ERCOT Compelled To Disclose Market Participants' Confidential Information In Panda Lawsuit
July 18, 2016 Email This Story Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
ERCOT informed market participants that, as part of ongoing litigation relating to the development of the Panda Sherman and Panda Temple plants, ERCOT has received discovery requests from plaintiffs seeking a variety of information relating to the development of generation in ERCOT.
As reported by RetailEnergyX.com, in the suit, Panda Power said that it, "relied on Defendant’s [ERCOT's] representations [in the CDR] to invest nearly $2.2 billion to build three power plants," and alleged that, due to changes in the CDR calculations, "ERCOT's actions with respect to the CDR amounted to negligent misrepresentation, fraud, and breach of duty."
ERCOT informed market participants that it has identified tens of thousands of documents responsive to Panda's discovery requests, and some of these documents constitute Protected Information as defined in the ERCOT Protocols.
The vast majority of the documents classified as Protected Information were identified in responding to plaintiffs’ request for "[a]ll preliminary versions or drafts of [Capacity, Demand, and Reserves Reports (CDRs)] from January 1, 2007 through 2014." The draft CDRs include two different types of Protected Information.
First, they include the name, output, fuel type, county, and expected year of commissioning of various projects for which a Full Interconnection Study (FIS) has not yet been requested. Except for the project name, which remains confidential until a Standard Generation Interconnection Agreement (SGIA) is executed, this project-specific information is considered Protected Information unless and until the developer requests an FIS. Although many of these projects have at some point reached a stage of development that removes any confidential status for any or all of the information, many other projects in these reports have not yet reached the requisite stage of development. For these projects, the above information remains confidential. The data at issue covers hundreds of generation projects that were at some stage of development in ERCOT between 2007 and 2014.
Second, the draft CDRs include anticipated available capacity values for generators in Private Use Networks (PUNs). PUN generation availability information submitted pursuant to Protocols Section 10.3.24, Reporting of Net Generation Capacity, is expressly deemed Protected Information by Section 22.214.171.124(x) of the ERCOT Protocols. The data at issue includes PUN generation capacity values in draft CDRs from 2007 through 2014.
For both of these types of Protected Information, ERCOT has historically removed the information from the CDR before posting the public version of the report. However, because the discovery requests at issue seek drafts of these reports, ERCOT is now required to disclose this confidential information, as it is discoverable based on the allegations in the litigation and under Texas law.
Protocols Section 1.3.6(1)(a) authorizes ERCOT to disclose this information when legally required to do so. When such a disclosure is required, Protocols Section 1.3.5 obligates ERCOT to provide notice to the Disclosing Party that it intends to produce the information and to seek protection of the information through confidentiality agreement, protective order, or other appropriate mechanism.
Pursuant to these provisions, ERCOT provided notice that it intends to produce the Protected Information described above during the week of July 18, 2016. In an effort to ensure the protection of this information, ERCOT has designated all Market Participants’ Protected Information identified in the disclosures as "Attorney’s Eyes Only" and, consistent with this designation, has requested that the Court enter a protective order prohibiting plaintiffs’ counsel from allowing plaintiffs to review such commercially sensitive information. A hearing to consider ERCOT’s proposed protective order is scheduled for July 27, 2016 in Grayson County District Court. Plaintiffs’ counsel has agreed to abide by the terms of the proposed order until further order of the court.
ERCOT’s discovery response also includes a number of various documents that include information classified as Critical Energy Infrastructure Information (CEII) under the ERCOT Protocols. While CEII is not considered Protected Information, ERCOT must safeguard this information from public disclosure and has therefore designated this information as "Confidential" under the terms of the proposed protective order. Such a designation would allow plaintiffs to review any CEII produced by ERCOT (which plaintiffs are already legally entitled to do), but would prohibit further disclosure to any third party, except as permitted under the narrow exceptions in the proposed order.