ORA DATA REQUEST NUMBER SCG-DR-ORA-043 A SOCALGAS RESPONSE

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1 Responses to this Data Request are from the Sempra Corporate Center, not from So Cal Gas. The activities and costs addressed in these responses are those of the Corporate Center, which are then allocated to both So Cal Gas and SDG&E.

2 Subject: : Follow-up to SCG-DR-ORA-21 Corporate Center Shared Services Legal and Executive Request 1. In response to Question 3, SoCalGas indicated that the $2.4 million increase in cost was due to increased staffing and administration of $2.270 million. How many filled staffing positions did SoCalGas have in 2001? What were the classifications and salary/benefits of each staffing position? How many staffing positions were vacant in 2001? There were 115 filled staff positions in There were no vacant positions in that year. The following table shows the classifications and salaries of the Legal Division positions in Benefit costs for all Corporate Center employees are included in the total Pension & Benefits table at FHA-97. They are not part of Legal Division costs as presented in the testimony and, therefore, are not included in this response. LEGAL DIVISION STAFFING 2001 Salary $ s CLASSIFICATION FILLED POSITIONS VACANT POSITIONS Number Salary Number Salary General Counsel Corporate Secretary Attorney 53 7, Paralegal Law Clerk Secretary 29 1, Other Administrative TOTAL ,

3 2. Did SoCalGas fill any of the 2001 vacancies in 2002? How many filled staffing positions did SoCalGas have in 2002? What were the classifications and salary/benefits of each staffing position? How many staffing positions were vacant in 2002? There were no vacancies in 2001; therefore, there were no 2001 vacancies filled in Because of increased legal requirements that could be cost-effectively supported in-house, the Law Department planned to add ten new attorney and six new legal support positions in By the end of 2002, the Law Department had hired seven new attorneys and two new legal support employees, bringing the total number of filled positions to 124. Three new attorney positions and four new legal support positions remained unfilled at the end of The following table shows the classifications and salaries of the Legal Division positions in Benefit costs for all Corporate Center employees are included in the total Pension & Benefits table at FHA-97. They are not part of Legal Division costs as presented in the testimony and, therefore, are not included in this response. LEGAL DIVISION STAFFING 2002 Salary $ s CLASSIFICATION FILLED POSITIONS VACANT POSITIONS Number Salary Number Salary General Counsel Corporate Secretary Attorney 60 8, Paralegal Law Clerk Secretary 30 1, Other Administrative TOTAL ,

4 3. Does SoCalGas estimate that it will fill any of the 2001 vacancies in 2003? How many filled staffing positions does SoCalGas estimate it will have in 2003? What are the classifications and salary/benefits of each staffing position? How many staffing positions will still be vacant in 2003? There were no 2001 vacancies; therefore, no 2001 vacancies will be filled in Through April 18, 2003, the Law Department has hired two attorneys to fill the three 2002 new attorney positions that had not been filled at the end of The Law Department plans to fill the remaining unfilled 2002-attorney position before the end of In addition to the four unfilled new legal support positions remaining at the end of 2002, the Law Department planned to hire two more new legal support employees in 2003, bringing the potential requirement of new legal support personnel in 2003 to six. Through April 18, 2003, the Law Department has hired three new legal support employees. It plans to hire one additional legal support employee this year, deferring the remaining two support positions to The following table shows the classifications and salaries of the Legal Division positions in Benefit costs for all Corporate Center employees are included in the total Pension & Benefits table at FHA-97. They are not part of Legal Division costs as presented in the testimony and, therefore, are not included in this response. CLASSIFICATION FILLED POSITIONS VACANT POSITIONS TO BE FILLED IN 2004 Number Salary Number Salary Number Salary General Counsel Corporate Secretary Attorney 62 9, Paralegal Law Clerk Secretary 31 1, Other Administrative TOTAL ,

5 4. In response to Question 5, SoCalGas indicated that the $0.2 million increase in costs is associated with the life insurance expense for the General Counsel. What is the total annual premium for this life insurance? Who is the primary beneficiary on the policy? Please explain why life insurance for the General Counsel is included as a cost to be charged to the utilities. Actual expenses incurred in 2002 did include $0.2 million for General Counsel life insurance. However, further investigation reveals that one half of that amount was for premiums owed, but not paid in Therefore, the correct annual expense should be $109,000. The annual premium for this policy is $90,000, which, adjusted for payroll taxes, becomes $109,000. This error was not discovered in time to include with the upcoming Errata filing. Life insurance benefits are one element of the General Counsel s total compensation. The General Counsel, as the owner of the policy, designates the primary beneficiary. As a directly assigned cost rather than a labor overhead, this expense was inadvertently not transferred to section H with all other Benefits costs. The General Counsel provides executive leadership and high-level legal counsel to the Utilities and all other business units, since they do not have their own Law Department or General Counsel. It is appropriate that his total compensation, including the cost of his life insurance, be partially allocated to the Utilities.

6 5. In response to Question 7, which requested costs incurred in 2001 and year to date costs SoCalGas provided a list of the 2001 litigation cases. Only the costs for 2001 were provided. Please provide the year to date costs as originally requested. The attached file provides the total case-to-date costs from 2001 through March of Please note that Settlement payments are not an expense of the Law Division and are not included in these costs or any Law Division forecasts. These costs are only for labor and associated case expenses. Settlements are recorded as an expense by the business unit involved in the matter.

7 6. In the Supplemental response to Question 7, SoCalGas provided a listing of 2001 Utility Litigation Matters. What do the letters ETS and EDS stand for? What is the total of the litigation costs as shown in the column headed 2001 costs? Are the 2001 costs of the litigation cases included in the 2001-recorded costs of Corporate Center s Legal unit? If so, how much? Prior to Utility Integration, SoCalGas was organized into two major operating entities: ETS and EDS. ETS (Energy Transmission Services) was responsible for providing energy services to large, commercial customers. EDS (Energy Distribution Services) was responsible for providing energy services for all other customers. Those operating entities are no longer in use. The total of litigation costs shown in the column headed 2001 costs is $10,073,866, which is also shown in the attachment to Question 5 of this Data Request. This entire amount is included in the 2001-recorded costs of the Corporate Center Law Department. Please note that Settlement payments are not an expense of the Law Division and are not included in these costs or any Law Division forecasts. Litigation costs are only for labor and associated case expenses. Settlements are recorded as an expense by the business unit involved in the matter.

8 7. For each of the cases listed in the attached spreadsheet please provide the complete description of the litigation, total costs, and why the case was settled (Confidential) The response to this request is contained in the attached file. Costs for 2002 and 2003 are only for the cases requested in this question They do not represent all legal costs for 2002 and After receiving this data request, Sempra Energy requested that the part asking, why the case was settled be eliminated because of the difficulty in providing a meaningful answer without jeopardizing attorney-client privilege. ORA agreed. Please note that Settlement payments are not an expense of the Law Division and are not included in these costs or any Law Division forecasts. Litigation costs are only for labor and associated case expenses. Settlements are recorded as an expense by the business unit involved in the matter. The attachment to this response is considered confidential information pursuant to PUC Code Section 583 & General Order 66-C and copied on blue paper.

9 8. In response to Question 10, SoCalGas indicated that non-labor expenses include travel and meetings, consulting, fringe benefits, telephone, office expenses and subscriptions. Please provide a breakdown of these non-labor expenses for 2001, 2002, 2003, and Group President - Utilities Dues & Subscriptions 2,037 3,307 3,000 3,000 Office Expense 3,417 18,450 32,800 32,800 Consulting & Misc. 30,191 77,281 65,561 65,561 Meeting Expense 34,082 34,180 31,800 31,800 Telephone 3,656 6,789 6,000 6,000 Travel 35,256 35,586 36,000 36,000 Benefits Not Included in H* 185,704 23, , , , , , ,161 See Workpaper FHA-177 *Includes life insurance, payroll taxes on imputed income, and other benefits not reclassified to Section H in this testimony. A budgeting error failed to include life insurance in 2002, as it is typically paid at year-end ($90K).