Several western energy suppliers — Reliant Energy Services Inc., El Paso Merchant Energy LP and Portland General Electric — last week urged FERC to limit the scope of the agency’s planned public release of confidential information relating to the ongoing California market manipulation cases at the agency. But California groups welcomed the Commission’s action, saying it was time for the “rocks to be lifted” and the “mud-slinging” to end.

El Paso Merchant, for one, called on the Commission to restrict disclosure to only those materials “within the geographic and temporal scope of the spot power refund proceedings.” This would limit the scope of the release to information obtained about suppliers’ activities in certain western state energy markets, notably California, during the 2000-2001 time frame.

It also asked that the release of the information coincide with FERC’s final decision in the case, which is expected on March 26.

El Paso Corp.’s merchant trading subsidiary echoed the concerns of the Competitive Supplier Group (CSG), which noted that FERC staff “on its own and working with other governmental agencies” has become privy to “information unrelated to events in the West” during the past year, and may divulge this. The Commission does not need to reveal unrelated data to “clear the air about the so-called California electricity crisis,” El Paso Merchant said.

El Paso Merchant said it further agreed with CSG that the unsealing of documents subject to FERC protective orders could “[cast] doubt upon the efficacy of protective orders that will chill cooperation in future Commission proceedings and investigations.”

El Paso Merchant is a party to the Commission’s power refund proceeding, and is involved in a complaint case alleging that affiliate El Paso Natural Gas manipulated natural gas prices in California during the crisis period. Information gathered by FERC staff about the El Paso pipeline proceeding is not expected to be divulged.

The Commission earlier this month said it planned to release to the public the bulk of the filed documents, tape recordings and other records related to its year-long probe of energy price gouging in the West [PA02-2]; evidence submitted by California regulators and others in an effort to show that western energy markets were manipulated by suppliers in 2000 and 2001, and that refunds are warranted; and suppliers’ response to the allegations [EL00-95, EL00-98, EL00-10]. Documents that FERC obtained from other federal agencies in the course of its probe [PA02-2], however, will remain confidential because they could jeopardize ongoing investigations.

Reliant Energy Services requested that FERC continue confidential treatment for: 1) data pertaining to its ongoing or future trade transactions; 2) personal information about Reliant employees; 3) unapproved offers of settlement between Reliant and FERC; and 4) materials prepared for a confidential investigation currently pending before the Securities and Exchange Commission (SEC).

Specifically, Reliant said it opposed the release of transaction data for trades that were executed in 2000 and 2001 for delivery in 2003 and beyond, as well as its Daily Position Reports (DPRs). “The DPRs contain transaction details and reflect the unaudited valuation of all forward positions that comprise the mark-to-market portion of Reliant’s business at a given point in time,” it noted. The DPRs also include Reliant’s calculation of its Value at Risk (VaR), a proprietary formula and trade secret developed as part of Reliant’s overall business strategy, according to the energy company.

Release of the trade information “would allow Reliant’s competitors to assess Reliant’s short or long positions for various market products and periods and the value of those positions,” it said, while disclosure of the DPRs “would allow competitors to determine cost and operational information and cause substantial harm to Reliant’s position.”

As part of FERC’s probe in the West, Reliant said it supplied the agency with the “names of traders who had engaged in certain volume-boosting roundtrip trades.” That information “was provided confidentially in documents separate from Reliant’s public submissions,” the company reminded FERC. It further noted that a document identifying Reliant’s roundtrip trades has been turned over to the SEC as part of its investigation.

Reliant also requested confidential treatment of audio recordings and written transcripts that it submitted in December and January to further settlement talks with FERC. In late January, Reliant and five of its California power generation facilities signed a consent settlement with the Commission to pay $13.8 million for withholding electricity from the state’s market to boost prices on two days in June 2000.

At the very least, FERC should not release any recordings that contain “purely personal information” about employees, it said.

Moreover, Reliant opposed the release of its earlier settlement offers that were not accepted by FERC, pointing out they “[were] not subject to discovery, and therefore should be kept confidential.”

Enron’s Portland General had only one request — that the Commission keep confidential the company’s “Energy Trading Policies and Procedures Manual” that was submitted in response to a March 5 subpoena. The manual “contains financial limits and specifically identifies the products that Portland will and will not trade,” the utility said, adding that it is a “guidebook to how Portland conducts negotiations and executes trades with its counterparties.”

Portland General’s “competitive position would be significantly harmed by divulging to prospective counterparties the positions Portland likely would take in negotiations,” it noted, adding that the manual “is devoid of any information relevant to the investigation.”

The Northern California Power Agency (NCPA) said it fully endorsed FERC’s decision to release documents and other materials to the public, saying it will allow California to close an ugly chapter in its energy market. “It is impossible for California to move on with this deadweight clinging to it,” it noted.

“Bringing closure to the situation as quickly as possible is what California needs, and there will never be closure as long as the mud-slinging continues. Cries that there are snakes under every rock are alarming indeed, and the mistrust and fear engendered by such wide-ranging accusations will continue to destroy the economic stability of the energy markets and harm California and its residents.”

The NCPA urged the Commission “to allow those rocks to be lifted, and the protected material shown to the world, so that the public itself can determine what the truth of the situation is.”

It called on FERC to disclose the information on March 20, at the same time that energy suppliers are due to respond to California’s supplemental evidence alleging market manipulation and supporting $7.5 billion in refunds to the state’s power customers.

The City of Tacoma, WA, and the Port of Seattle said they “welcome” the Commission’s action. They contend that parties to the California proceedings have routinely sought protection of filed documents and materials that didn’t warrant confidential treatment. This has resulted in a “gross abuse” of FERC’s regulations and rules, and “has aided culpable parties in their efforts to hide the evidence of market manipulation and to obstruct justice.”

However, Tacoma and the Port of Seattle expressed concern that FERC violated the Administrative Procedure Act (APA), which sets specific notice and comment requirements for agency rulemakings, when it issued the March 5 notice about the planned document release. Both argued that the Commission’s notice amounted to an informal rulemaking, and required the agency to give parties sufficient time to comment on it. FERC only allotted seven days for comments to be filed on the release of thousands and thousands of pages of documents, they noted.

Furthermore, the APA obligates the Commission to provide at least 30 days of public notice prior to actually disclosing the documents, according to the Washington State parties. However, they said FERC hasn’t given a date for that release.

“The Commission’s failure to comply with the requirements of the APA provides a legal basis upon which parties that have used the Commission’s protective orders can use the Commission’s unlawful actions in the notice to further delay the search for the truth.” Tacoma and the Port of Seattle urged FERC to make all documents public, but to do so in compliance with the APA.

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