Secret Deals Violate Sunshine Law in Duke-Progress Merger, says NC WARN – News Release by NC WARN
- June 21st, 2012
Group says ratepayers are harmed by Duke Energy’s continued deal-making, and state regulators must unseal 15-plus settlements as Monday hearing nears
Statement by Director Jim Warren:
Durham, NC – North Carolina’s Public Records Act clearly forbids Duke Energy from keeping secret at least 15 side deals central to the utility’s acquisition of Progress Energy, and NC WARN is calling on regulators to open the records for public scrutiny. We filed a motion today arguing the NC Utilities Commission cannot allow Duke to make the sweeping and vague claim of “trade secrets” for all those deals, many of which might impact other ratepayers.
Also today, NC WARN filed a broader motion contending the commission erred in limiting the overall scope of issues that can be raised at next Monday’s evidentiary hearing. NC WARN’s June 19 charges remain untouched: Duke implicitly admits that results of a secret study on major repairs at the Crystal River nuclear plant are due very soon; Duke doesn’t deny backroom discussions with SC officials regarding investment in the cost-ballooning Summer nuclear plant and; Duke does not deny that any of the 15 deals favor certain ratepayers while harming others.
Duke contends the Commission will handle NC WARN’s concerns in later dockets. However, in a separate new docket where Duke is explicitly seeking special deals for select large customers, the utility filed a motion Tuesday to block NC WARN from participating in the case.*
We want to make certain the Commission weighs all costs and benefits of the merger, and not rush to grant Duke Energy’s request. We reiterate our call for the Commission to ensure careful and open examination of all issues involving this sweeping arrangement.
Our sunshine motion filed today by attorney John Runkle spells out the criteria for trade secrets and why Duke’s deals do not qualify. Key points include:
> As stated in the NC WARN’s June 18 motion, we are concerned that some 15 or more side agreements tend to reduce benefits from the merger or to significantly shift the burdens among customer rate classes.
> These settlement agreements have modified the scope of the merger without being reviewed fully by the Commission, the other parties, stockholders, or the public.
> On May 17, Duke filed fourteen settlement agreements between it and other parties. As late as June 14, Duke filed an additional confidential amendment to its list, yet would not even disclose what new settlement agreements were being added to the list.
> NC WARN believes there are additional settlement agreements that are not in the record.
> The Public Records Act of NC enables citizens to “obtain copies of their public records” unless the records are specifically exempted by law. Public records include “all documents . . . made or received pursuant to law or ordinance in connection with the transaction of public business by any agency of North Carolina government or its subdivisions.” This clearly includes the Utilities Commission and the settlements filed in the merger docket.
> Under the statute, the only exception to public availability is when the information held by Commission is shown to meet all requirements for protection as “trade secrets.”
> The utilities have the burden of proving the documents are trade secrets, and NC WARN does not see that there is any actual or potential commercial value in the settlement agreements or that anyone could obtain economic value from their disclosure.
> Case law focuses on the “value to the business and competitors,” and in this instance, NC WARN does not believe the utilities can show economic value in the agreements.
> Rather than allowing anyone to obtain economic value from the disclosure of the settlement agreements, the “confidential” agreements have the opposite effect and hide from public scrutiny a significant portion of the costs and benefits of the merger.
> In Indiana last year, Duke Energy was compelled to publicly disclose hundreds of what it had claimed were trade secrets under a similar Indiana statute.
> The most compelling argument for full public disclosure in the present instance is that the much more detailed stipulation agreements between the utilities and the Public Staff no doubt contain much more economically valuable information, yet the two settlements those parties entered into are openly disclosed in the record.
The NC Public Records Act does not contain any requirements that the party requesting public records provide any rationale for obtaining them. However, NC WARN, as evidenced in its motion of June 18, has a clear and demonstrable interest in receiving the documents about what is in the settlements and how they have altered the costs and benefits of the merger.