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HomeMy WebLinkAbout43-Public Hearing ~ , . BE FORE . THE . PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA . "..-;" " ~. -;. ,J 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. ~~ ~ . . . . 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 , . ALJ/NRJ/ek/jt . Decision 86-04-020 AjJril 2, 1986 . . BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) ) ) ) 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. ) ) 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) ,.., ," .~ 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 - 1 - (!, - . . . A.83-07-02, 011 83-08-02 ALJ/NRJ/ek/jt . . 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. - 2 - ; ~ I I I I , A~-07-02, 011 83-08-02 ALJ~RJ/ek/jt . . 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 - 3 - /1 --- . . A.83-07-02. 011 83-08-02 . ALJ/NRJ/ek/jt . . 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 - 4 - / , A~-07-02, 011 83-08-02 ALJ~RJ/ek/jt . . 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 - 5 - , /i .j . A~3-07-02, 011 83-08-02 AL~RJ/ek/jt . . 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 - 6 - . . . A.83-07-02, 011 83-08-02 ALJ/NRJ/ek/jt . . 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 - 7 - . . . A.83-07~02, 011 83-08-02 ALJ/NRJ/ek/jt . . 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 - 8 - ~-- I . . A.83-07-02, 011 83-08-02 . . ALJ/NRJ/ek/jt * . 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. - 9 - 1(; . ,/ , . ~83-07-02, 011 83-08-02 A~/NRJ/ek/jt *... ... 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. - 10 - t . ... A.83-07-02, 011 83-08-02 A~/NRJ/ek/jt * . Q!.!1.~! 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. - 11 -