Rep: OEB Doc: 12NBG Rev: 0 ONTARIO ENERGY BOARD Volume: 17 (REDACTED) 29 APRIL 2003 BEFORE: R. BETTS PRESIDING MEMBER G. DOMINY MEMBER 1 RP-2002-0133 2 IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Schedule B); AND IN THE MATTER OF an Application by Enbridge Gas Distribution Inc. for an Order or Orders approving or fixing just and reasonable rates and other charges for the sale, distribution, transmission and storage of gas commencing October 1, 2002. 3 RP-2002-0133 4 29 APRIL 2003 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 PAT MORAN Board Counsel COLIN SCHUCH Board Staff TURGUT HASSAN Board Staff TANIA PERSAD Enbridge FRED CASS Enbridge ELIZABETH STEWART Enbridge Inc. et al. ROBERT WARREN CAC PETER THOMPSON IGUA MICHAEL JANIGAN VECC VINCE DeROSE VECC GAIL MORRISON VECC BRIAN DINGWALL HVAC DANIELLE YOUNG OPSBA TIBOR HAYNAL TCPL JIM HAMILTON OESC ROBERT HOWE Customer Works Inc. JOHN SPROAT Customer Works LP 8 TABLE OF CONTENTS 9 PRELIMINARY MATTERS: [22] ENBRIDGE GAS DISTRIBUTION PANEL ON PGVA BALANCES, ADJUSTMENT FOR GAS LOSSES; DUGUAY, SMALL, GIRIDHAR: [30] EXAMINATION BY MR. CASS: [36] CROSS-EXAMINATION BY MR. THOMPSON: [72] CROSS-EXAMINATION BY MR. WARREN: [108] CROSS-EXAMINATION BY MR. JANIGAN: [153] CROSS-EXAMINATION BY MR. HAMILTON: [180] FURTHER CROSS-EXAMINATION BY MR. THOMPSON: [226] PROCEDURAL MATTERS: [245] ORDER: [278] PROCEDURAL MATTERS: [285] ENBRIDGE GAS DISTRIBUTION PANEL RE WAMS; CHIOTTI, HOLDER: [301] CROSS-EXAMINATION BY MR. WARREN: [305] CROSS-EXAMINATION BY MR. THOMPSON: [548] CROSS-EXAMINATION BY MR. DINGWALL: [736] CROSS-EXAMINATION BY MR. MORAN: [767] RE-EXAMINATION BY MS. PERSAD: [878] QUESTIONS FROM THE BOARD: [886] PROCEDURAL MATTERS: [907] OVERVIEW BY MR. THOMPSON: [991] 10 EXHIBITS 11 EXHIBIT NO. K.17.1: LETTER TO JIM SCHULTZ, DATED JANUARY 30, 2003 [292] EXHIBIT NO. X.17.1: CONFIDENTIAL DOCUMENT [295] 12 UNDERTAKINGS 13 UNDERTAKING NO. J.17.1: TO PROVIDE A TABLE SETTING OUT THE DOLLAR IMPACTS FOR BOTH SYSTEM CUSTOMERS AND RESIDENTIAL DIRECT-PURCHASE CUSTOMERS [177] 14 --- Upon commencing at 10:18 a.m. 15 MR. BETTS: Thank you, everybody. Please be seated. 16 Welcome, everybody. Welcome back to day 17 of this hearing on application RP-2002-0133. I think every time I state the day number, everybody's eyes rise a little bit as they realise that we've been at it that long. Anyway, welcome back. 17 It's the understanding of the Board that today we will be dealing with several different items, the first of which, in recognising the panel, is to do with an item that arose through the recent rate order, which was a request to -- for approval of the Board to capture an under-recovery of gas costs and a 2003 deferral rebate account. Since that was not part of the settlement discussion, the Board ordered that it be considered in the course of this hearing, and it's the applicant's intention to do that today. 18 The Board also understands that there will be a witness panel coming forward that will be addressing the WAMS system and evidence that has arisen since their last day here, and I also understand that prior to that the Board may have to make a ruling on the confidential nature of some evidence. 19 And finally, later in the day the Board will consider the results of the meeting held on April 24th, which was ordered by the Board in terms of the motion regarding production of evidence, and it is now my understanding that that might be dealt with sometime after lunch. 20 With that kind of introduction, I'll ask if there are any preliminary matters or if any of that understanding needs to be corrected. Are there any preliminary matters? 21 Mr. Janigan. 22 PRELIMINARY MATTERS: 23 MR. JANIGAN: Very briefly, Mr. Chairman. My presence here today belies the letter that I sent to the Board last week saying that I would be absent today. Unfortunately the event that I was supposed to be attending in Toronto was cancelled because of SARS, so it's possible to have me in the result, and that was the reason for my attendance today. 24 MR. BETTS: Well, it was unfortunate for them, but fortunate for us. Welcome. 25 Any other preliminary matters? 26 Then I believe the first order of business will be to introduce the panel. I do believe some of the witnesses have been here before and are still under oath, but perhaps Mr. Cass will be leading this, if you could introduce the panel for us. 27 MR. CASS: I will, Mr. Chairman, thank you. 28 As you've alluded to, this panel is here today to talk about the first item of business on the current schedule, that being discussion of PGVA balances and also the issue pertaining to adjustment for gas losses. The members of the panel are Don Small, Pascale Duguay, and Malini Giridhar. The first two of those, I believe, were sworn on the day the settlement proposal was discussed, but I don't think that Ms. Giridhar has been sworn. 29 MR. BETTS: Thank you. We'll do that now, then. Mr. Dominy. 30 ENBRIDGE GAS DISTRIBUTION PANEL ON PGVA BALANCES, ADJUSTMENT FOR GAS LOSSES; DUGUAY, SMALL, GIRIDHAR: 31 P.DUGUAY; Previously sworn. 32 D.SMALL; Previously sworn. 33 M.GIRIDHAR; Sworn. 34 MR. BETTS: Thank you. The witnesses have been sworn. 35 MR. CASS: Mr. Chairman, I have just a couple of questions to assist this panel in introducing their evidence. 36 EXAMINATION BY MR. CASS: 37 MR. CASS: If I can start with you, Mr. Small, and ask whether you can update the Board and parties and the panel on the status of PGVA balances and the next QRAM application, please. 38 MR. SMALL: Certainly. Back on March 20th when we were here discussing the ADR settlement proposal we informed the Board and other parties about our projected year-end balance in the 2002 PGVA, and at that time we were projecting a balance of approximately $270 million. Since that time we've seen a decline in prices such that our most recent calculation is that we would have a projected balance of some $190 million, so approximately a $80 million decline in the projected year-end balance. 39 Just to qualify, though, that those two numbers don't include any projected amounts to be collected through the most recent April 1 rider that came into effect. 40 It is our intention, while we're still concerned about the size of the balance, that at this point in time we would wait till July 1 to have our next QRAM application and address what we intend to do with that sizable PGVA balance at that time. 41 MR. BETTS: Thank you. 42 Perhaps -- any questions? Thank you. Please proceed. Perhaps I could invite questions from any parties here, if there are any, with respect to that statement. 43 MR. SMALL: Excuse me, Mr. Chairman, just maybe before we do that, Ms. Duguay just reminded me of one fact. One of the contributing factors why we thought we would wait until July 1 was that if we were to calculate a perspective June 1 QRAM at this time, the reference price would not have met one of the criteria of the QRAM application which is that the gas supply charge wouldn't have charged by the half-a-cent per cubic meter. So that was another reason why we thought we would wait until July 1 as well. 44 MR. BETTS: Thank you. 45 Are there any questions that have arisen that somebody would like to pose at this point? 46 Mr. Cass, please proceed. 47 MR. CASS: Thank you, sir. 48 Turning to you, Ms. Duguay, can you please explain for the Board and for parties the adjustment for gas losses that is necessary in this case. 49 MS. DUGUAY: Certainly. In its draft rate order material, the company has applied to include in the 2003 deferred rebate account, or DRA, an under-recovery of distribution revenues attributable to gas losses for the month of May and June 2003, to be disposed at a later date. 50 In this submission, I will attempt to summarise the need for this request and attempt to clarify, for all parties, why the company is proposing to defer some costs in the 2003 deferred rebate account. 51 As you will probably recall, the overall revenue deficiency for fiscal 2003 was $38.2 million. This revenue deficiency was derived by calculating the revenues under interim EB-2002-0431, or the October 2002 rates, as well as the interim January 2003 rates, under docket EB-2002-0494, and comparing that revenue stream to the OEB-approved revenue requirement for fiscal 2003. 52 Due to the timing of the settlement proposal, and pending approval of the April 2003 QRAM rates, the company did not reflect in its revenue deficiency calculation the underlying revenues and gas costs underpinning the April QRAM rates. 53 In determining its final 2003 rates, the company used the following approach for establishing its new gas supply charge and gas supply load balancing charges. So in terms of the gas supply charge, it reflects essentially the April 2003 QRAM level plus an annualised recovery of the gas supply deficiency at the rate class level, thus reflecting current gas costs and the approved level of fiscal 2003 operating costs. The same approach was essentially applied to the gas supply load balancing charge, meaning that it does reflect, as a starting point, the April 2003 QRAM adjusted for any variance in the Board-approved 2003 operating costs. 54 So this approach was consistent with the existing QRAM methodology in the sense that it preserved the most recent market prices as it relates to gas costs, and was in keeping with the methodology that the company used last year when setting its final 2002 rates. 55 Now, finally, turning to the distribution revenues, Enbridge Gas Distribution could not follow the same approach for distribution revenues due to constraints that would have made this approach inappropriate. For example, the change in the approve level in the monthly customer charge for rate 6 prevented us from using the April QRAM as the starting point and adjusted -- adjusting for the revenue deficiency attributable to distribution. 56 Consequently, the company has used an average approach for the purpose of deriving the final distribution revenues as it relates to elements that are gas-costs related. These gas-cost related elements include unaccounted for gas, or U -- LUF, I'm sorry, as well as company use. 57 This average approach is based on the reference price supporting, as I mentioned earlier, the October 2002 interim, as well as the January 2003 interim rates under QRAM, and excluded the April QRAM reference price. 58 Consequently, from May 1st, 2003 and onwards, there will be a mismatch between the distribution revenue and the gas costs since the gas costs booking entries will reflect the April 2003 QRAM reference price, while distribution revenue, as it relates to gas losses, do reflect a blend of October and January 2003 rates. So there is a mismatch there. 59 As quantified in a document attached to the draft rate order, the mismatch for the month of May and June 2003 would amount to an under-recovery of approximately $570,000. In order to remedy this situation, the company has requested approval from the OEB to include the under-recovery of distribution revenues as it relates to gas losses in the 2003 deferred rebate account for a disposition at a later time. 60 In terms of the calculated revenue deficiency of 38.2 million agreed upon in the settlement proposal, it did assume a match between revenues and gas costs. Consequently, without this proposed entry in the 2003 deferred rebate account, the company will be recovering $38.2 million minus 570,000, all other things being equal. So this proposal does not alter in any way the revenue deficiency that was agreed upon in ADR. It simply enables the company to recover the revenue deficiency that was agreed upon in ADR. 61 In the next QRAM application, Enbridge Gas Distribution will adjust the price variance attributable to gas losses by applying the difference between the blended October and January 2003 reference prices and the new recalculated PGVA reference price in its determination of the change in the revenue requirement. 62 Well, this completes my submission, and Ms. Giridhar and myself will welcome any questions that you might have on this specific topic. Thank you. 63 MR. BETTS: That's all of the direct, is it, then, Mr. Cass? 64 MR. CASS: Yes, it is, sir. Thank you. 65 MR. BETTS: Then I will invite cross-examination from intervenors. 66 MR. WARREN: Mr. Chairman, I wonder if I could just beg the Board's indulgence to stand down on this. I'd like to speak to my client about this, because this information is certainly fresh to me and I need to get some instructions as to indeed whether or not we have any questions, so if others want to proceed that would be great with me. 67 MR. BETTS: How long do you feel you would need to get those instructions? 68 MR. WARREN: About three and a half minutes, sir. 69 MR. BETTS: Fair enough. Would anyone like to then proceed? 70 Mr. Thompson. 71 MR. THOMPSON: Yes, I'll try and fill up three and a half minutes. 72 CROSS-EXAMINATION BY MR. THOMPSON: 73 MR. THOMPSON: Just so that I can understand this in a simplified way, we agreed on a revenue deficiency for 2003 of $38.2 million, and had the 2003 rates been put in place before the April QRAM, they would have been based on what rates, January 1 rates? 74 MS. DUGUAY: Yes. 75 MR. THOMPSON: Okay. And had the QRAM then come along after those rates had been put in place, would we have this problem? 76 MS. GIRIDHAR: No. 77 MS. DUGUAY: No, we wouldn't. 78 MR. THOMPSON: Okay. So the 575 -- is it 570, 546, or -- there's a smaller number in the rate filing for -- 346,134 is -- 79 MS. DUGUAY: That would be strictly for the month of May, and I guess at the time we drafted the draft rate order material, we were still uncertain at that time whether we were forging ahead with a June or a July QRAM. So given the fact that we are not proposing at this time to file a June 2003 QRAM, we now have a price variance for two months instead of one month. So if you look on the table that was appended to the text, you see for the month of May, 346,134 -- 80 MR. THOMPSON: Right. 81 MS. DUGUAY: -- and an additional amount for June of 224,411 for a grand total of 570,546. 82 MR. THOMPSON: Is there some reason this wouldn't get picked up with the July 1 QRAM, this amount? 83 MS. DUGUAY: It wouldn't be because when we file a QRAM, we change the rates by the change in the revenue requirement. So if the base is wrong, which is the issue in this particular case, we cannot increment or decrement the base because we need to adjust the base. So even with this proposal, it includes some booking entries in the DRA for further recovery, but it requires as well that we do adjust the base such that instead of -- in calculating the change in the revenue requirement, it will be in comparison to not the April QRAM but rather the blended reference price for the month of October and January. I tried to explain that in the submission, but obviously I was not being too clear. 84 MR. THOMPSON: It's not easy to follow. 85 MS. DUGUAY: I'm sorry. 86 MR. THOMPSON: So the request is to record 570,546 in this third rebate account. 87 MS. DUGUAY: That's correct. 88 MR. THOMPSON: Now, in terms of the allocation, you appear to be proposing that this amount be allocated to all customers. 89 MS. DUGUAY: That's correct. And if it were embedded in rates, it would be allocated to all customers on the basis of volumes. So in the DRA, the allocation and the target groups or the customers that will support the recovery would be the same, so there's no change at all there. 90 MR. THOMPSON: All right. So it's not a gas cost commodity type change that only flows to system gas. You're suggesting it's more akin to lost and unaccounted for; is that right? 91 MS. DUGUAY: That's right, because those are losses on both our storage and our distribution system, and these costs are borne by all customers inclusive of direct-purchase customers. So there's no change in methodology. 92 MR. THOMPSON: Now, my last question: Is this going to be a big deal to my IGUA members or will it even register on their Richter scale. 93 MS. DUGUAY: I wouldn't think so in terms of the magnitude of the dollars. 94 MR. THOMPSON: That's on the record. I'm going to print that page. Thank you very much. 95 MS. DUGUAY: Maybe I should make a calculation. 96 MR. SMALL: You did mention it as 570 million though. 97 MR. THOMPSON: Did I? Well, that would be a big deal. 98 MS. DUGUAY: Ms. Giridhar has given me the number here. The unit rate is .04628 cents per cubic metre, so of course it will depend on the volume that will be applied to but I wouldn't think that this is a material amount. 99 MR. THOMPSON: But it's going to all the volumes, all the through-put on the system. 100 MS. DUGUAY: Right. 101 MR. THOMPSON: Which is almost 12, what, thousand, 106 m3 . 102 MS. DUGUAY: Yes. 103 MR. THOMPSON: Thank you. 104 MR. BETTS: That completes your questions? 105 MR. THOMPSON: Yes, sir. 106 MR. BETTS: Mr. Warren, are you in a position to proceed? 107 MR. WARREN: Thank you. 108 CROSS-EXAMINATION BY MR. WARREN: 109 MR. WARREN: Thank you. Ms. Duguay just -- Mr. Thompson finally woke me up when he used the number 570 million, I thought it was 570,000. 110 MS. DUGUAY: No, 570,000. 111 MR. WARREN: Okay, thank you. 112 Mr. Small, with apologies, can I just return to you for a couple of questions on the PGVA matter. 113 MR. SMALL: Sure. 114 MR. WARREN: Can you tell me, the $190 million that's your projection of what the PGVA balance will be at the end of the fiscal year in October; is that right? 115 MR. SMALL: The end of September, yes. 116 MR. WARREN: Sorry, the end of September. And what is the actual PGVA balance as we sit here today; do you know that? 117 MR. SMALL: The forecasted balance at the end of March would be approximately 250 million. 118 MR. WARREN: And what are the factors influencing the downward direction between now and the end of September? 119 MR. SMALL: I guess what we were seeing is when we were here about a month ago, from the time that we had put together our April 1 QRAM application, the April 1 QRAM application would have taken a 21-day average of prices up until -- including February 15th, I believe. And since February 15th, prices started to climb quite drastically, so not just winter prices but summer prices as well. So prices forecast for the summer were quite high so that contributed to a high projected balance. 120 What we've seen over the last few weeks is that prices before, prices have started to come back into line with where the prices were forecasted to be back in February. So we've seen a reduction in that projected balance. 121 MR. WARREN: Now, my reaction to that, Mr. Small, and tell me where I'm wrong about this, is that that reflects substantial volatility in prices; is that fair? 122 MR. SMALL: That's fair. 123 MR. WARREN: And is it possible that that volatility may go the opposite direction and spike back up between now and, let's say, July 1? 124 MR. SMALL: That's quite possible. I mean there's a number of contributing factors or viewpoints as to what's going to happen to prices this summer. 125 MR. WARREN: Let's just, for the moment, stay with the figure $190 million. Can you give me, roughly speaking, how much that would mean if that were cleared, how much that is for an average residential consumer? 126 MR. SMALL: Well, as I mentioned earlier, just to qualify, that projected balance doesn't include any amounts that we would expect to collect from the current rider that was put into place on April 1. That rider is projected to collect -- it was based upon collecting some $40 million. We know, or we're anticipating that because of slightly colder weather in the month of April, that we'll collect a little bit more through that rider, so that will go to further soften that 190. 127 So we're probably looking at something in the neighbourhood of $150 million based upon where prices are today. 128 Now, that $150 million, a sizable amount of that would be classified as load balancing, so that would then, in turn, be collected from all customers, not just system supply customers. And then the question becomes over what time frame would you be planning on collecting that money from, and that's one of the things that we want to discuss as part of that July 1 QRAM application. 129 MR. WARREN: Now, in terms of those dates, July 1 would be the ordinary -- in the ordinary course, that's when the next QRAM application would come forward; is that correct? 130 MR. SMALL: That's correct. 131 MR. WARREN: And when did the idea of a June 1 clearance come up? 132 MR. SMALL: I guess we were looking at that back around, you know, the end of March, and that had to do with the size of it. And that's why when we were here for the settlement day back on March 20th, we -- I guess you could say we kind of floated the idea that we would be coming forward for June 1. But there was a number of people that opposed that idea and we felt that maybe we should be continuing to monitor the situation and then reevaluate whether or not we should be coming forward June 1 or July. 133 MR. WARREN: As a practical matter, could you get a change in place for June 1? 134 MR. SMALL: I guess the one concern I would have right at this point in time is currently if -- certainly to get something in place for June 1 would be rather difficult at this point in time. But the concern I would have right now is that the way prices are and the way the QRAM application would work, it would mean that going forward, there would be no change to the gas supply component. 135 As I mentioned, the incremental change wouldn't hit the threshold amount. So what we'd end up doing is we'd end up trying to implement a new rider June 1, and then the question I would have is: Does that preclude us from coming forward for a July 1 change because of a change in the gas supply commodity rate. So that's a couple of things I personally would struggle with. 136 MR. WARREN: My final question is these amounts, however they work out on the unit basis, 190 million or 150 million is a substantial amount of amount; we can agree on that. 137 MR. SMALL: That's correct. 138 MR. WARREN: And is there some mechanism by which residential consumers can be cautioned that when they do their budgeting over the next few months, that there's something coming, even though we can't give them an estimate of the amount? I guess the fair question is, indeed, in two parts: Can that be done, and secondly, would the company feel it would be appropriate to do that, in light of your knowledge of your dealings with the customer. 139 MS. DUGUAY: I haven't had any discussion with regard to this because we were -- well, the decision not to forge ahead with the June 1st QRAM was made essentially last week. However, in terms of giving the customer a heads up, we've done that before when gas prices, especially in 2001, skyrocketed where we essentially would have a bill insert telling the customer one month in advance that based on the numbers that were available at the time to essentially prepare and expect a significant rate change, and here are the reasons, and so on and so forth. 140 So having said that, and given the sizable amount in the PGVA, I think certainly that would be an option that the company would consider doing. 141 MR. WARREN: Let's analogise to the 2001 circumstances. Were the kinds of amounts we're talking about today, whether 190 or 150, is it the same kind of amounts you were talking about in 2001 142 MR. SMALL: Yes, it was. 143 MR. WARREN: In light of that, Ms. Duguay, would it not be appropriate to craft some kind of general caution to residential consumers that sometime over the next whatever period of time, they are likely going to be looking at gas increases; would that be fair? 144 MS. DUGUAY: Yes. 145 MR. WARREN: And is the company going to do that? 146 MS. DUGUAY: Well, I'm not really -- I don't make those type of decisions, so I can't really answer that question. But I can tell you that this is something, in my opinion, that would be extremely desirable. 147 MR. WARREN: Okay. Thanks, Ms. Duguay, I appreciate it. Mr. Small, I appreciate it. 148 Thank you, sir. 149 MR. BETTS: Thank you. 150 Further questions on this panel? 151 Mr. Janigan. 152 MR. JANIGAN: Just one question, Mr. Chairman, for Mr. Small. 153 CROSS-EXAMINATION BY MR. JANIGAN: 154 MR. JANIGAN: I believe you indicated the $150 million figure, because it included a fair amount of load balancing costs, would be spread among all customers. Is it possible, that given those parameters, to give a ballpark estimate of what the impact will be on the average residential customer of that 150 million? 155 MS. DUGUAY: Can I attempt to clarify your question? Are you asking for a residential customer on ABC, what would be the impact of clearing the load balancing component of the PGVA? Do I get this right? 156 MR. JANIGAN: No. I would say there would be -- I'm looking at a system sales customer. 157 MS. DUGUAY: Okay. I do have some high-level numbers here, and obviously it's predicated upon whether the forecasted PGVA balance would be spread over three months, six months, or nine months. But for a typical residential customer system supply over a three-month period, the three months being July 1st through to the end of September, the rider would be approximately 25.5 cents per cubic meter. Spread over a six-month period, from July 1st through to the end of September -- the end of December, I'm sorry, the rider would be approximately 6.2 cents per cubic meter. Over a nine-month period it would be essentially 2.5 cents per cubic meter. 158 MR. JANIGAN: And roughly, if you could refresh my memory on the cubic meter consumption for an average residential customer. 159 MS. DUGUAY: For a typical residential customer, we use a profile of 30.64 cubic metres per year, so I can calculate that for you, if you like. I don't have -- I need the three-month volume to six months, and so on. But I can -- in terms of a total amount, it would be a hundred -- between 150 and $170, off top of my head. 160 MR. JANIGAN: Okay. Thank you. Those are all my questions for this panel. 161 MR. WARREN: Mr. Chairman, I apologise for doing this. I wonder if we could just ask for an undertaking from Ms. Duguay if she could give us those numbers from a typical customer for the recovery over three, six, or nine month options about what dollar amounts they're looking at, assuming it's 150 -- I'm sorry, Mr. Chairman, to jump in, but I think it would be useful to get those numbers on the record. 162 MS. DUGUAY: The dollar amount is the same under the three scenarios, it's just a unit rate that changes because the volume would change. I can undertake to give that, but that's predicated upon the breakdown that I have of the PGVA and what is load balancing, what is commodity, and whether we're going to forge ahead with a load balancing element in July, I think, is likely, but -- 163 MR. WARREN: Whatever variables you want to build into it, Ms. Duguay, whatever qualifications, if you can just set those qualifications out in the answer. We just want some sense of what it is residential consumers, system consumers are going to have to pay. If you could do that, I would appreciate it. 164 MS. DUGUAY: I think we have a schedule here. 165 MR. BETTS: Mr. Moran, do you want to establish an undertaking number at this point or -- 166 MR. MORAN: I am just wondering, Mr. Chair, if the witnesses are just looking it up right now or whether they -- 167 MR. BETTS: It would probably be helpful if -- I tend to agree. I would like to see that table as well, if you were able to do it on a spreadsheet for us. It would be helpful for the panel as well. 168 MS. DUGUAY: Okay. I'd like to build in those qualifications as well, which the dollar on the transcript won't capture. 169 MR. BETTS: We'll take that as an undertaking, then, Mr. Moran. 170 MR. JANIGAN: And for the purpose of completeness, Mr. Chairman, I wonder if it could also be done for residential direct-purchase customers. Is that possible? 171 MS. DUGUAY: Yeah. Yeah. 172 MR. BETTS: Any other wishes on that list for that? Okay. 173 MR. WARREN: Mr. Janigan and I are tag-teaming on this. 174 MR. BETTS: Mr. Moran. 175 MR. MORAN: That would be undertaking J.17.1. As I understand it, subject to correction, an undertaking to produce a table setting out the dollar impacts for both system customers and residential direct-purchase customers. 176 MR. BETTS: Thank you. 177 UNDERTAKING NO. J.17.1: TO PROVIDE A TABLE SETTING OUT THE DOLLAR IMPACTS FOR BOTH SYSTEM CUSTOMERS AND RESIDENTIAL DIRECT-PURCHASE CUSTOMERS 178 MR. BETTS: Thank you. Are there any further questions? 179 Mr. Hamilton. 180 CROSS-EXAMINATION BY MR. HAMILTON: 181 MR. HAMILTON: Yes, Ms. Duguay, I'm sorry. I apologize in advance. My shorthand has never been that good. But when you were talking about the need for -- in the event that you were to implement a rider, I believe you said that if it was a three-month rider, which would be the balance of the fiscal year presumably, there would be something just slightly in excess of 25 cents per cubic metre. 182 MS. DUGUAY: That's right, 25.5. 183 MR. HAMILTON: 25.5? 184 MS. DUGUAY: Cents per cubic metre, yes. 185 MR. HAMILTON: Six months was around 6 and a half cents? 186 MS. DUGUAY: 6.2, yes. 187 MR. HAMILTON: And nine months was about 2 and a half cents? 188 MS. DUGUAY: Yes. 189 MR. HAMILTON: You indicated in response to Mr. Janigan, I believe, that the amount of 190 or 170 million, whatever the number was, the dollar amount would be the same in any of those scenarios? 190 MS. DUGUAY: Correct. Yes. 191 MR. HAMILTON: Does that -- that seems strange to me because I would have thought that the longer you take to recover the deferral account, the higher the carrying costs would be on that deferral account. 192 MS. DUGUAY: True, I haven't taken that into consideration. But that's kind of the cost of doing business, in my opinion. 193 MR. HAMILTON: And the customers would pay those carrying costs? 194 MS. DUGUAY: Yes. 195 MR. HAMILTON: Okay. And this is my last question, I guess. The settlement agreement, as you pointed out earlier, contained an agreement with respect to a QRAM methodology. 196 MS. DUGUAY: Yes. 197 MR. HAMILTON: Did that QRAM methodology provide for any nine-month recovery period? 198 MS. DUGUAY: No, it would be three to six months. 199 MR. HAMILTON: So any such proposal would be a departure from the agreed upon methodology in the settlement. 200 MS. DUGUAY: Correct. 201 MR. HAMILTON: Does the company propose to -- 202 MS. DUGUAY: No. I was just relating those unit rates for information purposes. At the time being, there's no application before the Board, and those are illustrative at this point. 203 MR. HAMILTON: Thank you. Those are my questions. 204 MR. BETTS: Further questions? 205 Any questions from Board counsel? 206 MR. MORAN: No, Mr. Chair. 207 MR. BETTS: Any redirect? 208 MR. CASS: No, thank you, sir. 209 MR. BETTS: Perhaps, Mr. Cass, you can clarify for our purposes the timing requirement for a decision on this. Are we correct in assuming that this can simply be decided with all of the other issues yet to be decided on this hearing, or is there a degree of urgency that requires that it be dealt with quicker than that? 210 MR. CASS: I'm told that there is no urgency, Mr. Chairman. Thank you. 211 MR. BETTS: Okay. So we will be able to receive any arguments or submissions on this portion of the hearing with the arguments that will be coming on the other portions. 212 MR. CASS: Yes, sir. 213 MR. BETTS: Okay, thank you. 214 That concludes the questions of the panel and therefore the need for these witnesses. Thank you very much for joining us this morning. 215 MS. DUGUAY: Thank you. 216 MR. BETTS: It's probably an appropriate time for a short coffee break. That will allow the next witness panel to come in place, and to try and get organised for the events that are about to take place. So we'll break now and reconvene at, let's aim at 11:20, please. 217 --- Recess taken at 11:00 a.m. 218 --- On resuming at 11:33 a.m. 219 MR. BETTS: Thank you, everybody. Please be seated. 220 Thank you. We'll resume now. I see we have a new panel in place, some familiar faces, I guess they're all familiar faces. 221 Before we proceed with that panel, this particular matter does involve a question of confidentiality, and maybe before I -- I will be inviting Board counsel to kind of present the environment that we'll be looking at with respect to that confidential processing. 222 Before we do, are there any preliminary matters? 223 MR. CASS: Yes, Mr. Chair. Actually, there is. Ms. Giridhar has not actually joined the WAMS panel. During the break, Mr. Thompson pointed out to me that there was an outstanding question. It was a one he had raised in a letter to me and I had overlooked. Ms. Giridhar can answer that question and she's come back for that reason so that Mr. Thompson can put his question and she can answer it. 224 MR. BETTS: Mr. Thompson, let's do that now, then. 225 MR. THOMPSON: Yes, thanks very much, Mr. Chairman. 226 FURTHER CROSS-EXAMINATION BY MR. THOMPSON: 227 MR. THOMPSON: Just to put this in context, the Board, on April 7th, 2003, had written to Ms. Hare about the draft final order allowing comments by interested parties for a deadline date on or before April the 16th. I had written a letter on April 14th expressing some comments on the order. Mr. Cass had responded by later April the 17th, and I followed with the letter on the 22nd, and there is a question in that letter that perhaps we should have answered on the record. 228 And perhaps I could just refer to the passage in the letter of April the 22nd, 2003, where I made reference to the schedule to the settlement proposal dealing with rate changes. And the paragraph reads as follows: 229 "Exhibit N, tab 2, schedule 10, page 1 of the settlement proposal shows in the column entitled adjustment charge October 1 to April 30, 2002, the impact of the rate changes flowing from the settlement agreement for a period of six months. What we require from EGD is confirmation that the rate changes in the final rate order and the rate changes reflected in Exhibit N, tab 2, schedule 10 for a period of six months are the same in every respect. If there are any differences, then the differences must be explained." 230 Can you respond to that, please? 231 MS. GIRIDHAR: Yes, sir, I can. 232 There are no differences between the rate rider that was derived -- it was actually for a period of seven months and not six, from October to April the 30th, with respect to large volume customers. With respect to the general service customers, as you can appreciate, when we were turning this around for the settlement conference, it was a very -- a process that was compacted into less than 24 hours. It usually takes us a week, so there was one step that I did not do and it was not a material one. Basically what we do for general service customers, when we come up with a deficiency, we refine the blocking structure in such a way that you have the same percentage impact between summer and winter. When I did that, I didn't do that extra step. 233 To cut a long story short, what happened was when we did the final rate order we went through the normal process. The impact of that extra refinement step is minuscule, it's actually 12 cents for the entire seven-month period for a residential customer, and it actually gets reversed over the subsequent five months because, on annualized basis, there was no impact. It was just with respect to the rider. 234 So the answer to your question is the rider is the same for the large-volume customers. It's slightly different for rate 1 and rate 6. 235 MR. THOMPSON: All right. But the rate level reflected in the settlement proposal for the rate classes is one and the same. 236 MS. GIRIDHAR: Exactly the same, yes. 237 MR. THOMPSON: Thank you very much. 238 MR. BETTS: Thank you. 239 Are there any further questions related to that question posed by Mr. Thompson, or the answer that was given? 240 Thank you. Thank you very much for returning. 241 MS. GIRIDHAR: Thank you. 242 MR. THOMPSON: Yes, thank you very much. 243 MR. BETTS: With that, I will ask Mr. Moran, if he would, to -- we've had the opportunity to discuss how things are moving ahead in terms of handling of some requests for confidential treatment of documents, and I'll ask Mr. Moran, if he will, for the record, to state the current framework that's being proposed. 244 Mr. Moran. 245 PROCEDURAL MATTERS: 246 MR. MORAN: Thank you, Mr. Chair. 247 You will have in front of you a document that is entitled "Response Business Process Management of the Work Management Center Functions for Enbridge Gas Distribution Inc." dated September 30th, 2002, and it has the Accenture and the Enbridge logos on it. The proposal is to treat this document on a confidential basis, on the basis that it contains proprietary and comercially-sensitive information, with the exceptions of appendix B, which is the firm's brochure, and appendix C, which is the firm's annual report. 248 And the approach, based on that finding of confidentiality, would be then for persons who want to cross-examine using this document, that they would do that on the basis of asking their questions on the open record in such a way as not to disclose anything that is not confidential in the document. And if that were to happen, it would be up to the company to raise the matter and indicate that the question contains references that betray the confidence, as it were, and ask for the Board to rule with respect to the question and whether it should be treated as being part of an in-camera session for purposes of preparing the transcript. 249 As part of that, to protect inadvertent leaks on the part of those that are worried about it, the proposal is to go off air so that we're not broadcasting to the Internet in the course of questioning can be treated right away on the record and the record can be protected appropriately. 250 The alternative, then, if this approach isn't working very well, or if cross-examiners feel that they need to actually start including parts of the document in their question in order to be able to answer the question properly, the proposal would be that they would simply ask for your permission to go in camera in order to pose that question so that the court reporter will know that the next part of the transcript is in camera, and as soon as that is completed, then to go back onto the public record. 251 In terms of the transcript itself, the full transcript, including the confidential portions, would be delivered in hard copy only to those who have signed the Board's declaration and undertaking, and for public disclosure, a redacted version of the transcript would be made available showing where the Board went in camera, where that was necessary. 252 In order to implement the proposal, the Board would have to issue an order that has three things in it. First, that this document will be treated confidentially; secondly, that only individuals signing the Board's declaration and undertaking will have access to the confidential information, including the in-camera portion, if any, of the proceeding; and, three, any individual signing the undertaking shall comply with that undertaking. 253 So that's the overall framework that's proposed for dealing with this document, and there may be submissions that other parties wish to make. 254 MR. BETTS: Thank you. Are there any submissions from parties with respect to that proposal? 255 MR. WARREN: Mr. Chairman, I just ask this question, and I apologize for not having raised it before, but I was the one who asked for the production of the Accenture document originally, and Ms. Persad was kind enough to provide in response to that both the Accenture document and what is described as a letter of intent, dated January 30th, 2003. Is the intention that that would go in on the same basis as well? 256 MR. BETTS: Ms. Persad? 257 MS. PERSAD: Thank you, Mr. Chairman. I sent a letter to the Board through Mr. Pudge on April 25th, and in that letter I did state that the company and Accenture are agreeable to allowing the letter of intent to be filed on the public record. And we did, to that end, fax out to all interested parties, on April 25th, the letter of intent. So it was intended that that document actually be filed on the public record. 258 MR. BETTS: Thank you. 259 MR. WARREN: Thank you, sir. 260 MR. BETTS: And we will, I suppose at some point, then, enter that into the record as an exhibit. 261 MS. PERSAD: Yes, I think that that would be acceptable. 262 MR. BETTS: Thank you. 263 Are there any other submissions on this proposed confidentiality framework? 264 May I ask if all of the -- all of the people in this room have signed the undertaking -- are there any people in this room that have not signed the undertaking? 265 And I will repeat that question. Are there any people in this room that have not signed the undertaking? And that would be with the exception of Board Staff and the Board panel, who already undertake to treat this information confidentially as a result of our employment. I see that all parties here have signed the undertaking. Thank you. Excuse us for just a moment, please. 266 [The Board confers] 267 MR. BETTS: Thank you. Is anyone prepared to list for the record the parties that have signed the undertaking? 268 MR. MORAN: Yes, Mr. Chair. I have collected all of the undertakings that have been signed. If you want, I can go through them and indicate who actually signed them or -- 269 MR. BETTS: Please. Just names is fine. 270 MR. MORAN: Sure. Tibor Haynal, who is representing TransCanada PipeLines; Robert Warren, counsel for CAC; Peter Thompson, counsel for IGUA; Gail Morrison, consultant for VECC. 271 MR. BETTS: I think you may want to slow up just a bit. 272 MR. MORAN: Michael Janigan, counsel for VECC; Brian Dingwall, counsel for HVAC; Vincent DeRose, counsel for IGUA; Julie Girvan, consultant for CAC; Jim Hamilton, representative for Ontario Energy Savings Corp. or OESC; Danielle Young, counsel for School Boards', OPSBA. 273 We also have signed undertakings from the court reporter group, Patrick Keenan, Brad Donison, Catherine Keenan, and Stacey Donison. In addition, a number of Enbridge people have signed it, Fred Cass, counsel for Enbridge Gas Distribution; Marika Hare, Tom Ladanyi, B. Bodnar, Barbara Bodnar, Richard Lanni, and Mike Mees. 274 MR. BETTS: That is the list. And may I ask for clarification. Those undertakings, do they apply strictly to this particular document, or do they go beyond that? 275 MR. MORAN: Mr. Chair, the way the undertaking is worded it applies to the confidentiality of any information or evidence that the signing individual would receive during the course of the proceeding. As I understand it, these undertakings are intended to deal only with this document, and it may be a different group of people who are involved in other documents later on in the hearing as we get to that. 276 MR. BETTS: Okay, thank you. 277 [The Board confers] 278 ORDER: 279 MR. BETTS: The Board then is prepared to issue an order on this. The Board will follow the approach described by Mr. Moran, and the Board's order is as follows: 280 1. The document entitled "Response Business Process Management of the Work Management Centre Functions for Enbridge Gas Distribution Inc. dated September 30th, 2002" will be treated confidentially for the purposes of this hearing, except for appendices B and C, (the firm's brochure and annual report). 281 2. Only individuals signing the Board's confidentiality undertaking will have access to the confidential information. 282 3. Individuals signing the undertaking shall comply with the terms of the undertaking. 283 With that, as Mr. Moran suggested, we will, for the record, go off air. It's not a requirement of the Board that we telecast this hearing. But for any parties that will no longer be able to hear what is going on, they will have access, as usual, to the transcripts for today. And if there are references to confidential situations or information, those items will be redacted from the version that will be made public. 284 Ms. Persad. 285 PROCEDURAL MATTERS: 286 MS. PERSAD: Thank you, Mr. Chairman. Just before we go off the air, if I could just add my name to the list of the Enbridge employees who have signed a declaration and undertaking. I neglected to do that earlier. 287 MR. BETTS: Thank you. We'll add that to the list. I think with that, then, we'll go off air. I understand that the court reporting team, many of which are behind the wall back there, will still be able to hear us. We'll find out if they come rushing through the door. 288 We're now off air but still in a public forum at this point, I'll remind everybody. I appreciate that everybody will be doing their best to work within this somewhat informal handling of a confidential matter. If we find it awkward, the Board is prepared at any point to go into a formal in-camera session so that the questions can be posed frankly and completely and the answers can be given frankly and completely. It's our hope to keep as much as possible totally in the public realm, so we'll do our very best to accomplish the questioning and the answers in that special open forum arrangement. 289 Mr. Moran. 290 MR. MORAN: Mr. Chair, this might be an appropriate time then to mark two documents as exhibits. 291 The first document is the letter of intent that's been referred to a moment ago; it's a letter to Mr. Jim Schultz, dated January 30, 2003. That would become Exhibit K.17.1. 292 EXHIBIT NO. K.17.1: LETTER TO JIM SCHULTZ, DATED JANUARY 30, 2003 293 MR. BETTS: Thank you. 294 MR. MORAN: The document that's the subject of the confidentiality order, "Response Business Process Management of the Work Management Centre Function for Enbridge Gas Distribution Inc.," dated September 30th, 2002. We're using a special series to identify confidential documents, and this would become Exhibit X.17.1. 295 EXHIBIT NO. X.17.1: CONFIDENTIAL DOCUMENT 296 MR. BETTS: Thank you. 297 Is there any direct examination of the panel on this particular item? 298 MS. PERSAD: No, Mr. Chairman, there isn't. So I would just represent Ms. Holder and Mr. Chiotti to the Board for continued examination on any questions that have arisen out of review of the confidential document, the letter of intent, and the undertakings that have all been filed by this panel. 299 MR. BETTS: Thank you. And welcome back, panelists. May I have questions in examination of this witness panel. 300 Mr Warren. 301 ENBRIDGE GAS DISTRIBUTION PANEL RE WAMS; CHIOTTI, HOLDER: 302 J.HOLDER; Previously sworn. 303 L.CHIOTTI; Previously sworn. 304 MR. WARREN: Thank you, sir. I was going to say by way of preliminary, that we hadn't contemplated in going off air the effect on our Nielson ratings. It's not sweeps month. 305 CROSS-EXAMINATION BY MR. WARREN: 306 MR. WARREN: Panel, I would like to, with apologies, begin by a number of just general questions, some of which we've covered before, but I want to get back on the -- establish them just by way of sort of framework or chronology. 307 Ms. Holder, can I just begin with you. Your title, as I understand it, is VP of Operations of Enbridge Gas Distribution; is that correct? 308 MS. HOLDER: That's correct. 309 MR. WARREN: And in that capacity, as I understand it, you're responsible for all of the Enbridge Gas Distribution operations; is that correct? 310 MS. HOLDER: Yes. 311 MR. WARREN: And would that include supervisory responsibility for, for example, customer care functions? 312 MS. HOLDER: No, it does not. 313 MR. WARREN: Okay. And how long have you been in your position as VP of Operations? 314 MS. HOLDER: It would be not quite two years. 315 MR. WARREN: Okay. And do you have a position as a member of the corporate leadership team? 316 MS. HOLDER: Do I have a position? 317 MR. WARREN: Yes. 318 MS. HOLDER: Of the executive management team of Enbridge Gas Distribution, not of the corporate leadership team of Enbridge. 319 MR. WARREN: Do you have any position with Enbridge Inc.? 320 MS. HOLDER: No, I have some position with some subsidiaries of Enbridge Gas Distribution. I don't believe any of them are Enbridge Inc.. 321 MR. WARREN: What are your positions with subsidiaries? 322 MS. HOLDER: I have responsibility for St. Lawrence Gas, for Gazifere, and for Niagara Gas Transmission, and for Enbridge Management Services Inc. 323 MR. WARREN: And would your position with all of those be director of operations? 324 MS. HOLDER: In some cases it's an officer position, and in some cases it's a vice-president position. 325 MR. WARREN: Now, when I ask the question about whether you had any positions with Enbridge Inc., you said you don't believe so. Is it possible that you do? 326 MS. HOLDER: I don't believe so. I'm just not sure how the structure of Niagara Gas Transmission fits into the Enbridge Gas Distribution organisation. That's where I struggle. As well as Gazifere. 327 MR. WARREN: In terms of any links that you might have with Enbridge Inc., do you report to Mr. Schultz? 328 MS. HOLDER: Yes, I do. 329 MR. WARREN: Who is the President of Enbridge Gas Distribution; is that correct? 330 MS. HOLDER: That's correct. 331 MR. WARREN: Do you also report to anybody at Enbridge Inc.? 332 MS. HOLDER: No, I do not. 333 MR. WARREN: In the making of your decisions in your capacity as VP of Operations for Enbridge Gas Distribution, do you deal directly at all with anybody at Enbridge Inc.? 334 MS. HOLDER: No, I do not. 335 MR. WARREN: Okay. Now, turning to the WAMS proposal, these data points are on the record, I believe, but I'd like to re-establish them if I can. As I understand it, the request for proposal went out in September of 2002; is that correct? 336 MR. CHIOTTI: Yes, that's correct. 337 MR. WARREN: Mr. Chairman, my reference point there is Exhibit K.5.1, which is the RFP, and it's marked at the top September 2002. 338 Mr. Chiotti or Ms. Holder, could you turn up that exhibit, please. And if you turn, please, to page 7 of 13 of that, am I correct that when the RFP originally went out in September of 2002 we were dealing -- sorry, you were dealing with the original broad concept of WAMS which was to create a stand-alone entity to which all of the Enbridge work management service center staff were to be transferred; is that correct? 339 MS. HOLDER: We were exploring that as a possibility through that RFP; that is correct. 340 MR. WARREN: Okay. And it was subsequent to that time that you came to the narrower arrangement which is now before the Board; is that correct? 341 MS. HOLDER: Yes. 342 MR. WARREN: Okay. Now, just to complete the documents, Exhibit K.17.1, which is the letter of intent -- sorry, there's one intermediate step, and that is Exhibit X.17.1 which is the response from Accenture. That was received in the same month in which your RFP went out; is that correct? 343 MS. HOLDER: Yes. 344 MR. WARREN: And it dealt broadly with the entire concept of WAMS which included the creation of an outside entity and Enbridge having a shared interest in that, or some kind of controlling interest in that; is that correct? 345 MS. HOLDER: Yes. 346 MR. WARREN: Okay. Now, the letter of intent, which is Exhibit K.17.1, what is the relationship between K.17.1 and X.17.1? We went from a broad response to the entire WAMS proposal to a letter of intent. May I take it that the letter of intent deals only with the existing narrow arrangement? 347 MS. HOLDER: That is correct. 348 MR. WARREN: Okay. Can you tell me, panel, between the response, Exhibit X.17.1, and the letter of intent, there's a period of approximately four months, what negotiations took place in the interim that got you to a letter of intent which is narrower than the original response? 349 MS. HOLDER: Well, part of the time would have been reviewing the responses of Accenture as well as other parties who responded to the RFP, and then having discussions with those parties. We then would have made a decision that we preferred the Accenture proposal at that time relative to the other parties. And then that started discussions with what would be the relationship between ourselves and Accenture on the go-forward basis. We have Christmas in there, which was a month where I know I was not available, leading to the narrower scope in January that led to this letter of intent. 350 MR. WARREN: Now, I'm sure that these -- I'm sure I've seen these questions in the transcript which I reviewed, but I just want to establish a context, if I can. The other two -- there were two other responses to the request for proposal; is that correct? 351 MS. HOLDER: Yes. 352 MR. WARREN: And did those two other responses deal with the broadly-framed concept of WAMS at the time, which was the creation of the outside entity, and so on and so forth? 353 MS. HOLDER: Each responded to the RFP in a different way, but it was much broader than the context of the proposal we have today. 354 MR. WARREN: Now, when you went to the narrower proposal which is now before the Board, did you go back to the other two parties and say, The basic rules of the game have changed, we're now dealing with a narrower proposal, can you bid on that? 355 MS. HOLDER: No, we did not. 356 MR. WARREN: And the reason for that was what? 357 MS. HOLDER: I think there's probably two key reasons. One is we had been through a complete review of the other proposals and for many reasons, not just the ultimate scope which shows that Accenture won. We honestly felt Accenture is a better business partner for our work management solution independent of the structure, so that would be one of our reasons. 358 The other is we were negotiating with Accenture in good faith. When we changed our plan not to move work management out, we felt it was fair that we continue to negotiate with Accenture. 359 MR. WARREN: Okay. Now, I'll return to that a little bit later. But let me put this arrangement with Accenture, if I can, in a broader context. Am I correct in my understanding, panel, that Enbridge entered into an agreement with Customer Works Limited Partnership for the provision of certain services on or around January 1 of 2002; is that correct? 360 MS. HOLDER: I'll take that subject to check. I'm not sure of the timing. 361 MR. WARREN: Okay. And were you involved, Ms. Holder or Mr. Chiotti, were you involved in the negotiation of the deal between Enbridge Gas Distribution and what I'll refer to as CWLP? 362 MS. HOLDER: I was not. 363 MR. CHIOTTI: No. 364 MR. WARREN: Were you aware of the terms of the deal once it was signed? 365 MS. HOLDER: No, I was not. 366 MR. WARREN: When did you become aware of the terms of the deal? 367 MS. HOLDER: I'm not aware of the terms of the deal. 368 MR. WARREN: You know nothing about the terms of the deal? 369 MS. HOLDER: I know that there is -- I only know very basic structure; that Customer Works LP is an Enbridge joint venture with BC Gas, and that there's a relationship between them and Customer Works Inc., which is an Accenture company. That's the extent of it. 370 MR. WARREN: I wasn't at the Accenture stage yet, I was preliminary to that which is the deal between Enbridge Gas Distribution and CWLP. You're not aware of the terms of that deal? 371 MS. HOLDER: No, I'm not. 372 MR. WARREN: You weren't involved in negotiating it? 373 MS. HOLDER: No, I was not. 374 MR. WARREN: Mr. Chiotti, the same answer is true for you? 375 MR. CHIOTTI: That's right. 376 MR. WARREN: So as you sit here today, you can't tell us anything about the terms of that arrangement, either one of you? 377 MS. HOLDER: That's correct. 378 MR. WARREN: Now, subsequently the CWLP deal was -- there was a negotiation between CWLP and Accenture that began, I'm given to understand, some time around March of 2002. Do you take that, subject to check? 379 MS. HOLDER: Yes. 380 MR. WARREN: Were either of you involved in the negotiation of the deal between CWLP and Accenture? 381 MS. HOLDER: No. 382 MR. CHIOTTI: No. 383 MR. WARREN: Are either of you aware of -- were you aware of the existence of the negotiations between CWLP and Accenture? 384 MS. HOLDER: No. 385 MR. CHIOTTI: No. 386 MR. WARREN: When did you first become aware of the fact that there was a deal between CWLP and Accenture? 387 MS. HOLDER: I don't think I was aware until it became public knowledge, until the announcement by Accenture and Enbridge. 388 MR. WARREN: Same true for you, Mr. Chiotti? 389 MR. CHIOTTI: That's right. 390 MR. WARREN: Now, in terms of the -- you began your negotiations with Accenture -- first of all, your choice of parties to whom the RFP would be sent included Accenture. When you sent out the RFP to Accenture, were you aware that Accenture was in the process of completing negotiations with CWLP? 391 MS. HOLDER: Yes, it was public knowledge by that time. 392 MR. WARREN: And what information, if any, did you have from any source about the nature of the arrangement between CWLP and Accenture at the time you started to negotiate to -- at the time you sent out the RFP to Accenture? 393 MS. HOLDER: Other than Accenture was owning Customer Works Inc. and there would transfer of employees. 394 MR. WARREN: Now, was the fact that Accenture had struck a deal with CWLP and would be providing services to EGD, was it a factor in sending out the RFP to Accenture? 395 MS. HOLDER: Yes. 396 MR. WARREN: Okay. And why was it a factor? 397 MS. HOLDER: Well, it was brought to my attention that it probably was an oversight on our part that we had not originally considered Accenture as -- in the RFP, and that I should send the RFP off, which I did do, or which LLoyd did do. 398 MR. WARREN: Now, if you could turn up, panel -- sorry. And were you provided with -- you say it came to your attention. How did it come to your attention? 399 MS. HOLDER: Mr. Schultz had asked -- when I mentioned that we were sending out the RFP, Mr. Schultz asked me if Accenture was on the list. I said I was not sure; I would check. But I checked, I found out they were not, and suggested that probably should send the RFP also to Accenture. 400 MR. WARREN: Mr. Schultz suggested you should send it to Accenture? 401 MS. HOLDER: He asked if I had, and I said I would check. 402 MR. WARREN: You said no, and he said -- 403 MS. HOLDER: I don't think I ever went back to him and said no. I suggested we send it to Accenture. 404 MR. WARREN: Did Mr. Schultz discuss with you that -- at the time of that exchange, did Mr. Schultz indicate what the nature of the relationship was with Accenture? 405 MS. HOLDER: No, other than what was in the -- what was common knowledge, what would be in the press release. 406 MR. WARREN: Now, if you could turn up Exhibit X.17.1, which is the response. And if you turn to page 3 of the response, you'll see a reference there to, "Recent Customer Works arrangement"; correct? At the very bottom of the page. I'm sorry, panel, why don't you pull that out. 407 MS. HOLDER: Yes. 408 MR. CHIOTTI: Yes. 409 MR. WARREN: And also if you turn up page 12 of this document, you'll see at the very bottom of the page, and Ms. Persad will correct me if I have transgressed, the following sentence: "Recent efforts with Customer Works and BC Hydro setting up/charging entities clearly demonstrates our capabilities in this area." Correct? 410 MR. CHIOTTI: Yes. 411 MR. WARREN: So when Accenture was responding to this, they were clearly, may I suggest, clearly flagging for you the existence of an existing relationship, direct or indirect, between EGD and Accenture; correct? 412 MS. HOLDER: I would say that they're referring to a relationship between Enbridge and Accenture, and there was obviously a win-win situation with that relationship. 413 MR. WARREN: Now, in the course of negotiating with Accenture, to what extent are there links between the Accenture-CWLP arrangement and what you're negotiating with Accenture for your WAMS relationship? 414 MS. HOLDER: There are no links at all. As a matter of fact, the contract negotiated with Accenture actually does not allow Accenture to subcontract any of this business to Customer Works. 415 MR. WARREN: You use the term negotiate in the past tense. Is the deal now complete? 416 MS. HOLDER: We have a signed contract, but the statements of work have not been completed. 417 MR. WARREN: I'm sorry, the statements of? 418 MS. HOLDER: Work. 419 MR. WARREN: What are the statements of work in relation to the contract? 420 MR. CHIOTTI: They are schedules to the contract which spell out in detail the various components of what Accenture will do with us. 421 MR. WARREN: When was that agreement completed, subject to these statements of work? 422 MR. CHIOTTI: Are you talking about the contract that's signed now? April 6th, 7th -- sorry, I can't remember the exact date. 423 MR. WARREN: And is it your -- 424 MR. CHIOTTI: First week of April. 425 MR. WARREN: Sorry. Is it your intention to file that agreement as part of this proceeding? 426 MS. HOLDER: No, as a matter of fact that was an undertaking response that we provided to a question that was asked of us when we were here the last time, whether we would file that contract, and our response is no. 427 MR. WARREN: Let me ask it again. Will you file the contract? 428 MS. HOLDER: Our answer is still no. 429 MR. WARREN: Why is that? 430 MS. HOLDER: It is a confidential document between a third -- an independent party and ourselves. 431 MR. WARREN: But you're seeking approval, I take it, for recovering rates of money which is being spent pursuant to that contract; is that fair? 432 MS. HOLDER: That's fair. 433 MR. WARREN: And yet you don't want to file, you refuse to file that contract with the Board; have I got that right? 434 MS. HOLDER: Yes. But I don't think this contract is any different than the contracts we have with all our operating parties. We contract for construction, we contract for service, we contract for maintenance, we contract for gas supply. We do not file those contracts with the Board, though we ask this Board to approve the recovery of the costs of those services provided to us by third parties in our rates. We do provide the terms and conditions of those contracts, which we've already explained. 435 MR. WARREN: Mr. Thompson has pointed out to me that in the RFP there is a provision, if you turn up page 8 of 13 of Exhibit K.5.2 -- 436 MR. BETTS: I'll remind everybody, too, that the onus will be on the applicant's counsel to flag any concerns about specific references. 437 MR. WARREN: Ms. Persad has wired me, and the minute I transgress I explode. 438 K.5.2, page 8 of 13. 439 MS. HOLDER: Yes. 440 MR. WARREN: And it indicates that, and I quote, "the vendor will be required to establish the service level agreement between itself and Enbridge Gas Distribution Inc. which is subject to Ontario Energy Board review." The original RFP contemplated that the Board would look at the contract, did it not? 441 MS. HOLDER: I think what we're referring to there is what we referred to normally as the schedules of the service level agreements which outline the services that they provide not the legal contractual terms of the contract. And I think my testimony the last time I was here, I did say that we would be more than willing to provide the services -- or the service schedules of the work that Accenture is going to provide to us. 442 MR. WARREN: Well, a couple of questions. 443 First of all, the agreement that you struck between Accenture, the contract, does it contemplate just the provision of the computer services or is there a provision for a restructuring of the arrangement to what I'll call the original WAMS concept? 444 MS. HOLDER: I will let Mr. Chiotti respond to what all the contract covers because it is a little broader, which I think our evidence explains, than just the IT soft services. It does not contemplate a restructuring; however, it does provide for us to restructure at a future date if we feel it's appropriate. 445 MR. WARREN: Now, my second question is Exhibit 17.1, which is the RFP response, it has been filed in confidence. If the contract were filed subject to the Board's rules of confidentiality, you'd still refuse to provide it? 446 MS. HOLDER: Yes. 447 MR. WARREN: Mr. Chairman, I'm going to -- 448 MR. THOMPSON: I just exploded. 449 MR. WARREN: Mr. Chairman, I won't take up the time now, but I'm going to ask for a production of the contract. In my respectful submission, it's fundamental that the Board shouldn't approve an amount for recovery in rates based on a contract which the applicant won't file, and we've gone through elaborate discussions about filing it in confidence; it can be protected. All I hear from the witness is that it's concerned about confidentiality, third-party rights, and that has been recovered off in Exhibit 17.1. So I would ask that the contract be filed, sir. 450 MR. BETTS: Ms. Persad, do you have any comment at this point? It's the Board's understanding that there will be discussion about -- about some outstanding issues regarding production of evidence, and that the Board may have to rule on that at that time. I wonder if it's -- 451 MR. WARREN: I'm happy to take it up at that time. 452 MR. BETTS: Take it up at that time. 453 MR. WARREN: I simply wanted to flag the fact that I'm going to ask for production of the contract. 454 MR. BETTS: And that may well require that this witness panel be made available again in the future if, in fact, the Board agrees with Mr. Warren's position. 455 Any comment from the company on that? 456 MS. PERSAD: Mr. Chairman, given that the matter will be taken up again in the future, I won't make my comments lengthy. But I will just confine them to notifying the Board that the company takes the position that this document, the contract itself, is irrelevant to the Board's determination of what just and reasonable rates will be for the company in 2003. And this is despite the fact that the document is confidential. So we do take an issue with its relevance in this case and not just the confidentiality aspect. 457 MR. BETTS: Thank you. And that certainly is the first threshold that has to be considered. Thank you. We'll reserve, then, further discussion upon that particular request, and we'll look forward to submissions from all parties on that. 458 MR. WARREN: Thank you, sir. 459 Could you turn up, please, Exhibit X.17.1 which is the actual response. This document is marked "Draft for Discussion Purposes Only"; do you see that, panel? 460 MS. HOLDER: Yes. 461 MR. WARREN: Is there a reason why it's a draft is the first question. The second question is, was there a final draft version of this document produced to you? 462 MS. HOLDER: This is the only version that exists. And I don't know why draft is on it. 463 MR. WARREN: Did you regard it as the final, binding response from them? 464 MR. CHIOTTI: Yes. 465 MR. WARREN: Thank you. Now, on page 1 of the document, under the heading "Introduction and Understanding", the first sentence says: 466 "Enbridge is focused on making sizable changes to its distribution operation through a number of initiatives designed to achieve business results." 467 Now, will you tell me, what was the basis upon which Accenture could make that observation about Enbridge's focus on making sizable changes? 468 MS. HOLDER: Prior to responding, we did have face-to-face discussions with Accenture and the other parties. At that time we did explain to them other initiatives that were happening within the utility, the one being the -- our contractor relationship, the fact that we were changing the way we contract with our construction service and maintenance contractors. We were going from roughly 35 contracts down to two. That initiative was underway. We were in discussions or negotiations with our union where we had planned on providing some restructuring of the contract to provide more flexibility within that contract such that we can manage our business different. And this again is our operating -- maintenance, construction and service part of our business. 469 We were -- just recently we have started a training program for a more generally skilled employee such that we can have more flexibility about providing service and maintenance. 470 We were also, at the time, working very closely with our engineering group around adopting risk management procedures to determine -- helping us determine when we should be replacing old plants, when we should be increasing the size of plant that is starting to become over-utilised. There are probably a number of other initiatives, small initiatives. We have had some major capital efficiency initiatives underway as well. 471 MR. WARREN: And these were discussions that took place with all of the respondents, with all of the people to whom the RFP was sent? 472 MS. HOLDER: I believe so, yes. 473 MR. WARREN: And when did these discussions take place? 474 MS. HOLDER: All last fall. 475 MR. WARREN: And do you know, for example, whether or not the statement which I've just read into the record, did it reflect Accenture's understanding of Enbridge's plans based on the negotiations of the CWLP deal? 476 MS. HOLDER: I don't believe it should because that has no linkages to the initiatives that I have been responsible for, which is what they were responding to in the RFP. 477 MR. WARREN: The Enbridge referred to in that statement, is it Enbridge Inc. or Enbridge Gas Distribution, or do you know? 478 MS. HOLDER: I assume it's Enbridge Gas Distribution. That's who they're responding to. 479 MR. WARREN: But you don't know that. 480 MS. HOLDER: I don't know. 481 MR. WARREN: Certainly at the time that Accenture filed this response, can we not reasonably assume that they would have been aware through their negotiations of CWLP about what Enbridge Inc. broadly and, indeed, Enbridge Gas Distribution Inc. was doing with its business; is that not fair? 482 MS. HOLDER: There would be, obviously, employees of Accenture that were aware, but the employees who responded to this deal, or to our RFP, were not the same employees that were involved with the negotiations, nor the running of Customer Works LP, or Customer Works Inc. 483 MR. WARREN: How do you know that? 484 MS. HOLDER: Because I know the party who provided this response is Mr. David Roules who is a partner out of the U.S. who is responsible for the work management part of their business. He was not involved in any of the negotiations with Customer Works. 485 MR. WARREN: How do you know that? 486 MS. HOLDER: I answered that question. 487 MR. WARREN: Do you know whether he was informed by other people within Accenture about what was happening with Customer Works? 488 MS. HOLDER: I'm not aware that he was. I don't believe he was. To my understanding, he has no knowledge. 489 MR. WARREN: To cut to the nub of it, isn't it reasonable for me to conclude, in responding to this, when I read the sentence I just read into the record, that Accenture had a significant advantage over the other two respondents to the RFP because they knew, writ large, the general direction of EI and EGD with respect, among other things, to outsourcing arrangements. Is that not fair? 490 MS. HOLDER: No, that's not fair. I think I've made very clear the last time we were here testifying on this matter, as I said earlier today, Customer Works -- now I'm confused. Accenture, the part of Accenture that we've been negotiating with have extensive knowledge in work management. My responsibility is to provide efficiencies in our operations to the benefit of ratepayers. I believe, as well as the other teams who were negotiating with Accenture, honestly believe, that Accenture is the right party to deliver those efficiencies to us. 491 MR. WARREN: Can you turn up page 2 of Exhibit X.17.1, please. Please go to section 1, the last sentence in that paragraph, and Mr. Chairman, just to advise you, I checked this number with the folks from Accenture and they're okay with my reading it into the record. 492 MR. BETTS: Thank you. 493 MR. WARREN: The sentence reads: "Based upon our experience, we anticipate the savings in this area could be in the range of 10 to 20 percent, which would again be confirmed in a subsequent analysis with Enbridge." 494 Can you tell me what savings were being referred to? 495 MS. HOLDER: They're referring to the savings that Enbridge Gas Distribution could experience if we were to experience the same type of savings that they have seen in other utilities they have provided these services to. So this is based upon experience that they have witnessed and other utilities they have worked with with respect to the managing of our service construction and maintenance work. 496 MR. WARREN: Now, was that assertion of anticipated savings in the range of 10 to 20 percent, was that one of the reasons why Accenture was chosen? 497 MS. HOLDER: Yes. 498 MR. WARREN: Okay. And -- 499 MS. HOLDER: Probably the key reason. 500 MR. WARREN: Probably the key reason. And has that anticipation been carried through to what's being delivered in the contract? 501 MS. HOLDER: Yes. I mean we haven't specifically identified 10 to 20 percent savings, but I think as we mentioned, the contract does provide for gain sharing. So there is an incentive for Accenture to assist us in decreasing primarily our capital costs to -- in the order that you're seeing here, 10 to 20 percent. The more that we save within the utility, then the more money that they will make. They also put some dollars at risk so that we have to see a minimum savings before they even capture the dollars that they will be spending in order to assist us on this project. 502 MR. WARREN: So how these savings will be achieved and the respective risks and burdens will be allocated are things which are set out within the contract; is that correct? 503 MS. HOLDER: In a high level. I think they are more statements of work, as far as some of the details would be. 504 MR. WARREN: These are the statements of work which are currently being negotiated; is that correct? 505 MS. HOLDER: Yes. 506 MR. WARREN: Now, can I conclude then from that assertion that all of the cost arrangements, all the cost implications of the arrangement with Accenture have been negotiated finally, or there are other things to be negotiated as part of these statements of work? 507 MR. CHIOTTI: We've negotiated costs in the contract with one proviso and that is that we're in the process of selecting the software that we'll actually use. And so the price will be firmed up once the software selection has been completed. We would not expect a significant variance in the costs as we're now contemplating them based on that software selection, however. But we have a provision to true up the costs based on that software selection. 508 MR. WARREN: Mr. Chairman, subject to any questions which may arise in the event that I'm successful in my request to produce the contract, those are my questions of this panel. 509 MR. BETTS: Thank you. Are there any other questions of this panel? 510 Mr. Thompson. 511 MR. THOMPSON: Yes, thank you. 512 MR. BETTS: Mr. Thompson, before we begin, can you guess how long you might need? 513 MR. THOMPSON: 20 minutes. 514 MR. BETTS: I think then it's probably appropriate for us to consider a break at this point, if that's okay with you in terms of your questioning. Or is that okay? 515 MR. THOMPSON: I'd prefer to get it over and done with, if that's okay with you. I can't be here beyond today. That's my problem. I know we have our meeting after the break to deal with these further discussions that Mr. Moran was referring to, and hopefully we'll get back to the response -- the company's response and the producing party's response to your decision and order today at some point. I'm in your hands, really. 516 MR. BETTS: You would not be coming back after the lunch break? 517 MR. THOMPSON: No, I will be here after lunch. 518 MR. BETTS: I think if that is the situation, I think we will break now, then. I'm wondering whether someone can anticipate whether the parties will need a little bit longer through the lunch break to deal with whatever has to be dealt with. 519 Mr. Moran, I'm going to look at you and ask you to guess when we should return or reconvene. 520 MR. MORAN: Mr. Chair, I know it's about 12:30 now, and my understanding is that the parties involved in the production motion issues do want to meet. I'm not sure how long people need, but I think it's probably a good idea to build enough time into the lunch break to allow that meeting to occur so that an efficient use of the hearing schedule can be made this afternoon, especially since Mr. Thompson says he can't be here after today. I'm just wondering, subject to other ideas here, whether it makes sense to have at least an hour and a half break. 521 MR. BETTS: I think we can probably help a little bit and indicate that the panel -- the Board panel will be flexible. Perhaps what we'll do is make certain that you know where we are so that when you're ready to reconvene, you can do so. And I was perhaps a little bit quick in judging the position for Mr. Thompson. I should find out first whether there are any -- likely to be any other questions of these witnesses. If there are none, then it would make good sense to deal with those questions and allow this panel to move on. 522 What is the intent of other intervenors? Any other questions beyond Mr. Thompson's? 523 MR. JANIGAN: I don't anticipate any questions at this time, Mr. Chairman. 524 MR. DINGWALL: I anticipate, sir, a very small number of questions. 525 MR. BETTS: And roughly how long, Mr. Dingwall? 526 MR. DINGWALL: Between about 5 and 10 minutes, sir. 527 MR. BETTS: Any other questions? 528 MR. MORAN: I might have about 20 minutes, Mr. Chair. 529 MR. BETTS: Okay. So we're probably looking, if we add things up, to about 50 minutes and that -- I'm afraid we're going to have to have you stick around after the lunch break. So we'll go ahead with plan A which was to break now for lunch. Mr. Dominy and myself will be in the building, and when the parties are ready to reconvene, if they could give us a bit of forewarning, we will reconvene at their convenience. 530 With that we will stand adjourned until some time in the future. 531 Mr. Moran. 532 MR. MORAN: Sorry, Mr. Chair. Given your order on the confidentiality of this document, I'm just wondering if it makes sense to advise parties that this room is open and they may not want to leave their copy of the document lying around during the lunch break. 533 MR. BETTS: Thank you. That's a good reminder. And I encourage anybody as we go in and out of this confused state of confidentiality and in camera and what not to feel free to remind the Board panel and everybody else about things as we go through. Thank you, Mr. Moran. And as a reminder I'll certainly take my copy with me too. 534 We will adjourn now until we reconvene this afternoon. 535 --- Luncheon recess taken at 12:30 p.m. 536 --- On resuming at 2:22 p.m. 537 MR. BETTS: Thank you, everybody. Please be seated. 538 Welcome back, everybody. I assume that the microphone system or the PA system is connected to the reporting crew back there. We still are off air and that is our objective. 539 Before we begin this portion, I'm going to ask the question if all of the parties present at this point in time have signed the undertaking for confidentiality. Is there anybody that has not? Okay, thank you. 540 Are there any preliminary matters to deal with? There appear to be none. 541 MS. PERSAD: Sorry, Mr. Chairman. 542 MR. BETTS: Yes, Ms. Persad. 543 MS. PERSAD: Just with respect to the parties that have signed the declaration and undertaking, I have an additional one from one of the Enbridge people who is here in the back of the room, Mr. DeWolf. I'll just pass that up. 544 One other matter I just wanted to mention before we get back into questioning on this panel, and that's in respect to the contract between Accenture and Enbridge, the one that's been negotiated between the parties since they were -- the panel was last here. And I just wanted to advise that we've spoken to Accenture about this issue and they will want to be represented on this matter, so they won't -- we won't be able to speak to it this afternoon, but they will want to be represented by counsel and respond to the request for disclosure. So we will advise the Board when they will be available to do that, but it won't be today. 545 MR. BETTS: Okay. I'll remind everybody, the Board has a tight timeline, and the Board may advise when they're required to be here, so just let them be aware of that as well. 546 Let us continue now. Are there any other preliminary matters? Let us now, then, continue with the questions for this witness panel, and I believe Mr. Thompson, it's your opportunity to do that. 547 MR. THOMPSON: Thank you, Mr. Chairman. 548 CROSS-EXAMINATION BY MR. THOMPSON: 549 MR. THOMPSON: Ms. Holder, I'd like to start with a document that's in the public record, Exhibit K.5.2, which is the RFP. Do you have a copy of that in front of you, by any chance? 550 MS. HOLDER: Yes. 551 MR. THOMPSON: If you go to page 7, you'll see the concept that was envisaged there in paragraph 3.1.1 was a creation of a work management centre entity which was going to be a separate entity, and Enbridge was willing to consider holding an equity position that would not require a majority but would require operating and control. That was the original concept, was it? 552 MS. HOLDER: Yes. 553 MR. THOMPSON: And that concept was conceived sometime in 2002. This document went out, I believe, in September 2002; am I correct? 554 MS. HOLDER: Yes. 555 MR. THOMPSON: And would you agree with me that this particular outsourcing concept had been proceeded by a lot of other EGD outsourcing prior to September 2002? 556 MS. HOLDER: Yes. 557 MR. THOMPSON: And in particular, the initial outsourcing of customer care took place in 2000; were you aware of that, to ECS? 558 MS. HOLDER: Yes. 559 MR. THOMPSON: And then subsequently, there was outsourcing of operation services, and after that gas services. You were aware of that, I understand. 560 MS. HOLDER: Yes. 561 MR. THOMPSON: And I'd just like to understand your role in the outsourcing generally. You are the VP of Operations; is that correct? 562 MS. HOLDER: Yes. 563 MR. THOMPSON: And are you part of the senior management team of EGD? 564 MS. HOLDER: Yes. We refer to it as the executive team. 565 MR. THOMPSON: Have you been part of the senior management of EGD since 1999? 566 MS. HOLDER: Oh, boy. Yes. 567 MR. THOMPSON: And were you reporting to Mr. Riedl, the President? 568 MS. HOLDER: Yes. 569 MR. THOMPSON: And was the original decision to transfer utility functions for customer support information, technology, and fleet management to ECS developed by senior management of EGD? 570 MS. HOLDER: Yes. 571 MR. THOMPSON: And were you part of that? 572 MS. HOLDER: In some -- in part of the capacity, in that I had strategic planning responsibilities at the time, so I was responsible for generating the 5-year strap plan for the utility. 573 MR. THOMPSON: And what is EI's corporate leadership team? We heard about this in the last case. 574 MS. HOLDER: Sorry? 575 MR. THOMPSON: What is EI's, Enbridge Inc.'s corporate leadership team? 576 MS. HOLDER: They are the officers of Enbridge Inc. 577 MR. THOMPSON: Do you have a role in that group? 578 MS. HOLDER: No, I do not. 579 MR. THOMPSON: All right. Now, the -- my recollection is that you conceived the idea of outsourcing system operations. 580 MS. HOLDER: The gas control functions; that's correct. 581 MR. THOMPSON: And what about gas services? Were you an active participant in that outsourcing decision as well? 582 MS. HOLDER: Yes, I was. 583 MR. THOMPSON: Now, was there some reorganisation within Enbridge Inc. that took place in early 2000, and, in particular, was Enbridge Inc. organised into a new distribution -- or was there a distribution and services division created? 584 MS. HOLDER: Sorry, what's the date again you're referring to? 585 MR. THOMPSON: Early 2000. Did EI organise a new distribution and services division within which its energy distribution, customer care and retail services business were held? 586 MS. HOLDER: There was a reorganisation at Enbridge Inc., but I can't recall whether that was early 2000 or not. I know the gas utility reorganised about May of 2000. Actually, sorry, May 2001. 587 MR. THOMPSON: Did you have a role in the new distribution and services division, whenever it was organised? 588 MS. HOLDER: No. My role has always been with the gas utility, Enbridge Gas Distribution. 589 MR. THOMPSON: Well, do you know anything about this in distribution and services division? Can you tell me anything about it, who its members are? 590 MS. HOLDER: Back in 2000? 591 MR. THOMPSON: Yes. 592 MS. HOLDER: Sorry, I believe what you're referring to is just the organisational structure of Enbridge Inc. where we created the group vice-presidents. 593 MR. THOMPSON: Right. 594 MS. HOLDER: Without -- not knowing what you're looking at, I'm not sure what you mean by division. 595 MR. THOMPSON: Well, I'm asking you to tell me about this structure. Do you know anything about this division? If you don't, say so. Did you have a role in it? 596 MS. HOLDER: Not in the context you put it in. No, I've never had a role in anything other than Enbridge Gas Distribution. 597 MR. THOMPSON: All right. Do you know anything about the Enbridge East Business Development Group tag? 598 MS. HOLDER: Yes. 599 MR. THOMPSON: What is that? 600 MS. HOLDER: I know it's a group of individuals that have reported to Mr. Letwin, who is the group vice president reporting to Pat Daniel, the CEO. 601 MR. THOMPSON: Did you, or do you now have a role in that group? 602 MS. HOLDER: No, I do not, nor did I ever. 603 MR. THOMPSON: Now, are you aware of a gas distribution strategic plan or an Enbridge Inc. strategic plan? 604 MS. HOLDER: Yes. 605 MR. THOMPSON: Are they one and the same? 606 MS. HOLDER: The Enbridge Gas Distribution strategic plan eventually will form part of the Enbridge Inc. strategic plan. 607 MR. THOMPSON: Well, was there an Enbridge Inc. strategic plan as of October 2000? 608 MS. HOLDER: Yes. 609 MR. THOMPSON: And can you describe it to me in terms of outsourcing initiatives? Is it a written document? 610 MS. HOLDER: Yes. 611 MR. THOMPSON: Does Enbridge Consumers Gas have a copy of the document in its possession? 612 MS. HOLDER: I don't know. 613 MR. THOMPSON: Do you have a copy of the document? 614 MS. HOLDER: There is a document that is provided to employees of Enbridge which I -- which is an abbreviated document, which I do have. 615 MR. THOMPSON: Sorry, "that I have"? 616 MS. HOLDER: There is a document provided to the employees of Enbridge that relates to the strategic plan. It is not the strategic plan. I have that document, it's a summary. 617 MR. THOMPSON: What is your understanding of the Enbridge Inc. strategic plan? 618 MS. HOLDER: Sorry, I'm not sure what you're asking. What's my understanding of the strategic plan? 619 MR. THOMPSON: Yes. Can you describe its components? 620 MS. HOLDER: No, I cannot. 621 MR. THOMPSON: You've told me you have some document that paraphrases it; is that right? 622 MS. HOLDER: Right, but if you're asking me to paraphrase something that I read back in 2000, I wouldn't even be close to being able to be accurate on that. 623 MR. THOMPSON: Are you aware of any commitments by Enbridge Gas Distribution to an Enbridge strategic plan pertaining to obtaining PBR savings through outsourcing? 624 MS. PERSAD: Mr. Chairman, I wonder what this has to do with the WAMS issue, if Mr. Thompson could clarify that. It could be that Ms. Holder is not the right witness to speak to these issues that he's raising. 625 MR. THOMPSON: Well, its relevance to the WAMS issue is WAMS was originally conceived as an outsourcing initiative. I kind of put it in the context of these other outsourcing initiatives that preceded it. It's following along the lines of what Mr. Warren was getting at, because I think we have to understand that to understand the financial aspects of this particular proposal, so its context. 626 MS. PERSAD: Mr. Chairman, the company's also concerned that Mr. Thompson may be referring to documents that we filed or that we've distributed in confidence with the intervenors. 627 MR. THOMPSON: I'm not referring to any documents. I'm asking questions of the witness. 628 MR. BETTS: Is that all you're going to tell me on this? I'm not sure what you're looking for the Board to decide on this matter at this point. 629 Ms. Persad, maybe you can tell me what your expectations are in bringing up that submission to us. 630 MS. PERSAD: Yes, Mr. Chairman. The company would prefer that Mr. Thompson would defer these questions to the outsourcing panel, because that really is the panel to speak to these issues. 631 MR. BETTS: Mr. Thompson? 632 MR. THOMPSON: Are you on that panel, Ms. Holder? 633 MS. HOLDER: I believe so, but I don't know if it's been firmly etched in stone. But this might firmly etch that. 634 MR. THOMPSON: All right. Well, let's move on, then. I'll come back to this issue. 635 MR. BETTS: Thank you. Perhaps on that basis, it would be appropriate if Ms. Holder were available for that panel, if that's possible. We can deal with it at that time. 636 Thank you, please proceed. 637 MR. THOMPSON: Thanks. 638 Now, Mr. Warren had directed you to certain segments of the response to this RFP document. The RFP document was K.5.2. Just by way of preliminary, at page 3 of this document, you, Ms. Holder, are the person that is to whom responses were to be directed; is that correct? 639 MS. HOLDER: Yes. 640 MR. THOMPSON: And the RFP says: "Should additional details be required, Enbridge is open to a meeting to further discuss our requirements." 641 Did I understand you to say such a meeting was held with Accenture and others? 642 MS. HOLDER: Yes. 643 MR. THOMPSON: I see. Was there just one, or a series of meetings? 644 MS. HOLDER: There would have been more than one meeting. 645 MR. THOMPSON: All right. And then in the responding document, Exhibit X.17.1, there are a number of areas -- 646 MR. BETTS: Mr. Thompson, I'm just going to interrupt for a second. There is a new face in the audience. I saw Ms. Persad with a piece of paper, and perhaps we can deal with that right now. 647 MS. PERSAD: Yes, Mr. Chairman, thank you. We do have a signed declaration and undertaking from Mr. Peter Budd as counsel to Enbridge. 648 MR. BETTS: Thank you. 649 Sorry to interrupt, Mr. Thompson. 650 MR. THOMPSON: Now, is there anything in the response, Ms. Holder, by Accenture that you were not familiar with in terms of facts? 651 MS. HOLDER: Sorry, there was a lot of information about their own organisation I was not aware of. 652 MR. THOMPSON: Well, there's also reference in several occasions to the Customer Works arrangement. Were you familiar with that arrangement? 653 MS. HOLDER: I was familiar in the sense that I explained to Mr. Warren, that I did know that Customer Works LP was an Enbridge company with BC Gas, and that there was an arrangement between Accenture Inc. -- or Accenture through Customer Works Inc. with Customer Works LP, and that the employees were Accenture employees. That's about the extent of my knowledge. I don't know what the relationships are. 654 MR. THOMPSON: All right. So you knew that ECS had transferred -- or there had been an arrangement whereby the performance of customer care services moved from ECS to CWLP. Were you familiar with that? 655 MS. HOLDER: Yes. 656 MR. THOMPSON: Did you have any involvement in that transaction? 657 MS. HOLDER: No. 658 MR. THOMPSON: And then you were familiar with the fact that CWLP then outsourced the performance of the work it was obliged to provide to EGD to an Accenture subsidiary. 659 MS. HOLDER: Yes, at the time that was announced to the public, I became aware of that. 660 MR. THOMPSON: And the people that were performing that work for the utility in the Accenture subsidiary came from CWLP. They had originally been with ECS and they had originally been with EGD, are you aware of that? 661 MS. HOLDER: At least in part. I don't know if all employees that worked for Customer Works Inc. originate through that stream, but some employees, yes. 662 MR. THOMPSON: Well, were the people that were -- were the people providing the work for Accenture to EGD after this arrangement had been made with CWLP known to you as former, in part, Enbridge Gas Distribution employees? 663 MS. HOLDER: Most of them, but not all of them. 664 MR. THOMPSON: Okay. All right. Well, then, perhaps you could help me with your understanding of the language that's used on page 3 of Exhibit X.17.1 wherein, where referring to this recent Customer Works arrangement, it's described as a win-win for all parties. What did you understand that to mean, since this document was directed to you? 665 MS. HOLDER: I guess that Accenture felt they benefited from the agreement and they felt that Enbridge did. I took it very literally. 666 MR. THOMPSON: It didn't mean anything else to you other than at a high level? They win, we win, but I don't know how? 667 MS. HOLDER: That is correct. It's the same that any deal that is struck between two parties is to the best interests of both parties. 668 MR. THOMPSON: Okay. Now, there's another statement in this document at page 6 where it's stated: "Accenture is very excited about continuing to work closely with Enbridge to achieve significant benefits in the distribution operations business." 669 What did that mean to you? 670 MS. HOLDER: I think it means that they -- Accenture feels they have a strong relationship with Enbridge, and that they want to work with us to find benefits in the distribution operation business, which is the business I'm responsible for. 671 MR. THOMPSON: Okay. Now, are you aware of any documents that Enbridge has in its possession with respect to this Customer Works transaction; that is, I'm not asking you to tell me what they are yet, I'm just asking if you're aware of any documents in the possession of EGD with respect to the Customer Works arrangement that's described in this response of the RFP. 672 MS. HOLDER: No, I'm not aware of any specific documents. 673 MR. THOMPSON: Are you aware of any? Do you have any? 674 MS. HOLDER: I have -- I do not have any. I have never seen any. I assume something must exist. I don't know what exists. 675 MR. THOMPSON: Were you aware that Enbridge/EGD had to consent to the arrangements between CWLP and Accenture? Were you involved in that in any way? 676 MS. HOLDER: I was aware it was necessary. I was not involved in the decision. 677 MR. THOMPSON: Are you aware whether the benefits of this particular proposal in the context of its original concept, i.e., an outsourcing to a new entity to be incorporated, were the subject of any analysis in EGD in the context of PBR and savings under PBR? 678 MS. HOLDER: In this agreement, definitely not. PBR had basically expired by the time that we were even contemplating this arrangement. 679 MR. THOMPSON: Well -- 680 MS. HOLDER: Just to make the record very clear here. We did put placeholders in our O&M budget when we filed our 2003 rate case, which is the case we're hearing right now, for these services that we're getting from Accenture now. We didn't know what it would look like, but we knew that there would be some cost to us in 2003 and it was included in the O&M budget. 681 MR. THOMPSON: All right. We'll come back to that in a second. 682 Just going back to the acceptance of Accenture as a service provider under the CWLP arrangement with EGD. Did I understand you to say you were involved in that formal acceptance? 683 MS. HOLDER: No. I never had any involvement in any of the negotiations or the agreements with -- between Customer Works and Accenture. 684 MR. THOMPSON: So did you do any analysis of the benefits accruing to EGD from the Accenture deal? 685 MS. HOLDER: No, I did not. 686 MR. THOMPSON: Who is responsible for that deal within EGD? Is that Mr. McGill? 687 MS. HOLDER: No, it would not be. He would have been part of that deal. But that would have been the responsibility -- it's now the responsibility of Mr. Player. At the time of the negotiations I'm not sure who was ultimately responsible. I wasn't party to it. 688 MR. THOMPSON: Now, just looking at -- the original concept was this separate entity, and that concept has changed. You're now dealing, as I understand it, directly with Accenture; is that correct? 689 MS. HOLDER: Yes. That was the intent after we decided to choose them when they responded to our RFP. 690 MR. THOMPSON: And the scope of the work and its costs is a topic I just want to touch on briefly here. 691 Reading the response to the RFP and the letter of intent, Exhibit K.17.1, does the scope of the work continue to involve the development and implementation of a work management centre? 692 MS. HOLDER: Yes. 693 MR. THOMPSON: Does it continue to involve a field force transformation? 694 MS. HOLDER: Yes. 695 MR. THOMPSON: And the costs in the letter of intent, or at least the amounts flowing to Accenture on page 3 appear to total $86 million. I understand from the examination that's already taken place that the total cost is now estimated to be 50 million over seven years. Have I got that straight? 696 MS. HOLDER: No. The fees that you see on page 3 are for assets and work management only. There are no costs included in this letter of intent for field force transformation. These costs on page 3 also include a run cost of running the IT systems involved with work and asset management which were costs we're already incurring. So these costs aren't necessarily incremental to our current budgets because our current budgets do include some costs for work and asset management. 697 MR. THOMPSON: Okay. So in totaling the $86 million, I don't know if you'll take that subject to check, I did a total of those amounts and it came to $86 million. I'm not comparing apples to apples in terms of what's in your O&M budget; is that what you're telling me? 698 MS. HOLDER: That's correct. 699 MR. THOMPSON: But in terms of the project which involves these two stages, I'm going to call them the development and implementation of the work and management centre and the field force transformation, there are some numbers in response to the RFP to which Mr. Warren made reference, and I think they're on page 3. The investment for, as I understand it, the first part, work management centre was initially, in this document anyway, estimated to be 17 to 24 million, and then field force transformation down below, 11 million to 27. So I looked at those two numbers and said the cost estimates range between $24 and $44 million in the RFP. There's some benefit numbers given there as well, 11 to 21 for the first stage, 7 to 20 for the second stage, which I made to be 22 -- between $22 and $48 million. 700 Do these numbers in any way reconcile with where we are at the moment in this project? 701 MR. CHIOTTI: Let me attempt to provide an answer to that question. 702 They do reconcile to where we are, but it requires some explanation. The letter of intent only covers off the work in asset management and management assistance components of the work with Accenture at this point, okay? So the field force transformation numbers are not included in these numbers. 703 The second element of reconciliation that you need to take a look at is, included in these figures are the costs to run the system on our behalf, and you'll see a difference between the numbers in the letter of intent and the numbers that were actually filed in our evidence because the -- we deleted the current run costs of our existing systems that are going to be replaced by these systems from these numbers. So from fiscal year '05 on, in these numbers you'll see the numbers in our evidence to actually be $4 million less per year than you see here, and that's because those run costs were netted out. 704 The other aspect of all of this in terms of relating the numbers in the RFP response and the figures in the LOI and the figures that we have submitted is that Accenture's providing these on a fee-for-service basis. Therefore, that 17 to 24 million that's going to be incurred in creating the system in the first place will be financed over time and Accenture will recover their costs of doing that through the fee for service to us for providing us with that system. So that's how you reconcile all the numbers. 705 MR. THOMPSON: Well, do the expected costs exceed the expected benefits? 706 MS. HOLDER: No. The benefits exceed the expected costs. 707 MR. THOMPSON: And is that -- can that be gleaned from this document, or is that -- when I say "this document," Exhibit X.17, that's not what it indicated to me. But is that somewhere in the evidence already? 708 MR. CHIOTTI: Here again our evidence speaks to the work in the asset management component of this, and there is a -- there is a presentation of both costs and benefits in the evidence for the work in asset management component together with a net present value calculation. And if you give me a minute I'll actually find the exact reference. 709 If you return to the work in asset management evidence, Exhibit A.6, tab 7, schedule 3, page 8, I believe, page 8 lists the annual expected benefits of the system broken down by O&M and capital. On page 7 is the actual costs of the system on a -- over a seven-year period. And then on page 8, once again the final paragraph, 19, there's a reference to an NPV of 8.66 million that's generated from those costs and benefits. 710 MR. THOMPSON: Thank you. 711 Now, finally with respect to pricing and the contract arrangement that you have with Accenture, I'm paraphrasing this, but the impression I got from not only the response to the RFP but also in the letter of intent is that Accenture is doing this on a cost basis, but to the extent they deliver on gains, they will share in those gains and that's how they're going to make money. Is that the big picture, conceptually, how this works? 712 MS. HOLDER: Close, except for that there -- they do put some fees at risk such that if we do not -- we have to capture a certain level of benefits before they even -- before they capture their costs, and then we have to exceed that level before they will actually benefit. 713 MR. THOMPSON: But are there, therefore, thresholds specified in the agreement. Is this one of the reasons why you're reluctant to produce the hard copy of the agreement, because it specifies the gains levels over which the sharing kicks in? 714 MS. HOLDER: There are thresholds within the agreement, and that is not the reason why we don't want to file the contract. The terms and conditions of the contract were negotiated with a third party which is sensitive material for them as well as us. I think I've been -- I have indicated I am willing to provide the necessary information, under oath, with respect to the costs and the services that they will be providing us. 715 MR. THOMPSON: Well, there's a case for perhaps confidence, but maybe not a case for non-disclosure. Let me just follow up on this. 716 Does the contract contemplate a concept that can capture what was originally conceived, i.e., the creation of a new entity to provide these services, the transfer of people from EGD to that new entity? 717 MR. CHIOTTI: No. In fact, the only reference in the contract to the original concept of a new entity is that if Enbridge chooses to return to consider that -- that option, Accenture has requested a specific period of time under which we would work with them exclusively to pursue that idea before we would turn to another potential party to pursue that idea. And that's the only provision that I -- that's the only provision in the contract that makes any reference to the new-entity concept. 718 MR. THOMPSON: Now, we talked very briefly about the O&M envelope, and you indicated that there's a placeholder in the O&M envelope for WAMS in 2003. 719 MS. HOLDER: Yes. 720 MR. THOMPSON: Now, what is that placeholder? Can you refresh my memory as to amount? 721 MS. HOLDER: It's $4.5 million. 722 MR. THOMPSON: And does the $4.5 million operate as a threshold in the agreement? 723 MS. HOLDER: No, it does not. 724 MR. THOMPSON: So are there any thresholds operating in the agreement in 2003, that they kick in later? 725 MS. HOLDER: They kick in later. If you refer to Exhibit A.6 tab 7, schedule 3, page 8 of 8, you'll see there are no benefits expected in 2003, fiscal year; therefore, there's no reason to have a threshold. 726 MR. THOMPSON: So is the sharing, as it's contemplated conceptually, a sharing of the savings that -- from the level of O&M that you are recovering in rates versus the amounts actually paid? In other words, have you assumed some sort of PBR type rate making regime for the purposes of this contract? 727 MS. HOLDER: No, we have not. The benefits will be very specific and well defined. That's part of the statements of work that we are working on now. It will relate to specific levels of service. I'll give you one example. If we do five premises per day, or we have five -- five premises per day by employee, and that increases to six because of the implementation of the system, that one day -- that one premise per day will be used to calculate the benefit the utility is realising. So it has nothing to do with an O&M budget, it will be reference to activity levels. 728 MR. THOMPSON: And will the benefits always flow to ratepayers or will they flow to the shareholder until the O&M is recalibrated? 729 MS. HOLDER: Well, the only thing I can speak to with any level of certainty right now is 2004, and we have filed our application for 2004. And in that we are going to have to assume the costs which are in the magnitude of $10.2 million, and the benefits which are primarily the capital of $7 million. So in the 2004 case, my math would suggest that the shareholder will be bearing the brunt of the -- of this initiative. From 2005 on, I don't think any of us can speculate where we will be with regards to rates. 730 MR. THOMPSON: Thank you very much. Those are my questions. 731 MR. BETTS: Thank you, Mr. Thompson. 732 Was it Mr. Janigan that had questions as well? 733 MR. JANIGAN: No, I have no questions for this panel. 734 MR. BETTS: Any other -- Mr. Dingwall, yes, please proceed. 735 MR. DINGWALL: Thank you, sir. 736 CROSS-EXAMINATION BY MR. DINGWALL: 737 MR. DINGWALL: I'll address my questions and leave it up to the panel to choose who wishes to respond. 738 With respect to the agreement, you've stated that it's confidential for various purposes but that you're willing to share certain elements. Would one of those elements be the service level agreement? 739 MS. HOLDER: Sorry, I don't mean to smile, but we've had quite a debate over lunch what we mean by service level agreements, because clearly my definition was different than other people, even in our company. 740 In that we do understand the importance of understanding the costs and the benefits for rate-making purposes as is relevant to the case, we would share that information, and we would share what the services are that Accenture is to provide to us and the level of services that they must provide. In that they are providing an IT system, for example, I would say that it is relevant for us to say, do they provide this service 24 hours a day, 365 days of the year. If that's what you mean by service level, which is what I would mean by service level, then the answer is yes. 741 MR. DINGWALL: One other thing I'd like to understand is how this arrangement with Accenture dovetails with the new arrangement that will exist with the reduced number of outsourced contractors. 742 MS. HOLDER: The only dovetailing is in that we are providing work to contractors, that they -- any contractors we have that we're doing business with, will have to have systems in place that can integrate with our work management systems. So there is a dovetailing there. 743 MR. DINGWALL: Will this work management system flow the cash back and forth between these contractors and Enbridge? 744 MS. HOLDER: It will be used for invoicing and payment, yes, as our current work management system does. 745 MR. DINGWALL: Will that in any way put Accenture as an intermediary from a financial perspective, or will the monies flow back and forth from Enbridge to the third parties? 746 MS. HOLDER: No, they would not be an intermediary. 747 MR. DINGWALL: So then any invoicing or contracting with third parties would remain directly between Enbridge and the third parties? 748 MS. HOLDER: Yes. 749 MR. DINGWALL: With respect to the pricing associated with the agreement, has that been finalised yet? 750 MS. HOLDER: No, it has not. I think we have a June 15th or 16th date to finalise the pricing. 751 MR. DINGWALL: Are you able to share with us today what format of pricing you're looking at? Is it based on activity forecast? Is it based on simple delivered product? 752 MR. CHIOTTI: Well, the form of the pricing is very much what you see in the evidence that we filed for the work and asset management system. Here again, Accenture is developing the system for us and then providing to us on a fee-for-service basis. So they're providing the system; we pay them an annual fee. It's no more complex than that, really. 753 MR. DINGWALL: I'm curious, though. What is the annual fee based on? Is it based on an activity forecast or is it based on a finished product at a flat fee? 754 MR. CHIOTTI: It's based on the finished product; it's not activity based. 755 MR. DINGWALL: So there are no variables in the pricing associated with this? 756 MR. CHIOTTI: Only to the extent of the gain-sharing component that we've already been talking about. 757 MR. DINGWALL: Now, while we're not dealing with the PBR in the context of this hearing, it's conceivable that the world of PBR may surface again. What elements of measurement are there that enable there to be either on an ongoing basis, conceptually, in the future some measurement of the performance of the system? 758 MR. CHIOTTI: Well, we're still working through the details of defining all of those. But as Ms. Holder suggested in one of her responses, it is going to be an activity-based measure. So, for example, we anticipate that this system is going to allow us to be more productive in the field, and that our crews in the field will have a greater proportion of their day spent on productive time as opposed to travel time, wait time, what have you. It would be those kinds of things that we'll be measuring to determine the ultimate benefits that the system is providing to us. 759 MR. DINGWALL: Is there going to be some visibility of those benefits and how you measure them to this whole rate making process? 760 MS. HOLDER: We're now getting into what the world of rate making may look like in 2005 and on, and all I think I can say is, in that it's relevant to establishing rates in a case, then we would provide that information. As we do today, we do provide activities. If asked, we haven't been lately, but in the past we do show units of work and such, so we would do that again. 761 MR. DINGWALL: With respect to the interaction between the utility and I guess the contracting community, there have been some informal discussions with respect to looking at some various utility functions with a view to trying to standardise and identify areas for improvement with respect to response timings or things like that that kind of relate to this. Is the company open to the consideration of those types of activity forecasts or -- I guess the PBR term would have been a service quality indicator. 762 MS. HOLDER: Yes. If you're talking about service quality indicators, we've been open to them in the past, and we would still be open to them, yes. 763 MR. DINGWALL: Those are my questions. Thank you very much. 764 MR. BETTS: Thank you. I believe that was all of the questions short of Board counsel. Is that still the case? 765 Then, Mr. Moran. 766 MR. MORAN: Thank you, Mr. Chair. 767 CROSS-EXAMINATION BY MR. MORAN: 768 MR. MORAN: Just before I start, Mr. Chair, you'll need to refer to volume 6 of the transcript, if you could have that handy. 769 MR. BETTS: Thank you. 770 MR. MORAN: And the other documents you already have that I'll be referring to. 771 All right. I'd like to start, witnesses, just to go through the background and to take us to where we are today. Could you first turn up your prefiled evidence at Exhibit A.6, tab 7, schedule 3, and we'll start at page 7. 772 MS. HOLDER: Yes. 773 MR. MORAN: Okay. And on page 7 we see the annual service fees over the period of years that are expected from the WAMS project; right? 774 MS. HOLDER: Yes. And I think as we tried to explain, they're net of our current costs. 775 MR. MORAN: The current IT costs. 776 MS. HOLDER: Right. 777 MR. MORAN: And that's what it says just ahead of the table. 778 MS. HOLDER: Right. 779 MR. MORAN: Okay. And then if you turn then to the transcript, volume 6, at paragraph 372 - I believe this is the easiest place to start on this - paragraph 372 is the commencement of the cross-examination by Mr. DeRose. Do you have that? 780 MS. HOLDER: Yes. 781 MR. MORAN: And as you go through that, it's clear that there's a discussion with respect to the fees and a gain sharing mechanism; right? I mean if you take a moment just to review it. All right. 782 So at paragraph 382 we see the concept that the fees would be reduced. Was that a reference to the fees as they are set out in the prefiled evidence? 783 MR. CHIOTTI: Actually, the gain sharing mechanism, as we're contemplating implementing it, actually relates only to the field force transformation component of the fees, which we have not included as yet because we haven't submitted that part of the project at this point. 784 MR. MORAN: All right. So in looking at the prefiled evidence, the page I just referred you to, the numbers that we see as annual service fees are also net of field transformation component -- 785 MR. CHIOTTI: That's right. 786 MR. MORAN: -- which isn't stated in the prefiled evidence, obviously, but that's your addition to the evidence at this point? 787 MS. HOLDER: Yes. 788 MR. CHIOTTI: Yes. 789 MS. HOLDER: I think it was probably a timing issue when we wrote this in our negotiations. 790 MR. MORAN: All right. 791 MR. CHIOTTI: Field force transformation isn't even contemplated until the 2004 fiscal year, so it doesn't really impact 2003. 792 MR. MORAN: All right, I understand that. But to understand the table that we see on page 7 of 8 in the prefiled evidence, those numbers there, you would have to add something to those numbers to account for the cost of -- or the fee associated with field force transformation. 793 MR. CHIOTTI: That's correct. 794 MR. MORAN: All right. And is that what we see reflected, then, in Exhibit K.17.1 on page 3? 795 MR. CHIOTTI: No. K.17.1 also only speaks to the work in asset management system. You'll see a couple of variations in fiscal year '03 and '04. The fees actually drop from 12 million to the 10.2, and then from fiscal year '05 onwards, instead of the 10 million that's in the letter of intent, there's only 6 million that appears in the evidence. And that is the difference of the current IT costs. Our current IT costs are approximately $4 million annually. 796 MR. MORAN: Okay, then, let me just go through this exhibit with you. 797 In K.17.1, if we look at page 2, at the top there's a section called "Scope of Services". 798 MR. CHIOTTI: Yes. 799 MR. MORAN: Right. The project -- it says, "The Project". "The joint Accenture and EGD effort will focus on the following main areas of scope," and in the second bullet point it says, "Implementation of Related Field Force Improvements". 800 MR. CHIOTTI: Yes. 801 MR. MORAN: That's part of the scope of services under the project as set out in the letter of intent; right? That's what it says. 802 MR. CHIOTTI: Yes. 803 MR. MORAN: All right. And then if you turn -- 804 MR. CHIOTTI: Excuse me. The reason I was hesitating was that that reference is not to field force transformation, okay? What that refers to is when we implement the work in asset management system, that will cause some process changes in the field regardless, okay? And so you have to make those process changes in the field. Field force transformation is in reference to then going and implementing technology in the field which will then interface and connect with the work in asset management system. And that's a separate phase of the project, okay? So I just wanted to clarify that, because I can understand why that might have been confusing. 805 MR. MORAN: All right. Then let's turn to page 4 of the same exhibit, K.17.1. There's a section 6, "Accenture's Capabilities," and it says there: "Accenture will contribute an extensive combination of industry functional business and technical knowledge in the work in asset management and field force transformation areas." 806 MR. CHIOTTI: Yes. 807 MR. MORAN: It sounds like they're talking about field force transformation because that's -- 808 MR. CHIOTTI: Well, we're certainly absolutely contemplating field force transformation as a component of this, but it's a later phase of the project that isn't contemplated until the 2004 fiscal year. 809 MS. HOLDER: Sorry, just to add to that, it's actually later in the 2004 fiscal year. 810 MR. MORAN: Right. When we go back to page 3, it sets out the anticipated project fees which cover a number of years, including fiscal 2004. So if I understand everything you've indicated up to this point, what we see here is still not including whatever will be charged in relation to the field transformation -- field force transformation project as you're describing it. 811 MR. CHIOTTI: That's correct. 812 MS. HOLDER: And just to make sure the record is clear. We also responded to an undertaking and talked about the field force technology, or field force transformation, and the need for capital. There will be capital dollars required in fiscal 2004 to pay for the technology that we will start to implement late in 2004. 813 MR. MORAN: All right. And the -- again, just to confirm this, the gain sharing mechanism that's under discussion is solely with respect to the field force transformation component of the project? 814 MR. CHIOTTI: Let me clarify that as well. When you asked the question earlier, I believe you were referring to the fees at risk part of gain sharing. The fees at risk part of gain sharing are related to field force transformation. So Accenture will reduce the fees that they would otherwise charge for those services and have those fees at risk. 815 The gain sharing itself will be dependent on the total benefits that are gained from this agreement with Accenture, which would include the work and asset management system, field force transformation, et cetera. 816 MR. MORAN: All right. So what we see in the prefiled evidence and what we see in the letter of intent, K.17.1, as far as anticipated project fees are concerned, those numbers don't incorporate anything for the field force transformation component of the project; right? 817 MR. CHIOTTI: That is correct. 818 MR. MORAN: And when we talk about the gain sharing mechanism, that will be applied to the -- to that fee which will be subsequently worked out, I assume. It hasn't been worked out; is that the case? 819 MR. CHIOTTI: That's right. 820 MR. MORAN: So subsequently that will be worked out, and those are the fees that will be at risk but the risk is in association with all of the benefits from the entire project, including the field force transformation. 821 MR. CHIOTTI: Right. 822 MR. MORAN: Okay. 823 MR. CHIOTTI: And here again, we haven't worked out all the details yet, but there will be -- there will be a floor that, up to a certain level of benefits, there will be no gain sharing whatsoever, and we would have to exceed those benefits, and then we contemplate that that would be a graduated scale from there. 824 MR. MORAN: All right. And just to finish out the documentation, then, on this issue. If we turn to Exhibit X.17.1, at page 7, at the bottom of page 7 on the executive summary, that's behind the first tab, and continuing over onto page 8. Is that what you just told us, is that what we see described in the document? 825 MR. CHIOTTI: That is a potential model for gain sharing described, yes. It's not necessarily the final model that we will have in place, but that is a -- that is the type of model that's been proposed. 826 MR. MORAN: All right. And still to be negotiated. 827 MR. CHIOTTI: That's right. 828 MR. MORAN: And turning to page 2, then, of the executive summary. The paragraph that comes just before the heading number 2, in the last sentence there's a discussion of savings. Are those the benefits that we're talking about that will be shared? 829 MS. HOLDER: In part. But again, as we said, we have to -- we actually have to see a certain level of benefits before we are -- we will begin to share in other benefits. 830 MR. MORAN: All right. So subject to that, is this a description of the benefits we're talking about that will be subject to some sharing mechanism? 831 MR. CHIOTTI: What it really is, I think, is a description of the range of benefits that, in Accenture's experience, is the potential benefits that you can gain from implementing the kind of technology and processes that we've engaged them to help us implement. This is a response to an RFP. They didn't -- you know, they didn't have the benefit of having worked with us over a long period of time. This is a statement based on their experience, working with many utilities across North America. 832 MR. MORAN: Let me try the question this way. In a context of an expectation that, at least from Accenture's point of view, that savings could be in the range of as it's set out in the document, that this is the context against which you are negotiating a gain sharing mechanism? 833 MR. CHIOTTI: Yes. 834 MR. MORAN: Okay. Which then takes me to the question of what it is that you're asking the Board to decide here today in the context of this hearing, and maybe the easiest way to go through this is to take a look at the settlement agreement, Exhibit N.1, tab 1, schedule 1. 835 MS. HOLDER: Yes. 836 MR. MORAN: At page 58. 837 MS. HOLDER: Yes. 838 MR. MORAN: And we see at the bottom of page 58 issue 7.44, which is, I guess, this issue; right? 839 MS. HOLDER: Yes. 840 MR. MORAN: And it says: "There's an agreement to settle this issue on the following basis: The cost consequences of this issue are covered by the settlement of issue 7.1 on condition that the unresolved policy matter listed at issues 7.45 and 8.1 are to be addressed in the hearing." 841 And if we want to track this through, we have to turn to 7.45; right? 842 MS. HOLDER: Yes. 843 MR. MORAN: And at 7.45, it sets out the unresolved policy aspects of specific issues relating to O&M, and there's a numbered list at the bottom of the page. Number 6 is, again, this issue; right? 844 MS. HOLDER: Yes. 845 MR. MORAN: And then to continue to track it, we go to 7.1 at page 36 of the ADR agreement. 846 MS. HOLDER: Sorry, I don't have 7.1. Okay. 847 MR. MORAN: And at 7.1, there's an indication that, "Subject to the Board's determination of the amount, if any, that is to be recorded in the 2003 operations and maintenance expense deferral account described below, the parties agree that the company's overall O&M expense budget for the test year will be $270 million plus the amounts included in the DSM O&M budget described under issue 9.1. The parties agree that the O&M expense allowance of $270 million is an envelope amount that the company can allocate as it wishes." 848 And then in the subsequent paragraph there's a discussion of efficiency gains which, if any, would be recorded in the deferral account just referred to; right? 849 MS. HOLDER: Right. 850 MR. MORAN: How does the WAMS issue factor into this? Is it something that would also be recorded in the deferral account if the Board determined that there was some amount in the O&M envelope that shouldn't be included? 851 MS. HOLDER: My interpretation or understanding of the ADR agreement is that the dollar value associated with this project for 2003 is approved in the envelope approach for both O&M and capital. And the only issue that was to be dealt with in the hearing, which is why we're here, relates to unresolved policy issues. Now, what those unresolved policy issues are -- I don't believe there are issues. I believe they are the issues of the intervenors. I'm not sure what the unresolved policy issues are. 852 MR. MORAN: Okay. So on that basis, then, as I understand it, there aren't any rate-making consequences flowing from this issue in this hearing. 853 MS. HOLDER: That's my understanding as well. 854 MR. MORAN: All right. And you're not asking the Board to approve anything in this hearing, therefore, except for what's already captured in the ADR agreement. 855 MS. HOLDER: That's correct. 856 MR. MORAN: All right. 857 MS. HOLDER: I think I had mentioned the last time we were here that I would welcome a blessing of this concept on a go-forward basis. 858 MR. MORAN: But you're not inviting it. You're not asking for it. You'll take it if you get it, but you're not asking for it. 859 MS. HOLDER: That's probably a fair way to put it, yes. 860 MR. MORAN: Okay. So in terms of the agreement now that has been negotiated since you last showed up, do I understand it correctly that that agreement does not address the issue of field force transformation at all? That will be the subject of a separate agreement? 861 MS. HOLDER: The agreement does. The statements of work, which have not been finalised, which includes pricing on field force transformation, have not been finalised. So the main body of the contract does include field force transformation. It has been finalised and signed with the statements of work to follow, to be completed by June 15th. 862 MR. MORAN: All right. So the current agreement includes in the project field force transformation, but the details are to be worked out and will be reflected in a schedule that then will be incorporated into the agreement; is that -- 863 MS. HOLDER: Yes. 864 MR. MORAN: Okay, that's how it works. And in order to understand how the fee structure works, or would work, and how the gain sharing mechanism would work, we would have to wait to see what that schedule looks like in order to be able to understand that; right? 865 MS. HOLDER: That's correct. 866 MR. MORAN: Okay. Does the agreement indicate how the benefits are to be calculated, or is that something that would be described in the schedules that you're still negotiating? 867 MS. HOLDER: They'll be described in the schedules that we're negotiating. 868 MR. MORAN: Okay. So the formula for figuring out what the benefits are in order to be able to figure out what ought to be shared in the form of higher fees, that's still being negotiated as well? 869 MS. HOLDER: Yes. As they always say, the devil is in the detail, and this is an area where there's a lot of detail. 870 MR. MORAN: Okay. And then my last question is, of course, in addition to the anticipated fees as we've seen them set out in the evidence so far, in addition to those fees, I assume the company is expecting to -- or will it be asking to recover the additional fees associated with field force transformation in rates also? 871 MS. HOLDER: It's already, I guess, incorporated in the 2004 case as we presented it, in that we've gone to a more envelope type approach. So we would not be asking to revise our application that's already before this Board for 2004 due to any fees that we finalise with Accenture between now and the middle of June. 872 MR. MORAN: All right. So with that qualification, otherwise your answer would be yes? 873 MS. HOLDER: Yes. 874 MR. MORAN: Thank you, Mr. Chair. Those are all my questions. 875 MR. BETTS: Thank you. 876 Ms. Persad, are there any questions in redirect? 877 MS. PERSAD: Mr. Chairman, I only have a couple of questions in redirect. Thank you. 878 RE-EXAMINATION BY MS. PERSAD: 879 MS. PERSAD: Ms. Holder, I just want to follow up on something that Mr. Warren was asking you about any position that you might hold with Enbridge Inc.. For further clarification on the record, Ms. Holder, can I ask you, are you an officer of Enbridge Inc.? 880 MS. HOLDER: No, I'm not. 881 MS. PERSAD: And again to follow up on questions that were being asked by Mr. Warren concerning persons at Accenture that you're dealing with in relation to the WAMS project, and whether those persons are informed by or involved in any way with the Customer Works arrangement with Enbridge Gas Distribution or Enbridge Inc., have you had any chance since that time to confirm whether the answer that you gave previously is still the case? 882 MS. HOLDER: Yes. I did have a discussion with Mr. Roules who is partner in Accenture's distribution business, and he has no knowledge of the Customer Works/Accenture relationship or deal. 883 MS. PERSAD: Thank you. Those are all my questions, Mr. Chair. 884 MR. BETTS: Thank you. 885 [The Board confers] 886 QUESTIONS FROM THE BOARD: 887 MR. DOMINY: Ms. Holder, you said what you were looking for is approval of the concept. You've had a long discussion, I think, in previous testimony, in fact, as far as you're concerned, or your view that the costs arising out of the WAMS project for 2003 are covered in the revenue requirements settlement. 888 MS. HOLDER: Yes. 889 MR. DOMINY: And in answers to questions I remember asking you at your last appearance, you said that you would be expecting to get approval of the specific costs each year going forward, or assuming that you went forward, on a year-by-year basis. 890 MS. HOLDER: Yes, in that we already filed our 2004. That would include costs for the Accenture proposal. 891 MR. DOMINY: So what exactly, approval of the concept, does it mean? What exactly is the concept that you're seeking approval for? That's what I don't understand, what that expression means. 892 MS. HOLDER: I somewhat struggled with why we're here as well, in that the O&M costs associated with this deal for 2003 were in the ADR agreement. The only issue I think that I can -- this is only my own personal view, is that the deal with Accenture could be viewed somewhat as another outsourcing. In that the Board expressed some concerns about outsourcing in our last decision, as well as this is a major topic for this case, I believe the intervenors wanted to assure themselves that this was not another outsourcing deal or scheme, in their use of language, that the Board should be aware of and approve. 893 In our mind, this is no different than any outsourcing or help services for our PCs, or outsourcing our service work to contractors. So in that we do outsource to third parties as a normal course of our business, I don't see this as any different. So I think we're just looking that the Board recognises this is no different than a lot of the outsourcing arrangements we have with third party contractors. 894 MR. DOMINY: Thank you. And just to confirm my understanding. This word "transformation", the arrangement for that are still under negotiation, from what I understand you're saying, and this is something that if we were going on a traditional type of case, and I'm assuming one regards this hearing as a traditional cost-of-service type of case, it would be brought forward in the 2004 rate application. 895 MS. HOLDER: Yes. 896 MR. DOMINY: And because you've -- and I have very little knowledge of the 2004 application other than its being filed, because you've taken a different approach to it, you're assuming the costs related to that year are included in this method you're proposing. 897 MS. HOLDER: Yes, that the method we propose includes a cost -- includes an O&M level and a capital level, and it's left for us to manage our business, which would include the deal with Accenture within those cost envelopes. 898 MR. DOMINY: In that case, then, there would be no specific review of the field force transformation project, or would that be part of the discussions in the 2004 rates? 899 MS. HOLDER: I don't -- I believe the -- my understanding of the way we have filed the application and would like to pursue the application, this would not be a topic of discussion in that application specifically. 900 MR. DOMINY: Thank you, Ms. Holder. 901 MR. BETTS: I have no questions of this witness panel. 902 Are there any questions in redirect as a result of Mr. Dominy's questions? 903 MS. PERSAD: I have none, Mr. Chair. 904 MR. BETTS: Thank you. Then we can excuse this witness panel. 905 Thank you, once again, for being here. We may be seeing you later, by the sounds of it. 906 MS. HOLDER: Yes. 907 PROCEDURAL MATTERS: 908 MR. BETTS: Thank you. 909 It's now 3:30 and I'm going to really open a bit of a discussion here to determine what we do next, whether it's appropriate to take a break now or whether we're going to be seeing an early end to this afternoon. 910 I wonder if somebody would like to try to advise the Board as to the status of the discussions relating to production of evidence. Who would want to volunteer to be first? 911 Mr. Thompson -- 912 MR. MORAN: Mr. Chair, I assume we can go back on air now? 913 MR. BETTS: Thank you. Thanks for watching over. 914 MR. MORAN: That may be the only way some of the other parties involved in this will know that we're back. 915 MR. BETTS: Thank you. We have concluded with the witness panel and the specific discussion on the WAMS project and any discussion relating to some documentation provided in confidence. And we'll now hear from the parties as to where we stand in terms of the issues of production of further evidence. 916 MR. MORAN: Again, Mr. Chair, I note that some of the people who are directly involved in this issue aren't in the room at the moment. Perhaps we should take a five-minute break so they can be alerted and be here for whatever Mr. Thompson is about to say. 917 MR. BETTS: Okay. Well, let's make it a five-minute break -- I'll make it a ten-minute break. We'll reconvene at 3:45. We'll decide how long we're going this evening. I think there is a time limit of 5:00, one way or the other. We'll break now and reconvene at -- everybody is up and down all over the place -- reconvene at 3:45. Thank you. 918 --- Recess taken at 3:35 p.m. 919 --- On resuming at 3:51 p.m. 920 MR. BETTS: Thank you, everybody. Please be seated. 921 We are resuming the hearing at this point. One point I did want to make for the record, and correct me, anybody, if I'm wrong, but I do not believe there was any discussion or evidence -- any discussion or comments that were redacted from the session that we handled off the air; is that correct? So the public version will be the full version of that; okay. 922 MR. MORAN: If you're referring to the transcript, that's correct. 923 MR. BETTS: The transcripts, that's great. For the record, there was nothing redacted from the transcripts. Thank you. 924 And I understand that the parties would like to consider arguing at least, I believe, the issues surrounding EI's production of evidence. If that is the case, I'm going to ask now for a bit of a survey to find out who would like to speak to that, and approximately how long they're going to need. 925 MR. THOMPSON: I would like to speak to it, Mr. Chairman. And assuming you still wanted me to give you an update as to what happened, I think I would be probably 20 minutes to half an hour after that update. 926 MR. BETTS: After the update, okay. Anyone else? 927 MR. WARREN: Depending on what Mr. Thompson has to say, perhaps a minute and a half. 928 MR. BETTS: Okay. 929 MR. JANIGAN: Similar for me. 930 MR. BETTS: I appreciate that you will be waiting until you hear what's said before you, obviously. Obviously you intend to try and keep it brief, anyway. I'm not trying to limit anybody. I want to find out whether it makes sense to do it this afternoon or not. That's where I'm heading with these questions. 931 Mr. Cass. 932 MR. CASS: I'm sorry, Mr. Chairman, I have some quite lengthy submissions, based on my understanding of points that Mr. Thompson was going to be making. But I'm not sure where he's going. If he's just restricting comments to EI, it may be I have nothing to say, if it's just EI. 933 MR. THOMPSON: Enbridge Group of Companies, excluding CWLP. 934 MR. BETTS: Okay. 935 MR. CASS: Oh, well, then I'll probably have some fairly lengthy comments if it's the entire group of companies. 936 MR. BETTS: How lengthy? 937 MR. CASS: I haven't heard what he's said, Mr. Chair. It could be an hour or more. 938 MR. BETTS: And Ms. Stewart? 939 MS. STEWART: I will have some additional submissions to make. I think probably, depending on what Mr. Cass has to say, many of those conceivably would be covered. But I would expect that I would be an additional 10 or 15 minutes. 940 MR. BETTS: And I appreciate everybody trying to take -- make their best effort in coming up with these numbers, appreciating they haven't heard the discussion in advance. 941 Anyone else that would be speaking on the producing party's behalf? 942 MR. SPROAT: Mr. Chairman, I would be addressing you in relation to CWLP and some of the discussions and where we are today, and I believe that Mr. Howe would be addressing that as well. 943 MR. BETTS: And I'm sorry. For the record, I should remember your name and I don't. 944 MR. SPROAT: I'm sorry. Mr. Sproat. 945 MR. BETTS: Thank you, Mr. Sproat. And, Mr. Howe, did Mr. Sproat speak for you? 946 MR. HOWE: Yes, sir. I think we're going to be 10, 15 minutes at most. 947 MR. BETTS: And, Mr. Moran, do you anticipate a submission with respect to this? 948 MR. MORAN: No, Mr. Chair. In listening to the time estimates, the issue of the EI production, I guess, is now broader than we had anticipated and includes EGDI as a family. So that will clearly take longer than what's available before 5:00. Perhaps it would make most sense to deal with the CWLP issue tonight and the rest tomorrow so that that can be sorted out. 949 MR. BETTS: So there's a proposal here to deal with the specifics of CWLP and Accenture; is that correct? Does that make sense to the parties? 950 MR. MORAN: That's the update that Mr. Thompson, I think, was referring to. 951 MR. BETTS: Okay. 952 MR. THOMPSON: Due to my own personal difficulties, I would be most appreciative if I could give my position on the record today with respect to the motion. I'll be finished well before 5, and that would at least get me out of the way and give others an opportunity to consider their remarks for tomorrow. But I do have a personal problem tomorrow. Mr. DeRose will be here, but I'm the one who's prepared the kick-off remarks. I won't say I'm leading the charge, but I'll kick it off and let Mr. Warren run down under the ball and save me here. 953 MR. WARREN: That's not what you said last time. 954 MR. BETTS: And, Mr. Thompson, you would then be speaking to all of the issues surrounding all of the parties to this? 955 MR. THOMPSON: Yes. And I would also give my take on where we are with CWLP and Accenture, because I'm not seeking any relief against them today, but I can speak to that as well as part of the update, if you wish. 956 MR. BETTS: Okay. Let me just -- Mr. Cass, did you want to comment to that? 957 MR. CASS: I did want to make a comment, Mr. Chair, before we embark on the issue itself, if you don't mind. It doesn't have to be right at this moment. 958 MR. BETTS: I was going to confer with Mr. Dominy, but perhaps -- would your comment help us in our -- 959 MR. CASS: It's on something different, sir. 960 MR. BETTS: Then just give us a minute. 961 [The Board confers] 962 MR. BETTS: Here is another proposal. What is the possibility of doing the CWLP/Accenture as well as hearing from Mr. Thompson? Is that likely to be achievable in one hour? 963 MR. THOMPSON: I would say so, yes. 964 MR. BETTS: Anybody not see that as being possible? And what we would prefer to do is to try and keep things in order, is to do the CWLP/Accenture first, and then follow with Mr. Thompson which would lead in to tomorrow's matters. Is that sensible? Any objections? 965 MR. HOWE: It's certainly sensible from the perspective of my client, sir. 966 MR. BETTS: And, Mr. Thompson? 967 MR. THOMPSON: I assumed you wanted me to give you the update to provide the context. 968 MR. BETTS: I think we're ready to proceed on that basis. 969 If you would like to give us up the update, then we can move ahead. 970 MR. CASS: Sir. 971 MR. BETTS: Sorry, Mr. Cass. 972 MR. CASS: Sir, I think what we're doing today is an outflow of the Board's order that was issued on April 15th. As you'll recall, of course, the Board had ordered a meeting to be attended by what the Board called producing parties and moving parties, and ordered that the people attending that meeting sign an undertaking, and so on. As a result, it would be my understanding that what we're doing today, being an outflow of that process, would be in camera, and further, that the people participating today in the in-camera process would be the producing parties and the moving parties as referred to in the Board's decision and order. I thought perhaps that ought to be clarified before we embark on these comments. 973 MR. BETTS: Can I have any submissions on that proposal? 974 MR. MORAN: Mr. Chair, perhaps before submissions, if there could be some clarification from the parties. In the context of the submissions they want to make on this issue, will it be necessary for people to make direct reference to documents already produced? That might be useful to know before you decide to go in camera. 975 MR. BETTS: Okay. Two questions out there. Who would like to address one or both? 976 MR. THOMPSON: Let me try, Mr. Chairman. I agree with Mr. Cass that, in large measure, this is an outflow of what took place last Thursday. I was planning to give you an overview so you'd at least have the description of what has happened, and then suggest we go in camera to debate where we go from here. But you would at least have the description of what happened on the record in a way that, I believe, would not offend the in-camera process. But I'm indifferent as to whether we start in camera or we have a little lead in to the in camera. I agree we're going to have to refer to documents that were provided on Thursday and documents that resulted the following Thursday to understand the concerns that my client has. 977 MR. BETTS: Any other submissions? That really doesn't address the second part of, I think, Mr. Cass's point, as to who should participate in this discussion. There may be people here or people that would want to be here that were not among those defined as either moving parties or producing parties. If I don't hear from you, I'll assume that you're agreeable to that. 978 MR. HOWE: Mr. Chairman, technically, my client was not confined, I think, as a producing party, although we were a responding party to the motion and we've assisted, hopefully positively, in the disclosure process. So that if the Board is intending to go in camera, I would expect that my client and I would be able to participate in the discussion that follows insofar as the CWLP/Accenture issues are concerned. 979 MR. BETTS: Any other submissions? 980 MS. STEWART: Mr. Chairman. 981 MR. BETTS: Ms. Stewart. 982 MS. STEWART: Because the order of the Board deals with, in part at least, production of documents to the moving parties by entities that are not parties to the rate hearing itself, I would submit, in agreement with Mr. Cass, that the appropriate approach to take for dealing with any issues or disputes as to the adequacy of production, or whether or not the responding parties have complied with the order, is something that should be dealt with in camera, that is, not part of the public record, not part of the hearing, but rather as an issue of production to the intervenors, and in accordance with and under the umbrella of the undertaking that was entered into by all concerned to keep all of that information confidential. And it's very difficult to conceive of how an argument can be made with respect to compliance or adequacy of disclosure without referring to documents that have been produced under that agreement. 983 MR. BETTS: Yes, Mr. Haynal. 984 MR. HAYNAL: Mr. Chair, as you know, I represent TransCanada PipeLines, and TransCanada is not a moving party and obviously not a producing party in this proceeding; however, TransCanada is a registered intervenor in the hearing. What I would like to ask you, Mr. Chair, is to allow me to stay here until Mr. Thompson presents an overview of the result of the meeting, and if the rest of the arguments is going to be in camera, obviously I will leave. But I would ask you to allow me to stay for the overview which, I understand, is not going to be confidential. 985 MR. BETTS: Thank you, Mr. Haynal. 986 Any other submissions? 987 MR. SPROAT: Mr. Chairman, the only thing that I would say in relation to that: I'm not quite sure what Mr. Thompson contemplates as an overview, but I can see that the sum potential or risk that an overview may shade into some of the issues of confidentiality. So I raise that concern. I'm not quite sure what Mr. Thompson has in mind. 988 MR. BETTS: I'm sure I will hear an objection if he raises any issues related to confidentiality, and we will deal with those as they arise. 989 I think with that said, then, it would appear that the suggestions that have been made are reasonable ones. We can deal with the specific discussion in camera. It will relate to those parties that really participated in the initial meeting, and we will hear a non-confidential overview provided by Mr. Thompson and I will accept any comments on his comments if someone feels that's necessary. 990 Mr. Thompson, we're now down to 55 minutes, so please proceed. 991 OVERVIEW BY MR. THOMPSON: 992 MR. THOMPSON: What I propose to do by way of overview, sir, is just tell you the steps that took place following the issuance of your decision and order. That decision and order was issued, as I recall it, on April the 15th, and it specified production and says what it says. 993 Following that, the intervenors CAC, VECC and IGUA discussed the implications of the order and wrote a letter to the representatives of the producing parties describing what we believe was required to comply with the order. That letter was dated April the 22nd. 994 The meeting was then -- I can say in the letter what we suggested was that the producing parties list the documents they had in their possession, and produce them. The lists we considered were desirable because of a need to know what was there and to manage the production in an orderly fashion. We were paralleling the rules of civil procedure process. 995 We then met. The parties came and met on Thursday, I believe it was, the 24th, and at that meeting two binders of documents were produced by EGD. There was a discussion and a description from the intervenors' side as to the deficiencies that we felt were in production, and the meeting adjourned. The deficiencies, from the intervenors' perspective, were then confirmed again in a letter to counsel for the producing parties, dated April the 25th, so that was Friday. That was followed by some further discussions on Monday between counsel for EI, CWLP and Accenture, and Mr. Warren and myself, and a further letter, again to the producing parties indicating what we felt was required to comply with the order. That letter is dated April the 28th, 2003. So what you have is three letters from the intervenor camp, if you will, stating what's required. 996 At the gathering today, some further documents were provided by the producing parties, but we do not have any lists, as we've requested, and we still regard the documentation that has been provided as incomplete and not in compliance with the order. 997 Now, the Enbridge group, and when I say that, it's the EI, EGD group, have indicated nothing further is going to be provided, so that's why I wanted to speak today to their position on the matter and ours. CWLP and Accenture and the intervenors, Mr. Warren, Mr. Janigan, and myself are hopeful that something can be provided that will be responsive to the order as we envisage it, and that we can reach an agreement on compliance. 998 And so we're not seeking any relief against those companies today. The proposal is that they will get back to us. We didn't set a deadline, but certainly I believe it has to be a very short turnaround. But in terms of seeking any further relief against those -- against CWLP, we're just proposing that that be adjourned. 999 That's all I intended to provide by way of overview. In order to present the argument to you, you have to have copies of this stuff in front of you, and that's why I think we should go in camera after anybody has anything to say in supplement to this overview. 1000 MR. BETTS: Thank you. Are there any supplements to that overview? It appears that that was a fair assessment, thank you. 1001 We will now move into closed session, in camera, and we will -- it will not be part of the public transcript, but we will -- it will be transcribed for our purposes. 1002 Mr. Haynal? 1003 MR. HAYNAL: Yes, I have another question, Mr. Chair. Is it fair, on my part, to assume that the hearing tomorrow will be also in closed session so I should not come tomorrow either; is that correct? 1004 MR. BETTS: Yes. In fact, I would assume -- I can't think of anything that would be outside of that closed session. We would -- I will ask Staff perhaps to undertake to advise you if we are -- become aware of the fact that we will be going into open session. But I can't guarantee one way or the other, I think, at this point. 1005 MR. HAYNAL: Thank you very much. 1006 [Mr. Haynal withdrew] 1007 MR. BETTS: Thank you. 1008 I appreciate Mr. Haynal will be leaving. Is there any other party -- I have to ask all the participants to look around the room and really say is there anybody else that shouldn't be here? I hear no objection. So I'm going to assume that all of the other parties that are here should be here, and we will now move in closed session, in camera. 1009 [Hearing continued in camera]