8. The Record is Sufficient Despite
Confidentiality Concerns

IEP and CAC/EPUC ague that we cannot make a finding on the utilities' avoided costs without certain of the utility cost, load, and supply information that has not been made available to all the parties. IEP and CAC/EPUC claim that the Commission cannot use as a basis for its decisions information that is not disclosed to all parties. They claim that if they do not have access to all of the information they deem necessary to determine avoided costs, their due process rights will be violated. CAC/EPUC complain that without full access to IOU planning and procurement data, QFs cannot meaningfully evaluate rates offered by the IOUs for QF power. CAC/EPUC argue that in order to establish avoided cost rates for energy and capacity payments, we must consider the actual costs that would have been incurred by the IOU "but for" purchasing the power from the QF. Therefore, they argue, detailed information on actual procured resources and actual resources available to replace QFs is required. In support of its position, CAC/EPUC states that the FERC order in Tennessee Power Co., (77 FERC ¶61125) "entrusts State regulatory authorities...with the responsibility to compile the necessary data for the purpose of calculating avoided cost rates for QF purchases." (1996 WL 636527 (F.E.R.C. 1996.)) CAC/EPUC asserts that the lack of "granular" data in the record strongly supports the position that no changes may be lawfully made to the SRAC formula and leaves the IOUs' proposals unsubstantiated.

We disagree. The debate over the degree of access to specific IOU load and supply information began with (a) the CAC/EPUC Motion for Order Compelling Compliance with Federal Law and Production of Complete, Non-Redacted Responses to Data Requests (December 9, 2004); (b) the IEP Motion to Compel Responses to Data Requests (January 4, 2005); (c) the CAC/EPUC's Draft Protective Order (January 21, 2005); and (d) other parties' responses to and comments on these pleadings. These issues were resolved in the ALJ's May 9, 2005, Ruling on Protective Order and Remaining Discovery Disputes. In the May 9, 2005 ruling, the ALJ found that certain of the information requested by the parties during discovery in this proceeding should remain confidential, or should be released only under a protective order. As noted in the May 9, 2005 ruling, "the Commission often faces the tension between transparency of information and the potential adverse impacts the release of some information may have on markets and ultimately ratepayers." The ALJ further noted that many of the discovery requests at issue in this proceeding concern data related to the utilities' procurement of energy, therefore Pub. Util. Code § 454.5(g) governs the manner in which the issues are addressed. Pub. Util. Code § 454.5(g) provides that the Commission "shall ensure the confidentiality of any market sensitive information submitted in an electrical corporation's proposed procurement plan or resulting from or related to its 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 (ORA) and other consumer groups that are nonmarket participants shall be provided access to this information under confidentiality procedures authorized by the commission."

The May 9, 2005 Ruling resolved the discovery disputes by (a) adopting a protective order that balanced the QF parties' need for certain information to participate meaningfully in this proceeding with the utilities need (and, implicitly, the ratepayers' need) to prevent certain sensitive market information from being used by the QF parties' marketing personnel, and (b) determining the level of protection required for each type of requested data. The ruling found that, although market participating parties would not have access to certain proprietary information and would not have complete access to market sensitive information, non-market participants would have complete access to all information and would be able to provide the Commission with the information and arguments necessary to reach informed decisions on the substantive issues in this proceeding.

Subsequently, in D.06-06-066, the decision implementing SB 1499 (Stats. 2004, Ch. 690), we affirmed certain of the findings in the May 9, 2005 Ruling. In particular, D.06-06-066 found that "[T]he due process and confrontation clauses do not prohibit use of confidential data in Commission proceedings" (p. 4). The Commission further noted that "it is not a violation of due process for any agency to allow certain records to be deemed confidential where there is a statute allowing confidentiality in certain cases." D.06-06-066 goes on to direct that "[W]here we find that data are market sensitive pursuant to Pub. Util. Code § 454.5(g) or otherwise entitled to confidentiality protection, in most cases, we adopt a window of confidentiality..." (D.06-06-066, mimeo., OP 1.)

We therefore conclude that there is no due process error involved in reaching a decision on the IOU's avoided cost and other issues on the current record, which is complete for this purpose.