R07-0924Decision No. R07-0924
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO  
07R-325ALLDOCKET NO. 07R-325ALL
IN THE MATTER OF THE PROPOSED RULES OF PRACTICE AND PROCEDURE, 4 CODE OF COLORADO REGULATIONS 723-1.
RECOMMENDED DECISION OF
ADMINISTRATIVE LAW JUDGE
MANA L. JENNINGS-FADER
ADOPTING RULES
Mailed Date:  November 5, 2007
I.	STATEMENT  
1.	On August 30, 2007, the Commission issued the Notice of Proposed Rulemaking which commenced this docket.  Decision No. C07-0737.  The Commission invited interested persons to participate in the rulemaking by submission of written comments, by presentation of oral comments, or by both means and scheduled the hearing on the proposed rule changes for October 5, 2007.  
2.	On the scheduled date and at the announced time and location, the undersigned Administrative Law Judge (ALJ) held hearings on the proposed rules.  Written comments or oral comments, or both, were submitted by:  AT&T Communications of the Mountain States, Inc., et al. (AT&T); the Board of County Commissioners of Boulder (Boulder); the Colorado Office of Consumer Counsel (OCC); Dr. Ronald Larson (Larson); Public Service Company of Colorado (Public Service); Qwest Corporation (Qwest); Ratepayers United of Colorado, LLC (RUC); Western Resources Advocates (WRA); and Mr. Terry Joseph Wood (Wood).  At the conclusion of the rulemaking hearing, the ALJ took the matter under advisement.  
3.	In accordance with § 40-6-109, C.R.S., the ALJ now transmits to the Commission the record in this proceeding along with a written recommended decision.  
II.	FINDINGS AND DISCUSSION  
4.	Rulemaking is a quasi-legislative function.  Rulemakings encompass a range of determinations, with one end of the continuum being regulations based purely on policy considerations and the other end of the continuum being regulations the need for which, or the language of which, turns upon proof of discrete facts.  Citizens for Free Enterprise v. Department of Revenue, 649 P.2d 1054 (Colo. 1982).  The procedural rules at issue in this rulemaking fall on the policy end of that continuum.  
5.	Sections 40-2-108, 40-3-102, 40-6-101(1), 40-6-108(2), and 40-6-109(5), C.R.S., are the statutory authority for the rules promulgated by this Decision.  
6.	This is the third rulemaking proceeding with respect to the Rules of Practice and Procedure, 4 Code of Colorado Regulations (CCR) 723 Part 1, in the past two years.  See Docket No. 03R-528ALL (rules effective on April 1, 2006) and Docket No. 06R-488ALL (rules effective on August 1, 2007).  The previous rulemakings addressed the rules at issue here, particularly the rule governing confidentiality (Rule 4 CCR 723-1-1100).  
7.	Changes have been made to the rules as noticed.  Not all changes are discussed in this Decision.  
8.	There are two distinct subject matters addressed by the proposed rule changes.  Each is discussed separately.  
A.	Rules pertaining to extraordinary confidentiality and protection of data.  
9.	The Commission proposed changes to Rule 4 CCR 723-1-1100(a)(III) and to Rule 4 CCR 723-1-1100(c)(III).  Decision No. C07-0737 at Attachment A.  This decision amends Rule 4 CCR 723-1-1100(a)(III), Rule 4 CCR 723-1-1100(c)(III), and Rule 4 CCR 723-1-1100(g).  
1.	Rule 4 CCR 723-1-1100(a)(III) and Rule 4 CCR 723-1-1100(g).  
10.	Rule 4 CCR 723-1-1100 sets out the process by which a party in a formal docket before the Commission obtains, and by which the Commission reviews, confidential treatment for information claimed by the submitting party to be confidential or trade secret.  The Commission recognizes two types of confidential data:  those which require ordinary or standard protection and those which require extraordinary protection.  Although Rule 4 CCR 723-1-1100(g) is intertwined with the proposed amendment to Rule 4 CCR 723-1-1100(a), Decision No. C07-0737 proposed no amendment to Rule 4 CCR 723-1-1100(g).  
11.	Ordinary confidentiality is addressed in, and is protected by the processes specified in, Rule 4 CCR 723-1-1100(a) as it exists at present.  Ordinary confidentiality is not mentioned specifically in Decision No. C07-0737, and the proposed changes did not address this portion of Rule 4 CCR 723-1-1100(a).  The Commission proposed changes to Rule 4 CCR 723-1-1100(a)(III) to address extraordinary confidentiality.  
12.	Each Commission employee signs a nondisclosure agreement annually.  Rule 4 CCR 723-1-1100(g).  After signing the annual nondisclosure agreement, a Commission employee may access any information protected by ordinary confidentiality.  
13.	To obtain access to highly confidential data, a Commission employee must sign the specific nondisclosure agreement which pertains to those data.  The nondisclosure agreement governing access to the specific highly confidential information is usually appended to the Order or Decision granting a motion for extraordinary protection.  After signing the extraordinary protection nondisclosure agreement in a given docket, a Commission employee may access the highly confidential data in that docket.  
14.	Once a Commission employee signs a nondisclosure agreement (whether for ordinary confidentiality or for extraordinary confidentiality), the employee is bound by the terms of that agreement.  As a matter of internal Commission procedure, both confidential data and highly confidential data are maintained in restricted areas and, within those restricted areas, are in locked rooms or locked file cabinets.  Commission employees are knowledgeable about, and are sensitive to, the appropriate handling and storage of confidential information and of highly confidential information.  
15.	Every Commission employee receives, by electronic service, a copy of every Order and Decision issued by the Commission and its Administrative Law Judges.  Thus, every Commission employee knows or should know the content of, and the restrictions imposed by, an Order or a Decision granting a motion for extraordinary confidentiality protection.  
16.	With this background, the ALJ turns to the comments.  
a.	Ordinary confidentiality.  
17.	Written comments and oral presentations by WRA/RUC, to which Public Service and Qwest responded in writing and orally, suggested language changes to Rule 4 CCR 723-1-1100 with respect to ordinary confidentiality.  The WRA/RUC proposals will not be adopted.  
18.	First, as argued by Public Service and Qwest, the notice of proposed rulemaking (i.e., Decision No. C07-0737) did not state expressly that Rule 4 CCR 723-1-1100 in its entirety (i.e., the portions pertaining to ordinary confidentiality) would be under review.  WRA/RUC pointed out that the Order invited "[i]nterested persons ... to suggest changes that will make the subject rules more efficient, rational, or meaningful."  Decision No. C07-0737 at ¶ 8.  They argued that this statement is an invitation to offer revisions to any portion of Rule 4 CCR 723-1-1100, which is what they did.  While the WRA/RUC position has merit, the ALJ finds that addressing the larger issue of the treatment of ordinary confidentiality should be done in a rulemaking commenced to address that broader issue, as the Commission did in 1997.  The instant rulemaking had a narrow initial focus, and the ALJ believes that it is better in this case (albeit not required by law) to keep this rulemaking narrowly focused.  
19.	Second, presentations during the rulemaking hearing made it clear that the principal concerns of WRA/RUC were focused on highly confidential information and that WRA and RUC had little, if any, experience with the procedures governing ordinary confidentiality.  Neither could provide an example of a situation in which using the current rules governing ordinary confidentiality had created a problem.  
20.	Third, when asked by the ALJ to describe the process for challenging a claim of ordinary confidentiality which should be adopted, WRA and RUC each described a process remarkably similar to that contained in Rule 4 CCR 723-1-1100(b) as it now exists.  
21.	Thus, the ALJ finds no persuasive reason to use this rulemaking to modify the Rule governing ordinary confidentiality (other than changes for clarity).  If a person believes that the Commission ought to address in toto the issue of treatment of data claimed to be confidential, then that person can petition the Commission to commence a rulemaking to address that issue.  
22.	The remainder of the discussion in this Decision concerns extraordinary confidentiality unless the context indicates otherwise.  
b.	Extraordinary confidentiality.  
23.	The Commission proposes to change Rule 4 CCR 723-1-1100(a)(III) as follows:  
To the extent there may be information which a party believes requires extraordinary protection beyond that provided for in these rules the party shall submit a motion seeking such extraordinary protection.  The motion shall include a description and/or representative sample of the information for which extraordinary protection is sought and shall state the grounds for seeking the relief, the specific relief requested, and advise all other parties of the request and the subject matter of the material at issue.  The motion shall also be accompanied by the specific form of nondisclosure agreement requested by the party.  The party shall comply with rule 1204(a) in filing the motion.  The Commission will evaluate the motion and the description and/or representative sample in camera.  The Commission may enter an order either requiring additional information, or disposing of the motion and requiring the party to file a complete version and an appropriate number of copies of the information for which extraordinary protection is sought (the default number of copies is seven).  In ordering the number of copies to be filed, the Commission will consider the needs of its commissioners, administrative law judges, and trial, advisory, and administrative staff.  Unless otherwise ordered by the Commission, its staff shall have access to all information filed under this subparagraph (III) by virtue of the annual nondisclosure agreement executed under paragraph (g) of this rule.  
24.	AT&T, Public Service, Qwest, Mr. Wood, and WRA/RUC commented on the proposed changes to Rule 4 CCR 723-1-1101(a).  
25.	Mr. Wood expressed his concern that adopting the proposed changes "would decrease significantly [the security protection around highly confidential information] from the level currently witnessed."  Wood Comments.  In his opinion, increasing the number of copies filed with the Commission, when combined with increasing the number of Commission employees with access to the highly confidential data, could result in costs (i.e., disclosure) which outweigh the benefits and administrative convenience to be gained from amending the Rule as proposed.  Mr. Wood states that the Commission should take steps to assure, first, that the documents and their contents are protected and, second, that Commission employees with access to confidential data of any type take adequate steps to protect those data.  
26.	While the Commission appreciates the concern expressed by Mr. Wood, the Rule will not be amended to address this issue.  First, the specifics of the process by which Commission Staff may access highly confidential data are addressed more appropriately by internal Commission procedures.  Second, as outlined above, the Commission has sufficient safeguards in place to assure that confidential data of all stripes is protected.  Third, if the Commission-proposed change to Rule 4 CCR 723-1-1100(a) is adopted, only this modest change in current Commission practice will occur:  Commission employees will no longer be required to sign each specific nondisclosure agreement to have access to extraordinarily confidential data.  As each Commission employee receives every Decision and Order, each employee should be aware of the restrictions which apply to particular extraordinarily confidential information.  There is no reason to believe that this modest change in procedure will result in the release of highly confidential information.  Fourth and finally, as recommended by Qwest and discussed below, Rule 4 CCR 723-1-1100(g) will be amended to assure that Commission employees are aware that, with respect to extraordinary confidentiality, they are bound by, and must comply with, the protections spelled out in an Order or Decision which grants a motion for extraordinary confidentiality protection.  
27.	Qwest suggested (a) a clarification of Rule 4 CCR 723-1-1100(a)(III) and (b) an addition to Rule 4 CCR 723-1-1100(g).  Each is discussed separately.  
28.	With respect to Rule 4 CCR 723-1-1100(a)(III), Qwest recommended that the Commission clarify the circumstances under which a complete copy of the information for which extraordinary protection is sought must be filed with the Commission.  Qwest suggested language to make it explicit that a complete copy of the document containing those data would not be filed with the Commission unless (a) the Commission orders the filing of a complete copy prior to ruling on a motion for extraordinary protection (e.g., to review the document or information in camera) or (b) the Commission has granted a motion for extraordinary protection and a party seeks to rely on the highly confidential data as evidence in a proceeding.  Under either scenario, Qwest argues, the owner of the highly confidential data would have taken reasonable efforts to preserve the confidentiality of the information and, thus, would not be seen as having waived its claim of confidentiality.  
29.	WRA/RUC opposed Qwest's suggestion.  They took the position that the Commission should always review in camera each entire document containing the data for which extraordinary confidentiality is sought and that, as a result, a complete copy of the information (that is, a complete copy of the document in which the data are found) should always be filed with the Commission.  
30.	Qwest's recommendation will be adopted.  Of necessity, decisions on motions for extraordinary protection are made on a case-by-case basis.  At present, the Commission has discretion to order a party to file a complete copy of the document containing the data should the Commission wish to review a complete copy.  If the WRA/RUC approach were to be adopted, there would be no Commission discretion; and the moving party would be required to file a complete copy of the data at issue in every case.  Because the Commission is in the best position to know what it needs to examine in order to decide a motion for extraordinary protection, the preferred approach, and the one adopted here, is to maintain the existing flexibility.  
31.	As to data which are subject to a Commission order granting extraordinary confidentiality, Qwest observed that these data are exchanged principally during discovery.  Qwest noted that Rule 4 CCR 723-1-1405(b) prohibits the filing of discovery requests and responses except as necessary to support a motion or as an exhibit at hearing.  Qwest suggested that the language of Rule 4 CCR 723-1-1100(a)(III) should be consistent with that existing restriction.  Qwest proposed language changes intended to achieve this result, and the other participants agreed with Qwest's proposed changes.  
32.	The ALJ agrees with Qwest that the language of the rules should be consistent and that Rule 4 CCR 723-1-1100(a)(III) should mirror the Rule 4 CCR 723-1-1405(b) prohibition against filing discovery requests and responses with the Commission.  Consistency between and among procedural rules addressing the same subject matter is desirable.  In addition, filing with the Commission all highly confidential information exchanged during discovery would impose an undue financial burden on the parties and would impose a large and undue administrative and financial burden on the Commission.  It would be impractical, if not impossible, to implement.  Finally and importantly, § 40-6-115(a), C.R.S., requires the Commission to certify to a reviewing court the Commission's record in a proceeding under court review.  The Commission record includes all documents filed in the proceeding as well as evidence, orders, and decisions.  Thus, filing highly confidential data exchanged during discovery would result in those discovery materials being certified to a reviewing court as part of the Commission record, albeit not as evidence used by the Commission in reaching its decision.  Certifying such materials as part of the Commission record could create confusion during the judicial review process; this confusion will not arise if the highly confidential information exchanged during discovery are not filed.  
33.	As adopted by this Decision, Rule 4 CCR 723-1-1100(a)(III) states that a complete copy of data found by the Commission to be highly confidential information will be filed when the information is used to support a motion, is used as an exhibit to prefiled testimony, is prefiled as an exhibit to be offered at hearing, or is offered as an exhibit at hearing.  This is the general rule which applies in all proceedings.  If a party in a specific proceeding believes that it is not necessary or is inappropriate to file a complete copy of the information as required by the Rule, then the party may file a motion in that specific proceeding seeking a variance of the rule.  
34.	Qwest suggested amending Rule 4 CCR 723-1-1100(g) to make it consistent with the changes to Rule 4 CCR 723-1-1100(a)(III).  Specifically, Qwest recommended adding language to Rule 4 CCR 723-1-1100(g) to require the annual nondisclosure agreement signed by Commission Staff to state that, for all data for which the Commission orders extraordinary protections, a Commission employee who accesses those data will maintain them in accordance with the provisions of the applicable Decision or Order.  No participant opposed this suggestion.  The ALJ finds the proposal to be reasonable, finds that the proposal makes the rules internally consistent, and finds that adoption of the proposal is appropriate.  Rule 4 CCR 723-1-1100(g) will be amended as suggested.  
35.	WRA/RUC took the position that extraordinary protection should be reserved for extraordinary circumstances.  WRA/RUC also recommended that Rule 4 CCR 723-1-1100(a)(III) state that the party seeking extraordinary protection has the burden of proof to establish that material is highly confidential and that material requires extraordinary protection.  
36.	The ALJ agrees with WRA/RUC.  Under existing practice, extraordinary protection is reserved for extraordinary circumstances because, in order to obtain the highly confidential designation and extraordinary protections, a party must convince the Commission that the information is highly confidential and that ordinary confidentiality is not sufficient.  In addition, under existing practice, the burden to sustain a claim that extraordinary protection is needed rests on the party making the claim.  See, e.g., Rule 4 CCR 723-1-1500 ("the burden of proof and the burden of going forward on the party that is the proponent of the order").  
37.	To make these points clear, Rule 4 CCR 723-1-1100(as)(III) will be modified to include a requirement that the moving party establish the following:  (a) the information for which extraordinary confidentiality is sought is highly confidential; (b) the protections afforded by the Commission's rule governing ordinary confidentiality provide insufficient protection for the information; and (c) the extraordinary protections proposed by the moving party will afford sufficient protection.  
38.	WRA/RUC argued that general and broad assertions of confidentiality should not suffice to sustain a claim that extraordinary confidentiality is needed.  They recommended that, before affording highly confidential treatment,  
the Commission should require evidence and affidavits from affected persons that demonstrate that the need for ... extraordinary protection[] outweighs the public's need for open processes and the ability to evaluate the basis for agency decisions.  
WRA/RUC Comments at 5-6.  Public Service objected to this proposal, stating that whether information should be afforded extraordinary confidentiality is a legal question and, therefore, that evidence and affidavits are unnecessary.  
39.	The ALJ finds, and Public Service agreed during the hearing, that there may be instances in which the Commission may need evidence (e.g., affidavits or live testimony) to decide a motion for extraordinary confidentiality.  Thus, the ALJ is not persuaded that the question of extraordinary protection is always one of law for which no evidence is needed.  
40.	Adopting the WRA/RUC recommendation on this issue, however, would require an affidavit to be filed, or other evidence to be provided, with every motion for extraordinary confidentiality.  The ALJ finds this approach to be overly prescriptive, finds that adopting the proposal could impose undue cost on the moving party and the Commission, and finds that a party opposing a motion for extraordinary protection may address the lack of sufficient evidentiary support for factual assertions made in the motion when it responds to such a motion.  The Commission needs to retain its flexibility to hear evidence when the Commission deems it necessary in order to decide a motion for extraordinary protection and to dispense with evidence when the Commission deems evidence to be unnecessary.  If the Commission needs evidence, the Commission will ask the moving party to provide the requisite evidence.  The Rule will not be amended to incorporate the WRA/RUC recommendation that evidence must be presented in every instance.  
41.	Finally, WRA/RUC proposed that Rule 4 CCR 723-1-1100(a) contain the standards to be used to determine whether to grant extraordinary confidentiality.  They suggested these standards:   
	1)	that the information has not otherwise been publicly released;  
	2)	that release of the information would cause substantial, specific, economic harm; 
	3)	the period of time for which the information must remain confidential to avoid exposure to economic harm;  
	4)	in the case of rejected bid offers, why those particular offers are of significant commercial value in the marketplace; and that public disclosure of rejected bids would cause a less efficient market and higher prices rather than lower prices; and  
	5)	if extraordinary protection is sought, why the ordinary confidentiality protections afforded by Commission rules would result in specific, significant, economic harm that outweighs the public's interest in being able to meaningfully participate in Commission proceedings affecting their interests and, if protection from disclosure to all parties other than Staff and the OCC is sought, why preventing disclosure to parties without a commercial interest in the information is in the public interest.  
WRA/RUC Comments at 6; see also attachment to WRA/RUC Comments (proposed changes to Rule 4 CCR 723-1-1100(a)).  WRA/RUC proposed these standards based on current legal standards governing confidentiality.  
42.	Public Service opposed the WRA/RUC proposal.  It argued that the proposed standards are not grounded in Colorado law and that the Commission can apply, and should apply, Colorado law without writing it into the Rule.  
43.	The ALJ agrees with Public Service that the standards should not be written into the Rule.  First, if the standards are not set out in the Rule, the Commission can consider Colorado law as it evolves and changes over time.  Second, if the standards were set out in the Rule and if relevant Colorado law should change, then the Commission would need to conduct a rulemaking to conform the Rule to the law.  If the standards are not stated in the Rule, then the Commission avoids this complication.  Third, if the requested standards were adopted, then the Commission might be precluded from applying a standard or considering a factor other than, or in addition to, those contained in the Rule.  This could unreasonably circumscribe the Commission's ability to consider all factors or standards relevant to a particular case.  As a general matter, absent good reason demonstrated in the rulemaking record, a rule of procedure should not prevent or hamper full exploration of issues brought to the Commission for decision.  The record of this rulemaking contains no persuasive reason which supports the addition of the WRA/RUC-suggested, potentially restrictive standards to Rule 4 CCR 723-1-1100(a).  Fourth and finally, Rule 4 CCR 723-1-1100(a)(III) will be modified to require a moving party to establish (a) the information for which extraordinary confidentiality is sought is highly confidential; (b) the protections afforded by the Commission's rule governing ordinary confidentiality provide insufficient protection for the information; and (c) the extraordinary protections proposed by the movant will afford sufficient protection.  This addition should satisfy, to some degree, the WRA/RUC request for explicit standards.  For these reasons, the specific standards proposed by WRA/RUC will not be included in the Rule.  
2.	Rule 4 CCR 723-1-1100(c)(III).  
44.	No one commented on the proposed change to Rule 4 CCR 723-1-1100(c)(III).  This change is a simple clarification to conform the Rule's language with that of other subsections of Rule 4 CCR 723-1-1100(c).  The Rule change will be adopted as proposed.  In addition, there are changes to clarify that the Rule applies to all filings made with the Commission.  
45.	The language of Rule 4 CCR 723-1-1100(a)(III), of Rule 4 CCR 723-1-1100(c)(III), and of Rule 4 CCR 723-1-1100(g), as set out in Appendix A and Appendix B of this Decision, reflects this discussion.  
B.	Rule pertaining to intervention:  Rule 4 CCR 723-1-1401(a).  
46.	The Commission proposed to add the following sentence at the end of Rule 4 CCR 723-1-1401(a):  
The Commission may consider any application or petition without a hearing if no notice of intervention as of right or motion to permissively intervene requests a hearing or contests or opposes the application or petition.  
Decision No. C07-0737 at Attachment A at 4.  
47.	The proposed language contains two preconditions, both of which must be met, for the Commission to consider an application or petition without a hearing:  first, no intervention or request to intervene contains a request for a hearing; and, second, no intervention or request to intervene contests or opposes the application or petition.  The principal purposes of the proposed amendment are:  (a) inform one who intervenes and one who seeks to intervene of the need to include an explicit request for a hearing in the intervention filing; and (b) alert one who intervenes and one who seeks to intervene to the consequences of failing to include such a in the intervention filing.  
48.	If adopted, the proposed change will make the language of Rule 4 CCR 723-1-1401(a) consistent with, and parallel to, the language of existing Rule 4 CCR 723-1-1403, which provides in pertinent part:  
(a)	The Commission may, without a hearing and without further notice, ... determine any application or petition which is uncontested or unopposed, if a hearing is not requested or required by law and the application or petition is accompanied by a sworn statement verifying sufficient facts and supported by attachments and/or exhibits that adequately support the filing.  ...  
(b)	A proceeding will not be considered to be contested or opposed, [sic] unless an intervention has been filed that contains a clear statement specifying the grounds therefore.  
(Emphasis supplied.)  This language has been unchanged since Rule 4 CCR 723-1-1403 became effective on April 1, 2006.  
49.	The requirement that an intervenor of right or a person seeking to intervene permissively in an uncontested and unopposed application or petition docket must request a hearing in order to have a hearing is not new.  It has been in the Rules of Practice and Procedure since at least 1987.  See Rule 4 CCR 723-1-24(a) (repealed effective April 1, 2007) ("For any matter that is noncontested and unopposed under § 40-6-109(5), C.R.S., and [in which] a hearing is not requested, the matter may be determined by the Commission under its modified procedure as outlined in Rule [4 CCR 723-1-]4(b)(9) without a hearing and without further notice.").  
50.	Similarly, the requirement that an intervention specify its grounds or bases is not new.  This too has been in the Rules of Practice and Procedure since at least 1987.  See Rule 4 CCR 723-1-24(a)(1) (repealed effective April 1, 2007) ("An intervention will not be deemed to be a contest or opposition to a proceeding unless a statement specifying the grounds for the contest or opposition is included with the entry of appearance and notice of intervention or petition to intervene filed pursuant to Rule [4 CCR 723-1-]64.").  
51.	Rule 4 CCR 723-1-1403(a) and the proposed addition to Rule 4 CCR 723-1-1401(a) are based on, and are consistent with, § 40-6-109(5), C.R.S., which provides:  
The commission may by general rule or regulation provide for the taking of evidence in uncontested or unopposed proceedings by affidavit or otherwise, without the necessity of a formal oral hearing.  Such shortened or informal proceedings shall otherwise be subject to all of the provisions of [title 40, C.R.S.]  Upon its own motion the commission may[,] and upon request of a party timely made the commission shall[,] assign any such uncontested or unopposed proceeding for hearing.  
Emphasis supplied.  
52.	With this background, the ALJ turns to the comments.  
53.	AT&T, Boulder, OCC, Public Service, Qwest, and WRA/RUC commented concerning the proposed change to Rule 4 CCR 723-1-1401(a).  
54.	WRA/RUC argue that intervenors should not be required  
to state their specific interest and specifically request a hearing.  Often, the need for a hearing may not be established until some discovery is conducted.  The presumption should be in favor of Commission hearings.  
WRA/RUC Comments at 6.  In Attachment A to their Comments, WRA/RUC propose language for Rule 4 CCR 723-1-1401(a) which is consistent with their position.  
55.	WRA/RUC's proposed language will not be adopted.  First, WRA/RUC provide virtually no argument in support for their position.  Second, as discussed above, these requirements are consistent with the statute and have been in the Rules of Practice and Procedure for at least 20 years.  WRA/RUC neither provide instances in which they have been harmed by the requirements nor explain why the current practice, which appears to have worked well, is unsatisfactory and should be changed.  Third, adopting the language change proposed by WRA/RUC for Rule 4 CCR 723-1-1401(a) would create a conflict between that Rule and Rule 4 CCR 723-1-1403(a).  One aim of this rulemaking is to make the procedural rules consistent, not to create inconsistencies.  
56.	Boulder opposes the proposed change to Rule 4 CCR 723-1-1401(a) because "the public benefits derived from the presentation of a prima facie case before a magistrate outweigh any administrative convenience that may result from doing away with such hearings."  Boulder Comments at ¶ 2.
57.	The ALJ agrees -- and is of the opinion that the Commission agrees -- with Boulder that "public hearings themselves and the web casting of these hearings create a positive, open environment for decisions impacting rate payers, and should be continued."  Id.  Nonetheless, the ALJ will not adopt Boulder's suggestion that a hearing be held in every instance.  
58.	First, it appears that Boulder sees the proposal as a departure from the Commission's current practice.  This is not the case.  The proposal simply conforms Rule 4 CCR 723-1-1401(a) with Rule 4 CCR 723-1-1403 and provides information to intervenors of right and to those who seek permission to intervene.  The proposed language effects no change in the Commission's current practice.  
59.	Second, the ALJ agrees with AT&T and OCC that the proposed modification is consistent with, and implements, § 40-6-109(5), C.R.S.  That statute provides that, if no party requests a hearing and if a hearing is not required by law, the Commission has the discretion to consider an unopposed and uncontested application or petition without a hearing.  Adoption of Boulder's suggestion that the rule require a hearing in every application or petition docket would restrict the Commission's discretion inappropriately.  
60.	Third, the ALJ finds persuasive Qwest's argument that the Commission's public deliberations on each matter before it are sufficient to assure that the public debate advocated by Boulder will occur.  
61.	Fourth, the ALJ agrees with Public Service that practical considerations argue against adoption of Boulder's position.  Holding a hearing on every uncontested, unopposed application or petition, even if no one requests a hearing and a hearing is not required by law, would impose a needless expense on, and would result in delay for, the applicant or petitioner and would be a wasteful and inefficient use of limited Commission resources.  
62.	Fifth and finally, the ALJ finds that adopting Boulder's suggested language would create an inconsistency between Rule 4 CCR 723-1-1403(a) and Rule 4 CCR 723-1-1401(a).  The better approach is to continue the current practice:  leave the matter to the Commission's discretion, as both the statute and Rule 4 CCR 723-1-1403(a) allow.  
63.	The OCC suggests two changes to Rule 4 CCR 723-1-1401(a):  (a) clarify that the party requesting a hearing must do so in its intervention filing (whether a notice of intervention by right or a motion for leave to intervene) and (b) clarify that, if a party makes a request for a hearing, the Commission must set the matter for hearing.  OCC Comments at ¶ 5.  OCC argues that these proposals are consistent with applicable law and are necessary to protect the due process rights of the parties.  
64.	No one disagrees with OCC's suggestion that the request for hearing must be made in the intervention filing.  In the ALJ's experience, that is the current, albeit informal, practice before the Commission.  Accordingly, Rule 4 CCR 723-1-1401(a) will be amended to clarify that a request for hearing must be made explicitly in the intervention filing.  
65.	Public Service opposes OCC's proposal that a hearing must be held if requested by a party.  Relying on Rule 4 CCR 723-1-1403, Public Service argues that an intervenor must establish "that there is a real contested issue that requires an evidentiary hearing for resolution" (Public Service Comments at 2) as a precondition to the Commission's ordering a hearing.  Even if the Commission orders a hearing, Public Service argues that the hearing need not be evidentiary and that the Commission may conduct the type of hearing which, in the Commission's exercise of its discretion, is appropriate for the issue or issues to be decided.  
66.	Rule 4 CCR 723-1-1401(a) addresses intervention.  One may intervene in a manner which causes the application or petition to be contested or opposed.  See also Rule 4 CCR 723-1-1403(b) (quoted supra).  One may elect to intervene in a manner that leaves the application or petition uncontested and unopposed.  The proposed change to Rule 4 CCR 723-1-1401(a), if adopted, would apply only to unopposed and uncontested application or petition proceedings where a hearing is not required by law.  
67.	Section 40-6-109(5), C.R.S., provides in relevant part:  "Upon ... request of a party timely made the commission shall assign any ... uncontested or unopposed proceeding for hearing."  (Emphasis supplied.)  Rule 4 CCR 723-1-1403(a) provides in pertinent part:  "The Commission may, without a hearing and without further notice, ... [decide] any application or petition which is uncontested or unopposed, if a hearing is not requested or required by law[.]"  (Emphasis supplied.)  To make Rule 4 CCR 723-1-1401(a) fully consistent with the statute and with the other rules, OCC's suggestion that a hearing must be held if requested by a party will be adopted for uncontested and unopposed applications or petitions.  
68.	To say that the Commission will conduct a hearing is not to say that the Commission will hold a full-blown evidentiary hearing in every instance.  The Commission has the discretion to determine, on a case-by-case basis, the form of hearing best suited to provide due process to the parties in the particular unopposed and uncontested application or petition proceeding pending before it.  Decision No. C07-0809 at ¶¶ 12-19 and authorities cited there.  
69.	To the extent OCC seeks to amend Rule 4 CCR 723-1-1401(a) to require the Commission to hold a hearing in a contested or opposed application or petition if a party requests a hearing, the proposal will not be adopted.  First, neither statute nor judicial decision nor Commission decision requires the Commission to hold a hearing in every contested or opposed application or petition.  Decision No. C07-0809 at ¶¶ 14-17.  Second, Public Service's argument that the Commission must retain the flexibility and discretion necessary to determine, on a case-by-case basis, the process or procedure best suited to each contested or opposed matter is 
persuasive.  Mandating that the Commission hold an evidentiary hearing in every contested or opposed application or petition would restrict unreasonably the Commission's discretion.  The ALJ finds that this would be an ill-advised policy and a counter-intuitive result.  The better practice is to continue the Commission's current case-by-case approach with respect to deciding whether to hold a hearing in contested or opposed applications and petitions.  
70.	The language of Rule 4 CCR 723-1-1401(a), as set out in Appendix A and Appendix B of this Decision, reflects this discussion.  
C.	General findings regarding the rules as adopted.  
71.	The Commission has the necessary and proper authority to issue the rules attached to this Decision as Appendix A and Appendix B.  
72.	The rules attached to this Decision as Appendix A and Appendix B are consistent with the subject matter of this proceeding as set out in the Notice of Proposed Rulemaking (i.e., Decision No. C07-0737) which initiated this docket.  
73.	The rules attached to this Decision as Appendix A and Appendix B adopt the rules as noticed (i.e., Decision No. C07-0737 at Attachment A) with changes based on comments, with changes made for consistency with existing rules, with grammatical changes, and with changes made for clarity.  
74.	The record of this rulemaking proceeding demonstrates the need for the rules attached to this Decision as Appendix A and Appendix B.  
75.	The rules attached to this Decision as Appendix A and Appendix B are reasonable and will provide guidance to, and guidelines for, jurisdictional public utilities, customers of those utilities, and others who appear or who wish to appear in formal proceedings before the Commission.  
76.	The rules attached to this Decision as Appendix A and Appendix B are clearly and simply stated, and their meaning can be understood by any person required to comply with them.  
77.	The rules attached to this Decision as Appendix A and Appendix B do not conflict with any other provision of law and do not duplicate or overlap other rules.  
III.	CONCLUSIONS  
78.	The rules attached to this Decision as Appendix A and Appendix B are necessary.  
79.	The rules attached to this Decision as Appendix A and Appendix B meet the statutory requirements.  
80.	The rules attached to this Decision as Appendix A and Appendix B should be adopted in their entirety.  
81.	Pursuant to § 40-6-109(2), C.R.S., the Administrative Law Judge recommends that the Commission enter the following order.  
IV.	ORDER  
A.	The Commission Orders That:  
1.	The Rules which are contained in Appendix A and Appendix B to this Order are adopted.  
2.	This Recommended Decision shall be effective on the day it becomes the Decision of the Commission, if that is the case, and is entered as of the date above.  
3.	As provided by § 40-6-109, C.R.S., copies of this Recommended Decision shall be served upon the parties, who may file exceptions to it.  
a)	If no exceptions are filed within 20 days after service or within any extended period of time authorized, or unless the decision is stayed by the Commission upon its own motion, the recommended decision shall become the decision of the Commission and subject to the provisions of § 40-6-114, C.R.S.  
b)	If a party seeks to amend, modify, annul, or reverse basic findings of fact in its exceptions, that party must request and pay for a transcript to be filed, or the parties may stipulate to portions of the transcript according to the procedure stated in § 40-6-113, C.R.S.  If no transcript or stipulation is filed, the Commission is bound by the facts set out by the administrative law judge and the parties cannot challenge these facts.  This will limit what the Commission can review if exceptions are filed.  
4.	If exceptions to this Decision are filed, they shall not exceed 30 pages in length, unless the Commission for good cause shown permits this limit to be exceeded.  

		THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO

________________________________
Administrative Law Judge	
L:\final\R07-0924_07R-325ALL.doc:MSC

Decision No. C08-0237
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
DOCKET NO. 07R-325ALL
IN THE MATTER OF THE PROPOSED RULES OF PRACTICE AND PROCEDURE, 4 CODE OF COLORADO REGULATIONS 723-1.
ORDER addressing exceptions
Mailed Date:	March 10, 2008
Adopted Date:	February 13, 2008

TABLE OF CONTENTS
I.	BY THE COMMISSION	1
A.	Statement	1
B.	Background	2
C.	Issues on Exceptions	4
1.	Motions for extraordinary protection	4
2.	Interventions	6
II.	ORDER	7

V.	BY THE COMMISSION
A.	Statement
82.	This matter comes before the Commission for consideration of Exceptions to Recommended Decision No. R07-0924 (Recommended Decision) filed by Western Resource Advocates (WRA) on November 20, 2007.  In its Exceptions, WRA asks the Commission to reverse, in part, the Administrative Law Judge’s (ALJ) finding that it is unnecessary to amend Rule 4 Code of Colorado Regulations (CCR) 723-1-1100(a)(III) of the Rules of Practice and Procedure to require the parties seeking extraordinary protection to file the materials for which such protection is sought for an in camera review.  Public Service Company of Colorado (Public Service) filed a response to WRA’s Exceptions on December 4, 2007.  
83.	This matter also comes before the Commission for consideration of Exceptions to the Recommended Decision filed by Qwest Corporation (Qwest) on November 21, 2007.  In its Exceptions, Qwest argues against the modifications proposed by the ALJ with respect to Rule 1401(a).  The Colorado Office of Consumer Counsel (OCC) responded to Qwest’s Exceptions on December 4, 2007.  
84.	Now, being fully advised in the matter, we grant WRA’s Exceptions, in part, and grant Qwest’s Exceptions, in part, consistent with the discussion below.  
B.	Background
85.	The Commission issued the Notice of Proposed Rulemaking (NOPR), which commenced this docket, on August 30, 2007.  See Decision No. C07-0737.  The NOPR stated that:
	This NOPR proposes to modify Rule 4 Code of Colorado Regulations (CCR) 723-1-1100(a)(III).  The proposed rule generally… (b) specifies that the Commission may enter an order either requiring additional information or requiring a party to file an original and an appropriate number of copies of the complete version of the information for which extraordinary protection is sought…Id., at ¶4.
	This NOPR proposes to modify Rule 4 CCR 723-1-1401(a) by clarifying that the Commission may consider any application or petition without a hearing if no notice of intervention as of right or motion to permissively intervene requests a hearing or contests or opposes the application or petition.  Id., at ¶5.
	
86.	The hearing in this matter was held on October 5, 2007 before ALJ Mana L. Jennings-Fader.  WRA, Ratepayers United of Colorado, LLC (RUC), Public Service, Qwest, and OCC, among other parties, submitted written and/or oral comments.  The ALJ took the matter under advisement and issued the Recommended Decision on November 5, 2007.  
87.	With respect to Rule 1100(a)(III), Qwest, recommended among other things, that the Commission clarify the circumstances, if any, under which a complete copy of the materials for which the extraordinary protection is sought must be filed with the Commission for an in camera review.  See Recommended Decision, at ¶28.  Qwest recommended adopting the language that would make it explicit that a complete copy of the materials for which extraordinary protection is sought would not be filed with the Commission for an in camera review unless this was specifically ordered.  Id.  WRA, on the other hand, argued that the party seeking extraordinary protection should always file, and the Commission should always review in camera, a complete copy of the materials for which such protection is sought.  Id., at ¶29.  
88.	The ALJ agreed with Qwest.  The ALJ stated that the decisions regarding whether the extraordinary protection should be granted are never routine and must be made on a case by case basis.  Id., at ¶30.  The ALJ stated that the Commission is in the best position to know what information it needs to examine to decide a motion for extraordinary protection and that it is important to maintain discretion and flexibility. Id.
89.	Qwest also suggested that the language of Rule 1100(a)(III) should be consistent with Rule 1405(b), which provides that discovery requests and responses generally are not filed with the Commission except when necessary to support a pleading or as an exhibit.  Qwest pointed out that the information subject to extraordinary confidentiality is mainly exchanged during discovery.  Id., at ¶31.  The ALJ agreed that the language of Rule 1100(a)(III) should be consistent with Rule 1405(b).  Id., at ¶32.  
90.	With respect to Rule 1401(a),	 the ALJ pointed out that the language proposed in the NOPR contained the two requirements that must be met before the Commission could consider an application or a petition without a hearing: (1) no intervention or request to intervene requests a hearing; and (2) no intervention or request to intervene contests the application or petition.  Id., at ¶47.  The ALJ adopted OCC’s unopposed recommendation that an intervenor must specifically request a hearing in the intervention filing.  Id., at ¶64.  
91.	In addition, OCC recommended that Rule 1401(a) be amended to state that, if any party requests a hearing, the Commission must hold one.  Public Service, however, argued that the Commission must retain its flexibility and discretion to decide on a case by case basis the process best suited to resolve each matter.  Id., at ¶65.  The ALJ found the argument made by Public Service to be persuasive and rejected OCC’s recommendation.  Id., at ¶69.  
C.	Issues on Exceptions
1.	Motions for extraordinary protection
92.	WRA asked in its Exceptions that the Commission reconsider the ALJ’s finding that it is not necessary to require the party seeking extraordinary protection to file the materials for which such protection is sought for an in camera review with respect to the dockets where another party would be completely prevented from accessing the potential evidence and that party has no commercial interest in the contents and is willing to enter into a confidentiality agreement.  See WRA’s Exceptions.  WRA states that this requirement would only apply to a narrow category of extraordinary protection requests.  Id.  
93.	WRA also argued that requests for extraordinary protection must be accompanied by an affidavit providing: (1) the names of persons with access to the information; (2) the description of the harm which could ensue if the information were provided to a party that signed a confidentiality agreement and has no commercial interest in the information; and (3) the period of time for which the information must remain undisclosed to avoid exposure to the harm and a justification for that time period. Id.
94.	Public Service stated in its response that the majority of requests for extraordinary protection are filed because some information is so sensitive that only Staff, OCC and the Commission should have access.  The modifications proposed in WRA’s Exceptions, therefore, would apply not just to a small portion of requests for extraordinary protection but to most of them.  See Public Services Response to Exceptions.  Public Service argued that the reasons why the ALJ rejected the position that the parties seeking extraordinary protection should always file a complete copy of the materials for which such protection is sought for an in camera review remain persuasive.  
95.	We agree with the ALJ and Public Service that the Commission needs to retain its discretion and flexibility in these matters.  The Commission is in the best position to know what information it needs to review when deciding a motion for extraordinary protection.  We find that the approach where the party seeking extraordinary protection must automatically file a complete copy of the information for which such protection is sought, even if in limited circumstances, may impose undue cost on the moving party and the Commission.  
96.	We emphasize, however, that, if we determine that we must review a complete copy of the materials for which extraordinary protection in camera to decide a motion, we will not hesitate to ask for it.  We do not believe that requests for extraordinary protection are routine and we will grant them only if the moving party meets its high burden.  We will also consider solutions such as allowing counsel for intervening parties to review the materials.  
97.	We agree, in part, with WRA that an affidavit containing the names of all persons with access to the information and the period of time for which the information must remain undisclosed, if known, will be useful and therefore we amend Rule 1100(a)(III) to add the following sentence:  
	The party seeking extraordinary protection shall submit an affidavit containing the names of all persons with access to the information and the period of time for which the information must remain undisclosed, if known.
2.	Interventions 
98.	Qwest argued in its Exceptions that the proposed modification at the end of Rule 1401(a) is unnecessary and confusing.  Qwest states that this language is already contained in Rule 1403, which addresses uncontested and modified proceedings.  See Qwest’s Exceptions.  In addition, according to Qwest, a person could erroneously interpret this language as establishing an automatic right to a hearing upon request if certain conditions do not apply.  Id. 
99.	In its Response to Qwest’s Exceptions, OCC states that without the proposed modifications a person wishing to have a hearing will not know that one must be requested along with the intervention.  OCC argues that a person reviewing the Rules of Practice and Procedure for the steps necessary to intervene will not reasonably consider Rule 1403, titled “Uncontested (Modified) Proceedings,” only Rule 1401 titled “Intervention.”  See OCC’s Response to Qwest’s Exceptions.
100.	We agree with OCC that the proposed changes are necessary to inform a person wishing to have a hearing that he or she must request it along with the intervention.  We also agree that a potential intervenor might not reasonably consult Rule 1403 for the steps necessary to intervene.  We will, therefore, not strike the modifications proposed by the ALJ.  On the other hand, we agree with Qwest that a person could erroneously read the proposed language as establishing a right to hearing upon request if certain conditions do not apply.  We therefore modify the language proposed by the ALJ in Rule 1401(a) (along with slight, non-substantive modifications in Rule 1403).  We add the following sentence at the end of Rule 1401(a):
	If a person wishes to intervene and to request a hearing, that person’s intervention as of right or motion to intervene by permission must state that the application or petition is contested or opposed and must explicitly request a hearing.  However, the Commission may consider any application or petition without a hearing and without further notice if a hearing is not required by law.
	
VI.	ORDER
A.	The Commission Orders That:
1.	The Exceptions of Western Resource Advocates to Recommended Decision No. R07-0924 are granted, in part, and denied, in part, consistent with the discussion above. 
2.	The Exceptions of Qwest Corporation to Recommended Decision No. R07-0924 are granted, in part, consistent with the discussion above.  
3.	The 20 day time period provided by § 40-6-114, C.R.S., to file an application for rehearing, reargument, or reconsideration shall begin on the first day after the effective date of this Order.
4.	This Order is effective upon its Mailed Date.
B.	ADOPTED IN COMMISSIONERS’ WEEKLY MEETING
February 13, 2008

		THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO

________________________________

________________________________

________________________________
	Commissioners
	
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