A.15-04-012 ALJ/MLC/sf3
ALJ/MLC/sf3 Date of Issuance 1/19/2018
Decision 18-01-021 January 11, 2018
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of San Diego Gas & Electric Company (U902E) for Authority to Update Marginal Costs, Cost Allocation and Electric Rate Design. / Application15-04-012DECISION GRANTING COMPENSATION TO THE UTILITY CONSUMERS’ ACTION NETWORK TO DECISION 17-08-030
Intervenor: Utility Consumers’ Action Network / For contribution to Decision (D.) D.17-08-030Claimed: $146,162.18 / Awarded: $155,631.68
Assigned Commissioner: Michael Picker / Assigned ALJ: Michelle Cooke
PART I: PROCEDURAL ISSUES
A. Brief description of Decision: / This decision decides the issues addressed in San Diego Gas & Electric Company’s (SDG&E) application to establish marginal costs, allocate revenues, and design rates for service provided to its customers. This decision adopts the uncontested Revenue Allocation Settlement Agreement; rejects the contested Schools Settlement Agreement, and establishes new time-of-use (TOU) periods to reflect the changing energy market, including a later on-peak period and a spring super-off-peak period, while affirming the grandfathering provisions for eligible solar customers previously established by the California Public Utilities Commission and extending the Eligibility Grace Period for schools.B. Intervenor must satisfy intervenor compensation requirements set forth in Pub. Util. Code §§
1801-1812:
Timely filing of notice of intent to claim compensation (NOI) (§ 1804(a)):
1. Date of Prehearing Conference: / June 12, 2015 / June 12, 2015
2. Other specified date for NOI:
3. Date NOI filed: / July 13, 2015 / July 13, 2015
4. Was the NOI timely filed? / Yes
Showing 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: / A.17-01-012 / A1701012
6. Date of ALJ ruling: / April 24, 2017 / April 24, 2017
7. Based on another CPUC determination (specify):
8. Has the Intervenor demonstrated customer status or eligible government entity status? / Yes
Showing of “significant financial hardship” (§1802(h) or §1803.1(b))
9. Based on ALJ ruling issued in proceeding number: / A.17-01-012 / A1701012
10. Date of ALJ ruling: / April 24, 2017 / April 24, 2017
11. Based on another CPUC determination (specify):
12. 12. Has the Intervenor demonstrated significant financial hardship? / Yes
Timely request for compensation (§ 1804(c)):
13. Identify Final Decision: / D.17-08-030 / D1708030
14. Date of issuance of Final Order or Decision: / August 25, 2017 / August 25, 2017
15. File date of compensation request: / October 24, 2017 / October 24, 2017
16. Was the request for compensation timely? / Yes
PART II: SUBSTANTIAL CONTRIBUTION
A. Did the Intervenor substantially contribute to the final decision (see § 1802(j),
§ 1803(a), 1803.1(a) and D.98-04-059).
Summary
In this GRC Phase 2 proceeding, originally filed in April 2015, SDG&E has put forward proposals on marginal costs, revenue allocation, and rate design for Commission Consideration.
In UCAN’s examination of the issues presented we focused on rate design and revenue allocation issues. UCAN’s experts, William Marcus and Garrick Jones from JBS energy produced detailed and extensive testimony covering these topics. (See Exhibits UCAN -01, UCAN -02 and UCAN -03)
After a thorough examination, UCAN supported the revenue allocation settlement, which was adopted by the Commission, and we urged rejection of the SDG&E/San Diego Public Schools settlement, which was not adopted by the Commission. / This decision addresses the application of San Diego Gas & Electric Company (SDG&E) to establish marginal costs, allocate revenues, and design rates for service provided to its customers. The uncontested Revenue Allocation Settlement Agreement is approved; the contested Schools Settlement Agreement is not adopted. This decision establishes new time-of-use periods to reflect the changing energy market, including a later on-peak period and a spring super-off-peak period, while affirming the grandfathering provisions for eligible solar customers previously established by the California Public Utilities Commission and extending the Eligibility Grace Period for schools.
D.17-08-030, p. 2 / Verified
Revenue Allocation Settlement.
In this proceeding, over the course of 2 months and 10 settlement discussions, seven parties presented a settlement proposal on revenue allocation.
UCAN was a signatory to the revenue allocation settlement, and we urged the Commission to adopt it.
The Commission approved the settlement. / San Diego Gas & Electric Company (“SDG&E”), the Office of Ratepayer Advocates (“ORA”), the Utility Consumers’ Action Network (“UCAN”), the California Farm Bureau Federation (“Farm Bureau”), the Federal Executive Agencies (“FEA”), the City of San Diego (“City of San Diego”) and the California City-County Street Light Association (“CAL-SLA”) (referenced to hereinafter collectively as “Settling Parties” or individually as “Party”) respectfully request that the Commission adopt and find reasonable the Revenue Allocation Settlement Agreement (“Agreement”) appended to this motion as Attachment A.1
The Settling Parties have reached an agreement that resolves the revenue allocation issues that have been raised in this proceeding.
Motion to adopt revenue allocation settlement, P. 1
Given the established record of this proceeding, the settlement, when taken as a whole, is reasonable in light of the record, consistent with law and in the public interest, and UCAN urges its adoption without modification.
UCAN opening brief, p. 4
The Revenue Allocation Settlement Agreement reflects agreement on how to allocate authorized revenue requirements for distribution, commodity, California Solar Initiative, Self-Generation Incentive Program, Public Purpose Program, Competition Transition Charge, and Local Generation Charge among customer classes.
D.17-08-030, p. 12
“The record supports a finding that the Revenue Allocation Settlement Agreement is reasonable, consistent with law, and in the public interest. Parties representing all customer groups presented testimony on revenue allocation issues. The record shows that the Revenue Allocation Settlement Agreement was reached with participation and consideration of various allocation options by representatives of a broad range of customer groups on SDG&E’s system after significant give-and-take between the parties, which occurred over the course of ten settlement conference calls during two months. The result is a balanced settlement for all ratepayers”
D.17-08-030, p. 14 / Verified
UCAN opposed the San Diego Public Schools rate discount settlement with SDG&E
In this proceeding SDG&E and the San Diego Public Schools proposed a settlement that would provide rate discounts to schools by shifting the costs of those discounts to other customers. UCAN opposed the Schools settlement, and the Commission declined to adopt it. / UCAN, the Farm Bureau and TURN submitted joint comments opposing the Schools Settlement.
Among other things, these parties argue that “absent a statute and legislative directive to do so, the CPUC should decline the opportunity to give one subset of customers in the C&I class discounted rates at the expense of all other ratepayers.”
D.17-08-030, p. 56
While the public interest argument has been compellingly presented (by the schools), the annual cost of the discounts (approximately $11.6 million/year) will be borne by other customers who, while they may have more flexibility to pass costs on to others or shift their load to avoid increased energy costs, may also serve a public good. As UCAN points out, the City, “the U.S. Navy, nonprofits and charities are all similarly situated with the [Schools], with the exception that they are not going to receive a SDG&E rate discount and will now, if the settlement is approved, be paying for the [Schools] special rate discount of approximately $35 million of 3 years.” (UCAN Reply Brief at 4.)
D.17-08-030, p 58
The modifications adopted today to the SDG&E proposed on-peak TOU period, demand charges, generation demand cost recovery, and grandfathering for solar schools, all are expected to reduce the impacts of the changing time-of-use periods on affected solar school accounts. In light of these changes, we find that the additional line item and fixed indifference discounts proposed for schools place an inappropriate burden on other customers and therefore should not be adopted. (emphasis added)
D.17-08-030, p. 59 / Verified
B. Duplication of Effort (§ 1801.3(f) and § 1802.5):
Intervenor’s Assertion / CPUC Discussiona. Was the Office of Ratepayer Advocates (ORA) a party to the proceeding?[1] / Yes / Yes
b. Were there other parties to the proceeding with positions similar to yours? / yes / Yes
c. If so, provide name of other parties: ORA, TURN and the Farm Bureau / Confirmed
d. Intervenor’s claim of non-duplication:
In this proceeding UCAN coordinated with several other parties regarding the multiple issues presented in this application. Primarily UCAN’s testimony and presentation focused on revenue allocation issues affecting the residential class of customers. UCAN also contested SDG&E’s settlement with the San Diego Public Schools.
While there will always be some level of overlap in intervenor presentations in proceedings like this, UCAN’s presentation sought to minimize duplication and present unique issues for consideration. For those issues that were also covered by another intervenor, UCAN’s presentation sought to add to and compliment the showing of other intervenors. As can be shown from our timesheets, UCAN coordinated with several parties to this proceeding regarding scheduling, issue coverage, and in presenting a united opposition to the Schools settlement. Such coordination helped reduce any duplication of effort, and lead to a more effective presentation.
For example, in this proceeding UCAN offered unique testimony on Marginal Cost, Revenue Allocation, Rate Design Policy Issues, and Effective Demand Factors and Revenue Allocation from William Marcus and Garrick Jones, of JBS. The testimony produced by UCAN, was informative and covered these issue areas from a distinct perspective. The settlement on revenue allocation specifically noted that it was a broad based agreement supported by testimony, and the assumptions made for determining Commodity Revenue Allocation Factors in the settlement were based, in part, on UCAN’s calculation of its commodity revenue allocation presented in direct testimony.
Additional examples of UCAN’s attempts to avoid duplication of effort was the joint effort of UCAN, the Farm Bureau and TURN in opposing the SDG&E/Schools settlement. UCAN, the Farm Bureau and TURN coordinated effort to offer joint comments in opposition and in evidentiary hearings, UCAN and the Farm Bureau questioned the witnesses on different issue areas that did not overlap. UCAN’s opposition to the Schools settlement was not duplicative of other parties’ efforts. / Verified
PART III: REASONABLENESS OF REQUESTED COMPENSATION
A. General Claim of Reasonableness (§ 1801 and § 1806):
a. Intervenor’s claim of cost reasonableness:UCAN is seeking $146,162.18 dollars for our participation in this proceeding. This amount is substantially less than the $188,000 UCAN estimated in out NOI filed July 13, 2015.
This cost represents both attorney and expert witness time for this GRC Phase 2 proceeding, which took more than 2 years to conclude and required significant assets to properly assess and evaluate SDG&E’s marginal costs, revenue allocation and rate design proposals. The issues presented in this proceeding were both complex and required significant time and analysis to understand.
UCAN participated in almost all aspects of this proceeding, from attending hearings, and conferences, filing a protest, briefs, and comments, and producing testimony. For UCAN’s analysis we retained the services of William Marcus and Garrick Jones from JBS Energy to examine the issues presented and to offer testimony on behalf of UCAN. The issues that Mr. Marcus and Mr. Jones examined in their testimony included:
1. Marginal Generation Cost
- Generation Marginal Capacity Costs
- Marginal Energy Costs
2. Marginal Customer Costs
- Capital costs
- Customer related Distribution O&M Costs
3. Marginal Demand Distribution costs
4. Revenue Allocation issues
5. Rate Design Policy – Demand Charges.
6. Effective Demand Factors and Revenue Allocation
The issues raised in SDG&E’s application required an examination of SDG&E’s marginal costs. However, in reaching a settlement on the revenue allocation, the Joint Motion to adopt the settlement noted the following:
“A number of issues were raised regarding the calculation and methodologies used to derive marginal distribution customer and demand costs and marginal generation capacity and energy costs, including the underlying time-of-use (“TOU”) period definitions. The Settling Parties were able to agree on the allocation of SDG&E's revenue requirements among the customer classes, thereby making it unnecessary to resolve the parties’ differences regarding marginal cost values and methodologies and TOU period definitions. Therefore, the Agreement does not reflect the approval or acceptance of any one of the parties’ various' marginal cost or TOU proposals.
Joint Motion to Adopt Revenue Allocation Settlement, pp. 3-4
Even though the settlement does not accept any party’s marginal cost or TOU proposal, marginal cost issues were important factors to consider in this application and the costs UCAN incurred to examine these issues should be deemed reasonable.
UCAN opposition to the Schools settlement
UCAN also opposed the SDG&E/San Diego Public Schools (SDPS) settlement. In that settlement it was proposed that SDPS receive a discounted rate for electricity, of approximately $11.6 million per year, to be paid for by all other ratepayers. The Commission rejected the SDGE/SDPS settlement thus saving the ratepayers almost $35 million over 3 years.
Schools settlement saving $11.6 million per year
UCAN’s testimony and participation in this proceeding has produced favorable results for the ratepayers, and we ask the Commission to deem our costs to be reasonable. Not only has UCAN advocated against the Schools settlement whose rejection by the Commission saves the ratepayers $11.6 million per year, we also supported the revenue allocation settlement that caps the amount of a rate increase customers would see i.e., illustrative total rates for each customer class will increase by no more than 1.4% above the illustrative system average total rate increase.
Revenue Allocation Settlement, caps customer class rate increases to 1.4% above the system average total rate increase
As with any settlement, given the confidential nature of the discussions, it is very hard to quantify the impacts of a party’s participation. That being said, we did actively participate throughout this proceeding and by accepting the revenue allocation settlement the Commission avoided further litigation on those issues, freed up scarce Commission resources and helped to mitigate potentially adverse bill impacts on any particular customer class.
Travel lodging costs
As can be seen from UCAN’s timesheets, Mr. Kelly traveled to the Commission for hearings and workshops in this proceeding on a number of occasions. For the times when Mr. Kelly went to the Commission for more than one proceeding, he sought to divide the costs between the cases. Also, in order to save on lodging, Mr. Kelly, when traveling to the Commission for a multiday appearance (i.e., evidentiary hearings) will seek to avoid lodging expenses by staying with relatives in Santa Clara and then rent a car to commute to the Commission. As the cost of a rental car is usually substantially less than obtaining lodging in San Francisco, this reduces the overall costs UCAN has incurred.
UCAN asks the costs we seek reimbursement for be deemed reasonable. / CPUC Discussion
Noted
b. Reasonableness of hours claimed: The amount of hours UCAN incurred in this proceeding include 188 for attorney time and 280 for expert witnesses. For the most part, UCAN was, with the exception of ORA, the party that represented the residential ratepayers. The issues in this proceeding were very complex and took time to understand and examine.
As can be seen from our timesheets, the hours generated by UCAN’s experts were appropriately spent researching issues, writing their testimony and participating in settlement conferences. The hours generated by UCAN’s attorney also were appropriately spent reviewing the case, attending the hearings, workshops and conferences, coordinating with the parties, attending the multiple revenue allocation settlement discussions and opposing the SDPS settlement. Where possible, UCAN sought to minimize the number of hours spent on certain issues by coordinating issue coverage with other parties. For example: Regarding the Schools settlement, UCAN sought out other parties (the Farm Bureau and TURN) to see if they would join with UCAN in offering joint comments thus minimizing the number of hours necessary to handle that issue.
UCAN asks that our hours be deemed reasonable / Noted
c. Allocation of hours by issue:
As noted in UCAN’s timesheets we have divided the amount of time that UCAN spent for each event as follows.
Total hours Percentage of hours per issue
18.80 / 4.02% / 1. General Prep (GP)
18.50 / 3.95% / 2. Hearings, Workshops (HWC)
75.50 / 16.13% / 3. Filings (F)
31.71 / 6.77% / 4. Discovery (D)
212.12 / 45.32% / 5. Testimony (T)
25.60 / 5.47% / 6. Coordination (C)
14.25 / 3.04% / 7. Evidentiary Hearings (EH)
71.57 / 15.29% / 8. Settlement (S)
468.05 / 100.00%
UCAN would note that it is hard to quantify the amount of hours spent by issue in this proceeding, especially the sub issues not mentioned in the rev allocation settlement. However, for a detailed description of the activities UCAN engaged in, please see our attached time sheets and testimony produced. / Verified
B. Specific Claim:*