June 23, 2011
OFFICE OF THE PEOPLE'S COUNSEL, PETITIONER,
PUBLIC SERVICE COMMISSION OF THE DISTRICT OF COLUMBIA, RESPONDENT, AND POTOMAC ELECTRIC POWER COMPANY, INTERVENOR.
Petition for Review of Orders of the District of Columbia Public Service Commission (15831,15989, 15915 and 16066)
The opinion of the court was delivered by: Thompson, Associate Judge:
Argued April 26, 2011
Before RUIZ and THOMPSON, Associate Judges, and NEBEKER, Senior Judge.
In the matters before us, the District of Columbia Office of the People's Counsel ("OPC") seeks review of a series of orders of the Public Service Commission of the District of Columbia (the "Commission") that rejected OPC's requests that Potomac Electric Power Company ("Pepco") be compelled to provide OPC with copies of certain diagrams and maps depicting Pepco electrical substations, transformers and feeders (documents that OPC seeks in connection with its efforts to analyze the causes of electrical outages and electrical service reliability problems experienced by District of Columbia consumers). We remand these matters to the Commission for findings about whether (and, if so, for an explanation of why) the office-inspection restriction that the Commission ordered is "necessary" to protect against public disclosure of the documents that OPC seeks to obtain. D.C. Code § 34-1118 (c) (2001).
On June 17, 2008, the Commission initiated Formal Case No. 1062, an
investigation into the causes of an electrical power outage that
affected a large section of the District of Columbia on June 13, 2008,
and that originated at Pepco Substation #52, located on 10th Street,
N.W. To carry out its role in that investigation,*fn1
OPC made a number of document and information requests to Pepco,
including, inter alia, a request for true-to-size copies of the
"one-line diagram of [Pepco's] Tenth Street substation"*fn2
and the "diagram of the relay protection scheme for each of
the supply transformers" at that substation. Pepco provided a narrative
description of the "relay protection scheme for the four
transformers," and allowed OPC representatives to inspect the relevant
diagrams (after OPC executed a confidentiality agreement prepared by
Pepco (the "Confidentiality Agreement")), but Pepco declined to
provide OPC with copies of the diagrams. Pepco asserted that the
requested information was "confidential" and would be withheld for
"legitimate national security reasons," but could be "viewed by
appointment at Pepco's office."*fn3 Thereafter, OPC
filed a series of motions asking the Commission to compel Pepco to
provide OPC with copies of the requested diagrams. In Order No. 15831,
issued on June 7, 2010, the Commission directed that Pepco allow OPC
personnel to review the requested documents "in detail, in person at
[Pepco's] offices, and otherwise in accordance with the parties'
confidentiality agreement, except that copying and/or removal of any
of the documents from Pepco's offices is prohibited."*fn4
The Commission denied OPC's request for reconsideration of that
In the meantime, in conjunction with Commission Formal Case Nos. 766, 982, and 991 (all of which pertain in part to the reliability of the Pepco electricity distribution system), OPC had requested from Pepco, inter alia, "copies of maps and diagrams" pertaining to "feeders in residential and commercial neighborhoods in the District" and "engineering studies performed on the feeders in Ward 4 and the Crestwood/Carter Barron community." Pepco eventually produced copies of the engineering studies, but withheld maps and diagrams that "depict the utility's critical infrastructure" information, stating that these could be viewed by appointment at Pepco's offices. OPC filed a motion asking the Commission to compel Pepco to produce copies of the withheld documents. In Order No. 15989, issued on September 23, 2010, the Commission denied OPC's motion to compel but - repeating the terms it imposed in Order 15831 - "direct[ed] Pepco to allow OPC a reasonable opportunity to review the requested documents in detail, in person at [Pepco's] offices, and otherwise in accordance with the parties' confidentiality agreement, except that copying and/or removal of any of the documents from Pepco's offices is prohibited." Again, the Commission denied OPC's request for reconsideration of its ruling.
There followed the instant petitions by OPC for review of the Commission's orders (including its orders denying reconsideration: Order No. 15915, issued on August 6, 2010, and Order No. 16066, issued on November 22, 2010).
Before turning to the merits, we address briefly the issue of our jurisdiction to review the Commission orders now, when the formal proceedings to which they relate (Formal Cases 766, 982, 991, and 1062) have not yet concluded. We raised this issue sua sponte at oral argument, pointing out that the Commission's rulings on OPC's motions to compel are analogous to discovery rulings, which our case law typically treats as interlocutory and not immediately reviewable. See, e.g., Crane v. Crane, 657 A.2d 312, 315 (D.C. 1995) (explaining that "[d]iscovery orders typically bespeak their own interlocutory character," and thus ordinarily are not final for purposes of appeal) (citation and internal quotation marks omitted); cf. Office of the People's Counsel v. Pub. Serv. Comm'n, 414 A.2d 516, 517 (D.C. 1980) (dismissing petition for review of Commission order on ground that evidentiary rulings "are interlocutory and non-appealable"). For several reasons, we have concluded that we do have jurisdiction to review the challenged rulings.
First, our case law recognizes that "[i]t is not necessary that an order be issued at the conclusion of a proceeding; a 'final' order may be issued and reviewed at any point during a Commission proceeding." Potomac Elec. Power Co. v. Pub. Serv. Comm'n, 455 A.2d 374, 378 (D.C. 1982); see also Goodman v. Pub. Serv. Comm'n, 467 F.2d 375, 377 (D.C. Cir. 1972) ("For purposes of judicial review[,] the finality of an agency order depends upon the nature of the order rather than its chronology in relation to the whole of the agency proceedings."). Second, an order may be final and subject to immediate review if it "den[ies] a right," Potomac Elec. Power Co., 455 A.2d at 377, and the Commission rulings involved here restrict OPC's "right to obtain" documents reasonably relevant to the Commission investigation. D.C. Code § 34-1118 (c). Thus, "the impact of (the Commission's order) is sufficiently direct and immediate as to render the issue appropriate for judicial review at this stage." Chesapeake & Potomac Tel. Co. v. Pub. Serv. Comm'n, 378 A.2d 1085, 1087 n.8 (D.C. 1977) (quoting Abbott Laboratories v. Gardner, 387 U.S. 136, 152 (1967)). Third, a "relevant consideration in determining finality [is] whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication." Goodman, 467 F.2d at 377. Here, neither the parties nor the intervenor has suggested that our review of OPC's petitions will disrupt the ongoing proceedings before the Commission.
Fourth, "[a]nother factor that warrants consideration is whether postponing review will cause irreparable harm to the interests of the party seeking review." Potomac Elec. Power Co., 455
A.2d at 378. Here, OPC contends that understanding the design and relay protection scheme for the transformers must be "done through visualization," i.e., through study of "drawings that show the requested information"; and that without the requested diagrams, "it is impossible to tell where and what actions can be taken to improve this vital part of Pepco's distribution system." It further asserts that the "Commission's added restriction against making copies, partial copies or other representations of the operating documents" and the resultant lack of continuous access to the documents "render OPC's access ineffective and virtually valueless," impede its "ability to perform a thorough analysis" of the issues while the Commission investigation is underway,*fn6 and "greatly defeat OPC's ability to meaningfully participate in the formal case," all to the "severe detriment" of the public whose interests OPC is charged with representing. See D.C. Code 34-804 (d). In addition, it is unclear when the underlying formal Commission proceedings will conclude,*fn7 and whether, when the Commission concludes its investigation, it will issue an order as to which OPC could seek review by this court. Cf. Crane, 657 A.2d at 316 (explaining that a trial court's order denying discovery is a final appealable order if dismissal of an appeal "would effectively deny the aggrieved party appellate review at any time"). It appears to us that the issues presented may be "too important to be denied review and too independent of the cause to require that appellate consideration be deferred until the whole case is adjudicated." Potomac Elec. Power Co., 455 A.2d at 378 (quoting Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949)). For all of these reasons, we conclude that the petitions are ripe for review.
We next briefly identify several issues that we are not called upon to address in resolving the petitions before us, notwithstanding the considerable attention that the parties' and intervenor's briefs devote to these issues.
The first issue that we need not resolve relates to the scope of the Commission's authority under D.C. Code § 34-1118 (c). That section establishes that OPC is entitled to obtain from a public utility being investigated "all information and documents reasonably relevant and material to the investigation or proceeding"; that if the public utility fails to produce these materials, OPC may petition the Commission to issue an order compelling their production; and that the Commission may, "[w]hen necessary to protect the disclosure of trade secrets and other confidential research, development, or commercial information," issue a protective order placing conditions on the release of the materials. Id. In its filings before the Commission and in its initial brief to this court, OPC questioned whether the language of section 34-1118 (c) permits a public utility to withhold relevant information on the ground that the information implicates security considerations rather than the protection of trade secrets or other proprietary information. In its reply brief, however, OPC accepts that the Commission has authority under section 34-1118 (c) to protect information that "is in fact highly sensitive or critical to national security or a utility's critical infrastructure."*fn8 Accordingly, our analysis assumes rather than decides that the Commission acted within its authority in issuing orders designed to protect such information.
Second, we need not resolve whether the maps and diagrams in issue are
entitled to be protected as "confidential." In its briefs submitted to
the Commission and to this court, OPC argued that "[s]section 34-1118
(c) does not authorize the Commission to protect the disclosure of
information that a party merely asserts, without factual
substantiation, . . . may be, confidential" (emphasis in original). At
oral argument, however, counsel for OPC acknowledged that the Pepco
documents in issue "probably should be non-public" and confirmed that
OPC's concern is with the breadth of the restrictions that the
Commission ordered. Thus, at least for present purposes, OPC does not
take issue with Pepco's designation of the documents as "confidential"
or with the Commission's acceptance of that designation.*fn9
(And indeed, from the outset of the dispute, OPC
has been willing to handle the documents as required under its
Confidentiality Agreement with Pepco.)
A related issue that was disputed before the Commission but that we need not resolve is whether the maps and diagrams in question constitute, or are the equivalent of, "critical energy infrastructure information" ("CEII") as that term is defined in Federal Energy Regulatory Commission ("FERC") regulations. See 18 C.F.R. § 388.113 (c).*fn10 FERC regulations subject such information to limitations on use and disclosure to "ensure that information deemed CEII stays out of the possession of terrorists." 18 C.F.R. § 388.113 (d)(4). In initially ruling on OPC's motion to compel, the Commission required OPC to obtain a FERC determination as to whether the requested diagrams could be released to OPC pursuant to that agency's CEII disclosure rules. After a series of correspondence with FERC, OPC learned that the diagrams it had requested, of substations in specific locations in the District of Columbia used for local distribution of electricity, are not filed with FERC,*fn11 and thus cannot be processed or obtained under FERC's CEII disclosure rules. Because OPC agrees that the documents may be treated as confidential, we need not decide whether, as Pepco has asserted, the requested diagrams and maps involve the same security concerns as FERC-regulated CEII, or whether their unrestricted disclosure would pose a "national security" risk or a risk to Pepco's critical infrastructure. We do note, however, that FERC has recognized that diagrams and maps of "electrical transmission and distribution network[s] . . ., including local distribution networks and feeders," "could be used to harm the electric grid, which would endanger life and safety" and "could be harmful in the wrong hands."*fn12
(Moreover, as we discuss below, the evidence in the record that FERC was willing to release CEII information to OPC as a requester with a legitimate need for such information adds weight to OPC's argument that any order that the Commission fashions to protect Pepco infrastructure should recognize OPC's status as a government agency with a legitimate need for the requested maps and diagrams.*fn13
Finally, because OPC accepts the "confidential" designation of the documents in issue, we need not address OPC's argument that, in accepting without evidentiary substantiation Pepco's claim to confidentiality of the documents on the basis of national security considerations, the Commission effectively "established a new practice or policy relating to the disclosure of materials between parties" without compliance with the rulemaking procedures required by law.
Finally, we turn to the merits. "Under the general limited review that we undertake of any agency decision, 'we must affirm [the Commission's rulings] unless we conclude that [they were] arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.'" Office of the People's Counsel v. Pub. Serv. Comm'n, 955 A.2d 169, 173 (D.C. 2008) (citing King v. District of Columbia Water & Sewer Auth., 803 A.2d 966, 968 (D.C. 2002)). OPC contends that the Commission's rulings fail on all of the foregoing grounds. Although we express no opinion about the appropriateness of the particular restrictions the Commission imposed, we are constrained to agree with OPC that the Commission acted arbitrarily and contrary to law in the approach it took and the rationale it applied to arrive at its rulings.
As discussed above, the governing law is D.C. Code § 34-1118 (c). Section 34-1118 (c) does two things that are important to our analysis: First, it confers on OPC a "right to obtain," from a public utility, information and documents that are reasonably relevant and material to a Commission investigation or proceeding. Thus, section 34-1118 (c) establishes a presumption in favor of disclosure of materials that are relevant and material to a Commission investigation (and, notably, in this case, neither the Commission nor Pepco has suggested that the documents that OPC seeks are either irrelevant or immaterial*fn14 ). This means that the burden of justifying any restriction on disclosure of relevant and material information to OPC must in the first instance fall on the public utility, i.e., Pepco.*fn15 Second, section 34-1118 (c) authorizes the Commission to issue a protective order placing conditions on the release of the materials to OPC "[w]hen necessary" to protect the materials against further disclosure. We read the phrase "[w]hen necessary" to mean that the Commission is not authorized to issue a protective order further restricting the release of documents to OPC on the mere ground that documents are confidential, when OPC has agreed to treat them confidentially. In addition, we conclude, because section 34-1118 (c) contains a "[w]hen necessary" qualifier, the Commission was incorrect in asserting in its rulings under review that section 34-1118 (c) grants it "broad authority" to fashion a protective order if it simply "believes there is good reason to do so" (emphasis added). Although we accord great weight to the Commission's interpretation of the statute it is charged with administering, "the judiciary is the final authority on issues of statutory construction," Howard Univ. Hosp. v. District of Columbia Dep't of Emp't Servs., 952 A.2d 168, 173 (D.C. 2008), and we will not defer to the Commission's interpretation of section 34-1118 (c) if (as we find) it is inconsistent with the "unambiguously expressed intent of [the legislature]." Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 (1984). Contrary to the Commission's interpretation, section 34-1118 (c), by its plain language, tethers the Commission's authority to issue a protective order restricting OPC from "obtain[ing]" relevant and material public utility documents to a finding that a protective order is "necessary."*fn16
The Commission issued its rulings after Pepco asserted that "[p]ublic disclosure of [the requested] information would be invaluable for any plans seeking to cause damage to . . . critical infrastructure." However, this assertion, which addressed only the harm that might ensue from public disclosure, supported at most that the documents and maps are entitled to be treated as confidential and kept out of the hands of the public at large; it said nothing to justify restrictions on OPC. Pepco's lawyers also made similarly unsupported assertions that an order compelling the release of copies of the maps and diagrams would "severely inhibit the Company's ability to properly protect such data" and would "greatly increase the likelihood that this information may be obtained by the public." The Commission made no independent inquiry as to whether the goal of protecting the maps and diagrams against public disclosure could be achieved without barring OPC from obtaining the requested copies.*fn17 Thus, the Commission made no finding - and it had no ostensible basis for a finding - that a restriction on OPC's obtaining copies of the maps and diagrams was "necessary" to protect the documents.
Further, the record makes it at least questionable whether the Commission could reasonably have made such a finding of necessity. According to papers that OPC filed with the Commission, when OPC representatives first inspected the documents in dispute here and requested true-to-size copies, "Pepco representatives seemed amenable to OPC's request" (although "OPC was informed that someone higher up in the chain of command would have to decide if the information was going to be released"), and employees at Pepco initially "were told to start the [copying] process." If this account is correct, it suggests that the necessity to protect the documents from any copying for non-Pepco staff was not well known within Pepco, even though, as OPC asserted to the Commission, it would seem that this "should be top priority and known to all Pepco employees, especially the attorneys in General Counsel." In addition, as far as we can tell from the record, Pepco has neither provided information to the Commission about what measures it has in place to protect and secure the maps and diagrams within its company from "a rogue employee [who might] want to cause harm,"*fn18 nor identified any reason to suspect that OPC staff or consultants would not abide by the terms of a confidentiality or non-disclosure agreement. We also note that documents in the record show that Pepco has utilized the services of engineering consultants to assess Pepco's underground infrastructure; Pepco did not advise the Commission about what, if any, restrictions Pepco imposes on these individuals' and firms' access to copies of diagrams and maps depicting the infrastructure. Without having considered such (and, perhaps, other) information, the Commission had no basis for finding that an order limiting OPC inspection of the maps and diagrams in Pepco's offices was necessary.
Rather than make a determination of whether it was necessary to restrict OPC's access to the maps and diagrams as section 34-1118 (c) commands, the Commission focused on whether restricting OPC to inspection in Pepco's offices was unduly burdensome to OPC. It reasoned that "making numerous or repeated reviews of the documents at Pepco's offices are [sic] merely an inconvenience, not necessarily an impediment" to OPC.*fn19 In so reasoning, the Commission turned the statutory standard on its head. If the Commission had not found a protective order "necessary" to protect the utility's documents, entry of the protective order cannot be justified on the ground that the restrictions on access it imposes are not unduly burdensome to OPC, or on the ground that the restrictions do not entirely disable OPC from doing its work.*fn20 The Commission also appears to have lost sight of OPC's critical role as an independent investigatory authority and a statutory party in the regulatory scheme. See D.C. Code § 34-804 (a). As noted earlier, the Council of the District of Columbia has recognized that "[i]n order for OPC's advocacy to be effective," OPC must be able to conduct "analyses of the engineering . . . aspects of utility company operation." D.C. Council Committee on Public Services and Cable Television, Report on Bill 5-225 at 7 (June 20, 1984). All of the requested documents appear to relate precisely to that. The Commission's response to an OPC request for information should therefore facilitate, not hinder, OPC's ability to fulfill its statutory responsibilities, unless there is a clear basis for concluding that a restriction is "necessary."
For the foregoing reasons, we conclude that the Commission overstepped
its authority under section 34-1118 (c) in deciding not to enforce
OPC's right to "obtain" the requested documents, without having made a
determination that the restrictions it ordered were necessary. The
Commission also erred by essentially reversing the burden implied by
the statute - i.e., by
requiring that OPC show that the restrictions are unduly burdensome,
rather than requiring Pepco to prove that they are "necessary." In
addition, the Commission erroneously exercised its discretion in
fashioning the terms of the protective orders it issued.*fn21
For the Commission properly to exercise its discretion, it
must make decisions "drawn from a firm factual foundation" - i.e.,
"the factual record must be capable of supporting the determination
reached." Johnson v. United States, 398 A.2d 354, 364 (D.C. 1979). It
must "exercise its judgment in a rational and informed manner,"
meaning that it "should be apprised of all relevant factors pertaining
to the pending decision," (and, in turn, a reviewing court "must
determine whether the decision maker failed to consider a relevant
factor, whether [it] relied upon an improper factor, and whether the
reasons given reasonably support the conclusion"). Id. at 365. It also
should state the basis of its ruling "in sufficient detail so that
both parties may, if they desire, object and seek to persuade [the
Commission] to change the basis."*fn22 Winkler v.
Ballard, 63 A.2d 660, 662 (D.C. 1948). Here, the Commission did none
of these things. Without the types of information discussed above -
e.g., what internal measures Pepco takes to secure the maps and
diagrams, how Pepco protects confidential infrastructure information
disclosed to contractors, why a FERC-type non-disclosure agreement or
other alternative controls would not suffice to protect copies of maps
and diagrams produced to OPC - the Commission did not exercise its
discretion in an informed manner. In
addition, not having viewed or sought detailed descriptions of the
documents that OPC has been limited to viewing onsite, the Commission
did not have the information it needed to make an informed judgment
regarding whether, as to each category of document,*fn23
the office-inspection limitation it imposed addressed OPC's
asserted need for true-to-life sized copies; and to assess OPC's claim
that it "need[s] to constantly refer to the information sought in
order to adequately perform the analysis."
Accordingly, a remand is in order.*fn24 We vacate Commission Orders 15381, 15989, 15915, and 16066, and remand with an instruction that the Commission (1) determine, in light of the relevant factors identified in this opinion, and such other relevant factors as the Commission may identify, whether orders precluding OPC from obtaining copies as requested of the maps and diagrams in issue, and limiting OPC to inspection of the documents in Pepco's offices, are necessary to protect the documents from disclosure to the public (or whether, instead, the Confidentiality Agreement or some other terms restricting which individuals may have access to the maps and diagrams, or restricting use and disclosure of the documents, are appropriate to maintain the confidentiality of the documents); and (2) explain the basis for its determination.