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Florida utility regulators will ask for law changes that allow secrecy at public hearings

The push stems from a recent Duke Energy Florida case shrouded in secrecy.

State utility regulators are planning to ask for legislative changes that would allow them to conduct portions of public hearings in secret.

The legislative push, brought up at a Tuesday internal affairs meeting, was spurred by a recent Duke Energy Florida case. An administrative law judge ordered the utility to return $16.1 million to customers. The public was barred from a majority of the proceedings because they were heavily reliant on confidential trade secrets.

If carried through, the move could stymie public participation in issues that affect their bills.

“Why all of a sudden when the customers get a good, favorable decision is there a reaction to change the system?” said J.R. Kelly, a lawyer with the Office of Public Counsel. His office advocates on behalf of utility customers before regulators.

Nearly all issues that come before the Florida Public Service Commission, Kelly said, involve confidential information. Typically, witnesses and experts that testify talk around the sensitive information, referring to a specific line on a page, for example, without repeating it.

The Public Service Commission has a mandate to keep hearings open. Occasionally, when there is too much confidential information to talk around, the regulator can refer a case to the Florida Division of Administrative Hearings, which is allowed to close portions of a hearing.

This year, for the first time, confidential information was so central to the Duke Energy case that the public was shut out from the majority of it. Charles Rehwinkel, another lawyer with the Office of Public Counsel, called it “unprecedented” in his 35-year tenure.

It revolved around a repair Duke Energy made to a generator at its Wheedon Island power plant in 2012. The repair resulted in the plant producing less power and creating higher bills for customers to replace that power. The central question was whether the utility should have charged customers for the extra power. To determine that, much of the information that needed to be considered was about the generator’s design, which was considered a Mitsubishi Hitachi Power Systems trade secret. Duke Energy requested confidentiality.

Related: What does this Duke Energy case mean for utility transparency?

“The way we handled the last meeting was not what we would have preferred to do,” commission chairman Gary Clark said.

The legislative proposal would prevent the Public Service Commission from having to refer cases to the Division of Administrative Hearings in the first place. Regulators would be allowed to close portions of a hearing specifically for the purpose of asking questions about confidential information.

“As you know, our current processes for dealing with confidential information during the course of the hearing are very cumbersome, outdated and disjointed,” regulatory attorney Keith Hetrick said at the meeting, “and often inhibit the flow and contextual considerations of information.”

Municipal power companies, he noted, already have the ability to close off portions of their meetings for this purpose.

It would not change the definition of confidential information, he said, meaning it wouldn’t allow for new categories of information to be considered secret.

But what it could do is give power companies an additional incentive to push for information to fit into an existing category for confidentiality, moving portions of hearings that affect customers' bills behind closed doors.

This could make it harder for the public to weigh in on issues they consider important to them, Kelly said.

Public participation was central to a workshop in September when commissioners were getting up to speed on the state’s programs around rooftop solar incentives. While the meeting was solely informational, customers from around the state sent in 16,000 emails to regulators urging them not to make changes to what advocates consider a crucial way for customers to participate in renewable energy. The flood prompted regulators to address public concern, noting that they weren’t scheduled to make any decisions that day.

Related: Major Florida rooftop solar incentive won’t change yet

Most of the commissioners expressed support. Commissioner Andrew Fay noted that he could see a need for such a measure to protect against a recent situation where a witness said a proprietary number aloud by accident.

His only area of concern, he said, was a caution against creating a new public records exemption related to this, which “would be concerning to me.”

Commissioner Art Graham asked the regulator’s legal staff whether this was the only reason for municipal utilities to have confidential meetings. He requested more information on other scenarios that might justify closing all or portions of hearings.

“If we’re going to open the door, let’s just see what else they can do that we can’t do,” he said.

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