VIEWS OF THE BOARD. The Board notes that the scope of the MSA Xxxxxx included both a comparison of the Renewal MSA to the Original MSA, and a review of the appropriateness of the terms and conditions of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with Calgary’s interpretation of sections 12.1 and 12.2. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrary, the Board considers that it would be a stretch to accept ATCO’s argument that the Renewal MSA is a bare extension, not warranting a review of its terms and conditions. The Board notes for example that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Therefore, the Board will not require a change to the term of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and the Renewal MSA. The Board notes Calgary’s concern that if the 55,000-hour commitment for DME were breached, customers could be burdened.36 The Board notes that under the “exception handling” provision in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not exist. However, the Board considers that the issue is not whether everyone uses standard language, but whether it is typical to address certain principles or aspects of an outsourcing arrangement in a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might be different, the Board is persuaded by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would be fairly standard. The Board is again concerned, as it was when the original transfer of assets from the ATCO Utilities to ATCO I-Tek occurred, that the ATCO Utilities amended the contract without acknowledging that Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As will be discussed later in this Decision, the Board considers that the ATCO Utilities may be not be in compliance with section 101 with respect to the purported disposition under the Renewal MSA of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers that the Renewal MSA is something more than a simple extension of the Original MSA. However, the Board is not convinced that the nature of the Renewal MSA is so different from the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed in section 2.1 of this Decision, must be widened. The original scope already included consideration by the Board of the appropriateness of the terms and conditions of the Renewal MSA. Further the Board was to clarify the matters to be addressed by the Board in this MSA Xxxxxx, and those to then be addressed collaboratively by the parties, and subsequently reviewed by the Board. The Board believes the matters to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, and whether or not the provisions of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utility, and whether or not the Renewal MSA can and should be benchmarked. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for Non-Performance • Service Levels
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VIEWS OF THE BOARD. The Board notes that the scope of the MSA Xxxxxx included both a comparison of the Renewal MSA to the Original MSA, and a review of the appropriateness of the terms and conditions of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit contain gainsharing provisions, notwithstanding that gainsharing provisions appear to be a renewal until after widely used feature in outsourcing arrangements, as submitted by Xx. Xxxxxxxx. Instead, ATCO has relied on annual price reviews tied to the completion performance of the initial termIT market rather than gainsharing tied to ATCO I-Tek’s performance. The Board disagrees notes that Xx. Xxxxxxxx agreed xxxxxxxxxxx was the lowest priority on her list of four issues, and therefore, the Board considers that while gainsharing provisions are widely used they are not mandatory. The Board believes that gainsharing could provide some attractions to customers, depending on what was agreed to. The Board notes, based on interveners’ arguments, that xxxxxxxxxxx could provide a better link between ATCO I-Tek’s costs and the prices charged to the ATCO Utilities. The Board notes ATCO’s argument that the outsourcer in a gainsharing arrangement would typically require some form of financial concession that could increase the price of the outsourcing agreement. Likewise, the Board considers that the absence of gainsharing should also be reflected in ATCO I-Tek prices. The Board notes that parties generally appeared to accept that it was possible to assign a value to gainsharing, however parties disagreed with Calgary’s interpretation respect to the desirability of sections 12.1 and 12.2doing so. The Board considers that the meaning of the Original MSA allowed for either while it might be a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrarysubjective exercise, the Board considers that it would benchmarker should be a stretch able to accept ATCO’s argument that compensate for the Renewal MSA is a bare extension, not warranting a review inclusion/exclusion of its terms and conditions. The Board notes for example that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Therefore, the Board will not require a change to the term of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and gainsharing in the Renewal MSA. The Board notes Calgary’s concern that if interveners might be interested in participating in any debate with ATCO about the 55,000-hour commitment for DME were breachedvalue of gainsharing. However in this case, customers could owing to the relatively low priority to which Xx. Xxxxxxxx assigned gainsharing in her four main issues of concern, and since the Board does not consider gainsharing to be burdened.36 in the nature of a fundamental contract term, the Board will not require gainsharing provisions to be added to the Renewal MSA. The Board notes however directs that under ATCO ensures, through the “exception handling” provision Collaborative Process and the draft terms of reference for benchmarking, that the benchmarker be directed to provide clear evidence as to the adjustment to fair market value of ATCO I-Tek services accruing to the ATCO Utilities owing to the lack of gainsharing provisions in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not exist. However, the Board considers that the issue is not whether everyone uses standard language, but whether it is typical to address certain principles or aspects of an outsourcing arrangement in a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might be different, the Board is persuaded by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would be fairly standard. The Board is again concerned, as it was when the original transfer of assets from the ATCO Utilities to ATCO I-Tek occurred, that the ATCO Utilities amended the contract without acknowledging that Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As will be discussed later in this Decision, the Board considers that the ATCO Utilities may be not be in compliance with section 101 with respect to the purported disposition under the Renewal MSA of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers that the Renewal MSA is something more than a simple extension of the Original MSA. However, the Board is not convinced that the nature of the Renewal MSA is so different from the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed in section 2.1 of this Decision, must be widened. The original scope already included consideration by the Board of the appropriateness of the terms and conditions of the Renewal MSA. Further the Board was to clarify the matters to be addressed by the Board in this MSA Xxxxxx, and those to then be addressed collaboratively by the parties, and subsequently reviewed by the Board. The Board believes the matters to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, and whether or not the provisions of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utility, and whether or not the Renewal MSA can and should be benchmarked. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for Non-Performance • Service Levels.
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VIEWS OF THE BOARD. The Board notes that ATCO’s approach to remedies for non-performance is the scope of the MSA Xxxxxx included both a comparison of same in the Renewal MSA to the Original MSA, and a review of the appropriateness of the terms and conditions of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with Calgary’s interpretation of sections 12.1 and 12.2. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to as it was in the Original MSA. The Board also notes interveners’ submissions notes, however, that these remedies included in the Renewal MSA changed materially from do not appear to be as rigorous to the Original MSAservice provider as in other outsourcing arrangements that Xx. Xxxxxxxx has participated in. The Board notes that both the level of the penalty (5% of the affected service versus a maximum 12% penalty on the full monthly fees), and that several the ability to recover the amount withheld are different from industry standards as discussed in the evidence of the terms and conditions did not conform to industry normsXx. Notwithstanding ATCO’s claims to the contrary, the Xxxxxxxx. The Board considers that it would be a stretch to accept also notes ATCO’s argument that the Renewal MSA ATCO Utilities service levels have consistently been met or exceeded and that ATCO I-Tek is a bare extension, not warranting a review of its terms and conditionsincented to correct problems by the holdback scheme. The Board notes that both ATCO and Calgary argued that financial penalties for example non- performance, or the lack of financial penalties, would impact the FMV of the ATCO I-Tek prices charged. ATCO argued that ATCO acknowledged during large financial penalties would require an opportunity ‘for the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Thereforeservice provider to earn upsides’. Alternatively, the Board will not require a change to considers the term absence of the Renewal MSAusual substantial and permanent financial penalties should be attractive to ATCO I-Tek, but will proceed and should therefore be reflected by a noticeable adjustment to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriateATCO I-Tek prices. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSAOtherwise, the Board believes that the ATCO Utilities would not be compensated for what appears to be relatively weak remedies, notwithstanding ATCO’s argument that there is a good working relationship and interveners could failing that a good dispute resolution process. In this regard, the Board notes intervener arguments that the benchmarker would have legitimate concerns about to make assumptions and judgments to adjust for the cumulative impact of revisions between the Original MSA and non-standard remedies in the Renewal MSA. The Board notes Calgary’s concern Interveners preferred that if the 55,000-hour commitment for DME were breachedremedy provisions be standardized, customers could be burdened.36 The Board notes that under rather than have the “exception handling” provision benchmarker assess the ‘value’ of the remedies included in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not exist. However, the Board considers that the issue is not whether everyone uses standard language, but whether it is typical to address certain principles or aspects of an outsourcing arrangement in a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might be different, the Board is persuaded by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would be fairly standard. The Board is again concerned, as it was when the original transfer of assets from the ATCO Utilities to adjust ATCO I-Tek occurred, that the ATCO Utilities amended the contract without acknowledging that Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act)Tek’s prices. As will be discussed later in this Decision, the Board considers that the ATCO Utilities may be not be in compliance with section 101 with respect to the purported disposition under the Renewal MSA of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers that the Renewal MSA is something more than a simple extension of the Original MSA. However, the The Board is not convinced that the nature of the Renewal MSA is so different from the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed in section 2.1 of this Decision, remedy provisions must be widened. The original scope already included consideration by changed in order to enable the Board of the appropriateness of the terms and conditions benchmarker to address this non-standard aspect of the Renewal MSA. Further Accordingly, the Board was is prepared to clarify allow the matters remedy provisions to remain as presently contracted and directs ATCO to provide, in the draft terms of reference to be addressed by discussed through the Board in this MSA XxxxxxCollaborative Process, and those instructions to then be addressed collaboratively by the parties, and subsequently reviewed by benchmarker to note the Board. The Board believes adjustment to the matters fair market value of ATCO I-Tek services due to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence absence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, more usual substantial and whether or not the provisions of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utility, and whether or not the Renewal MSA can and should be benchmarked. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions permanent penalties for Non-Performance • Service Levelsnon- performance.
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VIEWS OF THE BOARD. The Board notes that the scope of the MSA Xxxxxx included both a comparison of the Renewal MSA to the Original MSA, and a review of the appropriateness of the terms and conditions of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with Calgary’s interpretation of sections 12.1 and 12.2. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrary, the Board considers that it would be a stretch to accept ATCO’s argument that the Renewal MSA is a bare extension, not warranting a review of its terms and conditions. The Board notes for example that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Therefore, the Board will not require a change to the term of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and the Renewal MSA. The Board notes Calgary’s concern that if the 55,000-hour commitment for DME were breached, customers could be burdened.36 The Board notes that under the “exception handling” provision in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and the interveners approached the termination provisions in a markedly differently way. ATCO argued for a ‘practical’ approach, where ATCO I-Tek was obligated to ‘ensure a smooth transition’. On the other hand, the interveners argued for an explicit transition plan, with guaranteed access to any “enhancements, custom programs and improvements they paid for, that any third party licenses that were held by I-Tek that were needed to continue the processing services were transferred to the utilities and that I-Tek would grant a license to its own proprietary technology to the utilities or their new outsourcer, together with any documentation, …46. The Board agrees with Calgary both indicated and FIRM/NCC that perfectly ‘standardized’ terms the 20% surcharge for an extension of contracted services, and conditions did the other termination provisions are not existsufficiently protective of the ATCO Utilities. The Board notes that the original client systems could be transferred back to the utilities. However, the Board considers that the issue is value of the original versions of the client systems transferred to ATCO I-Tek (in 1999) would most certainly have depreciated quickly unless ownership of subsequent enhancements were also included. 44 Transcript, page 494 45 Transcript, page 494 to 495 46 Transcript, page 494 to 495 The Board notes that the expansion of Clause 15.6 from the wording in the Original MSA appears to provide additional protection to ATCO I-Tek. This does not whether everyone uses standard languageappear to be unreasonable, but whether it is typical if the ATCO Utilities somehow caused ATCO I-Tek to want to terminate the Renewal MSA, as the outsourcer may have made arrangements with third parties or hired staff to meet the Clients’ needs. The Board agrees that, depending on the circumstances, ATCO I-Tek should be compensated if the ATCO Utilities were to prematurely terminate their outsourcing arrangement with ATCO I-Tek. However, the ATCO Utilities should not be responsible for ATCO I-Tek costs in the event that ATCO I-Tek chose to unilaterally terminate the Renewal MSA and the Board agrees with the suggestion of FIRM/NCC in this regard, that such a provision would be unreasonable. Moreover, the Board considers that there appears to have been little effort on the part of the ATCO Utilities to address certain principles the possibility of a transition plan, or aspects even the minimal protection that would be required should the relationship with ATCO I-Tek be terminated, in accordance with the evidence offered by Xx. Xxxxxxxx. While the Board notes that the Renewal MSA is between affiliates, and that the ATCO Group might view the relationship with ATCO I-Tek as a ‘permanent’ or long-term arrangement, a generic obligation to ‘ensure a smooth transition’ cannot be considered a norm in terms of an outsourcing arrangement arrangements. Further, there is no assurance that a corporate group such as the ATCO Group would continue to hold its regulated utility companies or assets in a consistent manner in the relevant contractsperpetuity. The Board believes that while it should be concerned with the specific language underlying issue of each outsourcing contract might be differentprudent management of utility property regardless of the identity of its ultimate corporate owner or its affiliates at any given time. Generally, with respect to termination provisions, the Board is persuaded by Xx. Xxxxxxxx inclined to believe that the inclusion or exclusion of certain principles ATCO Utilities have entered into arrangements with ATCO I-Tek that are more favourable to ATCO I- Tek than would be fairly standardhave been the case if the ATCO Utilities were contracting with an arm’s length third party service provider. The This being the case, the Board is again concerned, as it was when the original concerned that these provisions would constitute a transfer of assets value from the ATCO Utilities to ATCO I-Tek occurred, that and would not adequately protect the interests of the ATCO Utilities amended the contract without acknowledging that or their customers. The Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As notes, as will be discussed later in the next section of this Decision, that a key consideration related to the termination provisions involves the appropriate treatment of IP. ATCO contended that as long as the ATCO Utilities had access to the IP, the ownership rights to the IP would not be required by the ATCO Utilities. The Board could agree with ATCO’s suggested treatment of IP were the ATCO Utilities inclined to abandon their systems at termination, however, the Board believes that forfeiture by the ATCO Utilities of ownership of IP rights (including improvements) could fundamentally reduce their options at termination and hamper their ability to terminate the Renewal MSA. The Board considers that if the ATCO Utilities chose to terminate or temporarily extend the Renewal MSA without ownership of the IP rights the ATCO Utilities would be required to purchase them from ATCO I-Tek, or continue to use them subject to a 20% surcharge. In addition to the treatment of IP rights, the Board notes that there are other considerations that must be addressed. For example, the Board notes that the termination provisions in the Renewal MSA indicate that client data would be returned by ATCO I-Tek in a format that could facilitate loading into another software application. However, while the ATCO Utilities would have to pay for the conversion of any data stored in a proprietary or confidential format, the Board considers that this aspect of the ATCO Utilities core business appears to be protected. The Board also considered ATCO’s suggestions that their approach to termination provisions and IP was impacted by their strategy to “buy not build”, and that the right to use third party software products and IP was more important than trying to secure ownership of all IP. The Board considers that the ATCO Utilities may be should continue to have access to third party software, and ownership of IP rights. In summary, the Board does not be in compliance with section 101 agree that the ATCO Utilities should accept a generic obligation to ensure a smooth transition with respect to the purported disposition under the Renewal MSA of IP rights developed termination provisions. The termination obligations should be clearly stated and paid for by should not create a costly obligation on the ATCO Utilities. In any eventFurther, the Board considers believes it is also fundamentally prudent that contract obligations of this kind provide basic protection to the ATCO Utilities in respect of the IP, data and third party software related to their core businesses, regardless of which corporate group the ATCO Utilities reside in, rather than allowing for a ‘short-coming’ in the Renewal MSA to be reflected in the FMV of ATCO I- Tek services. Therefore, the Board directs that the Renewal MSA is something more than should be revised to include additional termination provisions related to a simple extension transition plan and the obligation of ATCO I-Tek to assist with the transition. The Board would not expect the 20% surcharge to apply to the implementation of the Original MSAtransition plan. However, The Board directs the Board is not convinced that ATCO Utilities to amend the nature terms of the Renewal MSA is so different from in a manner consistent with the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed Board’s findings in section 2.1 of this Decision, must be widened. The original scope already included consideration including the attachment, by the Board way of the appropriateness of the terms and conditions of the Renewal MSA. Further the Board was a schedule to clarify the matters to be addressed by the Board in this MSA Xxxxxx, and those to then be addressed collaboratively by the parties, and subsequently reviewed by the Board. The Board believes the matters to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, and whether or not the provisions of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utilitytransition plan. In addition, the revisions should include the matters referred to by Xx. Xxxxxxxx as follows: If you could say in an amendment, that the utilities got to use the enhancements, custom programs and whether improvements they paid for, that any third party licenses that were held by I-Tek that were needed to continue the processing services were transferred to the utilities and that I-Tek would grant a license to its own proprietary technology to the utilities or not the Renewal MSA can and should be benchmarked. their new outsourcer, together with any documentation, that would work.47 The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for Non-Performance • Service LevelsBoard directs ATCO to file such amended provisions in a Compliance Filing.
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VIEWS OF THE BOARD. The Board notes considers that the scope of the MSA Xxxxxx included both has remained unchanged from that provided by letters dated April 25, 2003 and May 5, 2003, as summarized in the opening remarks to the hearing by the Chair and as further confirmed during the course of the hearing.18 The 13 Decision 2002-069, page 48 14 Decision 2003-040, page 78 15 Transcript, page 34 16 Transcript, page 507 17 Transcript, page 52 18 Transcript, page 4 Board agrees with ATCO that the MSA Xxxxxx and this Decision should not re-visit the full suite of affiliate issues addressed during the ATCO Affiliate proceeding, including the Board’s acceptance of the out-sourcing arrangement with ATCO I-Tek. The Board notes the disagreement of the parties as to on the importance of the MSA being a comparison renewal of the Original MSA. ATCO viewed the Renewal MSA as a renewal wherein ‘the changes made were in the nature of clarifications and a streamlining of a successful and cooperative relationship between ATCO I-Tek and its customers’.19 On that basis ATCO argued that it was not necessary, nor within the scope of the MSA Module, to re-visit the full suite of affiliate issues addressed during the ATCO Affiliate proceeding with respect to the provision of IT services by ATCO I-Tek to the ATCO Utilities. Interveners disagreed with ATCO’s views regarding the ‘renewal’ nature of the Renewal MSA and argued that a more comprehensive review was justified. The Board notes Calgary’s suggestion that the Renewal MSA should be subject to the same scrutiny as the Original MSA. The Board has considered these issues and, and as previously noted, believes that a review of the appropriateness of the terms and conditions of the Renewal MSAMSA is appropriate and within the scope of the MSA Module. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board analyzed and interveners must accept compared aspects of the Renewal MSA, given its significance, without an appropriate review and testingMSA with the Original MSA in this Decision. The Board also considered Calgary’s argument believes that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with Calgary’s interpretation of sections 12.1 and 12.2. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrary, the Board considers that ultimately it would must be a stretch to accept ATCO’s argument satisfied that the Renewal MSA is a bare extensioncontract that a prudent utility would enter into, not warranting a review having regard to appropriate IT service and maintenance, and the protection of its terms and conditionscore business. The Board notes for example has considered IPCCAA’s suggestion that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Thereforeadditional scrutiny is required where market value is not easily defined. Further, the Board will not require notes suggestions by interveners that the ATCO Utilities should be held to a change higher standard due to the term affiliate nature of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and the Renewal MSA. The Board notes Calgary’s concern that if the 55,000-hour commitment for DME were breached, customers could be burdened.36 The Board notes that under the “exception handling” provision in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned relationship between the ATCO Utilities and others, and to confirm how any under utilization would be addressedATCO I-Tek. The Board would like to address agrees that the issue Renewal MSA must ultimately meet the requirements of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not existCode of Conduct decision (Decision 2003-040). However, the Board considers notes that ATCO has until October 31, 2003 to be in full compliance with the issue is not whether everyone uses standard language, but whether it is typical Code of Conduct. With regard to address certain principles or aspects of an outsourcing arrangement in XXXX’s suggestion that benchmarking was a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might preferred method by which FMV could be differentestablished, the Board is persuaded does not believe Decision 2002-069 and Decision 2003-040 presented benchmarking as a preferred method. Rather, while the Board accepted benchmarking as a method by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would which FMV could be fairly standard. The Board is again concerned, as it was when the original transfer of assets from the ATCO Utilities to ATCO I-Tek occurred, that the ATCO Utilities amended the contract without acknowledging that Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As will be discussed later in this Decisionestablished, the Board considers that would actually prefer tendering or some other objective and verifiable method in most instances (particularly when the ATCO Utilities may be not be in compliance with section 101 with respect initial decision to outsource is made). Ultimately, however, it is up to the purported disposition under utility to select and defend the Renewal MSA of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers that the Renewal MSA is something more than a simple extension of the Original MSA. However, the Board is not convinced that the nature of the Renewal MSA is so different from the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed in section 2.1 of this Decision, must be widened. The original scope already included consideration by the Board of the appropriateness of the terms and conditions of the Renewal MSA. Further the Board was to clarify the matters method it believes to be addressed by the Board most appropriate in this MSA Xxxxxx, and those to then be addressed collaboratively by the parties, and subsequently reviewed by the Board. The Board believes the matters to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, and whether or not the provisions of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utility, and whether or not the Renewal MSA can and should be benchmarked. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for Non-Performance • Service Levelsestablishing FMV.
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VIEWS OF THE BOARD. Having reviewed the Renewal MSA in general, and various of its amended and non-standard clauses in particular, the Board must now consider whether the ATCO I-Tek Renewal MSA can be reliably reviewed by an IT price-benchmarking expert or organization in order to determine FMV for services provided by ATCO I-Tek. The Board notes that there is relatively limited evidence on this particular question from witnesses directly involved in benchmarking. The Board is concerned that ATCO’s evidence does not provide sufficient assurance that a benchmarking organization would be able to readily deal with the Renewal MSA in light of some of the issues raised by interveners. Moreover, an underlying concern is whether a contract with non-standard provisions would be a prudent contract for a utility to execute regardless of whether the ‘non-standard’ provisions could be benchmarked. The Board has considered three approaches to resolving the question of how to treat the Renewal MSA prior to the commencement of the price benchmarking process. One option, as put forward by ATCO, is to allow the benchmarker to review the contract clauses as they stand, assigning a cost impact to each of them. The second option, as suggested by Calgary, is to have the benchmarker review a revised contract, where all non-standard clauses are replaced by those more typical of industry norms. The Board has also examined a third option, of replacing only those clauses that are outside of what the Board considers would be acceptable to a utility dealing with an arms-length third party. With regard to the first option, the Board notes that leaving the Renewal MSA as is, including the clauses noted by Calgary as being biased towards ATCO I-Tek, should have the effect of reducing the appropriate prices determined by the benchmarker, and the customers of the ATCO Utilities should receive a benefit from that. The Board notes ATCO’s argument, “…that utility customers should not be subjected to the higher prices that would result from contracting for higher service levels than necessary.”135 However, the Board also recognizes that there is a risk that a benchmarker may not be able to properly evaluate certain of the clauses in the Renewal MSA. The Board is most concerned that the particular clauses of the Renewal MSA dealing with IP rights and contract termination could not only present a challenge to determining an appropriate value, but would also constitute a serious downgrading of the contractual security of the assets of the utilities. Therefore, the Board is not satisfied that it is appropriate to leave the Renewal MSA in its current form for the purpose of price benchmarking, nor is it satisfied that the Renewal MSA as presently drafted constitutes a prudent agreement for the utilities. The second option is to revise the Renewal MSA for the purposes of price benchmarking by substituting more typical clauses for all of those determined to be non-standard. The Board is of 135 ATCO Utilities Argument, page 10 the view that not all such non-standard clauses raise prudence issues, rather some can adequately be addressed through an assessment of an appropriate price discount by a qualified benchmarker. For example, the Board believes that a benchmarker should be able to examine and set a fair market value in relation to the non-standard service levels in the Renewal MSA. Therefore, the Board has determined that it is not necessary to require an amendment to all clauses that may not be conventional. The Board is, however, of the view that affiliate agreements, for the purpose of benchmarking the value of utility affiliate transactions, must be measured against a standard of comparison to that which third-party organizations would reach in an arms-length transaction. While the Board accepts that some of the non-standard clauses of the Renewal MSA may be the subject of negotiation between arms-length parties, the Board is of the view that certain elements of the Renewal MSA would not be agreed to by prudent third parties. The Board has therefore followed the third option. In pursuing this option, the Board has adopted the approach of amending those clauses dealt with in sections 3.2.4 and 3.3.4, where prudence is an issue or where an appropriate discount may not be easily determined. This leaves the benchmarking exercise to determine an appropriate discount, if any, for other non-standard terms and conditions. The Board again notes that it does not have sufficient evidence on the record to be able to rule with certainty on the issue of the effect of non-standard clauses on the benchmarking process, and agrees with Calgary and FIRM/NCC that the benchmarking process must be transparent. The Board considers that it would assist all parties and the Board if the terms of reference explicitly required the benchmarker to identify which elements of the Renewal MSA it found to be non-standard or unusual, to explain how these non-standard components compare to industry norms, to clearly provide a value for any appropriate price discount or adjustment arising from each non-standard clause, and to comment on its ability to provide a confident estimate of such discount or adjustment. The Board expects the benchmarker’s report would include its supporting documentation for adjustments to prices relating to various components of the agreement. In particular, the Board expects that the adjustments would be itemized, and that the benchmarker would disclose the degree of confidence relating to specific adjustments (i.e. the number of data points relied upon, etc.). The Board also expects the benchmarker to disclose the degree of confidence for any price ranges developed and used in the process of determining the FMV of ATCO I-Tek services. Inclusion of these various elements in the benchmarker’s report would greatly enhance the transparency, and hopefully the confidence of stakeholders, in the benchmarking exercise. The Board notes that the scope termination provisions and treatment of the MSA Xxxxxx included both a comparison of IP in the Renewal MSA were found by the Board in Sections 3.2 and 3.3 of this Decision to the Original MSAnot be in keeping with what could reasonably be expected between two arm’s length parties, and a review of if they remained unamended would raise concerns about the appropriateness of the terms and conditions prudence of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with Calgary’s interpretation of sections 12.1 and 12.2. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrary, the Board considers that it would be a stretch to accept ATCO’s argument that the Renewal MSA is a bare extension, not warranting a review of its terms and conditions. The Board notes for example that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Therefore, the Board will not require a change to the term of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and the Renewal MSA. The Board notes Calgary’s concern that if the 55,000-hour commitment for DME were breached, customers could be burdened.36 The Board notes that under the “exception handling” provision in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not exist. However, the Board considers that the issue is not whether everyone uses standard language, but whether it is typical to address certain principles or aspects of an outsourcing arrangement in a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might be different, the Board is persuaded by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would be fairly standard. The Board is again concerned, as it was when the original these provisions constituted a transfer of assets value from the ATCO Utilities to ATCO I-Tek occurred, that and do not adequately protect the interests of the ATCO Utilities amended the contract without acknowledging that or their customers. The Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As will be discussed later in this Decision, the Board considers that the ATCO Utilities may be not be in compliance with section 101 with respect to the purported disposition under the Renewal MSA of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers therefore has directed that the Renewal MSA is something more be amended, rather than a simple extension of the Original MSA. However, the Board is not convinced that the nature of the Renewal MSA is so different from the terms and conditions of the Original MSA that the original scope of the proceeding, as confirmed in section 2.1 of this Decision, must be widened. The original scope already included consideration by the Board of the appropriateness of the terms and conditions of the Renewal MSA. Further the Board was attempt to clarify the matters to be addressed by the Board in this MSA Xxxxxx, and those to then be addressed collaboratively by the parties, and subsequently reviewed by the Board. The Board believes the matters to be addressed in this Decision will require a consideration of substantial differences between the Original MSA and the Renewal MSA, certain alleged non- 35 ATCO Utilities Argument, page 6 36 Further Written Evidence of the City of Calgary, February 24, 2003, page 58 37 Renewal MSA Schedule D, 3.1.3, page 12 reflect these non-standard provisions that may not be appropriate, and whether or not in the provisions FMV of the Renewal MSA are, individually and collectively, reasonable and prudent from the perspective of a public utility, and whether or not the Renewal MSA can and should be benchmarked. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for NonATCO I-Performance • Service LevelsTek services.
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VIEWS OF THE BOARD. The Board notes that the scope of the MSA Xxxxxx included both a comparison of the Renewal MSA to the Original MSA, and a review of the appropriateness of the terms and conditions of the Renewal MSA. The Board has previously stated its reluctance to ‘micro-manage’ ATCO’s affairs, however, that does not imply that the Board and interveners must accept the Renewal MSA, given its significance, without an appropriate review and testing. The Board also considered Calgary’s argument that the Original MSA did not permit a renewal until after the completion of the initial term. The Board disagrees with CalgaryATCO’s interpretation view that the ownership of sections 12.1 IP rights is irrelevant and 12.2is not convinced by the ATCO Utilities’ reasons for agreeing to relinquish IP rights. The Board considers that the meaning of the Original MSA allowed for either a 3-year renewal at the end of the initial term, or a 3-year extension to the original term on the third anniversary of the initial term. The Board notes interveners’ submissions regarding the nature and number of changes made to the Original MSA. The Board also notes interveners’ submissions that the Renewal MSA changed materially from the Original MSA, and that several of the terms and conditions did not conform to industry norms. Notwithstanding ATCO’s claims to the contrary, the Board considers that it would be a stretch to accept ATCO’s argument that the Renewal MSA is a bare extension, not warranting a review of reiterates its terms and conditions. The Board notes for example that ATCO acknowledged during the proceeding that the intellectual property (IP)/ownership changes were new.34 32 Transcript, page 40 33 FIRM/NCC-ATCOMSA-2 34 ATCO Utilities Reply Argument, page 10 Therefore, the Board will not require a change to the term of the Renewal MSA, but will proceed to review the major changes individually and then look at the changes as a whole to determine whether or not the new terms and conditions are appropriate. The Board also considered the ‘cumulative’ impact of regulatory revisions cautioned against by Xx. Xxxxxxx.35 While ATCO may be concerned about the cumulative impact of revisions that the Board might contemplate making to the Renewal MSA, the Board and interveners could have legitimate concerns about the cumulative impact of revisions between the Original MSA and the Renewal MSA. The Board notes Calgary’s concern that if the 55,000-hour commitment for DME were breached, customers could be burdened.36 The Board notes that under the “exception handling” provision in the Renewal MSA, any under utilization across the ATCO Group would be apportioned to the participating companies proportionate to their individual annual commitment from their Business Plan.37 The Board therefore directs ATCO to clarify how the 55,000-hour commitment is apportioned between the ATCO Utilities and others, and to confirm how any under utilization would be addressed. The Board would like to address the issue of standard terms and conditions as argued by the parties. The Board notes that ATCO and Calgary both indicated that perfectly ‘standardized’ terms and conditions did not exist. However, the Board considers that the issue is not whether everyone uses standard language, but whether it is typical to address certain principles or aspects of an outsourcing arrangement in a consistent manner in the relevant contracts. The Board believes that while the specific language of each outsourcing contract might be different, the Board is persuaded by Xx. Xxxxxxxx that the inclusion or exclusion of certain principles would be fairly standard. The Board is again concerned, as it was when the original transfer of assets from the ATCO Utilities to ATCO I-Tek occurred, that the ATCO Utilities amended the contract without acknowledging that Board approval might be required pursuant to section 101 of the Public Utilities Board Act (PUB Act). As will be discussed later in this Decision, the Board considers regard that the ATCO Utilities may be not be in compliance with section 101 of the PUB Act with respect to the purported disposition under the Renewal MSA their intended transfer to ATCO I-Tek of IP rights developed and paid for by the ATCO Utilities. In any event, the Board considers that the Renewal MSA is something more than a simple extension of the Original MSA. HoweverFurther, the Board is not convinced that a prudent utility operating at arm’s length with an outsourced service provider would relinquish ownership of IP rights to the nature service provider. The Board agrees with Calgary that were such ownership rights to be given up, then price concessions from the service provider would be evident. Even with price concessions, however, the Board is not convinced that transferring IP ownership to a third party would be an appropriate action by a utility. The Board notes that there was no technology or application plan that would enable the Board to verify ATCO’s strategy or approach with respect to client systems and third-party software. Similarly, the Board considers that one of the Renewal purposes of the MSA is so different from the terms to provide documentation, structure, and conditions of the Original MSA that the original scope of the proceedingcertainty to affiliate relationships, as confirmed in section 2.1 of this Decisionrather than relying on informal arrangements or assurances. Further, must be widened. The original scope already included consideration by the Board of notes that ATCO’s informal arrangements or assurances are not binding pursuant to the appropriateness of the terms and conditions “Entire Agreement” provision of the Renewal MSA. Further , which states that the agreement “supersedes all prior or contemporaneous agreements…discussions, whether oral or written…”.60 There appears to the Board was to clarify the matters to be addressed by no convincing reason for the Board in this MSA XxxxxxATCO Utilities to give up ownership of IP which they paid, and those or will pay, to then be addressed collaboratively by the parties, and subsequently reviewed by the Boarddevelop. The Board believes that it would be more prudent for the matters ATCO Utilities to retain the IP and then decide with each statement of work whether or not selling, sharing or otherwise trading a particular IP for concessions on the part of I-Tek is in their interest. Since a statement of work may override the text of the agreement61, if 57 Exhibit 114, page 4 58 Exhibit 102, page 41 59 Transcript, page 497-498 60 Renewal MSA, Article 18, 18.7, page 46 61 Renewal MSA, Article 4.4 page 16, Transcript, page 179 the ATCO Utilities had no IP ownership rights, they would have to consider and negotiate the ramifications of IP ownership in the preparation of each statement of work with ATCO I-Tek. The Board considers that it would be preferable to place the onus on ATCO I-Tek to be addressed vigilant with respect to acquiring or sharing access to the IP it requires or is interested in this Decision will require a and to pay an appropriate consideration for any such additional rights pursuant to each statement of substantial differences between work. The Board is also not convinced by ATCO’s suggestion there would not be many new client developed systems or projects in the future. The Board notes that there continues to be an annual 55,000-hour commitment on behalf of the ATCO Group for DME. Further, the Board notes that the 55,000 hours in the Original MSA and was limited to enhancements that were under 40 person days effort, but no such restriction was included in the Renewal MSA. The Board considers that the lack of clarity regarding the 55,000 hours of DME casts some doubt on ATCO’s stated “buy vs. build” approach. Until the product of those DME hours is clarified it would appear that IP related to existing applications would continue to be added. The Board believes that the ATCO Utilities should retain the IP related to those applications, or any new applications, unless the ATCO Utilities agree to some other suitable form of compensation. The Board considers that while it might be possible to factor the proposed treatment of IP, as per the Renewal MSA, certain alleged non- 35 into the benchmarking study (i.e. reflect it in the FMV of ATCO I-Tek services) the Board does not believe it is fundamentally acceptable for the ATCO Utilities Argumentto be exposed to potential harm or increased costs, page 6 36 Further Written Evidence or to pay to build up ATCO I-Tek’s market leverage, as could result from the relinquishment of IP ownership in the City Renewal MSA. The Board’s preference is to have the treatment of Calgary, February 24, 2003, page 58 37 IP addressed in the Renewal MSA Schedule D, 3.1.3, page 12 standard provisions that may not be appropriate, and whether or not in similar fashion to the Original MSA. The Board directs ATCO to amend the Renewal MSA to reflect the IP ownership provisions of the Renewal MSA areOriginal MSA, individually and collectivelyincluding amendment of applicable definitions relating to IP ownership, reasonable and prudent from the perspective of a public utilityin order to reflect that all improvements, enhancements, and whether modifications to existing custom designed programs, any new custom designed programs, and all ATCO I-Tek software substantially paid for by one or not more ATCO Utilities are to be owned by the Renewal MSA can and should be benchmarkedappropriate utility or utilities. The matters that will be addressed are: • Termination Provisions • Intellectual Property • Gainsharing Provisions • Remedy Provisions for Non-Performance • Service LevelsBoard directs ATCO to file such amended provisions in the Compliance Filing.
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