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NY ALJs Deny ESCOs Objections To Provision Of Confidential Info To PULP Consultant

Also Address Provision Of Protected Info To Other State Agencies, Staff Motion To Compel

April 19, 2017

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

The presiding ALJs in the New York PSC's evidentiary review of the retail energy mass markets denied ESCOs' objections to the provisions of confidential discovery responses to a consultant retained by the Public Utility Law Project, and, in separate rulings, further addresses the provision of confidential information to other state agencies, and a Department of Public Service Staff motion to compel

PULP retained Barbara Alexander as a consultant in the proceeding, and Alexander has executed a protective agreement to receive discovery responses which contained information for which ESCOs claim confidential status.

Constellation Energy and Direct Energy objected to the provision of protected information to Alexander, arguing that it would be impossible for Alexander to ignore and compartmentalize any confidential information in the course of her future consulting.

As summarize by the ALJs, "The objections to PULP’s consultant’s receiving Protected Information center on the fact that Ms. Alexander has been a consultant in retail market proceedings for other government entities and other parties in proceedings outside of New York State. Constellation and Direct Energy argue that, despite the Protective Order and Ms. Alexander’s execution of the Protective Agreement that requires her to maintain the confidentiality of any Protected Information, Ms. Alexander would be unable to honor her commitment and would disclose Protected Information unless she is precluded from receiving it."

"Their concerns are predicated on an assumption that once an individual learns information, it is virtually impossible for that person to forget the information or avoid using it in the future," the ALJs said, as the objecting ESCOs claimed that it is highly likely Alexander will, consciously or unconsciously, disclose protected information

The ALJs rejected these arguments.

"The fact that Ms. Alexander has testified in other proceedings regarding retail access does not provide a basis to conclude that she would disclose Protected Information gained in this proceeding. Constellation and Direct Energy provided no evidence that Ms. Alexander has violated any agreements or orders governing confidentiality of information that were entered in prior proceedings in New York or elsewhere. We note, in addition, that Ms. Alexander has an extensive background in academic publications, training presentations, and has submitted testimony in various venues on a multitude of topics related to the marketing acts and practices of energy service providers, consumer protection and retail access, as well as various aspects of utility regulation. Thus, Ms. Alexander would likely have a heightened interest in maintaining the Protected Information to ensure that her reputation as a consultant on these issues goes untarnished," the ALJs said

Furthermore, Direct Energy also claimed that the protective order expressly prohibits Alexander from receiving the protected information because she has a business interest that is adverse to the ESCOs. That business interest, Direct argued, is in testifying on behalf of governmental and non-governmental entities in opposition to retail access in other jurisdictions.

However, the ALJs said that the prohibition on a party's receipt of protected information due to an "adverse" business interest means a competitive interest, which does not cover Alexander's consulting practice

"That provision is designed to address circumstances such as those where an entity receiving Protected Information has represented or currently represents competitors in other jurisdictions who could utilize the information to obtain an economic advantage as a competitive service provider to the ESCOs subject to this proceeding," the ALJs said

"The fact that a consultant may have expressed opinions contrary to the interests of the ESCOs is not the competitive or business concern that paragraph 4 of the Protective Order seeks to protect against," the ALJs said

In a separate ruling, the ALJs addressed the remanded issue of the provision of confidential information to other state agencies (i.e. the Utility Intervention Unit, etc.)

"In all cases, we begin with the baseline scenario that information designated as Protected Information by a Providing Party is shared via email directly with counsel for a State agency intervening party. The information is labeled as Protected Information subject to the Protective Order in these cases. Under the Protective Order, the Providing Party simultaneously submits the information to the ALJs and to all other parties entitled to receive the information together with its explanation of the basis of its claim that the information is entitled to be exempt from public disclosure under FOIL," the ALJs said

"We leave up to the State agency party whether it would like to request that Providing Parties also provide the information to that State agency’s Records Access Officer (RAO), solely for housekeeping/recordkeeping purposes. In all instances, the information would be labeled as subject to the Protective Order in these PSC cases. In no instance would the Providing Party submit the information to the RAO of the State agency intervenor in such a way as to suggest that the Providing Party is making a separate, independent claim that it is submitting the information to that State agency under POL §89(5), nor would the Providing Party file with the State agency intervenor’s RAO its explanation of the merits of its claim that the information is entitled to be exempt from public disclosure under FOIL. As explained more fully below, is our expectation that these procedures will be followed to avoid any confusion about the respective roles of the State agency intervenors and the Department of Public Service in analyzing and ruling on substantive claims of confidentiality of Protected Information under FOIL," the ALJs said

The ALJs also outlined how state agencies should address FOIL requests for the information under different scenarios.

For example, consider the case where no formal ruling has been made by the presiding PSC ALJs as to the confidentiality of the information, and the state agency intervenor’s RAO receives a request for the protected information from an outside entity

In such case, the ALJs said that the RAO for that agency would deny access to the protected information, on the grounds that the information is exempt from disclosure pursuant to State statute, namely POL §89(5), because the information had been submitted to the Department of Public Service under POL §89(5) and had to be kept confidential pending a formal resolution to be made by the Department of Public Service. Pending such a resolution, the state agency intervenor would have access to the information solely by virtue of the Protective Order issued under the auspices of the Department of Public Service and would have no independent ability to make a separate FOIL determination.

In the case where the PSC ALJs have ruled that the information is exempt from FOIL, the RAO for the state agency would deny access to the Protected Information, on the grounds that the information was exempt from disclosure pursuant to State statute, namely POL §§87(2) & 89(5), pursuant to which the appropriate authority at the Department of Public Service, namely the ALJs, have already ruled on the applicability of an exemption from disclosure to the information. Because the State agency intervenor would have access to the information solely by virtue of the Protective Order issued under the auspices of the Department of Public Service, it would have no independent ability to make a separate FOIL determination, the ALJs said

"While we think that the State agency's status as an intervener party whose participation is subject to the ALJs' authority in these cases is sufficient for our Protective Order to govern that agency party's response to such a FOIL request, we could require the agency's written agreement to that effect," the ALJs said, and sought comment on the issue

Finally, the ALJs also addressed a DPS Staff motion to compel responses from ESCOs.

To the extent ESCOs had objected to provision of the information to Staff based on concerns about the application of the protective order in the case, the ALJs said that such concerns cannot excuse ESCOs' duty to provide the discovery responses.

"[W]e grant Staff’s motion, to the extent the motion seeks from us an order to compel discovery responses to Staff from ESCO parties who are refusing to provide discovery responses solely on the ground that such responses contain information claimed to be confidential and that Staff allegedly cannot adequately protect the confidentiality of the information under FOIL and the Protective Order. Such objections are not a valid response to Staff discovery questions," the ALJs said

However, the ALJs stressed that, "We decline to interpret Staff’s motion broadly to seek an order to compel discovery responses that are being withheld on any other grounds other than the confidentiality issue addressed in the Secretary’s determination. Alternatively, to the extent Staff’s motion was intended to seek an order to compel any and all discovery responses from ESCOs, it is denied as overbroad and lacking in sufficient specificity to allow us to make a proper determination of any other discovery dispute to which it might apply."

"Also, we repeat the caveat that we have stated previously with respect to this case; namely, that our rulings govern the conduct only of the parties to this proceeding. We understand that Staff has sought and continues to seek information related to the issues in these proceedings from ESCOs who are not parties to the case. Our rulings and the Commission’s rules relating to discovery do not apply to that Staff effort," the ALJs said

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