In the Matter of a Request
    for Advisory Opinion





)     Advisory Opinion   #27



Public Utilities Control Authority, Applicant

)     July 8, 1977








On June 8, 1977, the Commission considered and agreed to respond to the request for an advisory ruling filed by the Public Utilities Control Authority (PUCA).


As part of its preparation for hearing several upcoming rate cases, the PUCA has asked this Commission to advise on the propriety of the PUCA's deliberating in part in executive session. Specifically, the PUCA wishes to know whether under 1-18a(e) (5), G.S., it could exclude the public from the meetings during which it would be discussing its draft decisions on the rate increases. The resolution of this question depends on whether the PUCA's drafts of these decisions could be characterized as "preliminary drafts" under 1-19(b) (1). The PUCA also requested an opinion on whether its own procedures for convening in executive session conform with the requirements of the Freedom of Information Act


1-19(b) (1) allows a public agency to withhold preliminary drafts from public scrutiny once the agency determines that it would be in the public's interest to keep those documents confidential. The PUCA's request first requires the Commission to distinguish the issue of what constitutes a preliminary draft from that of how a public agency should evaluate the public interest. The Commission will not dictate the criteria to be followed in deciding whether the public interest demands the public airing of any issue before the PUCA. Rather, the Commission will simply expect the PUCA to justify, in public session, any decision it may make to meet in executive session. The Commission will not




substitute its judgment for that of the PUCA in this regard, so long as its reasons are stated publicly and are not arbitrary, capricious or patently unjustified. It is the character of the PUCA's decisions as preliminary drafts that the Commission perceives to be the primary issue.


The PUCA has described sketchily the nature of those draft decisions which it wishes to categorize as "preliminary". These include considerations of the rates of return allowable to the public utilities under the proposed rate schedules, and the PUCA's adjustments of the figures which the companies present. Given the Commission's past position on preliminary drafts, it is unlikely that the documents which Chairman Kleban has mentioned fall into that category.


In its Advisory Opinion #6, the Commission defined as public records any reports or studies delivered to the public agency, regardless of whether the agency has yet voted to accept them. The Commission extended this principle to certain types of proposed budgets, to proposed decisions by hearing officers, and to "other comparable events". While this precedent may not apply exactly to the PUCA's drafts, the documents noted in Advisory Opinion #6 share certain characteristics with those drafts. If, as Chairman Kleban has indicated will occur, the PUCA should resort to the panel procedure authorized for it by 16-2(c),G.S., to decide on the confidentiality of the drafts, then the findings that the panel would issue would be analogous to, proposed decisions by hearing officers, and thus conceivably would be public records. More specifically, the Commission is of the opinion that, once a draft is put into a form so that it is ready for any kind of agency action, it is not a, preliminary note. To conclude otherwise would be to suggest that no document could ever be considered a final draft for public inspection if there were any chance, that it might be revised. The Commission desires to avoid this kind of reductio ad absurdum. Thus, the PUCA should be advised that the Commission would probably consider the documents in question to be final drafts, and thus to be subject to disclosure.


The PUCA has also asked the Commission to advise on its procedure for meeting in executive session. According to Chairman Kleban's explanation of the panel procedure authorized by 16-2(c),G.S., a commissioner of the PUCA might move, in open session, that a three-member panel of the PUCA decide that the PUCA discuss the drafts in executive session. If the motion were passed and it is not clear from the context of the Chairman's letter whether the entire PUCA or the panel would be voting on the motion--then the PUCA would go into executive session. Since the Chairman has neither described this procedure coherently, nor supplied to the Commission sufficient information about the PUCA's notice and record-keeping practices for the Commission to evaluate such practices, the Commission declines to state its opinion on this issue at this time.






It is clear that the PUCA has decided to delegate a portion of its authority as a public agency to the panel. Thus the Commission will advise the PUCA that as long as the panel exercises the authority which the PUCA, a public agency, confers upon it, the panel must conduct its meetings in accordance with all the requirements of the Freedom of Information Act. Briefly 1-21, G.S., requires that each state agency annually file with the Secretary of the State a schedule of its regular meetings, and post notice of special meetings at least twenty-four hours before they are to be held; that each agency make available to the public within forty-eight hours of any meeting, whether in public or executive session, a record of the votes of each member of said agency upon any issue; that each agency incorporate the record of these votes into the minutes of the meeting and make the minutes available to the public within seven days; that each agency convene in executive session only after a two-thirds vote of the membership present and voting at a public session; and that the only discussion and votes at that executive session be specifically related to those purposes, as stated at the public meeting, for which such session was called. Thus a two-thirds vote of those commissioners present at a public meeting of the PUCA, would be required for the PUCA to be able to meet in executive session. The Commission suggests that a two-thirds vote of the panel would legally authorize no more than an executive session of that panel. Such a vote could not then be used to convene an executive session of the entire authority.


In his letter to the Commission, Chairman Kleban gave several reasons why the members of the FUCA felt that a discussion of these drafts in closed session would serve the public interest. The Commission will not dispute those reasons. But the Commission will caution the FUCA that it expects it to comply with the requirements of the Freedom of Information Act, and to act in good faith in deciding whether the public would benefit by the disclosure of these materials. If the FUCA's failure to do so should be brought to the Commission's attention, the Commission will not hesitate to investigate both the FUCA's procedures for convening in executive session, and its rationale for keeping such information confidential.


                                                                                            By Order of the Freedom of
                                                                                            Information Commission


                                                                                            Helen M. Loy, Chairman of
                                                                                            of the Freedom of Information

Date ___August 24, 1977__



Charlene G. Arnold, Clerk