February 2, 2017; Confidential Deliberative Process Privilege
Internal review draft; subject to ALJ Division Review
ALJ/KHY/lil Date of Issuance 4/12/2017
Decision 17-04-007 April 6, 2017
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Investigation on the Commission’s Own Motion Into the Planned Purchase and Acquisition by AT&T Inc. of T-Mobile USA, Inc., and its Effect on California Ratepayers and the California Economy. / Investigation 11-06-009(Filed June 9, 2011)
DECISION ON REMAND GRANTING COMPENSATION TO THE UTILITY REFORM NETWORK AND CENTER FOR ACCESSIBLE TECHNOLOGY FOR SUBSTANTIAL CONTRIBUTIONS TO DECISION 12-08-025
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February 2, 2017; Confidential Deliberative Process Privilege
Internal review draft; subject to ALJ Division Review
Table of Contents
Title Page
DECISION ON REMAND GRANTING COMPENSATION TO THE UTILITY REFORM NETWORK AND CENTER FOR ACCESSIBLE TECHNOLOGY
FOR SUBSTANTIAL CONTRIBUTIONS TO DECISION 12-08-025 1
Summary 2
1. Procedural History 2
2. Background: Substantial Contribution Without a Decision on the Merits 5
3. Applicable Commission Precedent 9
3.1. The Allen/Warner Precedent (Powerplant Siting) 9
3.2. The MCI Precedent (Telecommunications Merger) 12
4. Unique Circumstances in I.11-06-009 14
5. TURN’s Substantial Contribution 15
5.1. Procedural Contribution 15
5.2. Substantive Contribution 16
6. CforAT’s Substantial Contribution 18
7. Adoption of Amounts Previously Awarded in this Proceeding 18
8. Conclusion 19
9. Categorization and Need for Hearing 19
10. Comments on Proposed Decision 19
11. Assignment of Proceeding 22
Findings of Fact 22
Conclusion of Law 23
ORDER 23
Attachment 1 – TURN Award Itemization
Attachment 2 – CforAT Award Itemization
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I.11-06-009 ALJ/KHY/lil
DECISION ON REMAND GRANTING COMPENSATION TO THE UTILITY REFORM NETWORK AND CENTER FOR ACCESSIBLE TECHNOLOGY FOR SUBSTANTIAL CONTRIBUTIONS TO DECISION 12-08-025
Summary
In today’s decision, issued pursuant to the Court of Appeal’s direction in New Cingular Wireless PCS, LLC et al., v. Public Utilities Commission, Respondent; The Utility Reform Network et al., Real Parties in Interest, 246 Cal.App.4th 784; 2016 Cal.App.LEXIS 298, the Commission grants compensation to The Utility Reform Network (TURN) of $255,944.03 and Center for Accessible Technology (CforAT) of $20,286.42 for their respective contributions to Decision 12-08-025. The Commission finds that TURN and CforAT made both analytical and procedural contributions that were responsive, well-reasoned, and persuasive, thereby significantly advancing the Commission’s stated goals in the Order Instituting Investigation for Investigation 11-06-009.
1. Procedural History
The California Public Utilities Commission (CPUC or Commission), on June 9, 2011, opened Investigation (I.) 11-06-009 as to the proposed AT&T, Inc. and T-Mobile USA Inc. (AT&T and T-Mobile) merger. The merger proponents had applied to the Federal Communications Commission (FCC) on April 21, 2011, for approval of their merger. The Commission invited comments on the proposed merger’s potential impacts on customer service and competition from a California perspective. The Commission’s Order Instituting Investigation (OII) stated its intent to “complete this inquiry in a manner sufficiently timely to provide comment to the FCC” before the FCC review closed. (OII at 16.) The Commission therefore set an aggressive schedule for parties to attend workshops, conduct discovery, review documents provided by the merger proponents, and file comments, in order to complete its merger analysis before the end of 2011.
After significant activity by parties, but while the investigation still was pending, AT&T and T-Mobile withdrew their application at the FCC. In response, the Commission closed the investigation. (Decision (D.) 12-08-025.[1]) The Commission did not adopt the planned “comment” to the FCC. But, the Commission did affirm all of its prior rulings and also recognized the efforts of intervenors in the proceeding, stating that “requests for intervenor compensation are appropriate.” (D.12-08-025 at 9-11; see also Ordering Paragraph 2.) The Utility Reform Network (TURN) and Center for Accessible Technology (CforAT) filed timely claims for intervenor compensation, and the Commission granted the claims in part in D.13-05-031 and D.14-06-026, respectively. New Cingular Wireless (New Cingular), a subsidiary of AT&T, applied for rehearing on both decisions, and the Commission denied the rehearing applications by D.14-12-085 on December 18, 2014. (Rehearing Decision.)
New Cingular then petitioned for writ of review of both decisions at the California Court of Appeal, First Appellate District, Division Four, alleging that TURN and CforAT could not have made a “substantial contribution” in this proceeding, and therefore are ineligible for intervenor compensation. On April19, 2016, the Court of Appeal filed New Cingular Wireless PCS, LLC et al., v. Public Utilities Commission, Respondent; The Utility Reform Network et al., Real Parties in Interest, 246 Cal.App.4th 784; 2016 Cal.App.LEXIS 298. (New Cingular Wireless.) In this decision, the Court of Appeal held that the Commission had broad delegated authority to implement the statutory intervenor compensation program (Part 1, Chapter 9, Article 5 of the Cal. Pub. Util. Code § 1801 etseq.),[2] and that the record contained support for the awards to TURN and CforAT. (New Cingular Wireless, 246 Cal.App.4th at 821.) The Court of Appeal further held, however, that the Commission’s legal rationale in its Rehearing Decision (D.1412-085) was inconsistent with prior Commission decisions, and accordingly vacated that decision and remanded the matter for reconsideration of the rationale. Pending such reconsideration, the Court of Appeal also vacated the awards without prejudice.
The Commission on June 10, 2016, ruled that TURN and CforAT should refile their claims for intervenor compensation in light of New Cingular Wireless. Pursuant to this ruling, TURN and CforAT re-filed their claims on July 11, 2016. New Cingular objected to the new claims (July 26, 2016), and TURN and CforAT jointly replied (August 02, 2016) to the objections. The claimants are content with their original awards; New Cingular continues to assert that claimants should be awarded nothing. New Cingular continues to argue because intervenors have not pointed to a specific intervenor factual contention, legal contention, or specific procedural or policy recommendation that the Commission adopted, that they should not receive an award of intervenor compensation.[3] TURN and CforAT reply that New Cingular’s argument is indistinguishable from its prior argument that the Court of Appeal rejected; namely, that intervenors could not meet the “substantial contribution” requirement in a proceeding that is not resolved on the merits.[4]
Today’s decision reconsiders the claims in light of the whole record of I.1106-009, the remand from Court of Appeal, and the post-remand filings of TURN, CforAT, and New Cingular. As discussed below, and as acknowledged by the Court of Appeal, the awards to TURN and CforAT are consistent with prior intervenor compensation awards in similar circumstances. Based on this reconsideration, the Commission today awards the same amounts of compensation awarded to TURN and CforAT, and explains how these awards follow logically from the letter and the spirit of the governing statutes and Commission precedent, as well as the guidance provided in New Cingular Wireless.
2. Background: Substantial Contribution Without a Decision on the Merits
The intervenor compensation program compensates eligible parties who make substantial contributions to Commission proceedings, subject to the statutory regime in Sections 1801-1812. The purpose of the intervenor compensation program, as stated in Section 1801, is “to provide compensation for reasonable advocate’s fees, reasonable expert witness fees, and other reasonable costs to public utility customers of participation or intervention in any proceeding of the commission.” The program is meant to promote significant and broad participation by all stakeholders, including those that have limited resources to do so, in Commission proceedings. In order to assess whether or not an intervenor is entitled to compensation, the Commission, guided by the statute, reviews the claim and evaluates how much the intervenor has contributed within the context of the proceeding as a whole. Section 1802(i) states that “substantial contribution” means “in the judgement of the commission, the customer’s presentation has substantially assisted the commission in the making of its order or decision because the order or decision has adopted in whole or in part one or more factual contentions, legal contentions, or specific policy or procedural recommendations presented by the customer.”
The Commission resolved several procedural matters favorably to the intervenors in I.11-06-009, but the proceeding was rendered moot by the merger proponents’ withdrawal of their FCC application. Accordingly, the Commission closed the proceeding without adopting a set of comments (on factual, legal, or policy issues) to present to the FCC, but after creating a voluminous record to draw on for purposes of those comments.
Therefore, at issue here is whether the Commission may award compensation to intervenors when the Commission closes a proceeding without a decision “on the merits.” The New Cingular Wireless decision held that the Commission had authority to issue compensation to TURN and CforAT in I.1106-009 in a proceeding that did not conclude with a decision “on the merits,” but directed the Commission to better elucidate the rationale underlying the substantial contribution award under these circumstances, and to reconsider the awards to TURN and CforAT in light of the standard as elucidated.[5]
As highlighted by the Court of Appeal in New Cingular Wireless, “the CPUC has invoked its discretion to award intervenor compensation many times in cases resolved without a decision on the merits, in a wide variety of settings.” (246 Cal.App.4th at 814; see also id. at 815, fn. 25 and 27 (collecting cases).) These precedents illustrate why and how, in a proceeding that ends without resolving the merits, a participant eligible for intervenor compensation may receive an award if that participant presented substantive analysis, policy recommendations or procedural contentions that were clearly responsive, wellreasoned, and persuasive. The participation must have been of such significance that it would have materially influenced and therefore substantially assisted the Commission’s analysis and handling of the matter if the Commission were to have resolved the proceeding on the merits.
The Court of Appeal held in New Cingular Wireless that, under the statutory scheme governing intervenor compensation at the Commission, the Legislature:
not only agreed with the CPUC’s view that intervenor compensation may be awarded on a discretionary basis in cases that resolve short of a decision on the merits, but more than that, delegated to the CPUC the authority to ‘fill in gaps’ in Article 5 in the course of administering it based on express policy guidance in the statute. In enacting Article 5 in 1984, the Legislature confirmed the CPUC’s power to address intervenor compensation on its own, and then, in 1992, gave the CPUC explicit policy criteria in section 1801.3, subdivision (b) to guide Article 5’s administration. In light of this history, we conclude that the Legislature has expressly conferred power on the CPUC to ‘fill up the details’ of the statutory scheme. (Ramirez, supra, 20Cal.4th at p. 799.)
(New Cingular Wireless, 246 Cal.App.4th at 816-817, italics in the original.)
When analyzing the intervenor’s participation, the Commission has utilized “case by case” adjudication, which the Court in New Cingular Wireless acknowledged was the method the Legislature appeared to have contemplated that the Commission would use to administer the intervenor compensation statutory scheme. (246 Cal.App.4th at 818.) In case by case adjudication, the Commission takes into account the unique procedural history and factual circumstances of each case to inform its examination of the intervenor’s contributions.
In summary, an analysis of prior Commission precedent demonstrates that:
· the Commission has often awarded intervenor compensation in proceedings not resolved on the merits;
· in doing so, the Commission was using its delegated authority to “fill in the gaps” of the intervenor compensation statute; and
· each award in these circumstances depends on the facts and procedural history of the particular Commission proceeding in which the Commission approved compensation.
3. Applicable Commission Precedent
From our own survey of prior awards, two early decisions seem especially on point for purposes of I.11-06-009. One decision concerned a power plant siting case; the other concerned a proposed merger of telecommunications service providers. The Court of Appeal approvingly noted both of these earlier decisions. (New Cingular Wireless, 246 Cal.App.4th at 813-816.) We discuss them below and relate them to today’s decision.
3.1. The Allen/Warner Precedent (Powerplant Siting)
In D.93724, The Environmental Defense Fund Requests Compensation for its Participation in SoCal Edison Co.’s Application for a Certificate for the Harry Allen/Warner Valley Energy System (1981) 7 CPUC2d 75, 1981 Cal. PUC Lexis 370, (Allen/Warner) the Commission ruled that a withdrawn application did not preclude intervenors from seeking compensation. “[B]ecause of the unique circumstances of the utilities’ withdrawal of the Allen/Warner Application… we decided … to allow an application for fees. We reaffirm that decision today, in the interests of equity.” (Id., 7 CPUC2d at 95; 1981 Cal. PUC Lexis at 46-47). The Commission noted that the Environmental Defense Fund (EDF) would prevail and receive compensation if it demonstrated “significant contribution to the Commission, within the context of the unique procedural history of [Application59308], sufficient to justify a narrow exception to our adoption test.” (Id., 7CPUC2d at 96; 1981 Cal. PUC Lexis at 49, Conclusion of Law 9.) EDF’s work had included the presentation of the "ELFIN" computer model, “which permitted sophisticated manipulation of various supply and demand hypotheses in testing the need for and financial impacts of the Allen/Warner project …. The Commission staff also relied upon the ‘ELFIN’ model in its analysis of the operational and financial impacts of Allen/Warner, compared with potential alternatives.” (Id., 7 CPUC2d at 79; 1981 Cal. PUC Lexis at 10). The Commission, noting equitable reasons and the significance of the ELFIN model, determined that due to the last-minute withdrawal of the application, the intervenor should be allowed to seek compensation. The Commission noted that the intervenor’s contribution had to be “significant” in order to justify “even a narrow departure from our general standards.” (Id., 7 CPUC2d at 95; 1981 Cal. PUC Lexis at 48).
Allen/Warner is one of the Commission’s earliest decisions to address intervenor compensation; the decision actually precedes enactment of the statute.[6] The Commission had already established a “substantial contribution” test, but in Allen/Warner, the Commission explained how that test would be satisfied even where the Commission had not “adopted” an intervenor’s position on the merits. Even though Allen/Warner preceded the statute and is based in part on consideration of “fairness and equity” (see New Cingular Wireless, 246Cal.App.4th at 815), its stated rationale is consistent with the statute in defining substantial contribution, explaining how such contribution would occur short of “adoption,” and requiring that intervenors do much more than merely participate to receive an intervenor compensation award.