BEFORE THE

PENNSYLVANIA PUBLIC UTILITY COMMISSION

Application of Peregrine Keystone Gas :

Pipeline, LLC for Approval on a Non- :

Exclusive Basis to Begin to Offer, Render, : A-2010-2200201

Furnish, or Supply Natural Gas Gathering, :

Compression, Dehydration, and Transportation :

Or Conveying Service by Pipeline to the :

Public in All Municipalities Located in :

Greene and Fayette Counties and in East :

Bethlehem Township in Washington :

County, Pennsylvania :

FIFTH PREHEARING ORDER

Order Granting Motion For Protective Order

On September 17, 2010, Peregrine Keystone Gas Pipeline, LLC, (Applicant) filed its Application for a certificate of public convenience to offer, render, furnish, or supply natural gas gathering, compression, dehydration, and transportation or conveying service by pipeline to the public, on a non-exclusive basis, in all municipalities located in Greene and Fayette Counties and in East Bethlehem Township in Washington County, Pennsylvania (Application). Notice of the Application was published in the Pennsylvania Bulletin on October 2, 2010, 40 Pa. B. 5662, and the deadline for protests and interventions was set for November 1, 2010.

On November 1, 2010, petitions to intervene were filed by Superior Appalachian Pipeline, LLC (Superior), Columbia Gas of Pennsylvania, Inc. (Columbia), and Caiman Energy, LLC (Caiman). Applicant filed answers to each petition on November 15, 2010.

On October 27, 2010, a Motion for Special Admission pro hac vice was filed on behalf of Kurt L. Krieger, Esq., to represent Caiman Energy, LLC. The Motion was not opposed and was granted in the Order dated December 16, 2010.

Notices of appearance were filed by the Office of Trial Staff, now known as the Bureau of Investigation & Enforcement (BIE) on November 2, 2010, and by the Office of Consumer Advocate (OCA) on November 1, 2010.

Protests were filed by MarkWest Liberty Midstream & Resources, LLC (MarkWest) on November 1, 2010; Laurel Mountain Midstream, LLC (LMM) on November1,2010; by Mary Grace Butella on November 1, 2010; by James E. Rosenberg on November 1, 2010; and the protest of Veronica Coptis is stamped into the Secretary’s Bureau on November 4, 2010. On November 15, 2010, Applicant filed an answer to each protest, and on December 1, 2010, Protestant Rosenberg filed a reply to Applicant’s answer to his protest.

Applicant filed preliminary objections to the protests of Laurel Mountain Midstream and MarkWest on November 12, 2010, and each protestant filed an answer on November 22, 2010. Applicant filed a reply to the answer, along with leave to file the reply, on November 24, 2010.

On December 8, 2010, the case was assigned to me.

On December 16, 2010, a notice of prehearing conference was issued, which sets the prehearing conference in this matter for January 24, 2011 in Hearing Room 2 of the Commonwealth Keystone Building. By Prehearing Order dated December 16, 2010, the Preliminary Objections were denied and the parties directed to file prehearing memoranda.

On December 15, 2011, FirstEnergy Solutions Corp. (FES) filed a Petition to Intervene, and on January 4, 2011, Applicant filed its Answer opposing the intervention.

On December 23, 2010, Applicant filed a Motion for Continuance of Initial Prehearing Conference. The Motion indicates that all parties on the service list had been contacted and that no party had voiced opposition. By Order issued January 7, 2011, the Motion for Continuance was granted and the intervention of FES allowed.

In July, 2011, counsel for Applicant indicated in a telephone call that his client was ready to proceed and asked that the prehearing conference be rescheduled for the end of August. By Notice issued July 5, 2011, and published in the Pennsylvania Bulletin on July16,2011, 41 Pa.B. 3946, the prehearing conference was set for Wednesday, August31,2011 in Harrisburg.

The prehearing conference was held in Harrisburg with the following attending in person: Daniel P. Delaney, Esq., for Peregrine; Brian J. Knipe, Esq., for MarkWest; Kurt L. Krieger, Esq., and Brian Pulito, Esq., for Caiman; Alan M. Seltzer, Esq., for Laurel Mountain Midstream; Adeolu A. Bakare, Esq., for BIE; Theodore J. Gallagher, Esq., for Columbia; James A. Mullins, Esq., for OCA; Elizabeth U. Witmer, Esq., for Superior Appalachia; and Jeffrey A. Franklin, Esq., for FirstEnergy. Protestants Marigrace Butela and James Rosenberg participated by telephone from the Pittsburgh Office of Administrative Law Judge.

MarkWest, Laurel Mountain, Caiman, FirstEnergy Solutions, and Superior Appalachian filed a Joint Motion to Suspend the Proceedings on August 9, 2011, making the response due two days prior to the prehearing conference. Peregrine filed its answer in opposition on August 29, 2011.

At the prehearing conference, all interventions (Caiman, Columbia and Superior) were granted as unopposed.

The parties were informed that the Directed Questions issued by the Commission in the case captioned Application of Laser Northeast Gathering Company, LLC at docket no. A2010-2153371 (Laser) are required to be addressed in this proceeding as well. The parties submitted an agreed-upon schedule following the hearing, which was adopted in the Scheduling Order (Fourth Prehearing Order) issued September 12, 2011 along with agreed-upon discovery modifications. The Order of September 12, 2011, also denied the joint motion to suspend proceedings.

On September 15, 2011, Applicant filed an Application for Protective Order, which indicated that there was a need for confidentiality but that the parties had a disagreement over the wording of one specific issue. On September 21, 2011, MarkWest and Laurel Mountain filed a joint answer in opposition to the proposed protective order. The response period has run, and the Application for Protective Order (treated as a motion) is ready for disposition.

At issue is the best way to prevent a repeat of a specific situation which occurred during the litigation of the Laser case, described in the answer in opposition as follows:

The Laser protective order was invoked by the applicant to restrict access to twenty-five (25) paragraphs of terms and conditions of a non-unanimous settlement covering several different aspects of the applicant’s proposed natural gas gathering operations and circulated at the eleventh hour. The applicant offered to waive the Protective Order’s prohibition against access to protected information by competitors’ senior management, but only for two (2) individuals per party, and provided that these individuals first returned signed protective order acknowledgement forms. Given the time frame, there was simply insufficient time for MarkWest/LMM’s counsel to identify the management individuals needed to review the restricted terms and conditions – which covered numerous areas extending beyond the expertise of any two individuals within MarkWest or LMM – to provide signed protective order acknowledgment forms for these individuals, and to review the terms and conditions with these individuals in advance of hearing to consider potential business implications and formulate a position. Based upon their experience with the protective order in Laser, MarkWest/LMM cannot agree to the very same protective order in this case without expressly excluding settlements from its scope.

Joint Answer at 2-3.

Each side has proposed specific language for inclusion. Applicant recommends:

The Presiding Officer will not accept or consider a document proposing a settlement of some or all of the case issues which is presented by any case party which is not accompanied by the party’s certification that (1) all case parties have been informed of the settlement negotiations and invited to participate, and (2) that a copy of the completed settlement document has been provided to every case party with at least three days provided for the appropriate representatives of each party to review the document and decide whether to participate in the settlement or oppose it.

Motion at ¶10.

MarkWest/LMM recommends adding a sentence to the existing paragraph 2 of the proposed protective order so that it reads as follows, proposed language is bolded:

2. The materials subject to this Order are all correspondence, documents, data, information, studies, methodologies and other materials which a party or an affiliate of a party furnishes in this proceeding pursuant to Commission rules and regulations, discovery procedures or cross-examination or provides as a courtesy to a party to this proceeding, which are claimed to be of a proprietary or confidential nature and which are designated “PROPRIETARY INFORMATION” (hereinafter collectively referred to as “Proprietary Information”). Such information will include, but is not limited to, financial information for the Applicant or its affiliates that is not publicly disclosed, or other information which if disclosed will affect the Applicant’s or its affiliates’ competitive position or ability to conduct their business. However, such information will not include any document related to an agreement or stipulation between any parties to this proceeding, to settle or resolve any issue in this proceeding, or any portion of such a document.

Answer in opposition at 3-4.

MarkWest/LLM object to the Applicant’s language because: (1) it does not address the concern regarding using a discovery protective order to restrict access to information included in a settlement; (2) numerous aspects of the language used are subject to interpretation and raise more issues than they solve.

Applicant does not like the opposition’s language and does not agree with the description of the events which transpired at the Laser hearing. However, the unassailable fact is that the signatories to the non-unanimous settlement presented it for the first time at the evidentiary hearing, and several parties then reported that they had not had an opportunity to review it prior to the hearing. I note, too, that the “eleventh hour” settlement was in a form which included some hand markings in ink, which is further evidence of the last-minute nature of the agreement.

I share the concerns of MarkWest/LMM regarding the use of a last-minute settlement as well as the desire to prevent a repeat of the Laser situation, but the use of the proposed language may be too limiting to the development of a settlement at all. Therefore, a different approach will be taken here.

In Laser, a non-unanimous settlement which proposed to cover all issues in the case was presented at an evidentiary hearing before all parties had reviewed it. This action flies in the face of the due process rights of the parties.

Should there be a last-minute due process violation of a similar sort in this case, I will continue the hearing for at least two months. If any party is not given adequate time (the amount can vary depending on the party and the circumstances) to participate in settlement negotiations and to review settlement documents, the evidentiary hearing will be continued to permit those parties the necessary time. The language proposed by the Applicant is not adopted here because it may be too limiting, and a situation which complies with that language may well deprive some party or parties of their requisite due process rights.

This warning does not need to be included in an ordering paragraph because due process violations do not need to be listed to be enforceable. It is my practice to err on the side of affording more due process rather than less, and this will be my practice here as well.

Therefore, the standard language is approved, and the motion for protective order is granted.

THEREFORE,

IT IS ORDERED:

1.  That this Protective Order, submitted by Peregrine Keystone Gas Pipeline, LLC (“Applicant”), is hereby granted with respect to all materials and information identified at Paragraph 2 of this Protective Order which are filed with the Public Utility Commission (“Commission”), produced in discovery, or otherwise presented during these proceedings in testimony or exhibits. All persons now and hereafter granted access to the materials and information identified in Paragraph 2 of this Protective Order shall use and disclose such information only in accordance with this Order.

2.  That the materials subject to this Order are all correspondence, documents, data, information, studies, methodologies and other materials which a party or an affiliate of a party furnishes in this proceeding pursuant to Commission rules and regulations, discovery procedures or cross-examination or provides as a courtesy to a party to this proceeding, which are claimed to be of a proprietary or confidential nature and which are designated "PROPRIETARY INFORMATION" (hereinafter collectively referred to as "Proprietary Information"). Such information will include, but is not limited to, financial information for the Applicant or its affiliates that is not publicly disclosed, or other information which if disclosed will affect the Applicant’s or its affiliates’ competitive position or ability to conduct their business.

In addition, the parties may designate extremely sensitive Proprietary Information as "HIGHLY CONFIDENTIAL" (hereinafter referred to as "Highly Confidential Information") and thus secure the additional protections set forth in this Order pertaining to such material. Such "HIGHLY CONFIDENTIAL" information shall be only such Proprietary Information that constitutes or describes the producing party's competitively sensitive documents or information, including, but not limited to, documents or information relating to investors or documents or information relating to communications, negotiations, or resulting contracts or agreements with oil and natural gas producers, landowners and/or other customers, or materials related to the administration of such contracts.

3.  That Proprietary Information and Highly Confidential Information shall be made available to the Commission and its Staff and experts, and to the Office of Consumer Advocate and its Staff and experts, for use in this proceeding subject to Paragraph 5 below. For purposes of filing, to the extent that Highly Confidential Information or Proprietary Information is placed in the Commission's report folders, such information shall be handled in accordance with routine Commission procedures inasmuch as the report folders are not subject to public disclosure. To the extent that Proprietary Information or Highly Confidential Information is placed in the Commission's testimony or document folders, such information shall be separately bound, conspicuously marked, and accompanied by a copy of this Order. Public inspection of Proprietary Information or Highly Confidential Information shall be permitted only in accordance with this Protective Order.

4.  That Proprietary Information and Highly Confidential Information shall be made available to counsel of record for active parties in this proceeding, and a party's in-house counsel primarily responsible for this proceeding, pursuant to the following procedures: