public utility - HMS Legal

“Tip Letter” and Records Related to Investigation Leading to PUC-Approved Settlement Not Subject to Disclosure

Christopher Arfaa on January 5, 2015

The PUC is not required to disclose a utility employee’s “tip letter” or other records relating to an investigation of the utility’s practices where the documents are not considered by the Commissioners when approving the resulting settlement.

A panel of the Commonwealth Court has held that documents relating to a settled, informal investigation of a utility by the PUC’s Bureau of Investigation & Enforcement (I&E) are not subject to disclosure under either section 335(d) of the Public Utility Code or the provisions of Right to Know Law (RTKL), where the documents are not provided to or considered by the commissioners. The opinion in Pennsylvania Public Utility Commission v. Seder, No. 2132 C.D. 2013 (Pa. Commw. Ct. Dec. 3, 2014), reverses orders by the Office of Open Records directing the PUC to provide news reporters and their publications with access to an anonymous “tip letter” from a purported PPL employee and other documents relating to the resulting I&E informal investigation of the utility. As the court itself acknowledged, its construction of section 335(d) and the RTKL allows the parties to a PUC settlement “great leeway in determining which documents are subject to public disclosure.”

The court considered the requirements of section 335(d) and the RTKL in turn. Under section 335(d), the PUC must disclose documents related to an investigation of a public utility if (1) the commission has made a decision, entered into a settlement or taken any other official action under the Sunshine Act, and (2) the commission relied on the documents in question when doing so. 66 Pa. C.S. § 335(d). The key question before the court was who constitutes the “commission” in the context of section 335(d): the commissioners themselves, or the entirety of the PUC, including I&E. Conceding that the statute is not a model of clarity, the court determined that “commission” means only the commissioners themselves, because they alone are entitled, by majority vote, to make the decisions, enter into the settlements and take the other official actions that are the subject of section 335(d). The first prerequisite to disclosure was satisfied when the PUC approved the settlement with PPL, but the second was not, because the commissioners did not have access to or rely upon the “tip letter” or other documents when deciding to enter into the settlement.

The court then held that the requested documents are also exempt from public access under section 708(b)(17) of the RTKL, which exempts agency records relating to noncriminal investigations, including complaints, investigative materials, records containing the identity of a confidential source, and records containing information made confidential by law. 65 P.S. § 67.708(b)(17)(i)-(iv). The “tip letter” is exempt from disclosure because it was the basis for I&E’s institution of an informal investigation. The remaining documents are exempt because they were created or collected as part of an informal investigation to determine compliance with regulations. The court reasoned that to require the PUC to disclose the requested documents could lead to public utilities and employees being less likely to provide information out of fear of retaliation or public embarrassment, thus “frustrating the purpose of [the] PUC’s investigations and lessening the effectiveness of the PUC in monitoring the utilities’ compliance with statutory and regulatory requirements.” (The court concluded with a separate determination that a legal memorandum prepared by an I&E prosecuting attorney analyzing whether the allegations against PPL violated the Public Utility Code is legally privileged and therefore also exempt from disclosure.)

A copy of Pennsylvania Public Utility Commission v. Seder, No. 2132 C.D. 2013 (Pa. Commw. Ct. Dec. 3, 2014) is available here.

PA Utility Eminent Domain Exercise Not Limited to “Absolute Necessity”

Kevin McKeon on December 30, 2014

In a 5-2 en banc opinion issued December 22, the Commonwealth Court flatly rejected the notion that a utility must prove “absolute necessity” before resorting to condemnation. Affirming the PUC’s grant of PPL Electric’s application to exercise its eminent domain power to acquire rights-of-way and easements over the private lands of protestants to construct a new eleven-mile transmission line across the Susquehanna River and a related substation, the Court reaffirmed prior case law adopting an easier hurdle for would-be utility condemnors. As the Court reasoned: “Under Protestants’ proposed standard, utilities could only seek approval … when a problem is looming and the resolution is ‘absolutely necessary.’ Utilities would essentially have to wait until an existing system fails before seeking approval of a project. Not only would this approach be impractical and unrealistic, it would actually pose a danger to the health, safety and welfare of the public.” Hess v. Pennsylvania Public Utility Commission, 1370 C.D. 2013 (December 22, 2014) (en banc).

Pennsylvania law permits public utilities to place necessary facilities in the public right-of-way as a matter of right, and provides public utilities with eminent domain power to take private lands for that purpose upon a finding by the PUC that the service to be furnished by the utility is “necessary or proper for the service, accommodation, convenience, or safety of its patrons, employees and the public.” 15 Pa. C.S. §1511(c). In Hess, the landowners contended that the statutory standard requires proof that the project is “absolutely required,” for example, to avoid imminent “line overloading” and “permanent damage.” The Court, however, agreed with the Commission that “our courts have not required such a narrow standard to demonstrate necessity under 15 Pa. C.S. §1511(c). Rather, courts have found necessity wherever the project resulted in a benefit to the public, such as an improvement to the reliability of service or lower prices.”

Coming at a time when NIMBY (“Not In My Back Yard”) property owners and BANANA (“Build Absolutely Nothing Anywhere Near Anyone”) environmental groups are increasingly contesting the right of utilities to build natural gas and oil pipelines to support Pennsylvania’s energy boom, the decision is significant, even though its disposition of the “necessity” issue essentially follows existing law.

The dissent, however, offered support to those challenging utility projects such as transmission line siting on the basis of environmental concerns. Judge Leavitt, joined by Judge McCullough, argued that alternative river crossing sites were available, and that the PUC was required to evaluate the impact of PPL’s proposal on the environment, but failed to do so. Observing that PPL’s proposal will “degrade the environment” by placing “a new transmission line across the Susquehanna River in a pristine location,” she rejected the PUC’s reliance on its regulation implementing the Pennsylvania Constitution’s Environmental Rights Amendment to conclude that environmental impact analysis was not required because of the size of the transmission line: “There is no rationale for not including a 69 kV transmission line within the ambit regulation because it will have the same negative impact on the environment as a high-voltage transmission line. It will involve clearing a wide swath of land and leave in its place unsightly transmission poles and lines.” Given the Pennsylvania Supreme Court plurality’s recent reliance on the Environmental Rights Amendment as a basis for striking down key provisions of Act 13’s Marcellus Shale driller-friendly zoning provisions in the Robinson Township case (see previous blog posts), the dissent provides what may be an inviting basis for the landowners to seek Supreme Court discretionary review.

A copy of Hess v. Pennsylvania Public Utility Commission, 1370 C.D. 2013 (December 22, 2014) (en banc) is available here.

NIMBYs and Environmental Groups Win First Round Before PUC Against Sunoco Pipeline

Kevin McKeon on August 19, 2014

Sunoco’s proposed Mariner East pipeline that would transport natural gas liquids (NGLs) from Pennsylvania’s rich Marcellus Shale production in Western Pennsylvania to processing plants in southeastern Pennsylvania, received a blow from Pennsylvania Public Utility Commission ALJs on July 23, 2014.

Under Pennsylvania law, if the PUC finds public utility buildings or structures to be “reasonably necessary,” they are exempt from local zoning. Seeking such an exemption for the 18 pump stations and 17 valve control stations enclosed in metal buildings that it plans to install in 31 separate locations in order to carry the NGLs across Pennsylvania, Sunoco Pipeline filed petitions with the PUC seeking such an exemption and requesting a finding that the buildings are “reasonably necessary” for the operation of its pipeline. The rub is that the exemption is not available unless the applicant is a “public utility,” and under recent PUC decisions, the determination of whether an entity is a public utility has gotten less and less predictable.

In reaching their conclusion the ALJs relied on a number of factors, ranging from Sunoco’s recent abandonment of service on portions of the line to questions about whether the new proposed service transporting propane and ethane is subject to regulation at all, and, even if it is, whether the service to be provided will be, as required under the statute, “to or for the public.”

The ALJs summarized Sunoco’s petitions as “premature at best” because Sunoco’s applications to operate its NGL service from west to east are still pending before the Commission in other dockets, and its status as a public utility entitled to the exemption is not clear.

Sunoco has the opportunity to file exceptions to the ALJs’ decision to the PUC.

PUC Seeks Comments On Smart Meter Procurement And Installation Issues

Todd Stewart on July 21, 2011

The PUC recently issued a Tentative Order seeking comment on a number of issues involved in the implementation of the deployment of smart meter technology throughout the Commonwealth and the data transactions required to support that implementation. Smart Meter Procurement and Installation, Docket No. M-2009-2092655 (Tentative Order entered June 30, 2011).

The PUC’s June 30, 2011 Order proposes a methodology for providing real time and time-of-use pricing for companies using dual billing and rate ready consolidated billing; the means by which historical interval usage data is transmitted; and, the monthly exchange of bill quality interval usage data recorded at meter level. The Commission also clarified its expectations with regard to the required functionality it wants to see in smart meter deployment plans including the ability for smart meters to provide customers with direct access to their hourly usage and price information, support for automatic control of the customer’s electric consumption by the customer, the utility or the customer’s agent (at the discretion of the customer) and to allow for direct meter access or electronic access to the customer meter data to third parties with customer consent.

Lacking in this order, and left for resolution elsewhere, is the issue of what type of customer consent is required for access to the meter and for access to interval meter data. The issueThe issue of interval usage data privacy has been raised recently by a number of privacy and customer advocates who are concerned that interval meter data in the wrong hands can pose many threats to customers. The specific concern is that in the hands of someone who is capable of correctly interpreting the data, it can be used to learn much about a particular household’s behavior, such as what times they are home or not home, what appliances they use and when and on and on. Accordingly, these advocates want to restrict access to such data and to require affirmative customer consent before such data is released, and in some cases, before it is even gathered. For some, the concerns even involve the potential for the government to use such information to spy on its citizens, creating a very real, “big brother” scenario, law enforcement agencies already have used electric usage information as a basis of probable cause for search warrants, so the idea is not much of a stretch. Some have even raised the concern that customers be able to opt out of having a smart meter installed.

The Office of Consumer Advocates comments in response to the PUC’s Reconsideration Order in Interim Guidelines for Eligible Customer Lists, Docket Nos. M-2009-2183412, et seq. (Order entered June 13, 2011); exerted significant effort on addressing the need for express and affirmative customer consent to the release of any real time usage data. The OCA argues that any data derived from real time metering is subject to such provision under Act 129, 66 Pa. C.S. § 2807(f)(3). Others would argue that only the real time data or access to the meter is subject to the restriction. It is clear that the statute requires some form of customer consent, but so far the PUC has yet to provide guidance on what form that consent must take.

Comments to the data exchange questions posed by the Order are due on July 30, 2011. Reply comments at Docket Nos. M-2009-2183412 are due July 28, 2011.

PA PUC Enters Written Decision In Hms’laser Marcellus Pipeline Application Case

Thomas Sniscak on June 17, 2011

On June 4, 2011, the PUC reduced its majority motion to a written order and has remanded the case to an Administrative Law Judge for a ruling on whether the service and terms of the partial settlement are in the public interest. The Order essentially follows Commissioner Wayne E. Gardner’s Motion, which was joined by Chairman Robert F. Powelson and Vice-Chairman John F. Coleman, Jr. at the May 19, 2011 public meeting. It accepted the position of Laser and other parties, such as the PUC’s Office of Trial Staff, that the service proposed by Laser will be public utility service because it will be open to any member of the public requiring service to the extent of capacity.

Notably, the Order states that “not all gathering and transportation service providers will be considered public utilities and subject to the Commission’s jurisdiction.” Specifically, in resolving public utility status questions, the Commission will consider whether “service is provided to a defined, privileged and limited group when the provider [pipeline] reserves its right to select its customers by contractual arrangement so that on one outside of the group is privileged to demand service.”

The Order also clarifies the law regarding the imposition of voluntary versus involuntary conditions to a certificate of public convenience. In doing so, the majority found that the settlement conditions do not result in an expansion of PUC jurisdiction.

Finally, the Order leaves the door open for light-handed regulation of service and rates akin to present natural gas transportation service under the PUC’s regulations. Under that, a maximum approved tariff rate is filed and approved but the utility and customer more commonly negotiate a tailored contract rate and individualized service terms.

HMS’ Thomas J. Sniscak and William E. Lehman represent Laser in this proceeding.

PUC Approves New Rules Aimed at Improving Retail Natural Gas Competition

hmslaw1 on January 13, 2011

Today, in split vote, the PUC approved new regulations intended to level the playing field for natural gas competition.

PROPOSED RULEMAKING-PROMOTION OF COMPETITIVE RETAIL MARKETS, L-2008-2069114. While the final rulemaking order may not be publicly available for a few days, it appears that the new rules will require Natural Gas Distribution Companies to remove certain costs of providing default service from the base rate distribution charge, which all customers pay, and instead collect those charges as part of the gas cost rate, which is paid only by customers who remain on default service.

Based upon comments and earlier iterations of the rulemaking process, it appears likely that the Commission also will address Natural Gas Supplier requests to eliminate or shorten the recovery of prior period gas costs from customers who switch to a competitive provider from default service. These payments are collected through a mechanism referred to as a “migration rider” and are now recoverable for a full year after a customer switches. The new rules are expected to shorten the time period over which those costs may be recovered.

One other important change proposed by the new rules will be a further refinement of the Price to Compare. The PTC, as it is known, is intended to assist customers in evaluating competitive offers by presenting the “rate” that the customer pays, in theory, to their local gas utility for the commodity portion of service. The goal has always been for the PTC to provide a meaningful comparison point for competitive offers. Up till now, however, the PTC has not reflected a similar basket of costs as those faced by competitive suppliers, some of which change significantly over time. The new rules will require that additional costs that customers now pay as part of default service be explicitly included in the price to compare. Significant among those currently unrecognized costs that will in the future be included in the PTC is what is known as the e factor, which varies quarterly and is intended to recover or refund differences in actual prior period gas costs from projected prior period gas costs. It is the projected costs that form the basis of the rates customers actually pay. Including the e factor in the PTC is intended to make the PTC a better comparison point by making it more representative of the costs that a customer avoids by taking service from a competitive supplier.

The Final Rulemaking Order should be available within two weeks.

“Tip Letter” and Records Related to Investigation Leading to PUC-Approved Settlement Not Subject to Disclosure

PA Utility Eminent Domain Exercise Not Limited to “Absolute Necessity”

NIMBYs and Environmental Groups Win First Round Before PUC Against Sunoco Pipeline

PUC Seeks Comments On Smart Meter Procurement And Installation Issues

PA PUC Enters Written Decision In Hms’laser Marcellus Pipeline Application Case

PUC Approves New Rules Aimed at Improving Retail Natural Gas Competition

Our Socials

Resources

Contact Us