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NY PSC Secretary Remands Issue of Production of Confidential ESCO Responses To Other State Agencies To ALJs For Further Consideration; Says ALJs Correctly Applied FOIL Law With Respect To Provision of Materials To DPS Staff

April 5, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Secretary of the New York PSC issued a ruling finding that the ALJs presiding over the PSC's retail energy mass market review properly applied Freedom of Information Law (FOIL) and related statutes in their rulings governing the provision of confidential discovery responses, especially with respect to the provision of information to Department of Public Service Staff, but the Secretary found that the provision of protected information to other state agencies could benefit from additional procedures and remanded the issue to the ALJs to consider such additional processes

As more fully discussed in our prior stories, Direct Energy had sought interlocutory appeal of the ALJs' ruling governing the provision of confidential information to parties, as Direct Energy argued that the process was inconsistent with certain statutory requirements that must be met to receive an exemption from FOIL disclosure, and Direct Energy said that the ruling could expose ESCO's proprietary data to public disclosure.

However, the Secretary disagreed, finding that the ALJs properly applied the FOIL and related statutes.

"Initially, a distinction must be drawn between Direct Energy's refusal to submit confidential information to the ALJs and provide that information to Department of Public Service (DPS) Staff and its objection to supplying it to other State agency parties. There is no defensible basis for refusing to supply confidential information to DPS Staff in this proceeding. DPS Staff is bound to protect information claimed to be confidential by the party providing it pursuant to FOIL, the Commission's rules implementing FOIL, Public Service Law (PSL) §15, Public Officers Law § 74, and the Protective Order issued by the ALJs in this proceeding," the Secretary said

"The ALJs properly determined that protected information need not be filed with the Department of Public Service (DPS) Records Access Officer(RAO) in order to be exempt from disclosure under the Freedom of Information Law. The ruling correctly applied 16 NYCRR § 6-1.4, under which ALJs effectively act as the DPS RAO [Records Access Officer], by administering FOIL in Public Service Commission (PSC) evidentiary hearings," the Secretary said

"The thrust of Direct Energy's appeal is that material can only be protected under FOIL by a filing with the RAO under 6-1.3. It apparently believes that a filing with a presiding officer and consequent treatment of the material under 6-1.4 fails to comply with FOIL. The Commission has, however, established separate rules for submitted documents depending on whether a presiding officer is assigned. Compare 16NYCRR §§6-1.3 and 6-1.4. The general FOIL rules provide for filing with the DPS RAO, while the rules for cases where there is a presiding officer provide for the filing of confidential information with the presiding officer. Thus, the rules expressly permit the ALJs to act as the agency RAO in proceedings where they are assigned. The rules for hearings allow for development of protective orders to allow parties access to information without extensive litigation as to whether information is exempt from disclosure under FOIL. It is far more efficient to have the presiding officer for a hearing decide claims of confidentiality that arise in that hearing, rather than have a RAO decide such claims. It is particularly appropriate to have the presiding officers considering a market deemed to be unworkably competitive decide whether material should be protected because of competitive harm from disclosure," the Secretary said

The Secretary further said that the ALJs also properly ruled that other state agencies must protect confidential responses, but found that additional procedures may be appropriate to implement such protection, and remanded the issue to the ALJs

"Although the ALJs also properly concluded that other State agency parties are also bound to protect materials claimed to be confidential by the party providing them, those issues are remanded to the ALJs to consider the processes by which those State agency parties would protect the confidential information should it become the subject of a FOIL request, including whether it is necessary or advisable to obtain written agreements or stipulations to ensure the information is protected and remains subject to the Protective Order," the Secretary said

The ALJs had ordered that other state agency parties could determine whether the confidential information should be delivered to that agency's RAO in accordance with that agency's protocols for complying with FOIL.

"[T]he ALJs concluded that State agency parties would be bound to keep information accepted under the Protective Order as confidential under POL § 74(3)(c), which would provide a statutory exception to disclosure should the materials become the subject of a FOIL request (see POL § 87(2))," the Secretary noted

"The Utility Intervention Unit ('UIU') of the Department of State ('DOS') has supplied an advisory opinion from the Committee on Open Government (COOG) which appears to suggest that State agency parties can agree to be bound by the ALJs' handling of information under the Protective Order, and to accept that information from the other parties, subject to the Protective Order, without having the information go through their agency RAOs. The COOG advisory opinion recommends a signed agreement for other State agency parties," the Secretary noted

"That opinion suggests that more may be needed, however, to ensure that confidential information given to agency parties will be protected under FOIL. The COOG advisory opinion proposes that the State agency parties must sign an agreement or stipulation acknowledging that they are will be [sic] bound by the FOIL determinations made by DPS in this proceeding. Given the importance of this issue, more information from State agency parties concerning their process for separating and protecting confidential information is necessary to clarify whether any need exists to file the information directly with the RAO as Direct Energy claims. Accordingly, the matter is remanded to the ALJs to further address the procedures with regard to supplying confidential information to State agency parties other than Staff in light of the COOG opinion supplied by UIU and this Determination," the Secretary ruled

"Given the claimed sensitivity of the pertinent information and to provide complete clarity as to the obligations of the other State agency parties, the ALJs should further consider whether State agency parties (but not DPS staff) should be required to sign a written agreement that those agencies are bound to abide by the handling of information under the Protective Order, including deferring to the ALJs in the first instance, and the Secretary on behalf of the agency in case of appeal, for any formal determination of the status of any particular information as subject to exemption from disclosure under FOIL," the Secretary said

Finally, the Secretary clarified that the ALJs have not independently found any materials to be confidential solely because ESCOs have sought protected status for the materials.

Instead, the Secretary stressed that a determination on the confidential status of any such documents will be made using the standard statutory tests for confidential treatment and exemption from disclosure.

"[T]he ALJs have not determined that information filed with a request for protection will thereafter be deemed confidential based solely on their designation. Instead, the protections intended by the exemptions to disclosure in POL § 87(2)(d), and the procedures of POL§89(5)(a) are fully implemented by the Protective Order," the Secretary said

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