HomeMy WebLinkAbout43-Public Hearing
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BE FORE
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PUBLIC UTILITIES COMMISSION
OF THE
STATE OF CALIFORNIA
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SOUTHERN CALIFORNIA GAS COMPANY
NOTICE TO CUSTOMERS OF FILING OF APPLICATION
AND PUBLIC HEARING
IN APPLICATION NO. 86-03-058
The California Public Utilities Commission (Commission) will hold
public hearings on the request of Southern California Gas Company (SoCalGas) to
revise its rates in the May 1986 Consolidated Adjustment Mechanism (CAM).
Application No. 86-03-058, filed March 28, 1986, requests Commission approval to
increase retail rates by $99.424 million. The application reflects reductions
in forecast revenues from customers capable of burning oil as an alternate fuel
and the partially offsetting effect of reductions in the cost of gas to
SoCalGas. Furthermore, ammonia producer and wholesale rates are proposed to be
reduced in response to cost of gas reductions pursuant to legislative mandate
and Commission-set rate design formulas.
To recover the $99.4 million revenue shortfall, SoCalGas proposes to
increase customer charges for all retail customer classes, except electric utility
generation customers. The residential customer charge is proposed to increase from
$3.10 per month to $4.88 per month. Separately, SoCalGas has requested a reduction
in the residential baseline allowances in accordance with the baseline statute.
The revised monthly baseline allowances are: Summer - 20 therms for all climate
zones; Winter-Climate Zone 1 - 55 therms; Climate Zone 2 - 72 therms; Climate Zone
3 - 95 therms.
In addition, SoCalGas has proposed to reduce the residential Tier II
commodity rate from approximately 82c per therm to approximately 72c per thermo
The baseline commodity rate is proposed to be unchanged.
The effect of the proposed increase in the typical residential customer's
monthly bill would be $1.09 in the summer and $6.37 in the winter;
If SoCalGas' request is approved by the Commission as proposed, the
impact on various classes of customers will be as follows:
Class of Service
M$
Increase
(Decrease)
%
Increase
(Decrease)
Residential
Commercial/Industrial
Wholesale
Ammonia Producers
Total decrease
83,630
15,794
(94,807)
(8,379)
(3,762)
5.7
1.3
(22.5)
(31.0)
(0.1)
The actual rates adopted by the Commission may significantly differ
from those requested by SoCalGas, and may result in an increase or decrease in
your individual rates.
The public hearing date listed below gives customers an opportunity to
express their views to the Commission. You may submit written comments or'~~~ ,~
a brief oral statement at the hearing. ~~ ~
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DATE AND LOCATION OF PUBLIC HEARING
IN APPLICATION NUMBER 86-03-058 BEFORE
THE CALIFORNIA PUBLIC UTILITIES COMMISSION
Monday, May 5, 1986
at 10.00 a.m.
State Office Building
107 South Broadway
Los Angeles, California
The Commission welcomes your comments. If you cannot attend these
hearings, you may submit written comments to the Commission at one of the
addresses listed below. Simply state that you are writing about Application No.
86-03-058 of Southern California Gas Company.
Places of hearing are accessible to the handicapped. A copy of
SoCalGas' application may be inspected in its local business offices or at its
headquarters or at the commission offices located at the addresses listed below.
Additional hearing days will be devoted to analyzing the need for the
required rate increases and ways of allocating any approved increases among
residential, commercial/industrial, wholesale and utility electric generation
customers. At these hearings the Commission will receive the testimony of
SoCalGas, and the testimony of other interested parties, and the Commission
staff. The Commission staff consists of engineers, accountants, economists, and
attorneys who independently evaluate the proposals of utilities and present
their analyses and recommendations to the Commission at public hearing.
If you would like to participate in these proceedings and need advice
on how to do so, write to the Public Advisor, California Public Utilities
Commission, 350 McAllister Street, San Francisco, CA 94102.
Further information may be obtained from SoCalGas at its headquarters
at 810 South Flower Street, Los Angeles, CA 90017, its local business offices,
or from the Commission offices at:
350 McAllister Street
San Francisco, CA 94102
or
107 South Broadway, Room 5109
Los Angeles, CA 90012
Any party interested in the above application and related exhibits
will be furnished a copy upon written request to:
Frederick E. John, Vice President
Regulatory Affairs
Southern California Gas Company
P. O. Box 3249, Terminal Annex
Los Angeles, CA 90051
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Decision 86-04-020 AjJril 2, 1986
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
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Investigation on the Commission's )
own motion into the rates, tolls, )
rules, charges, operations, costs, )
separations, practices, contracts, )
service, ac' facilities of GENERAL)
TELEPHONE COMPANY OF CALIFORNIA, )
a California corporation; and of )
all the telephone corporations )
listed in Appendix A, attached )
hereto. )
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Application of General Telephone
Company of California, a corpora-
tion, for authority to increase
certain intrastate rates and
charges for telephone service.
Application 83-07-02
(Filed July I, 1983)
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OIl 83-08-02
(Filed August 3, 19837"
OPINION ON TOWARD UTILITY RATE NORMALIZATION'S
REQUEST FOR COMPENSATION (ATTRITION PHASE)
Toward Utility Rate Normalization (TURN) filed a request for
compensation on January 17, 1986 in connection with its participation
in General Telephone Company of California's (General) 1986 Attrition
Request. Our decision on this phase, Decision (D.) 85-12-081, was
issued on December 18, 1985 wherein we granted an attrition allowance
of $55.3 million compared to General's request of about $68,851,000.
The filing for the 1986 attrition increase was made by
Advice Letter October 1, 1985 and hearings on the matter were held in
Los Angeles on November 18 and 19, 1985. However, the underlying rate
increase application was filed by General on July 1, 1983.
Consequently the provisions of Article 18.6, of our Rules of Practice
and Procedure (Rules), establishing procedures for reasonable fees and
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costs to participants in proceedings before this Commission that were
initiated on or before December 31, 1984, are applicable rather than
the provisions of Article 18.7, adopted February 6, 1985, which apply
to proceedings initiated on or after January 1, 1985.
Comments on TURN's Request
On February 7, 1986, General filed comments on TURN's
request for compensation. General agrees that TURN is entitled to
some compensation for its "substantial contribution" to several
portions of D.85-12-081, but submits that the amount requested should
be reduced with respect to the hourly compensation rate and denial of
any interest should the decision be delayed beyond the 75 days set
forth in Rule 76.58 of Article 18.7.
TURN's Eligibilitv For Compensation
In a procedure we have since changed, TURN was found
eligible for compensation during calendar year 1985 by D.85-06-028
dated June 5, 1985 on Pacific Bell's (Pacific) Application (A.)
85-01-034 for a general rate increase. Rule 76.23(a) provides in part:
"
If the Commission has determined that the
participant has met its burden of showing finan-
cial hardship previously in the same calendar
year, participant shall make reference to that
decision by number to satisfy this requirement."
As we noted later in D.85-12-017 a finding of financial hardship
during a calendar year does not excuse the requirement for a filing
addressing the remainder of the eligibility requirements. However,
since TURN has relied on D.85-06-028 we will conclude that it has met
the requirements and may claim compensation.
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Substantial Contribution
To be eligible for compensation, a participant must show
that he has made a substantial contribution to the proceeding which
"in the judgment of the Commission, greatly assists the Commission to
promote a public purpose in a matter relating to an issue by the
adoption, at least in part, of the participant's position. A showing
of substantial contribution shall include, but need not be limited to,
a demonstration that the Commission's order or decision has adopted
factual cOL,ention(s), legal contention(s), and/or specific
recommendation(s) presented by the participant." (Rule 76.26). TURN
lists four such contributions set forth in D.85-12-081 as follows:
1. The elimination of two surcharge proposals
which did not conform to D.85-03-042
(combined 1985 attrition hearings for Pacific
and General).
2. The elimination of a proposed adjustment to
working cash.
3. An adjustment to the Telephone Plant Index
(TPI) used for plant additions.
4. A reduction in directory assistance (DA)
revenue requirement.
SurcharRe DesiRn
General's witness John M. Jensik presented three alternative
surcharge rate designs, only one of which conformed to the
requirements of D.85-03-042 regarding attrition rate surcharges. Had
one of the alternative proposals been adopted, the revenue requirement
would have remained unchanged, but the surcharge applicable to
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nonexempt subscribers would have been substantially increased. TURN's
motion to strike the alternative rate designs was granted.
WorkinR Cash Allowance
General presented testimony based on recorded 1984 data
indicating that the working cash requirement associated with the lag
in the receipt of settlement revenues was $24.7 million higher than
the test level adopted in D.84-07-108 which translates to an
additional revenue requirement of $4,984,000. TURN moved that the
related testimony be stricken on the basis that the working cash
requirement has to be computed as set forth in the 1985 attrition
decision, D.85-03-042.
The Commission staff (staff) presented testimony
recommending that the proposed working cash adjustment be stricken
because it reflected a "pick and choose a favorable adjustment"
mentality which the Commission elected to disallow during attrition
proceedings. The motion was granted. It should be noted that the
motion would have been granted solely on the basis of the staff
witness's testimony. Consequently TURN cannot be considered as making
a substantial contribution on this issue.
Telephone Plant Index (TPl)
The record indicated that General had used a TPI of 6.40%
based on a set of numbers provided General by Pacific in late 1984 and
updated in 1985. TURN's Elliott noted that D.85-03-042 provided that
the adopted test year construction budget be based on the most
recently published data and had introduced as evidence an excerpt from
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Pacific's rate increase application, A.85-01-034, showing a 1986 test
year TPI of 4.20%. Using this figure reduced the 1986 test year
operational revenue requirement by $1,555,000.
Directory Assistance Revenue Requirement
For the 1986 attrition year, General originally estimated
directory assistance charge plan savings to be $10,115,000, but
stipulated to the staff's estimate of $10,769,000. The operation
savings estimate methodology presented by General and the staff was
questioned LY TURN, and the resulting further review by General
indicated the savings should be increased an additional $172,000.
TURN's position was adopted.
Itemization of Costs
The summary of TURN's request for compensation is as
follows:
Advocate Hours - J. F. Elliott
26.5 - general hours
2.5 - surcharge issue
2.5 - working cash
6.25 - TPI issue
6.25 - directory assistance issue
44.0
hours at $125 =
$5,500.00
Other Expenses
Reproduce/Mail Motion to Strike (Actual)
Travel/Food/Lodging, Los Angeles
Reproduce/Mail Brief (23% of Actual)
Total
325.15
30.71
$5,882.72
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The general hours include such items as review of the filing
and preparation and analysis of data requests, preparation of cross-
examination, travel time, and review of the decision. The allowance
of such hours is consistent with our past practices in cases such as
this where the participant prevailed on a substantial portion of the
issues for which compensation is sought. Further, as previously
discussed, TURN made a substantial contribution to the proceeding with
respect to the surcharge, TPI, and directory assistance issues and is,
therefore, entitled to compensation for the 15 hours spent on those
three issues, but not for the two and one-half hours claimed on the
working cash issue.
TURN's request for reimbursement of costs to reproduce and
mail its motion to strike testimony and for travel expenses to Los
Angeles appear justifiable and will be allowed. TURN calculates the
cost to reproduce and mail its brief in this proceeding to be $133.50.
Since TURN did not prevail on all points, an allocation equivalent to
the ratio of compensable hours to total hours was made, resulting in a
request of $30.71 (23% of the total). This appears reasonable
and will be allowed. In summary, we will allow the full amount of
other expenses requested of $382.72 and 41.5 of the requested 44.0
compensable work time hours.
The hourly compensation requested for TURN's attorney
Elliott is $125. This contrasts with the $100 per hour allowed for
Elliott in 1983 and 1984 and for TURN's attorney, M. P. Florio, in
1982. According to TURN, failure to increase the hourly compensation
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will provide no recognition for the self-evident increase in Elliott's
experience and the evidence of the rising price for attorneys' time.
Further, TURN notes that Elliott's five years of continuous utility-
related practice coupled with his educational background of a law
degree, an interdisciplinary master's degree in public policy from the
University of California at Berkeley, and a bachelor's degree in
mechanical engineering from Princeton University, give him exceptional
qualifications for utility work. As TURN's lead counsel with complete
case management duties, Elliott believes he should be considered at
least the equivalent of a "high associate", which, according to the
most recent Of Counsel survey, reports rates of $130-150 per hour in
San Francisco and from $105 to $150 per hour in Los Angeles. Under
these circumstances, according to TURN, the requested $125 an hour is
conservative.
According to General, the article in Of Counsel referred to
by TURN does not support an increase in the hourly rate allowed for
the services of TURN's legal counsel because it states on page 3,
"Overall, billing rates appear to have stabilized in the past year.
Some firms have not changed their rates at all, others have increased
theirs only slightly." While this is a generally true statement, we
note that the attorneys of those firms in San Francisco actively
engaged in utility regulatory matter reported increases in billing
rates for 1985 over 1984 ranging from $5 to $30 an hour. We wish to
preserve our regulatory flexibility to set rates for compensating
advocates based on their skill and effectiveness. While we do not
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wish to be artificially bound to a survey such as the one in Of
Counsel, we find it a useful comparison in this case against which to
test our award. Rule 76.22(i) provides that reasonable fees shall be
computed at the prevailing market rates for persons of comparable
training and experience who are offering similar services. Surveys
are one indication of prevailing market rates for advocates skilled
and effective in their special area of expertise. We reserve for our
discretion judgment of individual advocate's skill and effectiveness.
In this case, we are persuaded that Elliott's skill, increased
experience and overall effectiveness in this case fully justify an
allowance of $125 per hour. Such an award is consistent with the
amount we would expect a utility to pay for a person of comparable
training and experience offering similar services. Consequently we
will approve compensation for TURN of $5,187.50 for 41.5 advocate
hours and $382.72 other expenses, a total of $5,570.22. General may
recover the $5,570.22 it pays to TURN under today's order by including
that amount as a deferred revenue recovery item in its attrition
filing for 1987.
TURN notes that Rule 76.58 of Article 18.7 commits the
Commission to rule on compensation requests within 75 days. It states
that given this Commission's extremely heavy workload of higher
priority cases, it seems unlikely that this deadline will be met in
every instance and requests that in the event the deadline cannot be
met, the eventual award include interest at the utility's balancing
account rate. General opposes such a grant on the basia that such an
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award would represent a major policy change since it is not based on
any statutory or regulatory authority and, as such, should reeeive
thoughtful input from all of the msjor utilities, staff, and the
various intervenor groups who regularly appear before the Commission.
General further asserts that no ruling should be made until and unless
the 75-day period is exceeded.
Article 18.7, including Rule 76.58, is inapplicable to this
matter since the request for compensation is filed under Article 18.6
(the 011 10) rules). The 011 100 rules have no specified time in
which the Commission is expected to issue a decision. Rule 76.29
provides only that a decision will issue as soon after the filing as
is reasonably possible. A proposed decision was prepared and
circulated within 45 days of the filing of the request which is not a
lengthy delay and would not entitle TURN to interest under
Article 18.7. Consequently there is no need to address the interest
issue at this time and we will deny TURN's request for interest.
Findings of Fact
1. TURN was found eligible for compensation during calendar
year 1985 by D.85-06-028 dated June 5, 1985 on Pacific's A.85-01-034
for a general rate increase.
2. TURN made a substantial contribution which greatly assisted
this Commission's resolution of the following issues in D.85-12-081:
surcharge rate design, telephone plant index, and direetory assistance
revenue requirement.
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3. TURN did not make a substantial contribution on the working
cash allowance issue wherein the Commission disallowed a requested
$4,984,000 revenue requirement allowance.
4. A reasonable participant's compensation for this proceeding
is $125 per hour.
5. The itemized "other costs" totaling $382.72 submitted by
TURN in the matter are reasonable.
6. TURN did not specify the number of hours its attorney spent
travelling, as opposed to hours spent using legal skills in its
request for compensation for "general hours". Our policy is to limit
reimbursement for travel to the actual costs of travel.
Conclusions of Law
1. TURN should be found eligible to claim compensation under
Article 18.6 of our Rules.
2. TURN's eligibility for compensation during calendar year
1985 was established by D.85-06-028 dated June 5, 1985.
3. TURN has made a substantial contribution under Article 18.6,
Rule 76.26, on the issues listed in the above findings of fact and is
entitled to compensation of $5,570.22 from General less compensation
at the attorney's hourly rate for time spent travelling.
4. The following order should be effective the date of
signature because an award of compensation has been found reasonable
for a participant's activity last year.
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IT IS ORDERED that:
1. Toward Utility Rate Normalization (TURN) shall file a
verification of the time spent travelling that was previously included
within the 26.5 hours of "GENERAL HOURS". The compensation award
shall be reduced by the product of the reported travel time and the
hourly attorney's fee. This filing shall be reviewed by the staff of
the Administrative Law Judge Division.
2. Within 30 days of the receipt of notice from our staff that
it has verified TURN's filing, General Telephone Company of California
shall pay TURN $5,570.22 less travel time for TURN's participation in
the 1986 attrition phase of these proceedings.
This order is effective today.
Dated April 2, 1986, at San Francisco, California.
DONALD VIAL
President
VICTOR CALVO
PRISCILLA C. GREW
FREDERICK R. DUDA
Commissioners
Commissioner William T. Bagley,
being necessarily absent, did
not participate.
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