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Advisory Opinion 98-054

December 31, 1998; Minnesota Public Utilities Commission

12/31/1998 10:14:43 AM

This is an opinion of the Commissioner of Administration issued pursuant to section 13.072 of Minnesota Statutes, Chapter 13 - the Minnesota Government Data Practices Act. It is based on the facts and information available to the Commissioner as described below.


Facts and Procedural History:

For purposes of simplification, the information presented by the person who requested this opinion and the response from the government entity with which the person disagrees are presented in summary form. Copies of the complete submissions are on file at the offices of IPA and, except for any data classified as not public, are available for public access.

On October 30, 1998, IPA received a letter October 27, 1998, from Dennis Ahlers, Assistant Minnesota Attorney General, on behalf of the Minnesota Public Utilities Commission (MPUC). In his letter, Mr. Ahlers requested that the Commissioner issue an opinion regarding the classification of certain data maintained by the MPUC.

A summary of the facts is as follows. Mr. Ahlers wrote that the MPUC received a data practices request from the Minnesota Energy Consumers (MEC) to gain access to the proposed Power Purchase Agreement (PPA) between Northern States Power (NSP) and Minnesota Valley Alfalfa Producers (MnVAP). The PPA was filed with the MPUC in regard to a request for Biomass Generation Resources. Mr. Ahlers stated, Both NSP and MnVAP have maintained throughout this proceeding before the MPUC that the contents of the PPA are proprietary in nature, and they object to MEC's data practices request.

In requesting an advisory opinion, Mr. Ahlers wrote, In particular, the MPUC wishes the Commissioner to comment on whether any or all of the information contained in the PPA is protected from disclosure under Minn. Stat. 13.37, subd. 1(b) and 2 [trade secret]; and the particular parts of the PPA that can be disclosed to MEC in response to its Data Practices Request. He added that attached to his opinion request were copies of comments each of the involved parties submitted to the MPUC regarding this issue.



Issue:

In his request for an opinion, Mr. Ahlers asked the Commissioner to address the following issue:
Are the following data, maintained by the Minnesota Public Utilities Commission, classified as trade secret pursuant to Minnesota Statutes Section 13.37: data contained in a proposed Power Purchase Agreement between Northern States Power and the Minnesota Valley Alfalfa Producers?



Discussion:

Pursuant to Minnesota Statutes Section 13.03, subdivision 1, government data are presumed public unless otherwise classified by statute, federal law, or temporary classification at Section 13.06. The issue currently before the Commissioner is whether data in the PPA are classified as not public pursuant to Section 13.37, trade secret. Attorneys for MnVAP (Harold Frederick) and NSP (Michael Krikava) submitted comments to the MPUC asserting that all or some of the data in the PPA are classified as not public by Section 13.37. Attorneys for the MEC (James Bertrand and Mary Schwind) submitted comments to the MPUC asserting that most of the data in the PPA are public.

As the Commissioner has opined in previous advisory opinions, the trade secret exemption applies only if the data in question satisfy the four elements set forth in Section 13.37. Subdivision 1 (b) of Section 13.37 states:

Trade Secret Information means government data, including a formula, pattern, compilation, program, device, method, technique or process (1) that was supplied by the affected individual or organization, (2) that is the subject of efforts by the individual or organization that are reasonable under the circumstances to maintain its secrecy, and (3) that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

Any data meeting the criteria outlined in subdivision 1 (b) of Section 13.37, are classified as nonpublic (data not on individuals) and private (data on individuals) by subdivision 2 of Section 13.37.

The PPA is a very large document, comprised of approximately 155 pages; ninety-six pages of text and fifty-eight pages of appendices. The text includes the following articles: definitions; purchase and sale; conditions precedent; representations and warranties; obligations; prohibitions; coordinating and management committees; force majeure; termination/default/remedies; laws and regulations; effect of PURA (the Public Utility Regulatory Policies Act of 1978) and EPAct (the Energy Policy Act of 1992); indemnification; dispute resolution; NSP's option to purchase and right of first refusal; and general.

The PPA also contains twenty-nine appendices; however, thirteen of those are not part of the copy the MPUC submitted to the Commissioner. Some of the document titles of the appendices included in the Commissioner's copy are Energy Production Guarantee; Buy Down Payment; Dispatch Flexibility Guarantees; Peak Controlled Service Rate Schedule; Milestones, Permits, Approvals; Form of Escrow Agreement; NSP EEO Policies; and Fuel Certification Requirements. The missing appendices are entitled NSP Generation Interconnection Standard, Description, Substation and Transmission System Description, Engineering Specifications, General Plant Specifications, Plant Acceptance Criteria and Capacity Test Requirements, Legal Description of Site, Point(s) of Interconnection, Point(s) of Interchange and Metering, One-Line Diagram(s), two entitled Intentionally Omitted, Major Project Documents, and Project Pro forma.

Upon an examination of the PPA, it is the Commissioner's opinion that some of the data do not meet the four requirements of Section 13.37. But, it is possible that some of the data do fit the rigorous definition. However, the Commissioner is unable to make definitive and detailed determinations as to which data qualify as trade secret under Section 13.37. One reason is that she cannot determine classifications of data she has not inspected. Another is that much of the data is very technical in nature.

The Commissioner has issued approximately eight opinions involving the trade secret provision. She has attempted to issue opinions that are helpful and informative to the involved parties. However, there are times when the staff of government entities who know and work with the data must make their own determinations. This is particularly true when determining whether certain data are a trade secret depends heavily on industry standards and detailed technical knowledge of equipment and processes that are used within that industry. In this case, presumably, the MPUC and its staff do have the technical expertise and are in a much better position to determine the appropriate classification of the data in the PPA.

The Commissioner does, however, offer the following guidance. First, data considered proprietary by a non-government entity are not protected from public disclosure when those data become government data. As the Commissioner stated in Advisory Opinions 98-017 and 98-026, she is not aware of any statutory provision that generally classifies proprietary data as not public.

In addition, any data that MnVAP or NSP have released to members of the public cannot possibly meet the requirement of Section 13.37, subdivision 1 (b), that the data are the subject of efforts by the individual or organization that are reasonable under the circumstances to maintain its secrecy. For example, MEC alleged that MnVAP disseminated pricing information in a 1998 newsletter published by the Coon Rapids Regional Energy/Environmental Demonstration Project. MEC provided a copy of some/all of this newsletter to the Commissioner and it appears that staff of both NSP and MnVAP wrote the articles. It may also be relevant that the articles contain information about the alfalfa gasification process.

Further, it is unlikely that financial data such as pricing provisions and financial projections are a formula, pattern, compilation, program, device, method, technique or process that derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. Although some of the pricing strategies may be formulas or methods, it is not clear to the Commissioner that other competitors would not be able to arrive at those same formulas or methods by proper means. Also important to keep in mind is that the Minnesota Government Data Practices Act, unlike the federal Freedom of Information Act, does not generally protect from public disclosure commercial or financial information when that information becomes government data. (See 5 U.S.C. 552 (b)(4).) (See Advisory Opinions 94-037, 95-017, and 98-050.)

An additional comment is appropriate. In his comments to the MPUC, Mr. Frederick discussed Minnesota Rules Section 7829.0500 which he described as permitting persons filing documents with the [MPUC] to identify and excise from all but a few copies proprietary and trade secret information contained in the documents. Mr. Frederick stated that in accordance with the Rule, NSP designated portions of its petition and the PPA as proprietary.

Minnesota Rules Section 7829.0500 states:

Subpart 1. Confidentiality protected. Nothing in this chapter requires the public disclosure of privileged proprietary information, trade secrets, or other privileged information.

Subp. 2. Procedure for excision. Persons filing documents containing proprietary information, trade secrets, or other privileged information shall excise this information in all copies but the original and six copies.

Subp. 3. Identification of excised material. When a person classifies an entire document, or a substantial part of a document, as protected information, the person shall file a description of the excised material that includes at least the following information: the nature of the material, its authors, its general import, and the date on which it was prepared.

Subp. 4. Document containing protected information. The first page or cover page of a document containing protected information must be clearly marked in bold print TRADE SECRET INFORMATION -- NOT FOR PUBLIC DISCLOSURE or with words of similar import. Every page on which protected information appears must be similarly marked and the protected information must be underlined, placed in brackets, or otherwise clearly identified as the information which is to be protected from disclosure.


Although NSP, via Section 7829.0500, may have designated certain data it submitted to the MPUC as protected, any such actions were essentially without effect. Section 7829.0200, subpart 2, states:

This chapter governs practice and procedure in matters before the commission except when a statute or a rule on a specific topic contains procedural requirements in direct conflict with this chapter. Then, the statute or rule on a specific topic controls insofar as it is in direct conflict with this chapter.

In the case of this opinion, the language of Chapter 13 controls because it is a statute and because it is more specific. Although Section 7829.0500, subpart 1, states that public disclosure of data that are privileged proprietary information or other privileged information, is not required, pursuant to Section 13.03, subdivision 1, government data are presumptively public and must be disclosed. Chapter 13 does provide a disclosure exemption for trade secret data but only if those data meet the four elements set forth in Section 13.37, subdivision 1(b).

Moreover, Chapter 13, by omission, provides that Minnesota Rules do not classify data. Section 13.03, subdivision 1, states that all government data are public unless otherwise classified by statute, federal law, or temporary classification. Therefore, NSP, MnVAP, and/or the MPUC cannot rely on Minnesota Rules Section 7829.0500 to classify any data as not public. The Commissioner urges re-drafting of this rule so it does not appear to suggest that data submitted to a government entity, that are public by operation of Chapter 13, should not be disclosed.


Opinion:


Based on the facts and information provided, my opinion on the issue raised by Mr. Ahlers is as follows:

Because the Commissioner has not reviewed the specific data, she cannot determine with absolute certainty whether the following data maintained by the Minnesota Public Utilities Commission are classified as trade secret pursuant to Minnesota Statutes Section 13.37: data contained in a proposed Power Purchase Agreement (PPA) between Northern States Power and the Minnesota Valley Alfalfa Producers. If any of the data in the PPA satisfy all four criteria of Section 13.37, subdivision 1(b), they are classified as nonpublic or private. Any of the data in the PPA not satisfying all the requirements of Section 13.37 are not protected by Section 13.37 and are public.

Signed:

Elaine S. Hansen
Commissioner

Dated: December 31, 1998



Trade secret

Freedom of Information Act (FOIA)

Proprietary information (See also: Intellectual property)

Statute supersedes rule

Commissioner's limited authority

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