PSCO v. Trigen-Nations Energy Co.
| Decision Date | 28 June 1999 |
| Docket Number | No. 98SA103.,98SA103. |
| Parties | PUBLIC SERVICE COMPANY OF COLORADO, a public utility, Respondent-Appellant, v. TRIGEN-NATIONS ENERGY COMPANY, L.L.L.P., a Colorado limited liability limited partnership; Enron Capital & Trade Resources Corporation, a Delaware corporation; Colorado Independent Energy Association, a nonprofit Colorado corporation; and Nicholas Muller, an individual, Petitioners-Appellees, and Public Utilities Commission of the State of Colorado, an agency of the State of Colorado; Bruce Smith, in his capacity as Executive Director of the Public Utilities Commission; Robert J. Hix, Vincent Majkowski, and R. Brent Alderfer, in their capacities as Commissioners of the Public Utilities Commission, Respondents-Appellees. |
| Court | Colorado Supreme Court |
Gorsuch Kirgis LLP, Dudley P. Spiller, Heather Hawker, Paula M. Connelly, Denver, Colorado, Attorneys for Respondent-Appellant.
Kelly Haglund Garnsey & Kahn LLC, James W. Hubbell, Christine L. Murphy, Jeffrey G. Pearson, Denver, Colorado, Attorneys for Petitioners-Appellees.
Ken Salazar, Attorney General, Barbara McDonnell, Chief Deputy Attorney General, Michael E. McLachlan, Solicitor General, Anne K. Botterud, Assistant Attorney General, Regulatory Law Section, Denver, Colorado, Attorneys for Respondents-Appellees.
Pursuant to section 40-6-115(5), 11 C.R.S. (1998), Public Service Company of Colorado (PSCo) appeals from the final judgment of the District Court of the City and County of Denver (district court) reversing a decision of the Public Utilities Commission (PUC). PUC had granted PSCo's application for approval of five customer agreements for special below-tariff electric rates, under section 40-3-104.3, 11 C.R.S. (1998). In the course of its proceeding, PUC had issued a protective order keeping the names of the five customers confidential and had denied petitions for intervention filed by three prospective parties. The district court set aside PUC's decision approving the five agreements. It determined that PUC should not have allowed redaction of the five customer names when the application and notice of proceeding were made public. It returned the action to PUC for identification of the customer names, reconsideration of the intervention motions, and redetermination of the application for approval of the below tariff agreements. We reverse and reinstate PUC's action.1
On August 26, 1997, PSCo filed with PUC a by-pass application under section 40-3-104.3 for authority to provide electric service to five named customers by contract at below-tariff rates. Together with the complete application and supporting customer utility information, PSCo submitted a motion for "extraordinary protection" in accordance with the PUC rules that implement the by-pass statute, in particular, 4 C.C.R. 723-10 exh. 1, para. 12 and 4 C.C.R. 723-10-3.4.2 (1994).3 PSCo requested that the following information be treated as confidential: (1) the identity of the customers; (2) the reason that these customers were offered a contract rate; and (3) the special rate agreements.
PSCo explained its request for confidential treatment of the information under PUC rules as follows:
Certain customers of Public Service Company have opportunities as a result of industry restructuring to purchase alternate services from another provider. The strategic marketing tactics that Public Service desires be kept confidential could be used by other customers or competitors to offer alternative services to additional customers, thereby increasing revenue loss to Public Service Company.
PUC granted PSCo's motion for protective order. Under PUC rules, confidential information is made available to PUC commissioners, their staff, the Office of Consumer Counsel (OCC), and any parties to the proceeding, see 4 C.C.R. 723-10 exh. 1, para. 2; 4 C.C.R. 723-16-3.7 (1999), but the confidential information is not accessible publicly. See 4 C.C.R. 723-10-3.4.3 (1994). As a result of PUC's protective order, the customer names, the five contracts, the customer notification letters to PSCo, and the written testimony of PSCo's marketing director that explained why it chose to offer below-tariff rates to these five customers, have been kept under seal throughout the administrative and judicial review proceedings.
Pursuant to section 40-3-104.3(1)(b), PUC ordered that the notice period for the by-pass application be shortened to five days. See Public Serv. Co., No. C97-898 (Public Utils. Comm'n Sept. 3, 1997). PSCo published notice in the Denver Post, and PUC mailed notices to fifty-two potentially interested individuals and organizations, deleting the customer names in accordance with PUC's protective order. The notices stated that PSCo had filed with PUC "an application seeking an order from the [PUC] authorizing it to provide electric service under contract without reference to its tariffs to five Customers who have expressed their intention to pursue purchase of alternative electric services from other providers." PUC made the notice and redacted application available to the public, deleting the customer names and the reasons for PSCo offering below-tariff rates to them pursuant to 4 C.C.R. 723-10-3.4.3. The redacted application recited items of compliance with the by-pass statute but nevertheless kept details of that compliance confidential to PUC and OCC in accordance with PUC's protective order.
In response to the notice, Trigen-Nations Energy Company, L.L.L.P. (Trigen), a qualifying cogeneration facility operator,4 and the Colorado Independent Energy Association (CIEA), a non-profit corporation formed to advocate interests of non-utility independent electric power generators, timely filed petitions to intervene in the by-pass proceeding. K N Marketing (KNM), a wholesale electric supplier, filed an untimely petition to intervene. PSCo objected to the intervention of all three entities, reasoning as follows:
Importantly, these Intervenors have admitted that they are competitors of Public Service Company, both currently and in the future. C.R.S. 40-3-104.3 was specifically enacted to permit the public utility to respond to competition and to offer a confidential contract to customers who have expressed an intention to decline or discontinue or partially discontinue service, to provide their own service, or to pursue the purchase of alternate services from another provider. The competitors of Public Service Company, such as these Intervenors, are the very people who should not be provided this confidential information in order to comply with the letter and the spirit of C.R.S. 40-3-104.3.
OCC intervened in furtherance of its statutory duty to represent the public interest and, in particular, the interests of residential, agricultural, and small business consumers. See §§ 40-6.5-104(1) & -106(1)(b), 11 C.R.S. (1998). PUC and PSCo made available to OCC the complete agency record in accordance with section 40-3-104.3(1)(b), which requires OCC to utilize the information confidentially.
OCC requested PUC to set a hearing on the PSCo application. PUC then referred PSCo's by-pass application for hearing to an administrative law judge (ALJ). The ALJ recommended denial of intervention by Trigen, CIEA, and KNM. See Public Serv. Co., No. R97-975 (Public Utils. Comm'n Sept. 26, 1997). On October 1, 1997, OCC moved to withdraw its intervention, explaining that:
After a thorough review of the application, consideration of the issues in this matter, and discussion with Public Service Company, the OCC hereby withdraws its intervention in this case. The OCC has no objection to Public Service Company's Application as filed in Docket No. 97A-364E.
Trigen and CIEA filed an exception and objection to the ALJ's recommendation denying their intervention, sought a hearing on PSCo's application, and requested rescission of the protective order's prohibition on disclosure of "the identity of the customers in the application in this matter and other information required by the statute not [to] be concealed."
On October 8, 1997, PUC upheld the ALJ's order denying Trigen, CIEA, and KNM's intervention, granted PSCo's application for approval of the five below-tariff special rate agreements, and placed under continued seal the five customer names, the agreements, the customer notices of intent to PSCo to discontinue service, and PSCo's written testimony regarding its reasons for offering the special rates. See Public Serv. Co., No. C97-1038 at 6-9 (Public Utils. Comm'n Oct. 8, 1997). In denying the third-party motions to intervene, PUC found that Trigen, KNM, and CIEA did not currently serve the five customers and that retail service by them "would likely be unlawful" under the doctrine of regulated monopoly. Id. at 7. PUC also found that intervention by these third parties and disclosure of the customer names to them would "likely frustrate the purpose of § 40-3-104.3 by hindering Public Service's efforts to retain utility retail customers in these particular circumstances." Id. at 7-8. PUC approved the customer agreements, finding that PSCo's application met all requirements of section 40-3-104.3, in particular, that the "application sufficiently demonstrates that retention by Public Service of these five customers under contract is preferable to losing these customers since these customers will continue to contribute to recovery of system fixed costs." Id. at 5-6.
Commissioner Alderfer objected in part to PUC's decision. He called upon PUC to "open a docket to examine the terms and conditions under which competing interests are balanced in the market," reasoning that:
It is both reasonable and desirable to allow a monopoly utility to prepare for competition by responding to customers' needs now. However, if § 40-3-104.3, C.R.S. is to be used to allow the utility to enhance its competitive position in a future deregulated market, the Commission...
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