|
OAH Docket No. 8-2500-19160-2 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE PUBLIC UTILITIES
COMMISSION
In the Matter of the Complaint of MNCoalGasPlant.com |
FINAL
REPORT OF THE ADMINISTRATIVE LAW JUDGE
PURSUANT TO MINN.
STAT. § 216A.037 (4) (G) |
This matter came before Administrative Law Judge Eric L. Lipman pursuant to a referral from the Public Utilities Commission under Minn. Stat. § 216A.037 (4) (e).
Carol A. Overland, Overland Law Office,
Based upon all of the files, records, and proceedings in this matter, and for the reasons discussed in the attached Memorandum,
IT IS HEREBY DETERMINED THAT:
1. There is not sufficient evidence from which to conclude that officials of Excelsior Energy made, either directly or indirectly, a prohibited ex parte communication In the Matter of a Petition by Excelsior Energy.[1]
2. There is not sufficient evidence from which to conclude that officials of Excelsior Energy attempted to make a prohibited ex parte communication In the Matter of a Petition by Excelsior Energy.
IT IS HEREBY RECOMMENDED THAT:
1. The Commission DISMISS the Complaint without taking further action.
2. The Commission DENY MNCoalGasPlant.com’s request for costs.
Dated: October 8, 2007
_s/Eric L. Lipman_____________
ERIC L. LIPMAN
Administrative Law Judge
INVESTIGATIVE
FINDINGS
1. During a Special Session in 2003, the Minnesota Legislature enacted both the Clean Energy Technology statute (Minn. Stat. § 216B.1693), and the Innovative Energy Project statute (Minn. Stat. § 216B.1694) as part of the 2003 Omnibus Energy Bill.[2]
2.
As the
Commission has since characterized, the 2003 bill was “comprehensive energy
policy legislation which, among other things, included two statutes designed to
create the conditions necessary for the construction of a state-of-the-art,
clean-coal power plant on the
3. On December 27, 2005, Excelsior filed a Petition asking the Commission to open a contested case proceeding, in PUC Docket No. E-6472/M-05-1993.[4]
4. On April 25, 2006, the Commission issued an Order finding that it had jurisdiction over Excelsior’s petition under Minn. Stat. §§ 216B.1693 and 216B.1694 and referred the matter to the Office of Administrative Hearings for a contested case proceeding.[5]
5. Pursuant to the First Pre-Hearing Order in the OAH proceedings, written comments from the public regarding the Petition were due by December 26, 2006.[6] Further, written exceptions from the parties to the report of the Administrative Law Judges in that matter were due by Wednesday, May 2, 2007.[7]
The
6. After the close of both the contested case hearing record and the public comment period, Leanne Stanley, a Public Affairs Representative with Excelsior Energy, Incorporated sent the following electronic mail message to several hundred supporters for whom she had e-mail addresses:
Hello everyone – as you know, our hearing
before the Public Utilities Commission is next Tuesday, July 31.
We’ve been working hard to prepare, and as
you’ve seen by our recent announcements, the Project itself is shaping up
quickly. We have passed a lot of milestones this summer, including
getting our transmission interconnection agreement signed so our output will be
deliverable throughout MISO, getting site control of our second site, kicking
off the final phase of engineering before construction starts, and nearing the
date our joint state/federal EIS will be published. But, now
is crunch time – you have been so helpful and supportive in the past, but I
would like to ask you to do one more thing before the hearing – please email
the PUC Commissioners and express your support for the Mesaba Project.
Just a few sentences in your own words would be extremely helpful. Here
are the email addresses for the Commissioners: Please reference The
Mesaba Energy Project PPA Docket No. 05-1993
LeRoy.Koppendrayer@state.mn.us;
Phyllis.Reha@state.mn.us; Marshall.Johnson@state.mn.us; Tom.Pugh@state.mn.us;
David.C.Boyd@state.mn.us
Please do not hesitate to contact Pat
Micheletti at 651-214-5184 or me at 218-245-1205 if you have any further
questions. As always, thank you so much for your continuing support![8]
The Electronic Mail message was dispatched at 11:12 a.m. on July 26, 2007.[9]
7. Some 19 minutes later, Ms. Stanley dispatched an Electronic mail notice to those whom she had sent the earlier E-mail signifying that she wished to recall the earlier E-mail of 11:12 a.m.[10]
8. Janet F. González, Energy Unit Manager with the Public Utilities Commission received a copy of the electronic mail message when it was sent, and alerted senior Commission Staff and the Attorney General’s Office of the possibility that the Commission Members would be “deluged with e-mails” regarding the project “way past the close of the comment period and the close of the record.”[11]
9. Additionally, at 12:11 p.m. on July 26, 2007, Ms. Stanley sent another, more specific follow-on message, requesting that E-mails not be sent to Commission Members regarding Excelsior Energy’s petition. She wrote:
Hi –
Please disregard the email you received from
me earlier today. It was sent in error. Please do not send any
emails to any of the people listed in my earlier email request. I
apologize for any inconvenience caused by my earlier message.
Thank you,
Leanne Stanley
Public Affairs Representative[12]
10. On their own initiative, Commission staff made strides to divert and segregate electronic messages relating to the Excelsior Energy project that had been sent to Commission Members following the E-mail sent by Ms. Stanley.[13]
The Garvey Communication:
11. By way of a letter of July 27, 2007, Edward A. Garvey, Deputy Commissioner of the Minnesota Department of Commerce for Energy and Telecommunications, wrote to the Commission and declared that the Department of Commerce “believes the Mesaba facility fulfills each of the five enumerated benefits to the State set forth in Minn. Stat. §216B.1694, subd. 2(a)(7).”[14] This letter was entered into the record of Excelsior Energy proceeding as “Comments – Supporting Excelsior.”[15]
12. MCGP requested that the Commission strike the Garvey letter from the record, a request that the Commission considered, but denied on August 30, 2007. As the Commission summarized:
While the Department's letter was not part of any established comment process, its submission was not prohibited under the Commission's rules of practice and procedure and was consistent with normal Commission practice. It was served on all parties, did not contain any facts or arguments not already in the record, and did not recommend any action not already recommended on the record by the Department or other parties. No party was prejudiced by the submission of the letter.
Further, in the course of the two days of oral argument and deliberations conducted in this case, other parties submitted copies of extracts from the record and summaries of exhibits to clarify their own oral presentations. Such submissions are proper. In complex administrative proceedings — in which the goal is to determine the public interest and not to resolve disputes between private litigants — procedural rigidity is inappropriate.
What is important is that Commission procedures maintain the flexibility, transparency, and predictability required to preserve all parties' due process rights and to advance their ability to develop and present their cases as comprehensively and persuasively as possible. For all these reasons, the motion will be denied.[16]
The Tomassoni Communication:
13.
On July 27, 2007, in advance of the Public
Utilities Commission’s scheduled meeting on July 31, 2007, Senator David J.
Tomassoni sent an electronic message to Commission Members urging them to
approve the proposed project. Senator
Tomassoni is the Chairman of the Senate Economic Development Budget Division
and was an author of the Senate version of 2003 Omnibus Energy Bill.[17]
14.
While
Senator Tomassoni does not himself “recall whether anyone asked me to write the
electronic mail message that I sent on July 27, 2007,” he credits the
recollection of Excelsior Energy officials who noted to him that they did
request him to “express [his] opinion to the Commission.”[18] On
July 27, 2007, the Senator wrote:
Dear Commissioners: The Mesaba Energy Project will be before the
commission on Tuesday, July 31st. The
enabling legislation was signed into law by Governor Pawlenty in 2003. The merits of the project are very obvious
and the need for a new, clean, cost effective, safe, and reliable source of
baseload power is evident. IGCC
technology will utilize
I wholeheartedly support this
project as it not only will help Minnesota meet future energy needs it will
also create several thousand jobs in the construction phase and at least 100
permanent jobs in the long term...the spin-off jobs will be a minimum of two to
one. In addition, as old, dirty coal
plants get shut down, a new and clean technology will be necessary. IGCC is that technology and as this technology
evolves it will only get better. But we
have to build the first one.
This innovative technology is
supported by state law and the governor, and has received DOE backing as well
as IRRRB and State Funding. It's been 4
years since the law passed. It's time we
get a shovel in the ground and get this project moving.
So it is with great pleasure that I
once again add my support to the Mesaba Energy Project and urge you to add
yours, also.
Thank you for your time and
consideration.
David Tomassoni
State Senator
District 5
The Senator notes further that he did greet
four of the five Commissioners on the day of the July 31, 2007 hearing.[19]
The Beard Communication:
15. Sometime in July of 2007, Julie Jorgensen, President and Co-Chief Executive Officer of Excelsior Energy, Incorporated, requested that State Representative Michael Beard write to the Commission expressing his support for the Excelsior Energy project.[20] State Representative Beard is a senior member of the House Energy Finance and Policy Division and has introduced or co-authored several pieces of legislation relating to utility regulation and renewable energy.[21]
16.
On his own
initiative, and without the knowledge or prompting of Ms. Jorgenson, or other
Excelsior Energy officials, Representative Beard requested a meeting with
Public Utilities Commission Chairman LeRoy Koppendrayer. The request was granted. This meeting occurred on or about July 30,
2007, at the Commission’s offices in
17.
At the
conclusion of the meeting, Representative Beard handed the Chairman a letter that
the Representative had written on the Excelsior Energy project with the request
that it be entered into the record.[23] This
letter was entered into the record of PUC Docket No. E-6472/M-05-1993 as “Comments.”[24]
The OAH Investigation:
18. On July 30, 2007, MCGP filed a Complaint with the Commission asserting that Ms. Stanley’s July 26, 2007 e-mail “solict[ed] prohibited indirect ex parte contact,” and that, in addition to other relief, the Commission should impose sanctions upon Excelsior Energy.[25]
19. By way of a letter dated August 7, 2007, the Commission referred the Complaint to the Office of Administrative Hearings for investigation.[26]
20. While the original complaint alleged misconduct by Ms. Stanley, by way of successive requests, MCGP has also sought inquiry into the writings of Representative Beard, Deputy Commissioner Garvey, and Senator Tomassoni. Within the statutory timeframes set by Minn. Stat. 216A.037 (f), the Administrative Law Judge has sought to accommodate and complete these subsequent inquiries.
21. By way of a letter dated August 23, 2007, the Administrative Law Judge requested the following documents from the Commission’s records and files:
(a) Any documents relating to the Petition by Excelsior Energy (OAH Docket No. 12-2500-17260-2) that was received by the Commission after July 26, 2007;
(b) Any electronic mail message directed to one or more of the Commission Members, relating to the Petition by Excelsior Energy, (OAH Docket No. 12-2500-17260-2) that was received by the Commission after July 26, 2007; and
(c) Correspondence from a member of the Minnesota Legislature that relates to the Petition by Excelsior Energy (OAH Docket No. 12-2500-17260-2).[27]
22.
A packet of materials responsive to these
requests was submitted to OAH on August 31, 2007 and was circulated to the
parties. Included in the packet were
copies of E-mail communications from Peter McDermott, of the Itasca Economic
Development Corporation, and Michael Troumbly, of the City of
23. The Commission submitted a second set of materials on October 3, 2007. This second set of items included electronic mail messages that had been retrieved from Commission computers in response to the request of August 23. E-Mail communications from Senator Tomassoni and Robert Smith were included in this second packet.
24. On October 3, 2007, there were two business days remaining in the investigation period established by Minn. Stat. 216A.037 (f). Prior to October 3, neither the Complainant, nor any other witness interviewed had referenced communications from Senator Tomassoni.
25. In the late afternoon of October 3, however, the Administrative Law Judge was able to interview Senator Tomassoni about the circumstances surrounding the drafting and dispatch of his July 27 E-mail.
26. On Friday, October 5, 2007, the last business day before the close of the investigation period, Counsel for the Complainant submitted requests to subpoena Mr. Garvey and Senator Tomassoni. As to Senator Tomassoni, counsel noted:
I request that this subpoena be issued in the event that Sen. Tomassoni declines to answer all of these questions under oath: whether he was contacted directly by Excelsior; whether he received direct contact in person, by phone and/or email; dates of these contacts; names of any and all Excelsior employees/principals/lobbyists he was contacted by; whether he was asked to contact the Commissioners; the specific content of the communication, etc., and reasonable follow up questions.[29]
27. On Friday, October 5, 2007, Senator Tomassoni submitted an affidavit describing his drafting and dispatch of an E-mail to Commission Members on July 27, 2007. The affidavit included a new fact that was developed after the October 3 interview. The Senator averred: “After speaking with the judge, I contacted Excelsior. They indicated that they had contacted me and asked me if I would be willing to express my opinion to the Commission. The attached e-mail is my own personal view indicating my support for the project.”[30]
CONCLUSIONS
1. The Public Utilities Commission and the Administrative Law Judge have the authority to conduct the instant investigation under Minn. Stat. § 216A.037 (2006).
2. Minn. Stat. § 216A.037, subd. 1 (2006), provides that “[t]he commission shall adopt rules . . . prescribing permissible and impermissible ex parte communications” and that “[t]he ex parte rules may prohibit only ex parte communications, directly or indirectly, between a commissioner and a participant . . . relating to . . . a material issue during a pending contested case proceeding . . . [or] a material issue in a disputed formal petition.”
3. Minn. R. 7845.7200, subp. 1 (2005), which was adopted pursuant to section 216A.037, provides that:
An ex parte communication, either direct or indirect, must not be made or attempted to be made between a commissioner and a party concerning:
A. a material issue during a pending contested case proceeding, from the date the matter is referred to the Office of Administrative Hearings until the commission issues its final order and the time to petition for reconsideration expires, or until the commission issues a final order responding to the petition for reconsideration, whichever is later[.]
4. Minn. R. 7845.7000, subp. 4 (2005), defines “ex parte communication” as:
an oral or written, off-the-record communication made to or by commissioners or commission decision-making personnel, without notice to parties, that is directed to the merits or outcome of an on-the-record proceeding. This term does not include procedural, scheduling, and status inquiries or other inquiries or requests for information that have no bearing on the merits or the outcome of the proceeding.
5. Minn. R. 7845.7000, subp. 5 (2005), provides that “‘[m]aterial issue’ means an issue that may affect the merits or outcome of an on-the-record proceeding.”
6. Minn. R. 7845.0300 states that the purpose of the Commission’s code of conduct is to:
preserve the integrity and independence of commission decision making and to promote public confidence in the objectivity of commission decisions. Commissioners and employees should maintain high standards of conduct to prevent a conflict or the appearance of a conflict between private interests and official duties. This code must be construed to secure these objectives in keeping with the quasi-judicial function of the commission.
7. Under Minn. Stat. § 216A.037, upon receipt of a proper complaint seeking sanctions for alleged violations of the ex parte communication rules, the Commission is directed to refer the matter to the Office of Administrative Hearings. Upon receipt, an Administrative Law Judge is required to undertake an investigation of the allegation and to “issue a report within 30 days after the matter is referred.”[31] In this case, however, because the Administrative Law Judge determined that the report could not be “properly completed within that time period,” the final report was filed with the Commission “no later than 60 days after the referral to the Office of Administrative Hearings.”[32]
8. In the final report submitted to the Commission the administrative law judge shall describe the relevant facts of the case, include findings and “recommendations regarding the imposition of sanctions ….”[33]
9. The evidence of record is insufficient to conclude that officials of Excelsior Energy intended that the challenged communications to be off-the-record contacts with Commission Members.
MEMORANDUM
In its filings, MCGP complains that Excelsior
Energy made or attempted, through its supporters, prohibited ex parte contacts with members of the
Commission. Specifically, MCGP asserts
that communications from Leanne Stanley, Edward Garvey, State Representative
Michael Beard, State Senator David J. Tomassoni, Robert Smith, Peter
McDermott and Michael Troumbly, made after
the close of the comment period in PUC Docket No. E-6472/M-05-1993,
violated the prohibitions on ex parte communications.[34]
Because each of the communications at issue
in this matter urges the Commission Members to approve the Petition submitted
by Excelsior Energy, they satisfy the “materiality” prong of the statute and
accompanying rules. The communications
speak to an “issue that may affect the merits or outcome of an
on-the-record proceeding ….”[35]
Accordingly, the determinations in this case
pivot upon the dual questions of whether the communications were directed
toward Commission Members after the close of the comment period in PUC
Docket No. E-6472/M-05-1993, and were
intended by Excelsior Energy to be off-the-record contacts. Upon these prongs of Minn. Stat. 216A.037, MCGP’s complaints falter.
A.
The
The
documentary evidence in the record establishes that the
B.
The
Beard Communication
As detailed in his affidavit, State Representative Beard submitted his comments for the public record (although out of time from the earlier scheduling order) and sought to speak with Chairman Koppendrayer upon his own initiative.[40] Representative Beard is not a party to PUC Docket No. E-6472/M-05-1993 and specifically disclaims that officials of Excelsior Energy prompted him to make an off-the-record communication to Chairman Koppendrayer. Accordingly, under these facts, Representative Beard’s communications do not meet the standards of the ex parte communication prohibitions under Minn. Stat. § 216A.037.
C.
The
Garvey Communication
Even if one could establish that because Ms. Stanley included Deputy Commissioner Garvey among the hundreds of recipients of her July 26 E-mail message, that he was prompted to write his letter of July 27, 2007 – a matter that is far from clear – the Commission has already considered and decided the questions raised by MGCP in the context of MCGP’s earlier Motion to Strike. Pointing to the public nature of the dissemination of the Garvey letter, and its de minimus impact upon the overall record, the Commission concluded that submission of the Garvey letter “was not prohibited under the Commission's rules of practice.”[41] Nothing in the investigative record presents any basis for revisiting that conclusion. Under these facts, Mr. Garvey’s communications do not meet the standards of the ex parte communication prohibitions under Minn. Stat. § 216A.037.
D.
The
Tomassoni Communication
Senator Tomassoni’s July 27, 2007 E-mail presents closer questions of fact and law. Principally because the Senator’s E-mail message came to light just days before the investigation was obliged by statute to close,[42] and because a key fact – namely, that he had been requested by Excelsior to make some communication to the Commission[43] – did not emerge until after the Administrative Law Judge’s interview with the Senator. Indeed, at the time of the interview, and still today, the Senator does not himself recall being asked by Excelsior to communicate with Commission Members.
Conceivably, the record would have been clearer and more complete if some additional identification could be made as to whom Senator Tomassoni spoke to at Excelsior Energy after October 3, 2007, and what this person recalls;[44] inquiries as to which there was simply not sufficient time within the 60-day investigation period to complete.
With that said, there are worthwhile clues that can be gained by looking at the Senator’s July 27, 2007 electronic message. The Senator’s message bears many of the hallmarks that the Commission found with respect to Deputy Commissioner Garvey’s letter – specifically, that this message did not contain facts or arguments that were not already presented elsewhere (and often) in the formal record; did not recommend any action that was not already recommended on the record by other parties; and did not introduce facts or contentions that would prejudice any other party. Indeed, if Senator Tomassoni were to delete the salutation “Dear Commissioners” from his message, one could imagine him reading this text word for word from his desk in the Senate Chamber or to the Chisholm Rotary Club. The message has all of the rhetorical flourishes of a speech from a campaign stop and no hint of a darker attempt to improperly influence, or unfairly dominate, the Commission’s decision-making process. Upon this record, the Administrative Law Judge cannot conclude that a sanction is warranted.
E.
The Smith
Communication
In a similar vein, is the July 26, 2007 E-mail message of Robert Smith in which he transmits what he describes as an “official document” in support of the Excelsior Energy petition.[45] Like Senator Tomassoni’s message it was sent directly to the electronic mail boxes of the Commission Members, without notice to the other parties.
Certainly, it would have been preferable if Senator Tomassoni and Mr. Smith had confined their remarks to the earlier public comment period, so that those remarks could be circulated publicly, but the ex parte rules should be read and applied in the context of surrounding circumstances – particularly that some non-lawyers will regard members of the Public Utilities Commission as exactly like other officials in the Executive Branch, whom they may contact on matters of public concern. The special requirements of the ex parte rules, and the requirement that the Commission ground its decision-making upon a transparently-developed administrative record, might elude non-lawyer citizens who wish a particular outcome from their government. A fair reading of the Smith message, however, does not lead one to conclude that improper influence was intended or that prejudice to any other party resulted from its dispatch. Upon this record, the Administrative Law Judge cannot conclude that a sanction is warranted.
F.
The
McDermott and Troumbly Communications
While MCGP traces the electronic mail messages from Peter McDermott, of the Itasca Economic Development Corporation, and Michael Troumbly, of the City of Taconite, to the July 26, 2007 E-mail of Leann Stanley – again, a matter that is far from clear – the argument fails because neither Mr. McDermott nor Mr. Troumbly contacted Commission Members with their communications. These messages were sent to Mr. Barr of the Commission staff. Accordingly, neither of these communications violate the ex parte rules, because Mr. Barr is not among the “commission decision-making personnel” in PUC Docket No. E-6472/M-05-1993.[46]
G.
Concluding
Observations
If there is a larger set of lessons to be drawn from MCGP’s complaint and this investigation, it is that for those who are interested in Commission decision-making, but who are not utility lawyers, the strictures of the Commission’s ex parte communication rules can come as a surprise. A recurring theme of this investigation is that there is a real tension between Commission Members being open and accessible to the public that they serve, on the one hand, and vigilant against the prospect of “indirect ex parte contact,” on the other. Indeed, in many respects, Minn. Stat. § 216A.037 places Commission Members in an impossible position: Is a communication from a state legislator, city official or member of the public what it appears to be on its face, or is it, in actuality, an “indirect” contact by a party to a contested case? It seems that this is a riddle only a clairvoyant could answer in sufficient time to avoid disaster.
Because of the evident dangers, one possibility that the Commission Members may wish to explore is whether they should withdraw their state electronic mail addresses from public circulation. To be sure, in this case, Commission Staff raced to filter the messages being placed into Commissioners’ electronic in-boxes after a problem was identified;[47] but the question recurs as to whether such a filter should always be in place.
While we all might hope that Commission Members would be in direct and close contact with the citizens whom they serve, Minn. Stat. § 216A.037 might, as a practical matter, require greater distance still.
E.L.L
[1] The full title of the matter is: In the Matter of a Petition by Excelsior Energy for Approval of a Power Purchase Agreement Under Minnesota Statutes 216B.1694, Determination of Least Cost Technology and Establishment of a Clean Energy Technology Minimum under Minnesota Statutes 216B.1693, PUC Docket No. E-6472/M-05-1993.
[2] See,
2003 Laws of Minnesota Ch. 11, Art. 4; 2003
[3] See, Order Resolving Procedural Issues, Disapproving Power Purchase Agreement, Requiring Further Negotiations, and Resolving to Explore the Potential for a Statewide Market for Project Power Under Minn. Stat. § 216B.1694, Subd. 5, PUC Docket No. E-6472/M-05-1993, at 8-9 (2007).
[4] See, In
the Matter of the Petition of Excelsior Energy Inc. for Approval of a Power
Purchase Agreement under
[5]
[6] See, Notice of Public Hearings for Excelsior Energy Power Purchase Agreement with Northern States Power Company, OAH Docket No. 12-2500-17260-2 (2007).
[7] See, Notice Seeking Exceptions and Replies to Exceptions, PUC Docket No. E-6472/M-05-1993 (2007).
[8] See, Appendix to Final Report at 18, 39 and 40 (“Appendix”).
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16] See, Order Resolving Procedural Issues, Disapproving Power Purchase Agreement, Requiring Further Negotiations, and Resolving to Explore the Potential for a Statewide Market for Project Power Under Minn. Stat. § 216B.1694, Subd. 5, PUC Docket No. E-6472/M-05-1993, at 8-9 (2007).
[17] Compare, 2003 Sp. Sess. Journal of the Senate, at 14 (May 20, 2003) with 2003 Sp. Sess. Journal of the Senate, at 69 (May 23, 2003).
[18]
[19]
[20]
[21]
[22]
[23]
[24] Id at 51.
[25] See,
MCGP's
[26] See, Appendix at 16.
[27]
[28]
[29]
[30]
[31] See,
[32]
[33] See,
[34] See, Appendix at 94 and 95.
[35] See,
[36]
[37]
[38]
[39]
[40] See,
Finding No. 16, supra.
[41] See, Order Resolving Procedural Issues, Disapproving Power Purchase Agreement, Requiring Further Negotiations, and Resolving to Explore the Potential for a Statewide Market for Project Power Under Minn. Stat. § 216B.1694, Subd. 5, PUC Docket No. E-6472/M-05-1993, at 8-9 (2007).
[42] See, Findings Nos. 23 and 24, supra.
[43] See, Finding No. 27, supra.
[44] Compare, Appendix at 13.
[45]
[46] See,
[47] See, Finding No. 10, supra.