COM/DGX/eap Mailed 7/5/2006

Decision 06-06-066 June 29, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

(List of Appearances - see Attachment A.)

INTERIM OPINION IMPLEMENTING SENATE BILL NO. 1488,
RELATING TO CONFIDENTIALITY OF ELECTRIC PROCUREMENT
DATA SUBMITTED TO THE COMMISSION

TABLE OF CONTENTS

Title Page

INTERIM OPINION IMPLEMENTING SENATE BILL NO. 1488, RELATING
TO CONFIDENTIALITY OF ELECTRIC PROCUREMENT DATA SUBMITTED TO THE COMMISSION 1

I. Summary 1

II. SB 1488 1

III. Procedural History 1

IV. SB 1488 Requires a Critical Examination of Information Proposed
for Confidential Treatment But Does Not Prohibit All Use
of Confidential Information 1

A. Parties' Positions on Whether SB 1488 Allows Use
of Confidential Information 1

1. IOUs' Position on SB 1488 1

2. Ratepayer Advocates' Position on SB 1488 1

3. ESPs' and Generators' Positions on SB 1488 1

4. AReM/CNE Positions on SB 1488 1

B. Discussion - SB 1488 Requires A Critical Examination of
Information Proposed for Confidential Treatment But Does Not Prohibit All Use of Confidential Information 1

1. Language of SB 1488 1

2. Prevention of Market Manipulation 1

V. Practical Application of SB 1488 1

A. Matrix Approach 1

B. Approach for Data Not in Matrix 1

C. Effect of GO 66-C 1

VI. Burden of Proof 1

A. Parties' Positions - Burden of Proof 1

B. Discussion - Burden of Proof 1

VII. Section 583 Does Not Provide a Substantive Basis for
Keeping Data Confidential 1

A. Parties' Positions on Meaning of § 583 1

B. Discussion - Section 583 Does Not Create a Presumption in
Favor of Confidential Treatment 1

VIII. The Due Process and Confrontation Clauses Do Not
Preclude Use of Confidential Data 1

A. Parties' Positions - Due Process and Confrontation Claims 1

B. Discussion - Due Process and Confrontation Claims 1

IX. Interpretation of § 454.5(g) Protection for "Market Sensitive"
Procurement Information 1

A. Introduction 1

B. Parties' Positions - Meaning Of § 454.5(g) "Market Sensitive"
Information 1

1. IOUs' Positions - § 454.5(g) "Market Sensitive" Information 1

2. Ratepayer Group Positions - § 454.5(g) "Market Sensitive"
Information 1

3. Market Participant and CEC Positions - § 454.5(g) "Market Sensitive" Information 1

C. Discussion - Meaning of "Market Sensitive" Information
Under § 454.5(g) 1

1. Introduction 1

2. Limited to Procurement Information 1

3. Potential to Affect the Market - Materiality Standard 1

4. Procedures to Ensure the Confidentiality of Market Sensitive
Information 1

X. Section 454.5(g) Distinguishes Between Market Participants
and Non-market Participants 1

A. Parties' Positions - Non-market vs. Market Participants
Under § 454.5(g) 1

B. Discussion - Non-market vs. Market Participants Under § 454.5(g) 1

XI. "Market Sensitive" Information Is Different From "Trade Secrets" 1

A. Parties' Positions - Market Sensitive Information vs. Trade Secrets 1

B. Discussion - Market Sensitive Information is Not the Same
as Trade Secret Information 1

XII. The Confidentiality Rules Applicable to IOUs and ESPs Need
Not Be Identical 1

A. Parties' Positions on Whether IOUs and ESPs Should Be Treated Identically 1

B. Discussion - The Confidentiality Rules Applicable to IOUs and
ESPs Need Not Be Idential 1

1. Process For Claiming Confidentiality Should be the Same
for All Entities 1

2. Substantive Confidentiality Determinations Will Depend
on Producing Party's Market Position 1

XIII. Access to ESP Data 1

A. Parties' Positions - Access to ESP Data by Non-market Participants 1

B. Discussion - Access to ESP Data by Non-market Participants 1

XIV. RPS Data 1

A. Section 399.14(a)(2)(A) 1

B. Section 399.12(c)(3)(B) 1

C. Details of Compliance 1

XV. Matrix Treatment of Data Types- IOU Data 1

A. Highlights of IOU Matrix 1

B. Quantity Data vs. Cost Data 1

XVI. Matrix Treatment of Data Types - ESP Data 1

XVII. Phase Two 1

A. Consequences For Excessive Confidentiality Designations 1

B. Model Protective Order 1

XVIII. Comments on the Proposed Decision 1

XIX. Assignment of Proceeding 1

Findings of Fact 1

Conclusions of Law 1

INTERIM ORDER 1

Appendix 1 IOU Matrix

Appendix 2 ESP Matrix

Appendix 3 Glossary of Terms Agreed Upon by Parties

Appendix 4 TURN's Proposed Protective Order and Nondisclosure
Agreement

Appendix 5 IOUs' Model Protective Order (May 9, 2005 ALJ Ruling
in R.04-04-003/R.04-04-025)

Appendix 6 FERC Model Protective Order

Attachment A List of Appearances

INTERIM OPINION IMPLEMENTING SENATE BILL NO. 1488,
RELATING TO CONFIDENTIALITY OF ELECTRIC PROCUREMENT
DATA SUBMITTED TO THE COMMISSION

I. Summary

This decision implements Senate Bill (SB) No. 1488 (2004 Cal. Stats., Ch. 690 (Sept. 22, 2004). SB 1488 requires that we examine our practices regarding confidential information to ensure meaningful public participation in our proceedings and open decision making, while taking account of our obligations under §§ 454.5(g) and 583¹ to protect the confidentiality of certain information.

SB 1488 expresses a preference for open decision making, a policy directive we embrace. However, the bill did not repeal the existing confidentiality provisions that govern our activities. Thus, the challenge we face in our decision today is how to balance the policy goals of public disclosure, full participation and transparency with the statutory provisions allowing and indeed requiring confidential treatment of data in limited instances.

We start with a presumption that information should be publicly disclosed and that any party seeking confidentiality bears a strong burden of proof. Indeed, as discussed below, a party seeking protection of its documents always bears the burden of proof. However, the statutes governing our treatment of confidentiality -- which we note are different from those of our sister energy agency, the California Energy Commission (CEC) - recognize that in some instances (such as "market sensitive" information relating to electric procurement that passes a materiality standard), confidential treatment of data may not only be allowed, but may be required in order to carry out our statutory and constitutional duties. To ensure the best balancing between the broadest disclosure and the narrowest confidentiality, we have developed two appendices to this decision which provide detailed guidance to parties. We have also specified procedures to be followed when there is a request for confidentiality. This guidance will ensure both more consistency and more public disclosure going forward.

We have also focused specifically on information relating to the Renewable Procurement Standard (RPS) program. California has taken a lead in promoting renewable sources of electricity. They are a critical component of the utilities' procurement activities and resource plans. The Commission has treated as public information in other energy areas that focus on reducing energy demand and environmental harm, such as the energy efficiency and demand response programs. Due to the strong public interest in RPS, we have provided in the attached appendices greater public access to RPS data than other data.

This is the first of two decisions we anticipate in the proceeding. In this first phase, we have examined our approach to confidentiality in the context of electricity procurement by investor-owned utilities (IOUs) and energy service providers (ESPs). The legislative history of SB 1488 indicated that the Legislature was most concerned about confidentiality in this context, so we have addressed this issue first. In the next phase of the proceeding, we will examine our practices more broadly.

In summary, this decision reaches the following conclusions:

· SB 1488 requires rigorous scrutiny of requests for confidentiality but does not prohibit all use of confidential information.

· Greater public access should be provided for procurement documents relating to the RPS program because of the public interest aspects of the program.

· The party producing the data always bears the burden of proof.

· Confidentiality protections are essential to avoid a repetition of electricity market manipulation. The due process and confrontation clauses do not prohibit use of confidential data in Commission proceedings.

· "Market sensitive" information is not the same as "trade secrets."

· Protections for "market sensitive" information are limited.

o § 454.5(g) only applies to procurement information.

o Only information that would have a material impact on a procuring party's market price for electricity is protected.

· We should distinguish between market participants and non-market participants such as consumer groups in setting confidentiality rules, but defer for further comment a decision on precisely how to define market participants and non-market participants.

· There should be a window of confidentiality (approximately one year backward and three to five years forward) for confidential procurement and related data.

· The substantive confidentiality protections applicable to IOUs and ESPs need not be identical, but the process for establishing entitlement to protection is the same for all entities.

· To provide detailed guidance, we include two appendices - Appendix 1 for documents relating to IOUs' and Appendix 2 for ESPs documents - explaining our confidentiality rules for these procurement and related records.

· We also establish specific procedures regarding requests for confidential treatment of documents.

· We will commence Phase Two of this proceeding and seek party input on various issues within 30 days.

¹ All statutory references are to the Public Utilities Code unless otherwise indicated.