PUC data at center of bias allegations to remain secret indefinitely 

The Maine Public Utilities Commission is refusing to release a set of energy-pricing forecasts that are at the center of allegations that it improperly scuttled a wind power contract.

The PUC is withholding the documents despite having said earlier that it would release them when they were no longer timely.

The data, requested by the Portland Press Herald/Maine Sunday Telegram in a public records request, are more than a year old and no longer being actively used by the commission, but the PUC said it is now considering the forecasts a “trade secret” of the consulting firm that generated them – and therefore may never release them.

“Transparency and public trust and confidence are all critically important to the commission; we take our role here very seriously in serving the people of Maine,” PUC spokesman Harry Lanphear said. “But in this particular case the forecasts are a trade secret, and we can’t release them.”

The 25-year projections for natural gas prices in Maine would, under normal circumstances, be of little interest to the public. They are important but dry technical data that the commissioners use to inform themselves during contract negotiations.

But these projections are at the center of an unprecedented and controversial action last year by the PUC that raised concerns about political interference and accountability at the quasi-judicial body, which makes decisions that can affect billions of dollars in ratepayer funds.

Critics – including an outgoing commissioner in a formal dissent – have said the data could show that the PUC had cherry-picked pricing forecasts in favor of natural gas and against wind projects.

In February, shortly after Gov. Paul LePage’s appointees gained the majority on the commission, the PUC announced it wanted to reopen the bidding process for two long-term wind power contracts it had approved just weeks earlier, and ordered new pricing forecasts from a consultancy with close ties to the natural gas industry. The commission had previously voted 2-1 to approve terms and directed the state’s electricity utilities to enter into long-term contracts with two wind power firms – SunEdison, for power supplied by the proposed Weaver Wind farm in Hancock County, and NextEra, for power from the proposed Highland project in Somerset County.

The reopening of the process was condemned by renewable energy companies, construction and engineering firms, environmental groups, most utilities and the Office of the Public Advocate, the body that represents ratepayers before the commission, primarily because it would increase uncertainties for businesses. Concerns about political interference soon followed, as LePage has been a vocal opponent of wind power but an advocate of natural gas pipeline expansion.

The Associated Press subsequently revealed that LePage had sent a letter to the commissioners two months earlier, expressing his concerns about the long-term wind contracts. While LePage told a radio audience he had never “had any conversations with the PUC about any of their work,” his calendars showed he met with one of his appointees, incoming chairman Mark Vannoy, to discuss the long-term contracts on Jan. 30, less than a month before the commission voted to reopen the bidding process. By that time, a senior LePage aide, Carlisle McLean, had joined the commission, replacing outgoing chairman Tom Welch and giving LePage appointees a voting majority for the first time.

The PUC drew scrutiny again in March, when Vannoy and McLean voted to nix $38 million in funding for the Efficiency Maine Trust – a program that helps homeowners and businesses reduce their energy needs – because of a typographical error accidentally introduced into the text of the relevant law by the revisor’s office.

ALLEGATIONS OF IMPROPRIETY

Last spring, outgoing PUC Commissioner David Littell – the last of the three-member body not to have been appointed by LePage – blasted the conduct of his fellow commissioners in the wind contract case in a pair of unusually sharp dissents, writing that so long as they kept the pricing forecasts secret, the PUC would be a “secret judge and jury ” operating without effective accountability.

Littell – who declined to be interviewed for this story – also alleged that the commission was re-engineering pricing scenarios to obtain “extraordinarily low pricing projections” that were favorable to natural gas interests and unfavorable to wind and other renewable projects that compete with them.

“The commission now has different grading schemes – different decks of cards – to apply to different projects,” he wrote. “So is it going to apply the same grading scheme without alteration to other projects … or is the Commission going to pick different cards out of each deck to put together a specific hand for each project?”

Littell had made a motion in April to release the data immediately to ensure public confidence in the body, which regulates utilities and sets power rates, in the midst of a set of controversial decisions. In May, his motion was defeated 2-1, with Commissioners Vannoy and McLean saying the question “is not whether to release forecast information, but when is the appropriate time” so as to not reveal data “directly relevant to ongoing and future discussions and negotiations.”

But in a Dec. 2 response to a public records request, the PUC said the key information – the November 2014 pricing forecasts by IHS Inc. of Englewood, Colorado – are “privileged and confidential matters” that cannot be released.

This is despite the fact that 2014 pricing forecasts from the consultancy the PUC usually uses, London Economics International, were released three months earlier in response to a public records request by the state chapter of the Sierra Club.

PUC CHAIRMAN: THERE’S NO BIAS

PUC Chairman Vannoy said in an interview that IHS has a legitimate trade secret claim.

“This vendor still protects this information and is making it quite clear in the contracts for which we entered and received that data that it is a trade secret and continues to be a trade secret,” Vannoy said. “It puts us in a unique situation, because if we do release a trade secret we do expose the state to significant litigation.”

The data will therefore remain secret as long as the company says it should, he said. “I expect we will release it when it is no longer of value to the vendor,” he added.

London Economics, by contrast, had given permission to release its old data, which is why it was not redacted from the documents given to the Sierra Club in September, he said.

Greg Cunningham, an attorney with the Conservation Law Foundation, said the trade secrets argument has no validity. “The consultant’s model might be proprietary, but the data isn’t,” he said. “This data doesn’t necessarily reflect anything about how the company performed the analysis, so it doesn’t put them at commercial risk to release it when it is this old.”

Vannoy also pushed back on former Commissioner Littell’s accusations, and said the PUC’s only motivation in reopening the long-term wind power bid was to get the best deal for Maine ratepayers. Last January, natural gas prices appeared to be plummeting, changing the calculus for what would constitute a below market rate for the wind power contracts. Subsequent market developments, he said, had vindicated this assumption.

Vannoy also said “no decks get swapped” when evaluating different projects, and pointed out that one of the two wind power firms involved in the controversial case had ultimately gone ahead with the deal. (The other, SunEdison, withdrew and ultimately canceled its proposed Weaver Wind project.) On Dec. 22, the PUC also approved long-term contracts with a group of community-based solar, biomass, hydro and wind projects, he noted, further evidence that the commission was not biased against renewables. Finally, he noted, the Office of the Public Advocate was privy to the proceedings and had access to the data, so “it is not a veiled proceeding.”

Timothy Schneider, the public advocate, agreed that the data should not have been released. “Those sort of numbers have never been made public (in other proceedings), even when the commission is entering into larger contracts,” he said. “The concern seems to be that they’re only relevant when the PUC doesn’t enter into a wind contract.”

While his office opposed the reopening of the wind power contract bidding process last year, Schneider said he saw no evidence that commissioners were cherry-picking pricing forecasts to thwart or approve projects.

“I don’t think Commissioner Littell’s suggestion that we’re using one set of analyses for wind contracts and another for natural gas contracts has been borne out,” he said.

Environmental groups are skeptical.

Cunningham of the Conservation Law Foundation said the data should be released to ensure the commission’s credibility.

“When the commission holds close to the vest this kind of information in a proceeding as unusual as this one was, they are undermining not only the confidence of the participants in that process, but maybe the confidence of ratepayers and consumers as well,” he said.

Glen Brand, director of the Sierra Club’s Maine chapter, called on the PUC to release the data.

“We believe it is irresponsible for the PUC to hide important information that a highly credible source says is distorting the decision-making process in favor of (natural gas) at the expense of clean energy, public health, our environment, and Maine rate payers,” he said in a written statement.