Case No. VFA-0477, 27 DOE ¶ 80,193

March 15, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner:Puget Sound Energy, Inc.

Date of Filing: February 12, 1999

Case Number: VFA-0477

On February 12, 1999, Puget Sound Energy, Inc. (PSE) filed an Appeal from a final determination that the Bonneville Power Administration (BPA) issued on January 28, 1999.(1)In its determination, BPA released a number of documents in their entirety but withheld portions of four documents and withheld in their entirety 17 other documents that were responsive to a request for information that PSE filed under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004.

I. BACKGROUND

In a request for information dated December 11, 1998 (Request), PSE sought:

(1) Documents pertaining to changes to electric transmission facilities relating to ARCO (a private firm), Whatcom County Public Utility District #1 (Whatcom County PUD), or any other entity in Whatcom County. (2)

(2) Agreements (or drafts) between the PUD and BPA relating to transmission and sale of electric power, including Agreement Number 97TX30078.

(3) A copy of the Whatcom County New Load Addition Preliminary System Impact Study (or similar documents) and all drafts of these documents.

(4) Any agreements (or drafts) concerning transmission capacity between BPA and Intalco (a private firm).

(5) Documents relating to a specified BPA memorandum outlining a new BPA transmission project to by-pass PSE's transmission system in Whatcom County for the benefit of ARCO.

In a January 28, 1999 determination letter (Determination Letter), BPA released a number of documents in their entirety and provided PSE with a list of 21 documents that it was withholding in part or in whole. The Determination Letter provided redacted copies of four documents (Documents Nos. 4, 9, 10, and 19). The remaining 17 documents were withheld in their entirety. Information in Documents Nos. 8, 9 and 10 was withheld pursuant to Exemption 4 of the FOIA. Specifically, BPA asserted that the withheld information consisted of confidential commercial information whose release would cause competitive harm to Whatcom County PUD. Documents Nos. 1-4, 6-7, 11-21 contained information that was withheld pursuant to Exemption 5. BPA asserted that the material withheld from these documents consisted of predecisional analyses by BPA staff members that are protected from mandatory disclosure by the deliberative process privilege. All of Document No. 5 and portions of Document No. 6 were also withheld under Exemption 5's attorney-client privilege. BPA stated that the material withheld in these documents consisted of confidential legal opinions. The Determination Letter also stated that portions of Document No. 7 contained information prepared in anticipation of an administrative rate hearing and thus, was protected by Exception 5's attorney work product privilege.

In its submission, PSE asserts numerous specific grounds for its Appeal. In general, PSE challenges the extent of the search that BPA conducted for responsive documents. Additionally, PSE challenges BPA's application of Exemptions 4 and 5 to the documents listed in the Determination Letter. (3)

II. ANALYSIS

As described below, after examining the documents in question, we believe that much of the withheld material was properly withheld pursuant to Exemptions 4 and 5. However, we also find that some of the withheld material was improperly withheld, under the rationale stated in BPA's Determination Letter. Additionally, BPA failed to segregate exempt material from the documents. Consequently, for the reasons stated below we will remand this matter to BPA. On remand, BPA shall either release the material described below or issue another determination detailing under what FOIA exemption it seeks to withhold the material.

A. Adequacy of the Search

The FOIA requires that federal agencies generally release documents to the public upon request. Following an appropriate request, the FOIA requires agencies to search their records for responsive documents. We have stated on numerous occasions that a FOIA request deserves a thorough and conscientious search for responsive documents, and we have not hesitated to remand a case where it is evident that the search conducted was in fact inadequate. See, e.g., Eugene Maples, 23 DOE ¶ 80,106 (1993); Native Americans for a Clean Environment, 23 DOE ¶ 80,149 (1993). To determine whether an agency's search was adequate, we must examine its actions under a "standard of reasonableness." McGehee v. CIA, 697 F.2d 1095, 1100-01 (D.C. Cir. 1983), modified in part on rehearing, 711 F.2d 1076 (D.C. Cir. 1983). This standard "does not require absolute exhaustion of the files; instead, it requires a search reasonably calculated to uncover the sought materials." Miller v. Department of State, 779 F.2d 1378, 1384-85 (8th Cir. 1985).

BPA informed us that upon receipt of PSE's FOIA request, the account executive of the BPA team working on the proposed new electricity transmission project was asked to conduct a search for responsive documents. This official searched his office and then asked each of the members of his team to search for responsive documents. All documents related to that inquiry were forwarded or identified to PSE. The official was also aware of an 1996 inquiry regarding a similar project. The account executive then asked BPA employees involved with that inquiry about the existence of responsive documents. All responsive documents were either forwarded or identified to PSE. BPA officials were not aware of any other location at BPA that would contain responsive records. See Memorandum of telephone conversation between Susan Millar, Esq., and Carol Jacobson, Office of Chief Counsel, BPA, and Richard Cronin, OHA Staff Attorney (February 25, 1999).

PSE argues that BPA's search was inadequate. Specifically, PSE asserts that given the "size, cost and unusual nature of the proposed new transmission project," BPA should have discovered many more documents. See February 12, 1999 Appeal Letter from William R. Mauer, Perkins Coie, LLP, at 3 n.1. PSE also argues that it was not provided any documents regarding the sale of electric power. In response, BPA asserts that it does not have a policy that requires the retention of meeting notes or notes from telephone conversations. In this connection, BPA also maintains that many of the meetings regarding the proposed project were held "face to face" and thus no documents were generated. BPA notes that the proposed project is still in the preliminary stage and that no construction agreement has been reached with Whatcom County PUD. With regard to "sale of power" documents, BPA states that it has recently responded to PSE's request for such documents through a February 24, 1999 response to a subsequent PSE FOIA Request.

As to documents pertaining to the new transmission project, we believe BPA conducted an adequate search. BPA contacted the official whose team was responsible for the proposed project and that official had a search conducted in the offices of each of the individuals working on that project. Aside from the offices of the team's personnel, BPA was not aware of any location where responsive documents would exist. Further, given BPA's explanation as to how it conducted business regarding the proposed new project and the status of the proposed project, we cannot say that the number of documents discovered tends to show that BPA did not conduct an adequate search. Consequently, we believe that BPA conducted an adequate search for responsive documents regarding the proposed new transmission project. With regard to the search for "sale of power" documents, PSE may file an appeal regarding the adequacy of the search for these documents upon receipt of BPA's determination regarding the other PSE FOIA Request.

B. Exemption 4

Exemption 4 exempts from mandatory public disclosure "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. § 552(b)(4); 10 C.F.R. § 1004.10(b)(4). In order to qualify under Exemption 4, a document must contain either (1) trade secrets or (2) information that is "commercial" or "financial," "obtained from a person," and "privileged or confidential." (4) National Parks & Conservation Ass'n v. Morton, 498 F.2d 765, 766 (D.C. Cir. 1974) (National Parks). In National Parks, the United States Court of Appeals for the District of Columbia Circuit found that commercial or financial information submitted to the federal government involuntarily is "confidential" for purposes of Exemption 4 if disclosure of the information is likely either (1) to impair the government's ability to obtain necessary information in the future or (2) to cause substantial harm to the competitive position of the person from whom the government obtained the information. Id. at 770; Critical Mass Energy Project v. NRC, 975 F.2d 871 (D.C. Cir. 1992), cert. denied, 113 S. Ct. 1579 (1993) (Critical Mass). By contrast, information a submitter provides to an agency voluntarily is "confidential" if it is of a kind that the provider would not customarily make available to the public. Critical Mass, 975 F.2d at 879. BPA withheld portions of Documents Nos. 9 and 10 and Document No. 8 in its entirety pursuant to Exemption 4.

Even if portions of the documents at issue in this Appeal meet the criteria cited above for applying Exemption 4 or any other Exemption, that does not mean that they may be withheld in their entirety. The FOIA requires that "[a]ny reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection." See 5 U.S.C. § 552(b); 10 C.F.R. § 1004.10; Boulder Scientific Co., 19 DOE ¶ 80,126 at 80,577 (1989). In the context of Exemption 4, this means that the non-confidential information in documents should be released to the requester. The only exceptions to the requirement of segregation are where exempt and non-exempt material are so "inextricably intertwined" that release of the non-exempt material would compromise the exempt material, Lead Industries Ass'n v. OSHA, 610 F.2d 70, 85 (2d Cir. 1979), or where non-exempt material is so small and interspersed with exempt material that it would pose "an inordinate burden" to segregate it. Id. at 86; Neufeld v. IRS, 646 F.2d 661, 666 (D.C. Cir. 1981).

Document No. 8 is a letter from the Whatcom County PUD soliciting a study by BPA regarding needed electric transmission options for potential new customers of Whatcom County PUD. The letter contains information about these potential new customers and Whatcom County PUD's preliminary ideas of how best to service these customers. Document No. 8 thus contains commercial information obtained from a person. The commercial information in Document No. 8 was submitted voluntarily to BPA. Consequently, this information can only be considered confidential if it is not information Whatcom County PUD would customarily make available to the public. We note that, in the letter, Whatcom County PUD itself requested confidential treatment of the content of the letter. Whatcom County PUD subsequently informed BPA that release of the information in Document No. 8, as well as Document Nos. 9 and 10, would reveal its business strategy in providing power to its customers and would cause it competitive harm. Given this background, we believe that Whatcom County PUD would not normally make the information in Document No. 8 available to the public. Consequently we believe that the commercial information in this Document is confidential. However, while most of the withheld information was properly withheld pursuant to Exemption 4, there is some segregable non-commercial information that is not withholdable under Exemption 4. Specifically, the address block, greeting line and the first sentence of the first paragraph of the letter contain segregable information. Additionally, the first and last sentences of the last paragraph of the letter, the signature block and the "cc" line contain segregable, non-commercial information that is not withholdable under Exemption 4.

Document No. 9 is an agreement between BPA and Whatcom County PUD in which BPA agrees to conduct a study regarding a proposed project involving the feasibility of new interconnections for the transmission of electricity in a certain area. The only information withheld in this document is the information regarding the proposed changes to the electrical transmission system in a specific area. We find that this information is commercial since it relates to Whatcom County PUD's plans for providing electric power to its customers. Further, this information was obtained by a person. This information was obtained involuntarily since Whatcom County PUD was required to put this information in the agreement. Consequently, such information is confidential only if its disclosure would either (1) impair the government's ability to obtain necessary information in the future or (2) cause substantial harm to the competitive position of the person from whom the government obtained the information. See National Parks, 498 F.2d at 770. We believe that release of the withheld information in this document would cause competitive harm to Whatcom County PUD. BPA has informed us that electric energy markets in the Pacific Northwest have become highly competitive and that it believes that release of the information could impair Whatcom County PUD's ability to compete in this market. We believe that competitors could gain a commercial advantage if they could find out details concerning where and how Whatcom County PUD sought to add extra electric load capacity. Thus, we believe that the information withheld in Document No. 9 is confidential commercial information that was properly withheld under Exemption 4.

Document No. 10 is Whatcom County PUD's application for electric transmission service to obtain interconnection facilities to obtain two new points of delivery for electricity. The only information withheld in this document was a table entitled "10 Year Monthly Electric Load Forecast-Year 2000 Loads" (Forecast) that Whatcom County PUD provided with its application. (5) The withheld information is commercial and was supplied by a person. Document No. 10 was submitted pursuant to a formal request for transmission services and thus was not voluntarily provided. Applying the National Parks analysis, we believe that release of the Forecast would cause competitive harm to Whatcom County PUD. Release of the Forecast would give competitors significant insight into Whatcom County PUD's future business strategy and thus cause substantial harm to the competitive position of Whatcom County PUD. Consequently, we believe that the withheld information is confidential and properly withheld pursuant to Exemption 4. However, there is some segregable, non- commercial information consisting of the title and column table headings in the Forecast that may not be protected by Exemption 4.

PSE argues that the information BPA withheld under Exemption 4 is not confidential because BPA has not met the agency's burden of proof to establish that the withheld information is "confidential." PSE apparently defines "confidential" as information that is not known to other companies or people. PSE's definition is at odds with the meaning of "confidential," for Exemption 4 purposes, as defined by the courts. See supra. PSE's arguments notwithstanding, we believe that the information BPA has provided us, along with the very nature of the withheld information, allow us to conclude that most of the information withheld pursuant to Exemption 4 in Documents Nos. 8, 9, and 10 is confidential commercial information and was properly protected pursuant to Exemption 4.

C. Exemption 5

Exemption 5 of the FOIA exempts from mandatory disclosure documents that are "inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency." 5 U.S.C. § 552(b)(5); 10 C.F.R. § 1004.10(b)(5). The Supreme Court has held that this provision exempts "those documents, and only those documents, normally privileged in the civil discovery context." NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975) (Sears) (footnote omitted). The courts have identified several traditional privileges that fall under this definition of exclusion, such as: the attorney-client privilege, the attorney work product privilege and the executive "deliberative process" or "predecisional" privilege. Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 862 (D.C. Cir. 1980) (Coastal States). All of these privileges are at issue in the present case.

1. Attorney-Client and Attorney Work Product Privileges

The attorney-client and the attorney work product privileges are frequently confused with each other. The attorney-client privilege exists to protect confidential communications between attorneys and

their clients made for the purpose of securing or providing legal advice. In Re Grand Jury Proceedings 88-9 (MIA), 899 F.2d 1039 (11th Cir. 1990); In Re Grand Jury Subpoena of Slaughter, 694 F.2d 1258, 1260 (11th Cir. 1982). Not all communications between attorney and client are privileged, however. Clarke v. American Commerce National Bank, 974 F.2d 127 (9th Cir. 1992) (Clark). The courts have limited the protection of the privilege to those disclosures necessary to obtain or provide legal advice. Fisher v. United States, 425 U.S. 391, 403 (1976). In other words, the privilege does not extend to social, informational, or procedural communications between attorney and client.

The attorney work product privilege protects from disclosure documents that reveal “the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.” Fed. R. Civ. P. 26(b)(3); see also Hickman v. Taylor, 329 U.S. 495, 511 (1947). This privilege is also limited. It does not extend to every written document generated by an attorney. In order to be afforded protection under the attorney work product privilege, a document must have been prepared either for trial or in anticipation of litigation. See, e.g., Coastal States, 617 F.2d at 865.

Documents Nos. 5 and 6 were withheld pursuant to the attorney-client privilege. Document No. 5 is a BPA Office of General Counsel memorandum outlining the potential legal consequences of a certain proposed business transaction between BPA and Whatcom County PUD. Its purpose is to provide legal advice to BPA decision makers regarding the proposed transaction. Consequently, we believe that the entire document should be protected by Exemption 5's attorney-client privilege. Document No. 6 is a compilation of six electronic mail (e-mail) messages sent between various BPA employees. Two of the six messages are marked "attorney-client confidential information" and are dated April 28, 1995 and May 1, 1995. (6)While BPA has not specifically indicated which sections of this document were withheld pursuant to which privilege, we will assume that the two e-mail messages marked "attorney-client confidential information" were withheld pursuant to the attorney- client privilege. The April 28, 1995 message is an e-mail from an attorney at BPA's Office of Chief Counsel generally summarizing legal precedent regarding a particular type of transaction and asking for additional details regarding the transaction as well as requesting further consultation regarding a potential legal issue. The May 1, 1995 message is from a BPA attorney, requests information about a proposed project, and offers a tentative legal opinion regarding the project. Both e-mail messages were sent to obtain and provide legal advice regarding the proposed transaction and as such are properly protected by the attorney-client privilege. However, the e-mail headings for each of these e-mails and the first paragraph of the May 1, 1995 e-mail message consist of segregable, non- confidential material that, on remand, should be either provided to PSE or withheld pursuant to another determination outlining under which FOIA exemption the material is being withheld.

PSE challenges the application of attorney-client privilege to Documents Nos. 5 and 6 asserting that, to the extent that these messages contain information provided by a third party, that information is not protected by the privilege. PSE cites Schlefer v. United States, 702 F.2d 233, 245 (D.C. Cir. 1983) (Schlefer), as support for this proposition. We disagree with PSE's assertion and find PSE's reliance on Schlefer misplaced. In Schlefer, the Chief Counsel of the Maritime Administration had issued memorandum opinions regarding fact situations provided by outside applicants seeking a ruling on agency loans or similar benefits. Because neither the third-party factual information nor the agency officials' communications transmitting the information to the Chief Counsel concerned confidential information concerning the agency itself, the Court held that attorney-client privilege did not apply. Schlefer, 702 F.2d at 245. Thus, Schlefer does not hold that material obtained from third parties can never be protected by attorney-client privilege; instead Schlefer holds that such information may not be protected by attorney-client privilege unless it is part of an agency communication containing confidential information about the agency itself. See id. ("The outsider's communications to the [agency] official do not contain any confidential information concerning the Agency; when the official transmits the relevant facts to the Chief Counsel, no new or confidential information concerning the Agency is imparted."); Tax Analysts v. Internal Revenue Service, 117 F.3d 607, 619 (D.C. Cir 1997) (TA). One must keep in mind when considering the BPA in the FOIA context that BPA is a commercial enterprise. See supra note 1. The communications in Documents Nos. 5 and 6 involve BPA officials seeking legal advice on BPA's behalf regarding a proposed project involving the BPA's participation as an entity. Consequently, even if BPA in these communications used factual material obtained from third-parties, the material in Documents Nos. 5 and 6 contains confidential information about BPA and thus is protected by attorney-client privilege. See TA, 117 F.3d at 620 (agency communications containing both third-party information and confidential information is protectable by attorney-client privilege); see also Coastal States, 617 F.2d at 863 (when government is dealing with its attorneys as would any private party seeking advice to protect personal interests, it needs assurance of confidentiality so it will not be deterred from full and frank communications with its counsel).

Document No. 7 is a document containing a summary of a proposed BPA power sale to Whatcom County PUD and a private firm. The document also contains notes as to factual issues about which the author inquired as well as comments regarding a potential procedural issue. BPA asserts that this document was prepared in anticipation of a challenge to a potential cost allocation proposal in BPA's 1996 administrative rate hearing and, as such, it is protected by the deliberative process and attorney work product privileges. However, BPA failed to indicate, and it is unclear to us, which privilege applies to which portions of the document. Consequently, on remand, BPA should issue another determination regarding Document No. 7 that specifies which portions of the document are being withheld pursuant to which specific Exemption 5 privilege.

2. Deliberative Process Privilege

The "deliberative process" privilege of Exemption 5 permits the government to withhold documents that reflect advisory opinions, recommendations, and deliberations comprising part of the process by which government formulates decisions and policies. Sears, 421 U.S. at 150. The ultimate purpose

of the exemption is to protect the quality of agency decisions by promoting frank and independent discussion among those responsible for making governmental decisions. Sears, 421 U.S. at 151. See EPA v. Mink, 410 U.S. 73, 87 (1973) (quoting Kaiser Aluminum & Chem. Corp. v. United States, 157 F. Supp. 939, 946 (Ct. Cl. 1958)) (Mink).

In order for Exemption 5 to shield a document, the document must be both predecisional, i.e. generated before the adoption of agency policy, and deliberative, i.e. reflecting the give-and-take of the consultative process. Coastal States, 617 F.2d at 866. The exemption thus covers documents that reflect, among other things, the personal opinion of the writer rather than the final policy of the agency. Id. Even then, however, the exemption only covers the subjective, deliberative portion of the document. Mink, 410 U.S. at 87-91. An agency must disclose factual information contained in the protected document unless the factual material is "inextricably intertwined" with the exempt material. Soucie v. David, 448 F.2d 1067, 1077-78 (D.C. Cir. 1971).

PSE argues that BPA has not definitively established the predecisional character of the documents it withheld pursuant to the deliberative process privilege. It goes on to argue that BPA's response does not establish the date the relevant decision was made, the nature of the process about which the predecisional deliberations occurred, the ultimate decision the documents lead up to, and whether any portions of the documents reflect the decision-making process. (7) We need not conduct an exhaustive inquiry of this particular information. Instead, we believe that we have obtained sufficient information from BPA to understand fully the nature of the documents and decide whether their predecisional nature has been established.

Document No. 1 is a copy of a letter a BPA official sent to a private firm regarding a new interconnection point to a BPA power line. Attached to the letter is a preliminary design diagram and a table listing the division of responsibilities for the project between the parties. BPA withheld the entire document pursuant to Exemption 5's deliberative process privilege. PSE argues that since this document was provided to a private individual outside of BPA, the deliberative process privilege was waived. We agree with PSE. FOIA exemptions may be waived if a document has been disclosed to others. See Carlson v. Department of Justice, 631 F.2d 1008, 1016 n.30 (D.C. Cir 1980). With regard to Document No. 1, it appears that the document was willingly disclosed to a private individual. Any deliberative process privilege that may have been applicable was waived by BPA's disclosure of the document. On remand, BPA should either promptly release Document No. 1 to PSE or issue another determination explaining under what exemption the document may be properly withheld. (8)

Documents Nos. 2 and 3 each consists of an e-mail message from a BPA official to other BPA officials with attached proposed schematic designs for a proposed project. The concerned parties have not yet agreed to the proposed project. Document No. 2 also contains a chart with preliminary cost figures for three separate design options for the project. With regard to the e-mail message within Document No. 2, portions of the message that are non-deliberative, such as the headings on top of the page, the last sentence, and the closing line, are not withholdable under the deliberative process privilege. The attached table in Document No. 2 contains information regarding costs for the three project options which are predecisional and deliberative and therefore withholdable pursuant to deliberative process privilege. However, most of the column headings to the attached table are segregable, non-deliberative information. The schematic diagrams are predecisional, deliberative material, which were properly protected in their entirety by Exemption 5. The e-mail message of Document No. 3 contains mostly predecisional, deliberative material. However, most of the e-mail headings, the last sentence, and the closing line, contain no deliberative material and, as such, are not protectable by the deliberative process privilege. The attached schematic diagram of a proposed option for the project is predecisional and deliberative and was properly protected in its entirety. On remand, BPA should release the non-deliberative portions of Documents Nos. 2 and 3 or issue another determination explaining under which FOIA exemption the material may be withheld.(9)

Document No. 4 consists of a BPA's employee's memorandum regarding Whatcom County PUD's proposed electrical service to another firm. Two sentences were withheld in the background section. The first sentence does not appear to be deliberative in nature but instead is a statement of fact. It therefore is not protectable pursuant to deliberative process privilege. The second sentence represents an opinion of the author as to who would be responsible with regard to a cost issue. This sentence is predecisional and deliberative and was therefore properly protected. Portions of text were also withheld in the section entitled "Current Situation." The portion withheld in the first sentence of this section does not appear to be deliberative. The withheld last two sentences of this section represent the opinions of the author and are predecisional and deliberative. They were therefore properly withheld pursuant to deliberative process privilege. The section title at the bottom of the first page is non-deliberative material and should not have been withheld pursuant to the deliberative process privilege. It is uncertain whether the withheld material at the bottom of the second page represents BPA's stated policy or the opinion of the author. On remand, BPA should issue another determination regarding the non-deliberative material in Document No. 4 and either release the material or explain why such material is withholdable under the FOIA. Additionally, BPA should make another determination regarding the material withheld at the bottom of the second page. If this material represents BPA adopted policy, it may not be protected by the deliberative process privilege.

Document No. 6 consists of a compilation of six e-mail messages. As discussed above, we believe that most of the two messages marked "Attorney-Client Confidential Information" were properly withheld pursuant to Exemption 5's attorney-client privilege. The remaining four e-mail messages consist of discussions and opinions by BPA officials regarding a proposed BPA project. BPA has informed us that no final decision has been reached with regard to the project. This material is therefore deliberative and predecisional and protected by Exemption 5. However, the e-mail headings are non-deliberative material. On remand, BPA should release the headings or explain the reason the material may be withheld pursuant to the FOIA.

Documents Nos. 11, 12, 13 and 16 are drafts of a Facilities Studies Agreement No. 98TX30171. These drafts represent BPA's proposed language for the agreement. However, the drafts are in the form of a letter to a private individual outside of BPA. BPA has informed us that it is uncertain whether any of these drafts were in fact disclosed to an outside individual. Consequently, we will direct on remand that BPA determine whether any of these drafts were disclosed outside of BPA. If so, BPA may have waived any deliberative process privilege that attached to the drafts. Document No. 12 contains a copy of the e-mail message that forwarded the draft. The e-mail message contains no deliberative material that could be protected by the deliberative process privilege.

Documents Nos. 14 and 15 contain a proposed timeline chart for completion of a Whatcom County PUD project and the proposed schematic design diagram for the project developed by BPA personnel. Both of these documents represent BPA proposals regarding the design and schedule for the proposed project. No agreement has been reached between BPA and Whatcom County PUD concerning this project. Thus both documents are predecisional, deliberative documents and were properly protected under Exemption 5. However, with regard to Document No. 14, some segregable non-deliberative information is not exempt. Specifically, the material consisting of all of the column headings of the chart, should either be released to PSE or BPA should issue another determination explaining under which FOIA exemption any of this material, such as the proposed location of the project, may be withheld.

BPA has informed us that Documents Nos. 17 and 18, while described differently to PSE in its determination letter, are actually the same document. This document is a letter from a BPA employee to a private firm. By disclosing it, BPA has waived any deliberative process privilege that may have attached to this document. Consequently, on remand BPA shall either release Documents Nos. 17-18 to PSE or issue another determination regarding this document.

Document No. 19 is an e-mail from a BPA employee regarding the proposed BPA project. BPA withheld the attachment to this e-mail, which consists of a list of the individual BPA team members for this project, their positions and their phone numbers, along with a description indicating the location of the proposed project. The withheld information, other than the proposed location of the project, is not deliberative or predecisional and is not witholdable pursuant to deliberative process privilege. BPA is concerned that release of these team members' names and phone numbers could subject these individuals to harassment. However, Exemption 5 only protects predecisonal, deliberative documents. The withheld list, other than the location of the proposed project, is purely factual and contains no deliberative elements. On remand, BPA should issue another determination regarding Document No. 19 and should either release the withheld information (other than the proposed location) or justify withholding the information pursuant to another FOIA exemption. (10)

Document Nos. 20 and 21 are e-mail communications from a BPA employee with attached notes. BPA has informed us that the attachments were prepared by an outside consultant firm. Because BPA's original determination does not describe how the deliberative process privilege applies to these non-government-created documents, we will order BPA, on remand, to issue another determination regarding these documents.

D. The Public Interest in Disclosure

The DOE regulations provide that the DOE should release to the public material exempt from mandatory disclosure under the FOIA if the DOE determines that federal law permits disclosure and it is in the public interest. 10 C.F.R. § 1004.1. Notwithstanding our finding that BPA properly applied Exemptions 4 and 5 to a significant portion of the requested information, we must consider whether the public interest nevertheless demands disclosure pursuant to 10 C.F.R. § 1004.1. In applying this regulation, we note that the Department of Justice has reviewed its administration of the FOIA and adopted a "foreseeable harm" standard for defending FOIA exemptions. Memorandum from the Attorney General to Heads of Departments and Agencies, Subject: The Freedom of Information Act (October 4, 1993) (Reno Memorandum). The Reno Memorandum indicates that whether or not there is a legally correct application of an exemption, it is the policy of the Department of Justice to defend the assertion of a FOIA exemption only in those cases where the agency articulates a reasonably foreseeable harm to an interest protected by that exemption. See Reno Memorandum at 1, 2. With regard to the material properly withheld in this matter pursuant to Exemption 5, the requested information consists of the opinions of individuals regarding different aspects of BPA decisions regarding the potential new business projects and the legal ramifications pertaining to these projects. The release of this information would in our opinion have a chilling effect on the willingness of employees and managers to make candid statements of opinion and seriously impede BPA's ability to obtain legal advice from its counsel. Consequently, we find that this harm satisfies the reasonably foreseeable harm standard articulated by the Attorney General and that the release of the material protected pursuant to Exemption 5 contained in the requested documents would not be in the public interest.

In cases involving material determined to be exempt from mandatory disclosure under Exemption 4, we do not make the usual inquiry into whether release of the material would be in the public interest. Disclosure of confidential information that an agency can withhold pursuant to Exemption 4 would constitute a violation of the Trade Secrets Act, 18 U.S.C. § 1905, and is therefore prohibited. See, e.g., Chicago Power Group, 23 DOE ¶ 80,125 at 80,560 (1993). Accordingly, we may not consider whether the public interest warrants discretionary release of the information properly withheld under Exemption 4.

E. Conclusion

While BPA correctly applied Exemptions 4 and 5 to a significant portion of the withheld material, we also find that some of the withheld material may not be withheld pursuant to the stated reasons given in BPA's Determination Letter. Further, BPA failed to segregate releasable material from exempt material. Consequently, we will remand this matter to BPA so that it may either release the information improperly withheld or issue another determination explaining why the material may be withheld pursuant to the FOIA. We will therefore grant PSE's appeal in part.

It Is Therefore Ordered That:

(1) The Appeal filed by Puget Sound Energy, Inc. on February 12, 1999, Case No. VFA-0477, is hereby granted in part as set forth in Paragraph (2).

(2) This matter is remanded to the Bonneville Power Administration for further consideration in accordance with the instructions contained in the foregoing decision.

(3) This is a final Order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to the provisions of 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought either in the district where the requester resides or has a principal place of business, or in which the agency records are situated, or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: March 15, 1999

(1)BPA is a self-financing, federal power marketing administration created to market power generated by federal dams on the Columbia River system. BPA also owns and operates approximately 80 percent of the bulk electric transmission system (e.g., power lines) in the Pacific Northwest. BPA markets both electric power and electric transmission service to various customers in the Pacific Northwest.

(2)Whatcom County PUD #1 is an electric utility in the business of supplying customers with electric power.

(3)In its Appeal, PSE argues that it did not receive a timely response to its FOIA Request from BPA. We can find no authority in the DOE regulations that gives us jurisdiction to supervise or otherwise regulate the conduct of DOE agencies regarding time delays in processing FOIA requests. However, if a requester does not receive a response at the end of the 20-day period, the requester shall be deemed to have exhausted his administrative remedies and has a right to a review in a district court of the United States. 5 U.S.C. § 552(a)(4)(B), (6)(A)(i), and (6)(C)(i); cf. Pollack v. Department of Justice, 49 F. 3d 115, 118-19 (4th Cir. 1995) cert. denied, 516 U.S. 843 (1995) (case decided under prior 10-day deadline).

(4)For the purposes of Exemption 4, the term "person" refers to a wide range of entities including partnerships, corporations, associations, and public or private organizations other than an agency. See Nadler v. FDIC, 92 F.3d 93, 95 (2d Cir. 1996). Thus, for Exemption 4 purposes, a utility such as Whatcom County PUD is considered to be a person.

(5)The Forecast estimates the amount of electricity Whatcom County PUD will provide to its customers in the next 10 years.

(6)The propriety of using Exemption 5 regarding the remaining four e-mail messages will be discussed infra in the next section of this Decision devoted to the BPA's application of the deliberative process privilege.

(7)We note that courts have held that an agency is not required to specifically point to an agency final decision to which a document has contributed. See Sears, 421 U.S. at 151 n.18.

(8)On Appeal, BPA has stated that it believes that a number of the withheld documents such as Documents Nos. 1, 17/18, 20 and 21 contain commercially sensitive information which would be protected by Exemption 5's qualified commercial privilege. See Federal Open Market Committee, 443 U.S. 340 (1979). Because BPA did not assert this privilege in its determination letter to PSE, we will not now issue an opinion regarding the applicability of that privilege to these documents. On remand, BPA may issue another determination asserting that privilege.

(9)BPA should review the headings in Documents Nos. 2 and 3 to determine if information describing the location and voltage of the proposed project is withholdable.

(10)We note that Exemption 6 shields from disclosure "[p]ersonnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C. § 552(b)(6); 10 C.F.R. § 1004.10(b)(6). The purpose of Exemption 6 is to "protect individuals from the injury and embarrassment that can result from the unnecessary disclosure of personal information." Department of State v. Washington Post Co., 456 U.S. 595, 599 (1982). We express no opinion regarding the potential applicability of Exemption 6 to the documents at issue in this case.