III. CONCLUSION

As set forth in Ordering Paragraph No. 1 below, D.06-06-066 is modified. A conformed copy of D.06-06-066, as modified herein, is attached as Appendix A. For the reasons specified herein, the applications for rehearing filed by TURN and CAC/EPUC of D.06-06-066, as modified herein, are denied.

THEREFORE, IT IS ORDERED that:

1. Decision 06-06-066 is modified as follows:

a. The following discussion is added at the end of the Section II.B on page 5:

"We note that as a matter of law, and consistent with SB 1488, the Commission continues to have broad discretion to determine whether confidential information submitted by regulated public utilities and other entities to the Commission should be shared with other parties. In exercising this discretion, the Commission will determine whether the public interest in keeping confidential materials confidential outweighs the public interest in making them public. Further, the Commission has the discretion to determine what procedures might be needed to ensure the confidentiality of market sensitive information. (See generally, Pub. Util. Code, §§454.5, subd. (g), 583 & 701.) For example, Public Utilities Code section 454.5(g) provides:

`The [C]ommission shall adopt appropriate procedures to ensure the confidentiality of any market sensitive information submitted in an electrical corporation's proposed procurement plan or resulting from or related to the approved procurement plan, including, but not limited to, proposed or executed power purchase agreements, data request responses, or consultant reports, or any combination, provided that the Office of Ratepayer Advocates and other consumer groups that are nonmarket participants shall be provided access to this information under confidentiality procedures authorized by the Commission.'

Although it expressly provides for access by the Office of Ratepayers (now, the Division of Ratepayer Advocates) and consumer groups that are non-market participants, neither this statute nor any other statutory provisions limits the Commission's authority to protect market sensitive information or make a distinction between non-market participants and market participants.

We note that the test for non-disclosure to the public includes whether "the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record." (See e.g., Gov. Code, §6255, subd. (a).) Further, the Commission's broad statutory authority permits it to do all things, whether specifically designated in law or "in addition thereto", that are "necessary and convenient" in the protection of ratepayers. (Pub.Util. Code, §701.)"

b. The first sentence of the third full paragraph on page 31 is modified to read as follows:

"As we discuss above, we have the authority to determine which information is entitled to be treated confidential, and to determine what procedures to use to maintain the confidentiality of the market sensitive information. In addition, §454.5(g) allows for confidential treatment of certain utility procurement information."


c. The following second sentence of the third full paragraph on page 31 is deleted:

"Thus, even if CAC/CPUC were correct that they have due process rights in Commission rulemaking proceedings, such rights do not require that they have access to every record on which the Commission relies in rendering its decisions."

d. The first sentence on page 32 is modified to read as follows:

"Allowing confidential treatment of such records in our proceedings does not violate any party's due process rights."

e. The following first sentence of the first full paragraph on page 40 shall be deleted:

"We must strike an appropriate balance in interpreting § 454.5(g)."

f. In the second full paragraph on page 40, the following is deleted:

"We must not forget the context in which Assembly Bill (SB) 57 (the act that promulgated § 454.5(g)) arose. The statute, signed in 2002, was conceived in the midst of the state energy crisis."

The deleted language shall be replaced by the following:

"Section 454.5(g) was enacted in 2002, in response to the state energy crisis."

g. The following second sentence in the third full paragraph on page 40 is deleted:

"As we discuss below, we believe this context, and the language of § 454.5(g) itself, dictate several outcomes."

h. The first full paragraph on page 41 is modified to read as follows:

"First, the statute covers specifically procurement plans and related contracts and information. Section 454.5(g) requires the Commission to adopt appropriate procedures to ensure the confidentiality of any market sensitive information, as determined by this Commission, submitted in an electrical corporation's proposed procurement plan or resulting from or related to its approved procurement plan. It also requires the Commission to provide access to such information to its staff and "other consumer groups that are nonmarket participants ... under confidentiality procedures authorized by the [C]ommission." Pursuant to § 454.5(g) market sensitive information includes, but is not limited to: "proposed or executed power purchase agreements, data request responses, or consultant reports, or any combination ...." Second, not all procurement plan and related data is market sensitive; a subset of such information meets this definition. Such information must have the potential to materially affect an electricity buyer's market price for electricity. Data that can have no material impact on this price are not "market sensitive." Finally, we must develop procedures to ensure the confidentiality of information meeting the foregoing requirements."

i. The following last sentence of the second full paragraph on page 42 is deleted:

"Information that does not allow market participants to raise the price of electricity the IOUs procure from them is not, therefore, market sensitive information."

j. On page 43, the following second full paragraph in its entirety, is deleted:

"We disagree with IEP and others who argue that all data should be available pursuant to a `reasonable protective order.' Data that are confidential may be kept from market participants altogether, although we will always require that the producing party meet its burden of proving that it cannot produce aggregated, partially redacted, summarized or other data that do not reveal the confidential material."

This deleted language is replaced by the following:

"As discussed below, we note that we will fully address the market participant issue in a subsequent decision."

k. The following second sentence of the third full paragraph on page 43 is deleted:

"We find these assertions to lack merit."

l. The title for Section X. on page 23 is modified to read as follows: "Access to Market Sensitive Information"

m. The following paragraph carried over from page 43 to page 44 under Section X is deleted:

"Several parties claim that § 454.5(g) does not permit the Commission or other parties to provide different access to data depending on whether they compete in the market for electricity. We find these assertions to lack merit. Section 454.5(g) states that, "the Office of Ratepayer Advocates (DRA) and other consumer groups that are non-market participants shall be provided access to [procurement] information under confidentiality procedures authorized by the Commission." The statute makes no such allowance for market participants who compete with electric utilities. We discuss this issue in the following paragraphs."

n. The title: "B. Discussion-Non-market vs. Market Participants Under § 454.5(g)" on page 45 is deleted and replaced with "B. Discussion-Access to Market Sensitive Information."

o. The following language beginning in the second full paragraph on page 45 and continuing to page 46 is deleted:

"The reference in § 454.5(g) granting access to DRA and other consumer groups who are non-market participants is evidence of a legislative intent to distinguish between non-market participants and market participants. We agree with PG&E that the Legislature could have easily said that market participants should have the same access to data as non-market participants if that had been its intent. Moreover, § 454.5(g)'s key purpose is to address protection for `market sensitive' information, and it makes sense in that context that the Legislature would be sensitive to the risks utilities face if participants in that market have access to their data. The Legislature's concern about protecting the confidentiality of `market sensitive' information logically includes restrictions on access to data for those who operate in that `market.'"

And the following language is added in its place, beginning at page 45:

"Section 454.5(g) specifically requires the Commission to provide access to confidential market sensitive information submitted in electric procurement plan/or resulting from or related to an approved procurement plan to our staff and also to non-market participant consumer groups who agree to subject themselves to our confidentiality procedures. As discussed herein, by this decision we believe various procedures for ensuring confidentiality of market sensitive information may include provision of such information under a protective order or confidentiality agreement, and in some instances, release of such information to the public in general, in aggregate, redacted or masked form.

Our confidentiality process must take into account the 2000-2002 energy crisis in California, and the fact that the Legislature recognizes a need to protect the confidential nature of market sensitive information and has mandated us to ensure such information remains confidential. We will define, by a separate decision, the terms "market participant," and "non-market participant,"as well as any related terms, e.g. "reviewing representatives." Thus, we will determine a more precise definition of the terms upon receipt of additional briefing, as noted in the ordering paragraphs below."

p. On page 46, the following should be deleted from the first full paragraph:

"Thus, it is appropriate and lawful under § 454.5(g) to make distinctions between non-market participants and market participants in determining whether to grant access to confidential data. We cannot anticipate in advance every distinction we might draw, and thus do not adopt a specific process here. Nor do we agree with PG&E that market participants may never have access to `market sensitive' information. There may be instances, for example, where it is appropriate to release such information in aggregate, redact, or masked form. Our decision here finds that § 454.5(g) does not preclude the Commission (or parties) from making distinctions between non-market and market participants in granting or denying access to `market sensitive' data. We will determine a more precise definition of the two terms upon receipt of additional briefing, as noted in the ordering paragraphs below."

q. The fourth sentence in the fourth full paragraph beginning on page 58 and ending on page 59 is deleted:

"The Legislature acknowledged in enacting § 454.5(g) that there may be differences between market participants and non-market participants, and we find the difference to be important."

r. The language in Finding of Fact No. 9 on page 77 is deleted, and replaced with the following language:

"Section 454.5(g) requires the Commission to ensure the confidentiality of market sensitive information and also to provide access to confidential market sensitive information submitted in an electric procurement plan and/or resulting from or related to an approved procurement plan to our staff and also to non-market participant consumer groups who agree to subject themselves to our confidentiality procedures."

s. Finding of Fact No. 12 should be added to page 78, which shall read as follows:

"12. The Commission has authority to determine the reasonable period wherein confidential market sensitive information submitted to it remains confidential. Market sensitive information that is confidential is entitled to protection during a window of confidentiality that may extend for up to three years into the future in most cases and one year in the past."

t. The language in Conclusion of Law No. 11 on page 78 is deleted, and replaced by the following:

"Section 454.5(g) does not require the Commission to ensure the confidentiality of every record connected to procurement; it only relates to confidential `market sensitive' information submitted in procurement plans and related documents."

u. Conclusion of Law No. 13 on page 78 is deleted and the following language added in its place to read as follows:

"13. The Commission has the authority to make a distinction between non-market participants and market participants, and to prescribe the terms of access."

v. Conclusion of Law No. 24 is added on page

79, and shall read as follows:

"24. The Commission is required by § 454.5(g) to ensure the confidentiality of market sensitive information. Once an entity has satisfied its burden of proving that information it has submitted to the Commission is entitled to be withheld from public disclosure and that such information satisfies the relevant requirements of the IOU or ESP matrices adopted by this decision, the public interest in disclosure of such information is outweighed by the public interest in protecting the confidentiality of such information for the time period in which it is confidential. This requirement does not affect the Commission's discretionary authority to determine whether disclosure of such information may be warranted in a case-by-case basis and/or for purposes of discovery subject to appropriate confidentiality procedures."

w. The first sentence in Ordering Paragraph No. 9 on page 82 is deleted in its entirety, and the remainder of the ordering paragraph is rewritten as follows:

"In all cases, the producing party shall meet its burden of proving that it cannot produce aggregated, partially readacted, summarized or other data that does not reveal the confidential material.  In those instances where a producing party believes that a protective order is inadequate to protect its data, it must substantiate its claim with a particularized showing." 

x. Ordering Paragraph No. 11 on page 83 is deleted and the following language is added in its place to read as follows:

"11. Generally, intervenor groups that are non-market participants and other parties that the Commission may so designate may have access to confidential IOU and/or ESP market sensitive information provided such parties shall comply with Commission directives for protecting the confidentiality of such information."

y. Ordering Paragraph Nos. 12-15 on pages 83 to 85 shall be renumbered as Ordering Paragraph Nos. 13-16 respectively.

z. The following is added as new Ordering Paragraph No. 12 on page 83:

"12. The issue of market participants' access to confidential information will be fully addressed in a subsequent decision."

2. Rehearing of D.06-06-066, as modified, is hereby denied.

This order is effective today.

Dated May 3, 2007, San Francisco, California.

MICHAEL R. PEEVEY

President

DIAN M. GRUENEICH

JOHN A. BOHN

RACHELLE B. CHONG

TIMOTHY A. SIMON

Commissioners