7

Facts About the UIG

7.1

What is the Background?

The effectiveness of an industry's EDI program depends on how well the accepted standards comply to that industry's specific needs.

For the Electric and Combination Utility Industry, those needs are being addressed, within the ANSI ASC Xl 2 standards, by the active involvement of the Utility Industry Group.

7.2

What Function Does the UIG Serve?

The UIG works with industry associations and their members to facilitate implementation of Electronic Commerce/EDI in the Utility Industry.

7.3

Utility Industry Group full membership is open to Electric, Gas, and Combination Utilities, their suppliers, their customers, and supplier group representatives.

7.4

The American National Standard Institute (ANSI) through its accredited standards committee X12 develops National Standards for Electronic Data Interchange.

The UIG does not set standards, rather it participates in the ANSI process that sets the cross-industry standards, providing the Utility Industry’s input for our business needs.

The UIG provides guidelines that may assist other Utilities using the standards to benefit more fully from EDI.

7.5

Should I Join the UIG?

If your company is an Electric, Gas, or Combination Utility,

If your company is a Refuse, Sewer, or Water Utility,

If your company supplies goods or services to this Industry, or

If your company is a customer of an Electric, Gas, or Combination Utility,

You should join the UIG.

The UIG is helping it’s members use Electronic Commerce/EDI to:

• Achieve more timely delivery of business transactions that can reduce lead time and the overall stock replenishment cycle.
• Reduce material costs associated with printing, mailing and handling of paper based transactions.
• Improve cash flow due to reduced inventory and more timely invoicing and payment.
• Improve business efficiency due to the more complete, timely and accurate use of information.
  

The path to a successful implementation of EDI has been blazed by today’s members of the UIG. We are looking forward to welcoming you to our effort. Only by participating can you benefit fully from the cumulative experience of the UIG. You will also assure that the standards will accurately reflect your specific business needs.

7.6

UIG Charter

The UIG Charter is a living document which is revised as the needs of the organization evolve. The Name, Function, and Purpose sections of the Charter are reproduced here; the current revision of the Charter may be viewed on the UIG World Wide Web site: www.uig.org.

• 1. Name
  
  This organization shall be called the Utility Industry Group (UIG).
  

• 2.1 Function
  
  The function of the Utility Industry Group is to:
  

2.1.1

Represent Electric, Gas, and Combination Utilities, their suppliers, their customers, and other interested parties as an Industry Action Group to ASC X12, specifically in the standards-setting process, for their Electronic Data Interchange (EDI) business needs.

2.1.2

Encourage promote and establish conventions for the use of ASC X12 standards as the "recommended" method of EDI.

2.1.3

Develop and coordinate, as required, implementation guidelines and tools to promote the growth and timely implementation of EDI within the industry.

2.1.4

Provide a forum for the exchange of ideas related to EDI and its influence on the business needs of the industry.

2.1.5

Represent the Edison Electric Institute (EEI) and its members to facilitate implementation of EDI in the Utility industry.

• 2.2 Policies
  
  It is the policy of the Utility Industry Group to:

2.2.1

Comply with federal and state antitrust laws and trade regulations promulgated thereunder.

2.2.2

Specifically prohibit its Members, Directors and elected Officers or staff from engaging in any activity or conduct which has the effect, intent, or even the appearance of restraining trade, including efforts to fix prices, divide markets, allocate production, or impose boycotts.

2.2.3

Conduct all UIG Membership Meetings, Board of Officers Meetings and Executive Committee Meetings pursuant to written agendas distributed in advance, to the extent possible, to members expected to attend. Written minutes shall be prepared and filed by the Secretary and distributed to all members.

2.2.4

Consult the UIG "Guide to Antitrust Compliance" and its Antitrust Counsel if any questions should arise from time to time pertaining to the UIG’s membership eligibility requirement, adoption of codes or standards, participation in cooperative research agreements, participation in statistical exchange programs, or other matters related to UIG activities having possible antitrust involvement.

7.7

UIG Guide to Antitrust Compliance

7.7.1

Background

Competition is the cornerstone of the free enterprise system in the United States. It assures all purchasers free choice in the goods or services purchased. It also motivates each seller to strive to improve the quality of goods and services offered. The federal and state antitrust laws are designed to provide a framework for this free enterprise system. The Utility Industry Group (UIG) directs that its members and staff abide by these laws.

7.7.1.1

The Charter and Mission of the UIG specifically prohibits ". . . its members, Directors and elected Officers or staff from engaging in any activity or conduct which has the effect, intent, or even the appearance of restraining trade, including efforts to fix prices, divide markets, allocate production or impose boycotts."

7.7.1.2

UIG's operating policies are based upon a fundamental and abiding respect for the law and a belief that UIG's overall interests can best be served by strict adherence to the antitrust laws. Thus, an increased awareness of permissible, questionable and prohibited conduct is one of UIG's goals. UIG desires to provide its members and staff with this antitrust policy guide which summarizes the antitrust laws and explains the pitfalls which may await those whose activities are found to violate those laws. It is important to remember that the complexities and subtleties of antitrust made a "do-it-yourself kit" for its interpretation virtually impossible. Nevertheless, it is hoped and expected that this guide will help each of our members recognize antitrust questions when they arise. No action which may be questionable under the antitrust laws should be taken before the matter has been reviewed by the Chairman of UIG, and at the President's discretion, by UIG Antitrust Counsel.

7.7.2

The Antitrust Laws

7.7.2.1

The basic federal antitrust law is the Sherman Act. Phrased in broad, constitutional-like terms, it outlaws agreements or conspiracies to restrain competition in both interstate and, in certain situations, foreign commerce. It also prohibits acts of monopolization conducted individually or as a part of a group. Section 1 of the Sherman Act makes illegal any contract, combination or conspiracy which unreasonably restrains trade. Section 1 is directed to combinations formed by competitors whose effect or purpose is to limit or inhibit competition among them. There are certain categories of activities which the law will find unreasonable under Section 1 by the mere proof of their existence. These are the so-called "per se" violations of Section 1. "Per se" violations include agreements among competitors to fix prices, allocate territories, allocate production, or boycott third parties.

7.7.2.2

Section 2 of the Sherman Act prohibits monopolization, attempts to monopolize or combinations to monopolize any line of commerce. Oftentimes, the same facts which constitute a violation of the restraint of trade provisions of Section 1 are sufficient to constitute a violation of the monopoly provisions of Section 2.

7.7.2.2.1

Criminal penalties apply to violations of the Sherman Act. It is a felony to violate either Section 1 or Section 2 of the Sherman Act. A fine of up to $1,000,000 for corporations and $100,000 for individuals and imprisonment of not more that three years or both for individuals may be imposed upon conviction.

7.7.2.3

The Sherman Act was enacted in 1890. In 1914, Congress passed the Federal Trade Commission (FTC) Act and the Clayton Act. Section 5 of the FTC Act prohibits "unfair methods of competition and deceptive acts or practices in commerce." This provision is meant to prohibit activities which in themselves are violations or which, if allowed to continue, would evolve into violations of the antitrust laws. Thus, Section 5 of the FTC Act covers violations of the "spirit" of the Sherman or Clayton acts and activities which fall into gaps in these acts.

7.7.2.4

The Clayton Act has more than 20 sections. The most important to the activities of UIG and its members are Section 2, 3, and 7 which deal with price discrimination, tying and exclusive dealing arrangements, and mergers. Section 2 of the Clayton Act was completely superseded by the Robinson-Patman Act of 1936. The Robinson-Patman Act essentially requires a manufacturer to treat each level of customer equally with respect to prices and price-related services.

7.7.2.5

The antitrust laws may be enforced by either of two federal government agencies: the Antitrust Division of the Department of Justice or the Federal Trade Commission. In addition, private lawsuits by individuals or by state attorneys general on behalf of their citizens (so called "parens-patriae" suits) may be brought to recover three times the actual civil damages as well as attorneys' fees and costs. There have also been situations in which courts have ordered trade associations dissolved. The FTC Act is enforced only through administrative proceedings conducted by and within the Federal Trade Commission, and only the Department of Justice may bring criminal actions under the Sherman Act. Many states, including Colorado, also make it a criminal offense to violate state antitrust laws.

7.7.3

Conduct to be Followed at UIG Meeetings

7.7.3.1

It is well recognized that trade associations serve valid business objectives. As an industry organization, UIG may legally and quite properly engage in a variety of activities to serve the common interests of its members. However, antitrust laws require that the activities of the UIG members, as well as those of the UIG, to be structured so as not to prevent or discourage competition. Accordingly, UIG offers the following advice to its members with respect to their participation in UIG activities.

7.7.3.1.1

Do refer all UIG matters having potential antitrust implications to the Chairman of UIG. Matters to be referred would include those in which there is any suggestion of a discussion of prices among UIG members, agreements to divide markets or customers, allocation of production and boycotts or refusals to deal with prospective customers.

7.7.3.1.2

Do follow previously published agendas for all annual meetings, Board meetings, Executive Committee, Steering Committee and Committee meetings of UIG. Such meetings shall be conducted pursuant to previously published agendas, and written minutes shall be prepared for each of these meetings.

7.7.3.1.3

To the extent possible, do conduct all other committee meetings pursuant to written agendas and prepare written minutes (which shall be filed with UIG) for each of these meetings.

7.7.3.1.4

Do avoid loose, careless or flippant remarks, especially in correspondence, that can pose an antitrust problem for UIG if examined out of context at a later date.

7.7.3.1.5

Do not discuss, agree or enter into any arrangement or contract with anyone who competes with you regarding your prices. This should preclude any discussion of competitive factors which may influence cost such as production costs, discounts, transportation or credit terms. Even gossiping or jesting about prices with competitors may be construed or inferred later to have been part of a scheme to fix prices.

7.7.3.1.6

Do not exchange or discuss any competitive information when dealing with competitors.

7.7.3.1.7

Do not agree with your competitors to limit production, fix production quotas, or otherwise limit the supply of any product.

7.7.3.1.8

Do not contact competitors with regard to future prices or other terms of sale to customers.

7.7.3.1.9

Do not discuss or enter into any agreement to allocate production. Such agreements have often resulted in stabilizing commodity prices at an artificially high level.

7.7.3.1.10

Do not discriminate in your treatment of competing customers or suppliers.

7.7.3.1.11

Do not enter into exclusive dealing arrangements whereby one company requires as a condition of sale or purchase that another company deal exclusively with it, or agree not to deal with the company's competitors.

7.7.3.1.12

Do not provide any customer with the understanding that the customer will sell your product or serve only at certain prices or in certain markets or to persons specified by you.

7.7.3.1.13

Do not assume that business outside the United States is exempt from the United States antitrust laws.

7.7.3.1.14

Do not try to guess what the law is; when in doubt, get help. Approaches by UIG and its members to legislative, administrative or judicial arms of government are ordinarily protected from being considered antitrust violations even when they may necessarily result in a disadvantage to competitors of UIG members. This is because the Supreme Court has held that the First Amendment right to petition government ordinarily supersedes the antitrust prohibitions against joint action that results in injury to competitors when the First Amendment right is utilized. It is clear, however, that "sham" activities designed to restrain competition or other improper activities to influence government must be avoided.

7.7.4

Conclusion

7.8

UIG Best Practices

7.8.1

Implementation Guidelines

The UIG has developed a group of document conventions through a process of member consensus using four basic tenets. These tenets establish both a basis for our shared vision of EDI and a structure for its implementation within the electric, gas, and combination utility industry. It is also recognized that individual trading partner implementations must provide a balance between the shared vision and the practical limitations that may exist for a time with one or both trading partners. For this reason, the UIG has developed best practice recommendations to assist the trading partners in utilizing the document conventions.

7.8.2

7.8.2.1

Electronic Data Interchange (EDI) is the exchange of routine business transactions in a standardized computer processable format.

7.8.2.2

All document conventions will be based on ANSI ASC X12. The UIG will neither recommend nor support the use of any non compliant transactions.

7.8.2.3

Implementation Guidelines and Document Conventions are recommendations based on the experiences and best judgment of its members. Though not mandatory, the UIG encourages their adoption in the absence of any overriding business needs of the trading partners.

7.8.2.4

The UIG currently recommends the use of ANSI ASC X12 version 3030. Trading partners implementing a new EDI program or documents should utilize 3030 if possible and we encourage existing members to migrate to this version and release.

7.8.3

Best Practices

The UIG has established best practices which address the use and purpose of transaction sets that are exchanged between trading parties. Best practices can be grouped into two categories: global and document-specific. Global best practices are presented within this section and also within each UIG transaction set. Global best practices govern the use and purpose of all established UIG transaction sets. Document-specific best practices are itemized within the particular transaction set, where the best practice explicitly addresses that transaction.

The UIG recommends that the note (NTE) segment be avoided because this segment is not machine readable. Other text segments, such as MSG and PID, may be used if their use will lead to machine-processable information in subsequent applications.

The use of data fields to transmit uncoded or textual information should be avoided. This practice is usually associated with the use of the ZZ qualifier as a normal course of doing business.

The purpose of the 997 is to verify receipt of a transmitted document only - not the acceptance of the document. For example, the acceptance of a purchase order (850) is accomplished through the use of the purchase order acknowledgment (855).

An unique and sequential Interchange Control Number should be used on every envelope that is transmitted to a trading partner. This approach will allow the receiver to audit the interchange for any non-unique or missing transmissions.

A Dun & Bradstreet (DUNS) number should be used to identify the trading partners. D&B assigns a nine-digit identifier to each trading partner. The trading partner then assigns a four-digit suffix (DUNS+4) to uniquely identify a specific location.

Guidelines that outline the use of transactions relating to interactions between a sender and the sender's financial institution are available from the Banker's EDI Council and the NACHA EDI Council. Other publications that address the use of financial payment transactions include Technical Report 1 (TR 1) and Technical Report 2 (TR2). Both publications are available from DISA.