Bryant v. Arkansas Public Service Com'n

• Decision Date: 02 March 1994
• Docket Number: No. CA,CA
• Parties: Winston BRYANT, Attorney General, Appellant, v. ARKANSAS PUBLIC SERVICE COMMISSION, Appellee. 93-211.
• Court: Arkansas Court of Appeals

Page 414

871 S.W.2d 414

45 Ark.App. 56

Winston BRYANT, Attorney General, Appellant, v. ARKANSAS PUBLIC SERVICE COMMISSION, Appellee.

No. CA 93-211.

Court of Appeals of Arkansas En Banc.

March 2, 1994.

Shirley Gunthard, Deputy Atty. Gen., James D. Senger, Mitchell F. Hertz, Washington, DC, Herbert C. Rule, Stephen N. Joiner, Little Rock, for Arkansas Gas Consumers & Arkansas Elec. Energy Consumers.

Lee McCulloch, E.B. Dillon, Jr., Little Rock, for Arkansas Power & Light Co. ROBBINS, Judge.

The Attorney General (AG) appeals a decision of the Arkansas Public Service Commission (Commission), in which the Commission refused to render a finding on the AG's motion to disclose documents that the Commission had placed under seal by protective order. The AG contends that the Commission failed to make a specific factual determination that the documents were not subject to disclosure as required by Ark.Code Ann. § 23-2-316 (1987) and § 23-2-421(a) (1987). We agree and therefore reverse and remand.

Arkansas Power and Light Company (AP & L) and St. Vincent Infirmary Medical Center (St. Vincent) entered into an incentive rate agreement whereby AP & L offered St. Vincent a special rate in return for St. Vincent's agreement to continue to purchase its energy needs from AP & L rather than obtain it from co-generation. The agreement required the approval of the Commission, and in July 1992, AP & L filed an application with the Commission requesting that it approve the incentive rate contract. In connection with this proceeding, AP & L filed a motion for a protective order of disclosure pertaining to certain exhibits and workpapers provided by St. Vincent. AP & L claimed that these documents were confidential and disclosure of them could harm St. Vincent and requested that disclosure of the confidential information be limited to persons working directly on this Docket. The Commission's staff (Staff) responded to AP & L's motion, stating that it did not object to entry of the protective order but reserving the right to contest it at a future date. The Commission then entered Order No. 1, which granted AP & L's motion for a protective order. Order No. 1 provided:

On July 13, 1992, Arkansas Power & Light Company (AP & L or Company) and St. Vincent Infirmary Medical Center (St. Vincent) filed in this Docket its Motion For Protective Order Of Non-Disclosure (Motion) pursuant to Ark.Code Ann. Section 23-2-316 and 13.05 of the Commission Rules of Practice and Procedure, requesting that the Commission enter a Protective Order prohibiting any disclosure to the general public.... In their Motion, AP & L and St. Vincent's state that the exhibits and workpapers contain proprietary, confidential, and sensitive information that has not been previously disclosed by St. Vincent and has been maintained as confidential by AP & L pursuant to contractual commitment and that the release of this material would damage St. Vincent's competitive position by providing unfair advantage to its competitors. In addition, AP & L and St. Vincent's allege that the public disclosure of the information contained in the exhibits and workpapers may cause security concerns or problems because it contains certain physical descriptions and locations of equipment which is critical to the daily operation of a hospital and to which access is controlled.

On July 21, 1992, Staff filed its Staff Response To Motion For Protective Order of Non-Disclosure (Staff Response). Staff stated that it will not be able to review the exhibits and workpapers absent a Protective Order. Staff stated that based upon the representation that the information is proprietary, Staff does not object to the Commission entering a Protective Order for the exhibits and workpapers if Staff is reserved the right to contest at a future date, upon reasonable notice, AP & L's and St. Vincent's entitlement to a Protective Order for all or portions of the information.

Having considered the matter, it is the finding of the Commission that the Motion For Protective Order For Non-Disclosure filed by Arkansas Power & Light Company and St. Vincent Infirmary Medical Center on July 13, 1992, should be granted subject to the reservation of the right to contest Arkansas Power & Light Company's entitlement to such Protective Order at a later date by Staff.

Subsequent to the entry of Order No. 1, the AG notified the Commission of its intent to participate in the Commission Docket pursuant to Act 39 of 1981. By motion, the AG argued that AP & L and St. Vincent had offered no compelling reasons for shielding the information and that it is in the public interest to make available for public scrutiny the documents from which the public's rates may be set. The AG requested clarification of Commission Order No. 1 and disclosure of the protected information. The Commission then entered Order No. 6, directing all parties who wished to respond to the AG's motion to do so by a certain date and scheduling a hearing on the motion. Arkansas Electric Energy Consumers (AEEC) and Arkansas Gas Consumers (AGC) responded that almost all the information the AG sought had already been disclosed and that the remainder of the information should be kept confidential. AP & L and Staff also responded that the AG's motion should be denied.

At a hearing held on the AG's motion for disclosure, John Talpas, vice president of manufacturing for Great Lakes Chemical Corporation; Neal Jansonius, of AP & L; and Larry Whitt, senior vice president of engineering for St. Vincent's Infirmary, testified as to the necessity of maintaining the protective order. Talpas testified regarding a similar protective order, which had been entered when AP & L and Great Lakes Chemical Corporation sought the Commission's approval of an incentive rate contract. He stated that disclosure to the public of Great Lakes' protected information would have given its competitors valuable insights into Great Lakes' operations and methodology, which would have placed Great Lakes at a distinct disadvantage in competitive bidding. He also testified that he would not have provided sufficient information to AP & L to allow it to make a co-generation deferral offer if he had known Great Lakes' protected information could be disclosed.

Neal Jansonius testified that the AP & L tariffs are on file with the Commission; that the rate St. Vincent will be assessed under the proposed contract has also been filed as part of the public record; but that AP & L has always kept confidential the electricity usage of its individual customers. He testified that the purpose of its rate agreement with St. Vincent was to retain St. Vincent as a full requirement customer and that AP & L would lose $1,500,000.00 in revenue if St. Vincent begins co-generation. He also testified that AP & L would lose its ability to negotiate co-generation deferral contracts with its customers in the future if the AG's motion for disclosure is granted.

Larry Whitt testified that St. Vincent had decided to co-generate its own electrical needs until AP & L offered to enter into the present contract. He stated that, in order for AP & L to offer the special rate, it was necessary for St. Vincent to give AP & L considerable confidential information which he refused to do until AP & L advised him the Commission had authority to issue a protective order. He testified that St. Vincent's co-generation study, which the AG wants disclosed to the public, was developed at considerable cost and that energy usage is very detailed in the study. He stated that the data contained in the study could be manipulated to ascertain the costs of certain factors used in delivering a day of patient care and releasing this information would allow all entities competing with St. Vincent to have information not otherwise available to them. This would clearly put St. Vincent's competitors in a better pricing position than they are now. He further stated that he would have broken off negotiations with AP & L if he had been aware that this information could be disclosed to the public.

Staff agreed with AP & L and St. Vincent that the AG's motion for disclosure should be denied. Staff counsel Lee McCulloch testified regarding the concerns Staff would have if companies such as St. Vincent are forced to make public information the companies believe they are entitled to keep confidential. He testified that the loss of St. Vincent from the AP & L system would have an immediate and large impact on current AP & L customers and that this possibility causes Staff grave concern for AP & L ratepayers. He stated that Staff's position is that the Commission should continue to proceed as it has in the past rather than put a chill factor in the mind of certain industries when they look at Arkansas as a place to provide jobs and make their products.

The only testimony the AG offered in support of its motion was that of John Watkins, a professor of law for the University of Arkansas. He testified that, in his opinion, a competitor could not use St. Vincent's current electrical usage to determine St. Vincent's costs of delivering a patient a day of care, and the fact that the Commission's decision in this proceeding may affect electric rates of other AP & L customers plainly points out the public's interest in disclosure.

On December 23, 1992, after finding the agreement to be in the public interest, the Commission entered Order No. 7, which approved the agreement between AP & L and St. Vincent, but made no finding on the AG's motion to lift the protective order. The AG petitioned the Commission for rehearing of Order No. 7 to obtain a ruling on his motion, but the petition was deemed denied after thirty days. The AG then filed his notice of appeal.

On appeal, the AG does not contest the Commission's approval of the incentive rate agreement between AP & L and St. Vincent but appeals the Commission's refusal to lift its protective order. He...