STATE
OF MISSOURI
PUBLIC
SERVICE COMMISSION
At a session of the Public Service Commission held at its office in Jefferson City on the 24th day of September, 2014.
In the Matter of
the Application of Grain Belt Express )
Clean Line LLC for
a Certificate of Convenience and )
Necessity
Authorizing It to Construct, Own, Operate, )
Control, Manage, and
Maintain a High Voltage, Direct ) File No. EA-2014-0207
Current
Transmission Line and an Associated Converter )
Station Providing
an Interconnection on the Maywood – )
Montgomery 345 kV
Transmission Line )
ORDER DENYING MOTION TO COMPEL AND GRANTING
MOTIONS FOR PROTECTIVE ORDER
Issue Date: September 24, 2014 Effective Date: September 24, 2014
On March 26, 2014, Grain Belt Express Clean Line LLC (“Grain Belt Express”) applied
to the Commission for
a Certificate of Convenience and Necessity (“CCN”). Grain Belt Express wants
the CCN so it can construct, own, operate, control, manage and maintain a high
voltage, direct current transmission line and associated facilities within
Buchanan, Clinton, Caldwell, Carroll, Chariton, Randolph, Monroe and Ralls
Counties, Missouri, as well as an associated converter station in Ralls
County.
Motion
to Compel
On August 28, 2014, the Missouri Landowners Alliance
(“MLA”) filed a motion seeking to compel Grain Belt Express to further respond
to two data requests numbered 48 and 94 that MLA had previously directed
to Grain Belt Express. Those data requests sought information regarding
responses provided to Grain Belt Express from potential wind farm generators
pursuant to a request for information (“RFI”) and identification of the wind
generators it used to calculate the lowest-priced cost of energy mentioned in the
direct testimony of Grain Belt Express witness David Berry. In response to the data requests, Grain Belt
Express provided several hundred pages of documents, including (1) copies of
all responses to the RFI from the 26 wind farm generators, with the identity of
the generators and exact locations redacted; (2) a list of all wind generators
that responded to the RFI; (3) a credit analysis of those respondents; (4) a
list of wind farm projects that responded to the RFI; (5) a map indicating the
number of responding wind farms by county; (6) proprietary summaries of
the RFI responses, including aggregated pricing and wind speed information, and
(7) a map from the U.S. Department of Energy showing wind speeds in the counties
where the responding wind farms are located. MLA was not satisfied with Grain Belt Express’
responses, as the information provided did not link the identity and precise
location of the wind farm generators with specific wind speed and pricing
information. The motion to compel was
filed after the parties were unable to resolve their dispute through either negotiation
or the procedures required in Commission Rule 4 CSR 240-2.090(8).
MLA argues that it needs to link the responses to
the RFI to the name of each responding wind farm generator to determine if the
cost of energy estimates are correlated with creditworthiness. MLA also states that it needs the exact
location of each wind farm generator in order to confirm or challenge the
projected wind speeds and pricing estimates.
Grain Belt Express argues that the information requested by MLA is not relevant
to the issues in this case; disclosure of that confidential information would
reveal trade secrets of the wind generators and result in harm to their
business interests; and requiring disclosure may result in potential litigation
and Grain Belt Express being unable to acquire such information in the future. TradeWind Energy, Inc. (“TradeWind”) and
Infinity Wind Power (“Infinity”), who are intervenors in this matter, join in
Grain Belt Express’ arguments.[1]
Parties may obtain discovery regarding any matter, not privileged, that is relevant to a pending action or reasonably calculated to lead to the discovery of admissible evidence.[2] Missouri’s courts have indicated that there are two aspects to relevance – logical relevance and legal relevance.[3] Logical relevance simply means that the questioned evidence tends to make the existence of a material fact more or less probable.[4] MLA argues that the information requested is relevant because it relates directly to the projected price of energy from the wind farms on the proposed transmission line. Grain Belt Express argues that the information it withheld from MLA is not relevant, but admits that whether the project can provide low-cost wind power to Missouri is relevant. Therefore, the information MLA seeks is logically relevant because it concerns whether the proposed transmission line is economically feasible.
The more difficult question is whether the information MLA seeks is also legally relevant. In deciding whether a party should be allowed to discover certain information, the court, or administrative agency, must weigh “the probative value of the evidence against the dangers to the opposing party of unfair prejudice, confusion of the issues, undue delay, waste of time, cumulativeness, or violations of confidentiality. Evidence is legally relevant if its probative value outweighs its prejudicial effect.”[5] In this case the prejudicial effect to Grain Belt Express, TradeWind and Infinity of disclosure is great, as pricing and wind speed information is the most valuable trade secret of a wind developer. Disclosure of this information would cause Grain Belt Express to violate confidentiality agreements with the RFI respondents, as well as causing TradeWind and Infinity to violate confidentiality agreements with independent contractors who provided information for the RFI and are not parties to this matter. Requiring violation of these agreements will subject Grain Belt Express, TradeWind and Infinity to the risk of litigation and harm the wind generators’ ability to negotiate power purchase agreements with potential customers. Disclosure of such confidential information could result in wind generators and their contractors declining to provide any RFI information for future projects, which would prevent future applicants from obtaining this type of information.
The probative value of the additional information MLA seeks is relatively low. Grain Belt Express has already provided considerable information in response to MLA’s data requests that will permit MLA to develop close estimates of the wind speed and pricing information necessary to verify or challenge the energy cost estimates presented by Grain Belt Express. The balancing test for legal relevance indicates that the value of this additional information is outweighed by the prejudicial effects to Grain Belt Express, TradeWind, and Infinity. Even the Commission’s classification of this information as highly confidential in its records would not adequately protect these parties from disclosure to their competitors’ attorneys and experts. Therefore, the Commission will deny MLA’s motion to compel disclosure of the requested information.
Motions
for Protective Order
MLA has also issued data requests to TradeWind and
Infinity seeking information regarding (1) communications between TradeWind and
Infinity and prospective purchasers of energy transmitted over the proposed
transmission line, and (2) descriptions of pricing calculations included in
their RFI responses. TradeWind and
Infinity object to the data requests and ask that the Commission issue a
protective order to prohibiting the disclosure of the requested
information. A copy of the data requests
is attached as Exhibit A.
Commission rules provide for the issuance of
protective orders when necessary to protect information from discovery more
rigorously than would be provided from a highly confidential designation.[6] Missouri Supreme Court Rule 56.01(c) states
that protective orders may be issued “to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or expense, including…that
a trade secret or other confidential research, development, or commercial
information not be disclosed or be disclosed only in a designated way”. Where confidential information is being sought,
especially from non-parties, the burden is on the party seeking discovery to
show that the probative value of the information outweighs the harm disclosure
would cause to the person from whom the information is sought.[7]
MLA admits that the information it has requested
from TradeWind and Infinity is confidential, so the Commission must balance the
probative value of the information against the harm of its disclosure in order
to determine if a protective order should be granted. As with the motion to compel discussed above,
the Commission finds that disclosure of the requested information would be
harmful to the business interests of TradeWind and Infinity. Release
of that information would negatively impact their ability to negotiate power
contracts with customers and subject them to litigation from their independent
contractors who provided much of this information. Disclosure would also harm these independent
contractors, who are not parties to this matter, as their
commercially-sensitive algorithmic and modeling data formed the basis of a
portion of TradeWind and Infinity’s RFI responses to Grain Belt Express. Designation of this information as highly
confidential, which permits disclosure to a party’s attorneys and expert
witnesses, would not adequately protect the information because once that
information is known to other persons it could be utilized in the future in
other forums.
MLA states that the information is necessary for it
to address disputed issues in the case through testimony, cross-examination and
briefs. But MLA has already received
considerable information from Grain Belt Express regarding pricing and wind
energy costs and is free to develop additional independent sources of
information on its own. The Commission
finds that the probative value of the information requested in the MLA data
requests to TradeWind and Infinity is outweighed by the harm that disclosure
would cause to TradeWind, Infinity, and their non-party independent
contractors. So, the Commission will
grant the motions for protective orders.
THE COMMISSION ORDERS THAT:
1. The Missouri Landowners Alliance’s motion to compel filed on August 28, 2014, is denied.
2. The motions for protective order filed by TradeWind Energy, Inc. and Infinity Wind Power on September 11, 2014, are granted.
3. This order shall become effective upon issuance.
BY THE COMMISSION
Morris L. Woodruff
Secretary
R. Kenney, Chm., Stoll, W. Kenney,
and Rupp, CC., concur.
Hall, C., dissents.
Bushmann, Senior Regulatory Law Judge
[1] TradeWind also filed a motion for a protective order on September 8, 2014 regarding the data requests 48 and 94 issued to Grain Belt Express. The Commission need not rule on this motion because of its decision to deny MLA’s motion to compel.
[2] Mo. Sup. Ct. Rule 56.01(b)(1). Commission Rule 4 CSR 240-2.090(1) provides that discovery in matters before the Commission may be obtained by the same means and under the same conditions as in civil actions in the circuit court.
[3]
State v. Kennedy, 107 SW 3d 306, 311 (
[4] State v. Kennedy, at 311.
[5]
[6] Commission Rule 4 CSR 240-2.135(6).
[7] Litton Industries, Inc. v. Chesapeake & Ohio Railway Company, 129 F.R.D. 528, 530 (E.D.Wis. 1990), analyzing Federal Rule of Civil Procedure 26(c), which is substantially similar to Mo. Sup. Ct. R. 56.01(c). The federal district court in Litton held that some confidential information could not be discovered where disclosure would provide an advantage to a non-party’s competitors and harm the non-party’s customer relations. “[F]ederal precedent concerning that [federal] rule…is a persuasive guide for the construction of Rule 56.01(c)”. Stortz by Stortz v. Seier, 835 S.W. 2d 540, 541 (Mo. App. 1992).