N.Y. PSC Secretary Denies Hess Appeal on ESCO Contract Confidentiality

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January 13, 2011

The Secretary of the New York PSC has denied an appeal from Hess Corporation regarding a record access officer's earlier determination denying confidential protection to sales contracts which Hess filed with the PSC in compliance with the Uniform Business Practices.

As only reported in Matters (12/28), Halifax-American Energy, a unit of Freedom Energy Logistics which acts as an agent for South Jersey Energy Co., sought disclosure of standard form variable rate contracts filed by several ESCOs.  Hess' original statement of intent to preserve confidential protection was denied by a records access officer (RAO); Hess appealed the ruling

The Secretary agreed with the records officer that since the contracts at issue are samples or standard form contracts, their release will not result in substantial injury to an ESCO's competitive position which warrants confidential treatment.

"Only if the sales agreement included the kind of information, price and volume, previously held to be entitled to an exception, or contained that information as a result of demonstrated effort that would be costly or near impossible to replicate, could it bear significant weight on an individual ESCO's market position.  That is not the case here.  I agree with the RAO that a template sales contract or agreement alone should not be protected under the trade secret exemption."

The Secretary said that the subject contracts, "are not analogous to process, formula, or financial information which showed strengths or weaknesses of Hess; rather, they indicate standard terms of contracts required to be filed with the Department, and thus that kind of information that should be disclosed."

The Secretary describes the filed contracts as containing "template" or "boilerplate" language, despite Hess' argument that the contracts reflect ESCO-specific terms and conditions even in the absence of actual pricing.

"Many industries are required to fully disclose sales contracts to the public.  For example, federal law requires the telecommunications industry to publicly file its resale and interconnection contracts for public review, specifically to provide a template for use by other telecommunications carriers.  Such a requirement ensures transparency and enables consumers to compare offers for service and to determine which package of service meets its needs.  Even in light of this, the telecommunications industry remains highly competitive.  Without such a nexus, I cannot consider granting the appeal and the requested relief," the Secretary ruled.

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