Daily Rules, Proposed Rules, and Notices of the Federal Government
Also, the Commission revises Rule 213(d) of its Rules of Practice and Procedure, which establishes the timeline for filing answers to motions, to clarify that the standard fifteen day reply time will not apply to motions requesting an extension of time or a shortened time period for action. Instead, the Commission proposes to set the time for responding to such motions at five days, unless another time period is established by notice based on the circumstances.
1. In this Final Rule, the Commission revises its rules and regulations relating to the filing of privileged material in keeping with the Commission's efforts to comply with the Paperwork Reduction Act, the Government Paperwork Elimination Act and the E-Government Act of 2002. First, the Commission establishes two categories of privileged material for filing purposes: privileged material and critical energy infrastructure information (CEII). This revision will expand the ability to file electronically by permitting electronic filing of materials subject to Administrative Law Judge (ALJ) protective orders as appropriate. Second, the Commission revises its regulations to provide a single set of uniform procedures for filing privileged materials. These revisions continue the Commission's effort to reassess and streamline its regulations to ensure that they are efficient, effective and up to date.
2. Also, the Commission revises Rule 213(d) of its Rules of Practice and Procedure, which establishes the timeline for filing answers to motions, to clarify that the standard fifteen day reply time will not apply to motions requesting an extension of time or a shortened time period for action. Instead, the Commission proposes to set the time for responding to such motions at five days, unless another time period is established by notice based on the circumstances.
3. In 2000, the Commission first permitted filers to use the Internet to submit documents to the Commission.
4. The eFiling system plays an important role in the Commission's efforts to comply with the Government Paperwork Elimination Act, which requires that agencies provide the option to submit information electronically, when practicable, as a substitute for paper.
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6. Currently, the Commission accepts through electronic filing all documents, including privileged material and CEII,
7. The Commission's current complaint and answer regulations (sections 385.206 and 385.213) contain detailed requirements for submitting privileged materials. Under these regulations, a party filing a complaint or an answer with privileged and/or confidential material is required to submit a request for privileged treatment of documents, a public redacted document, a privileged unredacted document, and a proposed form of protective agreement.
8. In recent years, the Commission has been receiving a larger number of requests for privileged treatment of documents not associated with
9. In its December 16, 2011 Notice of Proposed Rulemaking (NOPR), the Commission proposed to revise its regulations to address two outstanding concerns.
10. Second, the Commission proposed to revise its answer regulations, Rule 213, to provide an opportunity for parties to file answers to requests for extension of the time to take action under the Commission's orders and regulations or seeking expedited action where the time to act on these requests may fall sooner than the standard 15 day answer date. To provide an opportunity for interested parties to respond and facilitate the Commission's response to such motions, the Commission proposed to shorten the answer period for these motions to five business days. In addition, the Commission proposed conforming revisions, in particular, revisions to the Secretary's delegated authority under 18 CFR 375.302(b), to clarify the Secretary's authority to address shortened answer periods for requests for extension of time, consistent with the delegated authority of other office directors.
11. In response to the NOPR, American Public Gas Association (APGA), Edison Electric Institute (EEI), Electric Power Supply Association (EPSA), Interstate Natural Gas Association (INGA), International Transmission Co. (ITC), MidAmerican Energy Holdings Company (MidAmerican), North American Electric Reliability Corp. (NERC), PJM Interconnection, L.L.C. and Transmission Dependent Utility Systems (TDU)
12. In this Final Rule, the Commission largely adopts the NOPR proposal to consolidate the Commission's regulations for filing privileged materials in section 388.112 and establish procedures in that section for distribution of such materials pursuant to a protective agreement in proceedings with a right to intervene. The protective agreement provisions largely parallel the existing regulations governing complaints and answers. These regulations will expand those procedures to cover other types of filings, such as statutory public utility or pipeline filings, and protests in those filings, containing confidential information. With these revisions, the Commission is taking advantage of the technologies available to the Commission to safely and securely accept materials by designating them as privileged, while providing for limited use of the materials in proceedings in which other parties must review the materials, by requiring the filing party to make them available pursuant to a protective agreement. In instances where the filer elects to electronically file materials with a protective agreement, submission of the identical hard copy files to the Commission will no longer be necessary. Permitting privileged materials to be submitted via eFiling will facilitate entry of the documents into the Commission's document repository, eLibrary, and will make them available to staff conducting analysis of the documents. Electronic filing will simplify retrieval of the documents in the course of the Commission's duties because the documents may be accessed via the Commission electronic archive in eLibrary, and Commission staff will no longer have to retrieve hard copy documents from offsite document storage. This will avoid the resulting delay in obtaining materials.
13. The consolidated filing procedures, as well as the protective agreement provisions for proceedings in which a right to intervene exists are included in revised section 388.112. Revised section 388.112(a)(1) adopts the Commission's long-standing usage of the term “privileged materials” to refer to information subject to an outstanding claim of exemption from mandatory disclosure under the Freedom of Information Act (FOIA), including CEII.
This means that, when a person files a document containing privileged material, that person must prominently indicate the fact that the filing contains privileged material, using an appropriate header on the cover page of the filing. In most cases, the header must be included on the accompanying filing letter or first page of a pleading or motion, and on the separate cover of any portion of the document that contains privileged material, such as an affidavit, exhibit, attachment, etc. In addition, the individual pages should be marked to indicate that the page contains privileged material, and the material identified on the page.
14. The revised regulations make special provision in proceedings featuring a right to intervene, including complaint, certificate, merger and rate filings, to facilitate review of the privileged materials by intervening parties. In such proceedings, a person filing privileged material is required to include a public, redacted copy of the filing and a proposed form of protective agreement and serve these items on the appropriate persons, that is, those required by Commission rule or order, or by law.
15. The Commission's Model Protective Order may be used as a guide for protective agreements, and the Commission's prior orders may also provide guidance as to how to address particular confidentiality concerns.
16. The public version of the filing should be prepared with only the privileged information redacted to the extent practicable. If a document or filing contains both public and privileged material, the Commission expects filers to file a public version in which the privileged material has been removed or redacted thereby making the non-privileged portion of a document available for use by the Commission and participants in the proceeding.
17. The revised regulations incorporate exceptions for landowner lists, certain cultural resources and liquefied natural gas facility (LNG) information, and proceedings set for hearing or settlement procedures in accordance with the Commission's Rules of Practice and Procedure.
18. Conforming changes were made throughout the Commission's regulations, including revisions to reflect that section 388.112 provides the procedures for filing privileged materials. To simplify and clarify the regulations, the Commission largely avoided directly referencing section 388.112. Since section 388.112 is intended to apply to all submittals and filings containing privileged or CEII material, it is unnecessary to specify the provision that applies in the many parts of the regulations that refer to filing of privileged materials.
19. The Commission responds to the comments filed in response to the NOPR below.
20. In the NOPR, the Commission proposed to continue its long-standing practice of referring to confidential material as privileged.
21. A number of commenters object to the scope of the revised regulations, arguing that the privileged filing procedures, in particular the disclosure procedures developed for proceedings with a right to intervene, should not apply to materials eligible for common law evidentiary privileges such as attorney-client or work product privileges or CEII, which are subject to the disclosure procedures in 18 CFR 388.113.
22. The Commission disagrees with suggestions made by EEI and INGAA that use of the term privilege detracts from a filing party's ability to assert a common law evidentiary privilege. The Commission's power to withhold information from mandatory public disclosure is established by FOIA and presented in its rules and regulations, chiefly 18 CFR 388.107. The Commission's long-standing practice has been to refer to materials subject to an outstanding claim of exemption from mandatory disclosure as privileged.
23. The Commission likewise disagrees with EEI's and INGAA's suggestions that failure to make separate provision for information subject to a claim of common law privilege will create a risk of improper disclosure and loss of privilege.
24. In the NOPR, the Commission proposed to retain its current regulations (sections 285.206, 385.213 and 388.112) under which privileged and CEII information are subject to the same requirements with respect to disclosure.
25. EEI contends that CEII should be a separate category subject to separate disclosure procedures, as provided for in 18 CFR 388.113.
26. We do not find that using the same regulatory framework for “privileged materials” and “CEII” in section 388.112 will cloud the procedures in 18 CFR 388.113 for handling CEII or that continuation of these procedures will not provide adequate protection for CEII. The Commission's regulations specify that to qualify as CEII, the material must be “exempt from mandatory disclosure under the Freedom of Information Act.”
27. We also disagree with EEI that CEII should be treated separately and distributed within a Commission proceeding under procedures modeled after the current CEII procedures in 18 CFR 388.113, providing for review of privilege requests with a determination.
28. The Commission is not changing its rules for acquiring materials through a FOIA or CEII request, and materials that may be sought through the protective agreement procedures established herein also remain available through FOIA and CEII requests where appropriate. However, the Commission has determined that reliance on the existing CEII procedures exclusively would serve to delay the processing of filings and other pleadings in Commission proceedings. To facilitate timely distribution of materials without the potential for delay pending Commission review, participants who choose to submit CEII information as part of a Commission proceeding must follow the procedures provided in
29. The Commission proposed that its existing procedures regarding protective agreements in its complaint and answer regulations be applied to other filings. Under these procedures, the filing party must provide a “proposed form of protective agreement to each entity that is to be served.”
30. Several commenters ask the Commission to establish one or more standard protective agreements, based on the Model Protective Order or tailored to meet particular circumstances.
31. MidAmerican suggests refinements to the requirement that a proposed form of protective agreement be served on each entity that is required to be served with the filing, arguing that service need not be required after the first time the protective agreement is used.
32. APGA urges the Commission to require that a party may execute a non-conforming agreement under protest, with issues to be resolved at a later date by the Commission.
33. APGA urges the Commission to lessen the requirements for signing the protective agreement and receiving the privileged materials and permit any person to whom service is required under the regulations to seek access, rather than require filing of an intervention.
34. APGA argues that the Commission's proposal requiring delivery of privileged materials within five days after a protective agreement is signed is insufficient to ensure that interested persons have timely access to privileged materials filed in pipeline filings due to the short (30-day) statutory action period.
35. Citing procedures developed in applying the Model Protective Order, TDUs ask the Commission to clarify that the burden of proof is on the party asserting a claim of privilege in any dispute of privileged status. TDUs also question whether the provision permitting a party to object to the terms in a protective agreement is effective, given statutory deadlines. TDUs ask the Commission to specify limits on the terms that may be included in a protective agreement, so that parties will not be forced to agree to unduly restrictive access or engage in fruitless litigation. TDUs argue that this is needed because, unlike in a proceeding overseen by an administrative law judge, the Commission cannot delay a statutory deadline to provide time to resolve a dispute.
36. The Commission declines to adopt a standard protective agreement or provide detailed guidance as to appropriate departures or additions to the Model Protective Order in this proceeding, in light of the need for flexibility in handling different types of privileged material. In the NOPR, the Commission suggested that parties filing privileged materials in a proceeding with a right to intervene may use the Office of Administrative Litigation's Model Protective Order as a guide for protective agreements.
37. In the event a protective agreement is protested, the Commission has reviewed proposed protective orders in other contexts and provided for appropriate additions to address particular confidentiality concerns.
38. APGA expresses concern that a participant may be bound by undesirable terms of a protective agreement, prior to having the opportunity to object. We do not find that signing a protective agreement should result in a waiver of the right to challenge the privileged status of the information. This procedure ensures solely that the case can be processed, not that it result in a waiver of any procedural rights. We note that the Model Protective Order contains procedures under which the signatory reserves its right to challenge the privileged status of documents covered by the agreement, and we encourage parties to include such provisions in their protective agreements. Should a protective agreement purport to contain such a waiver requriement, a party may preserve its rights by filing an objection under section 388.112(b)(2)(iii) and the Commission can then require the protective agreement be revised.
39. TDU's are concerned that the right to object to a protective agreement may not be effective given statutory deadlines. As indicated above, the Commission has procedures that may be used to resolve such disputes fairly.
40. We decline to adopt the revision proposed by APGA that a filing party must provide privileged materials to any person to whom service is required on request, rather than only those who have filed an intervention. As Mid-American suggests, the regulations provide that parties who are entitled to receive service will receive a copy of the filing with the protective order when served.
41. We likewise reject EEI's suggestion that materials should not be provided until an intervention has been granted. We do not believe that lack of intervenor status alone provides justification for refusing to provide the privileged materials.
42. In response to EEI's inquiry whether a protective agreement may apply in separate subdockets, the filer should determine whether a protective agreement signed in one subdocket is sufficient for the information that may be produced in another subdocket. The different character of such information may require a somewhat different form of protective agreement.
43. TDU argues that the burden of proof should be on the party seeking privileged status. This rulemaking does not change existing procedures regarding assignment of burdens. While the determination as to the applicability of the privileged designation is not a hearing with formal burdens of proof, the applicant needs to justify why the information is confidential under the FOIA categories.
44. In the NOPR, the Commission proposed that, for filings made prior to hearing, the party filing the privileged material will propose a form of protective agreement. However, in proceedings set for trial-type hearing, the NOPR proposed to leave intact the authority of the ALJ to administer the hearing and determine the appropriate scope of a protective order.
45. TDUs suggest that the Commission is inconsistent in removing the designation “Protected Materials” covered by an ALJ-approved protective order and treating these materials as privileged. It asserts that an ALJ's protective order may cover a broader range of materials than filings in proceedings not set for hearing. TDUs explain that, in discovery, the term protected materials refers to materials that customarily are treated by a participant as sensitive or proprietary, which are not available to the public and which, if disclosed freely, would subject the participant to competitive harm.
46. Revised section 388.112(b)(2)(v), adopted in this proceeding, states, “For material filed in proceedings set for trial-type hearing or settlement judge proceedings, a participant's access to material for which privileged treatment is claimed is governed by the presiding official's protective order.” The term protected material is a colloquial term that some parties apply to materials covered by a protective order. For consistency, the Commission has used the word “privileged,” as it existed in the regulations prior to this rule, to refer to all material for which confidential treatment is claimed. But the use of the term privileged does not change the scope of material eligible for confidential treatment.
47. TDUs assert that the discovery materials that may be protected by an administrative law judge's protective order include materials that customarily are treated by a participant as sensitive or proprietary, which are not available to the public and which, if disclosed freely, would subject the participant to competitive harm. This description is comparable to the type of information that qualifies for confidential treatment under FOIA Exemption No. 4, which protects information where disclosure is likely “to cause substantial harm to the competitive position of the person from whom the information was obtained.”
48. The NOPR proposed procedures obtaining access to material that is filed as privileged in complaint proceedings and in any proceeding with a right to intervene. The Commission proposed that any participant or person filing an intervention in the proceeding may request the filer to provide a copy of the complete, non-public version of the document, by providing an executed copy of the protective agreement and showing appropriate party, participant or intervenor status. The proposed regulations provide that the filer provide a copy of the complete, non-public document to the requesting person within five days of receiving the request, if no objection is filed.
49. To provide adequate due process for responses to requests for information, EEI asks the Commission to modify the requirement that confidential information be released “within” five days, to a requirement that the information not be released until the 5th business day, in order to permit parties to object, and suggests the Commission provide a bit more time for objections to be lodged.
50. TDUs object to the five day delay in delivering privileged materials after receipt of an executed copy of the non-disclosure agreement; instead they request delivery by the next business day. TDUs argue that delay prejudices the party seeking the information, by providing limited time for review.
51. INGAA objects to its reading of the proposed regulations to require service of “fully redacted” documents. According to INGAA, redacting an entire document can be burdensome to the filer and circulation of the document does not provide any benefit to recipients.
52. EEI responds to the Commission's observation in the NOPR that a failure by the filing party to afford intervenors a meaningful opportunity to review confidential information under a protective agreement could lead to suspension of the filing, rejection, or other delays in processing an application. EEI a