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Disorder in the Court! Disgusted PUC Staff Threatens To Walk Out over Xcel’s Discovery Gaffe

On Saturday morning, a defiant PUC Staff threatened to walk out of proceedings on the Clean Air Clean Jobs Act unless the PUC agreed to disqualify an accelerated version of Xcel “preferred” HB 1365 implementation plan. This unprecedented outburst was precipitated by the revelation that Xcel had failed to fully comply with a discovery request.

On Friday afternoon, Peabody counsel Ray Gifford alerted the PUC of a “potentially serious matter” regarding discovery. According to Mr. Gifford, Peabody had come into possession of almost 65 megabytes of data that Xcel did not provide to the parties upon request.

The disputed information pertained to construction schedules for Plan 6.2J, an accelerated version of Xcel’s original, “preferred” plan. Here is a timeline that explains the discovery imbroglio:

  • August 13: Xcel proposed its “preferred” Plan 6.1E for achieving HB 1365, which it chose from nine scenarios.
  • September 29: The PUC disqualified Xcel’s “preferred” Plan 6.1E because it called for the construction of a 314 megawatt natural gas power plant in 2022, five years after a 2017 implementation deadline established by HB 1365. On October 21, the PUC re-affirmed this decision.
  • October 18:  Up until this date, Xcel had maintained that it would be impossible to accelerate the construction schedule for Plan 6.1E so that the 314 MW natural gas power plant was completed by 2017. However, on October 18, Xcel witness Greg Ford indicated that the utility had found “a late hour solution” that would allow for an accelerated construction schedule of Xcel’s “preferred” plan.
  • October 25: Xcel proposed Plan 6.2 J, an accelerated version of its “preferred” Plan 6.1E.
  • October 29: Peabody asks Xcel for all information pertaining to Plan 6.2J. In particular, Peabody wanted to know how Xcel was suddenly able to accelerate the construction schedule of its “preferred” Plan 6.1E, after it had long maintained that such a schedule was impossible.
  • November 3: Xcel complied with Peabody’s discovery request.
  • November 19: Peabody comes into possession of 65 megabytes of data about Plan 6.2J that Xcel omitted from its November 3 discovery response.

Xcel counsel Paula Connelly was clearly surprised by Mr. Gifford’s revelation. She told the PUC that “we are not in a position to respond.” PUC Chairman Ron Binz then demanded that Xcel produce an exhibit “forthwith” containing all relevant information pertaining to plan 6.2J. On Friday night, Xcel distributed a disk encoded with all the “missing” information.

The following morning, the PUC revisited the matter. Xcel counsel Bill Dudley was the first speak, and he maintained that the “missing” data was not materially different from what the utility originally provided on November 3; nonetheless, he said that Xcel would offer engineering witness Gregory Ford for additional cross examination on the new information, if the PUC determined that such a course of action was necessary.

Peabody counsel Ray Gifford objected to Xcel’s remedy. Instead, he recommended two actions: (1) an in camera review of the “missing” information, so as to determine the materiality of the evidence; and (2) that the PUC strike Plan 6.2J from consideration.

Chairman Binz replied that “it’s a given we want the first (ie, the in camera review),” and then he asked for input from the parties regarding Mr. Gifford’s second request (to strike Plan 6.2J).

This is where things got interesting. PUC Staff counsel David Nocera addressed the PUC in a voice dripping with disgust. Regarding Xcel’s omission of 6.2J data in response to a discovery request, Mr. Nocera said it was “unprecedented” and “one of the most egregious discovery instances abuses [after reviewing the transcript, I learned that Mr. Nocera said “abuses” and not “instances”] we’ve ever seen.” He then said that the “obvious answer is to strike [Plan 6.2J],” and he even suggested that the PUC Staff would decline to participate in the proceedings if the PUC continued to consider Plan 6.2J.

It is difficult to understate the significance of Mr. Nocera’s comments. The frustration in his voice was palpable. Normally, resource acquisition plans take two years; HB 1365 allows for such a process in only four months. The PUC Staff was already under the gun to adequately analyze the nine scenarios that were introduced in August. So when Xcel’s introduced three new plans on October 25—almost two-thirds of the way through an already compressed schedule—the Staff became noticeably agitated. Xcel’s discovery gaffe, intentional or not, was the final straw. In essence, Mr. Nocera told the PUC to bug off.

Other parties then weighed in. Counsel for Gas Interveners, Colorado Department of Public Health and Environment, and Western Resource Advocates stated that they objected to Peabody’s motion to strike Plan 6.2J.

Commissioner James Tarpey articulated the PUC’s solution. He indicated that the issue at hand was whether or not the new information was materially different than the information that Xcel initially provided for discovery on November 3. He said that the PUC would rule on the materiality of the “missing” information by noon, November 24. If the information was materially different, then the PUC could either strike Plan 6.2J, or it could call back Xcel witness Gregory Ford to testify.

William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.