGriffingExpert$1952020$195(END OF APPENDIX) ................
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