2. Discussion
Pursuant to Rule 12.1(d) of the Commission's Rules of Practice and procedure, the Commission will not approve a settlement unless it is "reasonable in light of the whole record, consistent with law, and in the public interest."7 In determining whether a settlement is fair, adequate, and reasonable, the Commission reviews a number of factors. These factors include whether the settlement reflects the relative risks and costs of litigation; whether it fairly and reasonably resolves the disputed issues and conserves public and private resources; and whether the agreed-upon terms fall clearly within the range of possible outcomes had the parties fully litigated the dispute.8 The Commission also has considered factors such as whether the settlement negotiations were at arm's length and without collusion, whether the parties were adequately represented, and how far the proceedings had progressed when the parties settled.9
The Settlements satisfy the criteria of Rule 12.1(d). Each of the foregoing factors the Commission reviews to determine reasonableness militates in favor of the Settlements at issue in this proceeding. While the terms of the Settlements are confidential, PG&E has furnished the Commission full details under seal. We have examined all the sealed documents: the Settlements; the portions of the application, which discuss the parties' settlement efforts and PG&E's rationale for Commission approval.
In our view, the Settlements are reasonable. They reflect the relative risks and costs of continued litigation of the disputed issues. The Settlements' terms lie within the range of possible outcomes had these matters gone to trial. Considering the range of possible outcomes and the attendant uncertainty, we agree that the Settlements are a positive outcome. We concur with PG&E's qualitative statement that the Settlements benefit ratepayers by avoiding the uncertainties of litigation, attorney's fees and costs associated with litigation, and the improbability of collecting any judgments awarded PG&E. The Settlements are consistent with this determination, since PG&E has demonstrated that it has very little chance of recovering any damages awarded in connection with its affirmative claims against either San Joaquin or Byron Cogen. Therefore, Commission approval of the Settlement Agreements is in the public interest. The Settlements are also consistent with the law.
There is no evidence of collusion. The parties' identities are separate and their interests, distinct. We note that settlement negotiations have taken more than a year, each side relied on in-house and outside counsel to research and conduct settlement negotiations and the Settlements were reached after the parties had exchanged information and engaged in comprehensive independent investigation. The negotiation process allowed the parties a further opportunity to review the relative strengths and weaknesses of their litigation positions. Every indication is that counsel on each side adequately analyzed the risks and benefits of their clients' respective positions, and advised their clients competently.
Thus, for the foregoing reasons, the Settlements meet the criteria of Rule 12.1(d) and should be approved.
2.1. PG&E's Motion for Protective Order
By motion filed concurrently with the application, PG&E seeks confidential treatment of redacted portions of the application quantifying damages amounts, Exhibits 1, 2, 3, 4, and portions of Exhibit 6.
In D.06-06-066, the Commission analyzed certain data about Investor-Owned Utility's (IOU) procurement, resource adequacy and renewable portfolio standard obligation and deemed some of it confidential as "market sensitive" data pursuant to § 454.5(g). In D.06-06-066, the Commission set forth standards for designating certain information as confidential. In Appendix 1 to D.06-06-066, the Commission set forth a Matrix that identified several categories of data and the level of confidentiality granted to each category. Specifically, in Ordering Paragraph 2 the Commission stated: "[w]here a party seeks confidentiality protection for data contained in the Matrix, its burden shall be to prove that the data match the Matrix category. Once it does so it is entitled to the protection the Matrix provides for that category."
When an IOU files materials with the Commission and seeks confidential treatment, the IOU must concurrently file a motion with any proposed designation of confidentiality, establishing:
1) That the material it is submitting constitutes a particular type of data listed in the Matrix;
2) Which category or categories in the Matrix the data correspond to;
3) That it is complying with the limitations on confidentiality specified in the Matrix for that type of data;
4) That the information is not already public; and
5) That the data cannot be aggregated, redacted, summarized, masked or otherwise protected in a way that allows partial disclosure. (D.08-04-023 at 24.)
In its motion, PG&E identified as confidential certain redacted portions of the application, and all of Exhibits 1, 2, 3, 4, and portions of Exhibit 6. PG&E's motion is unopposed. PG&E asserts the information at issue is the type of data covered by the matrix under General Order 66-C, Section 2. In addition, to providing the table that identified the specific type of purportedly confidential information and applicable matrix category, PG&E also represented that it was complying with the limitations on confidentiality specified in the Matrix for that type of data, that the information was not already public, and the data could not be aggregated, redacted, summarized, masked, or otherwise protected.
PG&E has fulfilled the requirements for its motion to file under seal. No party has opposed PG&E's motion to protect certain information contained in the Application and Exhibits 1,2,3,4 and portions of Exhibit 6. Both parties have had the opportunity to access and review the claimed confidential materials. The public versions of the Application contain a summary of the Settlement terms. A comparison of the confidential and public versions of the Application and attached Exhibits reveals that the confidential versions contain market sensitive information regarding the operations and organizational structure of the counterparties, as well as settlement payment amounts resulting from negotiations between the parties. PG&E has limited their request to file under seal only data covered by the matrix.
PG&E has met its burden to show that the data it seeks confidentiality protection for matches the Matrix category. As a result, we conclude that PG&E has demonstrated good cause to maintain the terms of the Settlements in confidence. Therefore, we grant PG&E's motion for protective order as set forth in the order.
PG&E has requested that the protected information remain under seal indefinitely. In establishing the Matrix for treatment of confidential data, the Commission determined the length of time that data would be accorded confidential treatment. Data protected under Section 2 of the Matrix must remain confidential for three years. (D.06-06-066 at Appendix 1, Section II.)
7 Commission Rules of Practice and Procedure, Rule 12.1(d).
8 Re Southern California Edison Company, 66 CPUC 2d 314, 317 (1996); see also Re Southern California Edison, 70 CPUC 427, 430 (1996), Re Pacific Gas and Electric Company, 30 CPUC 2d 189, 222 (1988).
9 Re Southern California Edison Company (2000) Decision (D.) 00-11-041.
