3. PG&E's Application
PG&E filed A.10-10-006 on October 7, 2010.4 Notice of A.10-10-006 appeared in the Daily Calendar on October 12, 2010. PG&E also served a copy of A.10-10-006 on the service list for A.06-05-007, the docket in which D.07-06-013 was issued. There were no protests or responses.
In A.10-10-006, PG&E asks the Commission to keep PG&E's 2007-2008 Winter Hedging Plan under seal for an additional three years. PG&E also asks for authority to request future extensions of confidential treatment by filing a motion. To achieve these objectives, PG&E proposes that the Commission adopt an ordering paragraph that states as follows:
PG&E's 2007-2008 Winter Hedging Plan shall remain sealed for a period of three years as provided in this Order. Within 30 days of the expiration of this protective order, PG&E may file and serve a motion requesting an extension of the protective order authorized herein.
PG&E states that it is necessary to keep its 2007-2008 Winter Hedging Plan under seal to ensure that market-sensitive information does not fall into the wrong hands. PG&E asserts that sophisticated gas traders could use the detailed information in its 2007-2008 Winter Hedging Plan to predict PG&E's hedging behavior. Armed with this information, market participants could position themselves to extract higher prices from PG&E's hedging activity.
PG&E cites four Commission precedents for its application. First, in Rulemaking 08-06-025, the assigned Administrative Law Judge (ALJ) denied a motion by Shell Energy North America, L.P. (Shell) to obtain PG&E's and Southern California Gas Company's (SoCalGas) confidential 2005-2006 winter hedging plans. The ALJ's ruling stated:
The Commission has previously recognized that natural gas hedging plans contain commercially sensitive information that should be protected from public disclosure. For example, as noted in D.08-09-005, in reference to the SoCalGas hedging plan, the Commission stated:
If some or all of the proposed plan were made public, or otherwise became known to market participants, this could inflate the market prices for the hedging instruments purchased by SoCalGas on behalf of the core customers of SoCalGas and SDG&E.
As a reason to support disclosure, Shell argues that it is not seeking a current hedging plan, and that because the 2005-2006 hedging plans do not reflect current market conditions, their disclosure now would not present competitive harm.
Shell has not justified disclosure of the referenced gas hedging plans, however, merely because of the passage of time. The fact that the hedging plans are now over three years old does not mean that the information contained in those plans no longer is commercially sensitive.
In their filed responses, the utilities persuasively argue that their 2005-2006 hedging plans continue to be commercially sensitive even though the information therein is more than three years old. Disclosure of the older hedging plans could provide Shell, as a market participant, with a road map of how each of the utilities approaches winter hedging, including the timing and strategy for hedging. (ALJ's Ruling in R.08-06-025, at 3-7 (July 8, 2009). (Footnotes omitted.))
The second precedent cited by PG&E is D.07-06-027. There, the Commission placed SoCalGas's 2007-2008 Winter Hedging Program under seal for three years and authorized SoCalGas to file a motion to extend confidential treatment at least 30 days before the expiration of D.07-06-027.5
The third precedent is Resolution ALJ-255, issued on September 3, 2010, which granted a motion by SoCalGas to extend confidential treatment for its 2007-2008 Winter Hedging Program. PG&E believes the Commission's reasoning in ALJ-255 also applies to PG&E's 2007-2008 Winter Hedging Plan:
SoCalGas has provided ample evidence for extension of the protective order. As illustrated in the assigned ALJ ruling in R.08-06-025 discussed above, the Commission found that hedging programs from prior periods contain market sensitive information, disclosure of which could be detrimental to the utility or its customers. (ALJ-255 at 2.)
The final precedent is D.10-01-023. There, the Commission reiterated that utility hedging plans are confidential and should be shielded from disclosure:
We reject Shell's claim that utility hedge plans should be provided to third parties, including gas marketers. As stated in past decisions, the utility hedging plan is to remain confidential, presumably containing highly sensitive market information which, if released, could work toward the detriment of ratepayers... Shell fails to justify why utilities, buying gas for core customers, should be compelled to establish a ... "full disclosure" solicitation protocol for hedge products, while the rest of the market would not be covered within this protocol. (D.10-01-023 at 34.)
4 PG&E originally filed a petition to modify D.07-06-013, but the Docket Office directed PG&E to re-file the petition as a new application.
5 D.07-06-027, Ordering Paragraph 12. The Commission uses slightly different terminology for SoCalGas (Winter Hedging Program) versus PG&E (Winter Hedging Plan).
