Niagara Mohawk Power Corp. v. U.S. Dept. of Energy

• Decision Date: 09 March 1999
• Docket Number: Nos. 96-5082,96-5246,s. 96-5082
• Citation: 169 F.3d 16
• Parties: NIAGARA MOHAWK POWER CORPORATION, Appellant, v. UNITED STATES DEPARTMENT OF ENERGY, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 16

169 F.3d 16

335 U.S.App.D.C. 100

NIAGARA MOHAWK POWER CORPORATION, Appellant, v. UNITED STATES DEPARTMENT OF ENERGY, et al., Appellees.

Nos. 96-5082, 96-5246.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 12, 1998.

Decided March 9, 1999.

William J. Mertens argued the cause for appellant. With him on the briefs was Robert V. Zener.

Claire Whitaker, Assistant U.S. Attorney, argued the cause for appellee United States Department of Energy. With her on the brief were Eric H. Holder, Jr., U.S. Attorney, and John D. Bates, Assistant U.S. Attorney, both at the time the brief was filed, R. Craig Lawrence, Assistant U.S. Attorney, and Thomas Kemp, Attorney, U.S. Department of Energy.

Curtis P. Lu argued the cause for appellee Independent Power Producers of New York, Inc. With him on the brief were W. Harrison Wellford and John C. Marchese.

Before: WILLIAMS, GINSBURG and HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

A cogeneration plant produces not only electric power but also steam or other thermal energy that can be used for various industrial or commercial purposes. 16 U.S.C. § 796. To encourage this source of energy, the Public Utilities Regulatory Policies Act of 1978, 16 U.S.C. § 824a-3 ("PURPA"), imposed a requirement on electric power utilities to purchase power from any qualifying facility ("QF")--a cogeneration plant that meets PURPA's QF standards. See 18 CFR §§ 292.101(b)(1), 292.203(b). The utility must pay for the power at a rate no greater than its "avoided cost"--the cost it would incur to generate an equivalent amount of power itself. See 16 U.S.C.s 824a-3(b); 18 CFR §§ 292.304(a), 292.101(b)(6). Although the phrase "avoided cost" has the ring of an economically sound price, it was suggested without contradiction at oral argument that it has not so proved.

Niagara, a producer and seller of electricity in upstate New York and subject to the PURPA mandate, suspected that some of the facilities from which it buys may not actually qualify for QF status, and to pursue the matter filed a request with the Department of Energy ("DOE") in 1995 under the Freedom of Information Act ("FOIA"), seeking information collected by DOE on forms that these facilities are required to file with DOE's Energy Information Administration--Forms EIA-867. DOE disclosed some but withheld other information, invoking FOIA's Exemption 4, 5 U.S.C. § 552(b)(4), which covers "trade secrets and commercial or financial information obtained from a person and privileged or confidential." The information withheld relates particularly to quantities of fuel consumed and power generated, from which, given market prices for fuel, outsiders could go far to calculating a facility's unit cost of power.

Niagara sued in district court to compel release of the withheld data. Independent Power Producers of New York, Inc., a trade group, and Sithe Energy Inc. ("QF Intervenors" collectively) intervened in support of DOE. Both DOE and the QF Intervenors moved for summary judgment, supporting the motion with affidavits describing the QF industry. Niagara moved for discovery, and on the district court's denial of its motion filed an opposition to the motion for summary judgment, attaching an affidavit depicting the industry in rather different terms. The district court granted summary judgment. It held that Niagara had failed to raise an issue of material fact against DOE's position that the information was exempt because its release (1) would cause substantial competitive harm to the entities submitting the information (the QFs), and (2) would impair the agency's ability to collect this information in the future. The court also rejected Niagara's claim that no FOIA exemption could apply because the information was already publicly available.

* * *

The language of Exemption 4 protects from disclosure "commercial information" obtained from a non-government source, so long as it is "privileged or confidential." The only dispute here is over the last phrase. In National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C.Cir.1974) ("National Parks I"), this court adopted a narrow reading of the word "confidential," saying that information was confidential within the meaning of Exemption 4 only if its disclosure was likely to (1) impair the government's ability to obtain necessary information in the future, or (2) cause substantial harm to the competitive position of the person from whom the information was obtained. The district court found here that DOE had satisfied both alternatives.

In support of its claim that release would impair government interests, DOE offered two conclusory affidavits, claiming that disclosure would impair the EIA's ability to collect such information in the future. See Walton Decl. 57 39-43; Grutsch Decl., p 10. The claim is inherently weak where, as here, the agency has secured the information under compulsion. Critical Mass Energy Project v. NRC, 975 F.2d 871, 878 (D.C.Cir.1992) (en banc). Yet DOE and the QF Intervenors offer nothing but Walton's speculative opinion that QFs may not be forthcoming in the data they submit if DOE allows disclosure, see Walton Decl., p 41, and Grutsch's terse and self-serving statement that as an executive of various QFs he would "attempt to minimize the scope and specificity of the information provided." See Grutsch Decl., p 10. But the agency has the burden of showing that requested information comes within a FOIA exemption, National Parks & Conservation Ass'n v. Kleppe, 547 F.2d 673, 679 (D.C.Cir.1976) ("National Parks II"), and we have more than once held that such conclusory and generalized assertions are not enough to establish the requisite risk of impairment. Id. at 680; Washington Post Co. v. U.S. Dep't of Health and Human Serv., 690 F.2d 252, 269 (D.C.Cir.1982).

DOE insists that summary judgment is proper because Niagara did not controvert the assertions of impairment. But on a summary judgment motion, "[f]acts not conclusively demonstrated, but essential to the movant's claim, are not established merely by his opponent's silence; rather, the movant must shoulder the burden of showing affirmatively the absence of any meaningful factual issue." See National Assoc. Of Gov't Employees v. Campbell, 593 F.2d 1023, 1027 (D.C.Cir.1978). A paper asserting the affiant's intention to sail as close to the wind as possible is hardly enough for this case--especially as the data sought appears to take the form of hard, cold numbers on energy use and production, the fudging of which may strain all but the deliberately mendacious. As the DOE and QF Intervenor affidavits are in these circumstances too vague, the grant of summary judgment on this issue was unjustified.

DOE fares no better in its effort to show that there is no genuine issue of material fact on the likelihood of substantial competitive harm. In National Parks II, we held that for the government to preclude disclosure based on a competitive injury claim, it must prove that the submitters "(1) actually face competition, and (2) substantial competitive injury would likely result from disclosure." 547 F.2d. at 679. Here, DOE's assertions of the existence of competition are somewhat conclusory. See Walton Decl. 57 22-31. But assuming arguendo that DOE met its initial burden of proving that QFs were engaged in competition, Niagara's response was adequate to raise genuine issues of material fact. The affidavit submitted by Niagara, from James Cifaratta, its Director of Unregulated Generation, flatly disputes the assertions of competition. For example, so far as competition by QFs in the sale of power is concerned, Cifaratta asserts that arrangements under which QFs sell electricity in an unregulated market (i.e., outside the shelter of the PURPA mandate) are uncommon and "truly exceptional." See Cifaratta Decl. 57 11-12. He further says that the long term contracts that QFs have with their steam hosts--buyers of the thermal energy produced by cogeneration--preclude competition among the QFs for such hosts. Id. p 13. This theoretically leaves competition among the QFs as contracts expire. But our decision in National Parks II, that the district court was clearly erroneous in finding that certain concessionaires faced substantial competitive harms in contract renewal when the contracts were for long periods and thus renewal competition would only occur infrequently, 547 F.2d at 681-82, suggests that a competitive injury is too remote for purposes of Exemption 4 if it can occur only in the occasional renegotiation of long-term contracts. Niagara's response thus puts in dispute whether there is a likelihood of substantial competition among QFs in contract renegotiation with their steam hosts.

Further, though implicitly accepting DOE's and the QF Intervenors' assumption that QFs' competition with their steam hosts for the division of rents (quite apart from the long terms of the contracts) qualifies as "competition" for purposes of National Parks, Niagara contests the claim that they actually do so. See Cifaratta Decl. p 14. ("[T]he arrangements between QFs and their steam hosts typically are not determined by ordinary market-based concerns ... QFs often provide steam to their hosts at very low rates, sometimes for free. Some QFs, in fact, subsidize their steam hosts in order to secure PURPA and PSL § 66-c benefits for themselves."). While this struggle-free relation may seem unlikely, the contention directly contradicts the assertions on which the district court relied.

DOE's other arguments relating to competitive injury are legally inadequate under the National Parks standard. For example, DOE argues that the QFs may face future or potential competition. But the test explicitly requires proof that the submitters face actual competition. National Parks II, 547 F.2d at 679. DOE also insinuates that...