19991101Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
STEPHANIE MILLER
TONYA CLARK
RON LAW
JOE CUSICK
BEV BARKER
RANDY LOBB
TERRI CARLOCK
DAVE HATTAWAY
WORKING FILE

FROM:

DATE: November 1, 1999

RE: AMENDMENTS TO THE COMMISSION’S RULES OF PROCEDURE,
CASE NO. 31-0101-9901

On August 27, 1999, the Commission issued a Notice of Proposed Rulemaking regarding amendments to its Rules of Procedure, IDAPA 31.01.01.000 et seq. The Commission’s Notice stated that the Rules of Procedure had last been updated in 1993. Given the changes in the utilities industry and various state statutes, the Commission determined that it was appropriate to update its Rules of Procedure.
In its Notice, the Commission observed there were several reasons why it was necessary to update its rules. First, the Commission stated that the Legislature had repealed the Motor Carrier Act, recodified the Public Records Act, and permitted the Commission to exempt utilities from certain securities filing procedures. Second, the Commission proposed to amend its rules to address procedures for the receipt, safeguarding and handling of trade secrets and other confidential information exempt from public disclosure. Third, the Commission proposed several rules to allow it to electronically serve Orders and Notices. Fourth, the Commission proposed to modify its rules to require affected counties to be served Notices of Application and Modified Procedure. Finally, the Commission proposed several other amendments to its Rules of Procedure to improve readability and clarity, eliminate ambiguity and inconsistencies, correct citations, and make other housekeeping changes.
The table below categorizes the reasons for the proposed amendments and the rule specifically amended. Given the nature of some proposed amendments, the rules may appear in more than one category.
Nature of Amendment Affected Rules
Motor Carrier Act Repealed 000, 9, 52, 61, 72, 76, 102, 111, 112, 113, 121, 123, 131, 201, 202, and 263
Public Records Act Recodification 000 and 26 Security Statute Enacted 141, 145 and 147 Procedures for Trade Secrets 67, 233, 243, 267, 282 and 287 Electronic Orders/Notices 12, 16, 41, 19, 61, 111 and 202 Miscellaneous Changes 000, 12, 39, 111, 121, 122, 162, 202, 203, 231, 331 and 343
THE COMMENTS
Notice of the Commission’s proposed rulemaking was published in the Administrative Bulletin on October 6, 1999. The Administrative Bulletin and the Commission’s Notice of Proposed Rulemaking required interested persons to submit comments no later than October 27, 1999. Timely comments were filed by the Legislative Services Office, Citizens Telecommunications Company, U S WEST Communications and the Northwest Industrial Gas Users (NWIGU). Untimely comments were received from Potlatch & Troy Telephone Companies. Their untimely comments are identical to comments filed by Citizens. The Senate and House Subcommittees for review of Administrative Rules reported that no objections to the proposed rules will be filed.
1. NWIGU. The gas users simply commented that it did not appear that the revised rules are intended to change procedural rules regarding how the Commission “handles the filing
by a gas utility seeking to provide service pursuant to special contracts. NWIGU strongly endorses the Commission continuing to treat the basic terms and conditions of gas service under special contracts with regulated gas utilities as publicly available documents and not as trade secrets or confidential information.” NWIGU Comments at 1-2.
2. Citizens. In Citizens’ comments, it “fully supports” the Commission’s implementation of the proposed rule, particularly those facilitating the use of electronic communication.…” Citizens Comments at 1. Citizens also submitted comments concerning the electronic filing of pleadings and documents. In particular, Citizens urged the Commission to amend its proposed rules to specifically provide exceptions for the electronic filing of exhibits and trade secrets. Id. at 2 (attached).
Citizens may be confused with the scope of the Commission’s proposed amendment to its procedural rules. The changes to the Procedural Rules primarily deal with the service of Commission Notices and Orders upon parties that wish to be served by electronic means. More specifically, amendments to Rule 16 provides that the Commission may serve its Notices and Orders by electronic mail at the request of the person to be served. As far as submitting documents to the Commission, at this time the only documents that the Commission has authorized being filed electronically concern the filing of tariffs and price lists recently adopted in Case No. GNR-U-99-1. In that case, the Commission determined that it was appropriate to file electronic tariffs and price lists. The Commission specifically noted that “the experience gained from electronic filing of tariffs/price lists will be beneficial when the Commission considers implementing additional electronic filing procedures for other documents.” Order No. 28173 at 5 (emphasis added). As explained elsewhere in the Commission’s electronic filing Order, the Commission recognized that certain (such as maps, spreadsheets, etc.) documents may do not lend themselves to electronic filing. The Commission also recognized that documents submitted with tariffs/price lists containing trade secrets or confidential material are subject to special handling and filing procedures. See Order No. 28173 at 6. Consequently, Staff believes that no additional action is necessary regarding this comment.
3. Rule 121.02. Citizens also submitted comments specifically in reference to the proposed amendments to Rule 121.02. The Commission proposed the following change to the rule:
121. Form and Contents of Application to Change Rates (Rule 121).

…

02. proposals based upon computer modeling. In addition, in any Application in which a computer model is used to represent or simulate processes to which the revenue requirement is derived or upon which allocations of the revenue requirement to different customer classes are based, complete documentation of all those computer models must be supplied to the Staff, upon request, and be available in the utility’s office or other depository. The Staff may request that the computer model itself be provided. A computer model includes the representation or simulation of a process, but does not mean or include the compilation of actual data. The Application must state that the documentation of the model already on file in the applicant’s office or other depository fully describes the models or that necessary updates and additions to previous documentation that will fully describe the models is on file and will be supplied on request.

In its comments, Citizens urged the Commission to amend this rule. More specifically, the Company suggested that the Commission:
a. clarify whether the computer model is to be made available only to Staff, or if other parties may also request access;

b. set forth specific rules and procedures for the protection of the proprietary information contained in the model, as well as possibly protect the proprietary nature of the model itself; [and]

c. adopt specific rules to protect the model and the information in the model from unnecessary public disclosure.

Citizens Comments at 3.

U S WEST also submitted comments regarding this particular rule. See attached Comments. The Company stated that it does not object to the proposed modification that would permit “Staff to request that a computer model used by the regulated company be provided to Staff.” U S WEST Comments at 2 (emphasis original). The Company suggested that the use of the word “request” suggests that the utility “may be given an opportunity to make a case as to why the request cannot be granted.” Id. U S WEST asserted that it may not be feasible for a utility to provide a computer model in instances where the model has not been developed by the utility but is obtained through a licensing agreement from a third party. The Company stated that it is possible to simply address this issue on a case-by-case basis. In the alternative, U S WEST suggested that the phrase “and the utility will provide such a model if feasible under existing licensing agreements” be added to the end of the sentence which is being proposed for insertion to the existing rule.
4. Rule 67. U S WEST also offered specific comments regarding two rules. U S WEST suggests that the Commission make a typographical correction to its proposed Rule 67 dealing with trade secrets. In particular, the Company suggests that the second sentence in subsection (ii) be a continuation of subparagraph (a).
01. Definitions. ( )

a. “Trade secrets” as defined in Section 9-340D, Idaho Code, means information, including a formula, pattern, compilation, program, computer program, device, method, technique, process, or unpublished or in progress research that: ( )

i. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and ( )

ii. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trade secrets filed with the Commission are exempt from public inspection, examination and copying pursuant to Section 9-340D, Idaho Code. ( )

b. “Confidential information” means information, documents, or records filed with the Commission that are specifically exempt from public inspection, examination and copying pursuant to Sections 9-340A through 9-340F, Idaho Code. ( )

The Company is suggesting no changes to the text but simply moving the second sentence of subparagraph ii as shown above instead of being a continuation of subsection ii.
5. Rule 243. U S WEST also offered specific comments regarding proposed Rule 243. The purpose of this rule was to have parties advise the Commission if it becomes necessary to publicly discuss or address trade secret or other confidential information during public hearings. The Commission proposed changes are set out below in pertinent part:

243. HOW HEARINGS ARE HELD (Rule 243).

01. All Hearings Presumed Open. All hearings conducted by the Commission are open to the public except when a hearing may be partially closed to safeguard trade secrets or other confidential information protected from public disclosure. The Commission disfavors closed hearings and parties shall take all reasonable measures to avoid the need to close a public hearing. Such measures include: (7-1-93)( )

a. Using references to page and line or column numbers; ( )

b. Using summaries or generalizations; ( )

c. Stipulating that the evidence be offered in the public hearing; or ( )

d. Offering testimony in writing. ( )

If parties intend to cross-examine or offer testimony that may necessitate the partial closure of a hearing, they shall advise the Commission or presiding officer at the beginning of the hearing. ( )

U S WEST expressed concern that the final sentence of subsection .01 immediately above may not be practical. In particular, the Company suggested that in cases of longer hearings, it may be difficult to accurately predict when confidential or trade secret testimony may arise during a “live” hearing. U S WEST Comments at 2. U S WEST suggested that the rule be revised (by adding the underlined text below) to require that parties advise the Commission of their intentions to solicit trade secret or confidential testimony “at the beginning of the hearing or as soon thereafter as practical.” The Company maintained that this change will facilitate the Commission’s objective to limit and control the need to partially close hearings while affording the parties the flexibility necessary to present their cases.

COMMISSION DECISION
1. Does the Commission wish to amend the language of any of its proposed rules before adopting them as pending rules?
2. Does the Commission wish to adopt its proposed rules as its pending rules and submit those rules for legislative review?

vld/M:31-0101-9901_dh

The Notice of Rulemaking and the Notice of Proposed Rules required that comments be postmarked no later than October 27, 1999. The untimely comments were not mailed but were hand delivered after the deadline for mailing comments.

DECISION MEMORANDUM 1