I live on Long Island, New York. I've been working on Contingency planning for my bank. I want to make a convincing argument for our Board for the purchase of generators. I think I have it but I need a piece to this missing puzzle. Through the research I have done, of which I can understand , I think the safe production (not safe shut down, which the industry is contesting too) could cause the NRC to shut down the nukes. On the NCR site (NRC.org) I obtained this:

..."Six States relied on nuclear power for more than 50 percent of their electricity. Thirteen additional States relied on nuclear power for 25 to 50 percent of their electricity."

Does anyone know how much of electricity in the New York region is derived from the Nukes?

This is a very important piece for my presentation. Our budget for 1999 is being approved this month.

Please feel free to add any other information related to the generation of power. Also please support your disclosure with urls and source docs.

Thanks very much.

KTobin@bridgenb.com

Below is my local Utility (Keyspan's) 10Q filing for 9/98. They're not nuclear. Is what they're saying realistic?? *************************************************************************** As compared to other utilities with the same size Y2K budgets, are they realistic, ahead of the game, or will they die a quick Y2K death? Also, I my local utility says (in their latest 10Q) that they can take the utility off the grid. Is this true? *************************************************************************** Each of KeySpan's critical business processes is being reviewed to: identify and inventory sub-components; assess for year 2000 compliance; establish repair plans as necessary; and test in a year 2000 environment. The inventory phase for the IT systems is 100% complete and 95% complete for non-IT systems. The total assessment phase is 100% complete for the IT systems, and 50% complete for non-IT systems.

The assessment phase is expected to be complete by January 1, 1999. Hardware, software and embedded systems are being tested and certified to be Year 2000 complaint. Repair and testing to sustain operability is now 65% complete for the IT systems and 20% complete for the non-IT systems.

Components needed to support the critical business process and associated business contingency plans are expected to be ready for the year 2000 by July 1, 1999.

Vendors and business partners needed to support the critical business processes of KeySpan are also being reviewed for their Year 2000 compliance. At this time none of these vendors have indicated to KeySpan that they will be materially affected by the year 2000 problem.

By December 1999, KeySpan expects to spend a total of approximately $30.9 million to address the year 2000 issue. As of October 31, 1998, $11.3 million has been expended on the project. The largest percent expended is attributable to the assessment, repair and testing of corporate IT supported computer software and in-house written applications, which totals $8.4 million. In 1998, Year 2000 IT costs represent 11.6% of the total IT budget. In 1999, the IT Year 2000 costs are expected to be 8.3% of the IT budget. The year 2000 issue has not directly resulted in delaying any IT projects. Presently, KeySpan expects that cash flow from operations and cash on-hand will be sufficient to fund year 2000 expenditures.

KeySpan is presently in the process of analyzing each of the critical business processes to identify possible Year 2000 risks. Each critical business process will be certified by the responsible corporate officer as being Year 2000 ready. However, the most reasonable likely worst case scenarios are also being identified. Business operating procedures will be reviewed to ensure that risks are minimized when entering the Year 2000 and other high risk dates. Contingency plans are being developed to address possible failure points in each critical business process.

While KeySpan must plan for the following worst case scenarios, management believes that these events are improbable.

(MY OWN WORDS, ARE THESE RISKS BELOW REALLY UNLIKELY. OR IS THIS A CYA EXERCISE. They will have no liability becaure they can say, hey we warned you)

Loss of gas pipeline delivery: KeySpan's generation subsidiary receives gas delivery from multiple national and international pipelines and, therefore the effects of a loss in any one pipeline can be mitigated through the use of other pipelines. Complete loss of all the supply lines is not considered a reasonable scenario. Nevertheless, the impact of the loss of any one pipeline is dependent on temperature and vaporization rate. The partial loss of gas supply will not affect KeySpan's ability to supply electricity since many of the plants have the ability to operate on oil.

Loss of electric grid inter-connections/KeySpan operated electric distribution facilities Electric utilities are physically connected on a regional basis to manage electric load. This is often referred to as the regional grid. Presently, KeySpan is working with other regional utilities to develop a coordinated operating plan. Should there be an instability in the grid, KeySpan has the ability to remove itself and operate independently.

Certain electric system components such as individual generating units, transmission and distribution system facilities, and the electric energy management system have the potential to malfunction due to Year 2000 problems. KeySpan has inventoried electric system components and developed a plan to certify mission critical process as Year 2000 compliant. Contingency plans are being developed, where appropriate, for loss of critical system elements. KeySpan presently estimates that contingency plans regarding its electric facilities should be completed by July 1999.

Loss of telecommunications: KeySpan has a substantial dependency on many telecommunication systems and services for both internal and external communications. External communications with the public and the ability of customers to contact KeySpan in cases of emergency response, is essential. KeySpan intends to coordinate its emergency response efforts with the offices of emergency management of the various local governments within its service territory.

Internally, there are a number of critical processes in both the gas and electric operating areas that rely on external communication providers. Contingency plans will address methods for manually monitoring these functions. These contingency plans, KeySpan presently estimates, should be finalized by July 1999.

In addition to the above, KeySpan is also planning for the following scenarios: short term reduction in system power generating capability; limitation of fuel oil operations; reduction in quality of power output; loss of automated meter reading; loss of ability to read, bill and collect; and loss of the purchasing/materials management system.

KeySpan believes that, with modifications to existing software and conversions to new hardware and software, the Year 2000 issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed on time, and contingency plans fail the Year 2000 issue could have a material adverse impact on the operations of the Successor Company.

(What a horror story ! !, Give me some tissues)

Thanks very much.

KTobin@bridgenb.com

-- Anonymous, December 01, 1998

Answers

Ken, here is some information which may help you with your presentation to the bank. First, there is a chart giving the percentage of nuclear generated power by state at:

http://www.nrc.gov/NRC/NUREGS/SR1350/V9/table03.html

This is from 1995, but I believe the percentages have not changed in any significant way.

There is a map of commercial nuclear reactor sites in the U.S. at:

http://www.nrc.gov/NRC/NUREGS/SR1350/V9/fig15.html

If you make it clear to the powers that be at the bank that there is an interconnection between all the northeast utilities, they may see that it is not only a local power generating utility's readiness which must be taken into consideration, but the stability of the entire regional area. In regards to this interconnection, your area is part of the Northeast Power Coordinating Council, which is one of ten regional reliability areas in the nation. The NPCC was created after the 1965 Northeast blackout. (The 1965 blackout provides you with a precedent to exemplify how a problem in one area can spread to many others, regardless of whether the nuclear facilities are online.) There is more information at the NPCC site at:

http://www.npcc.org/about.htm

Hopefully this info will be of some use to you. Our small town central New York bank has already installed a whopping big generator and run several tests with it. They decided it was a necessary precaution given their information re northeast power generation. I hope your bank will decide the same.

I'll try to address your 10Q questions as I have time, but I wanted to get this info to you first. Good luck!

-- Anonymous, December 01, 1998

Ken, the questions you have about your utility's 10Q can only be answered with opinions, and those will vary. For what it's worth, I'll give you mine. You asked, " Is what they're saying realistic?? " I interpreted this to mean you are asking if their remediation schedule, as they have outlined it, has a realistic chance of being completed in the stated time frames. Neither the inventory phase nor the assessment phase has been completed for non-IT systems. Repair and testing "to sustain operability" for those non-IT systems is only 20% complete and work also remains to be done on the IT systems. Since they state the assessment phase is expected to be completed on Jan.1, 1999, and expect all the rest of the fixing and testing to be accomplished only six months later, I have very serious doubts this can be accomplished. Whether enough can be accomplished with critical systems by Dec.31, 1999, is an unknown. I would say it's going to be a very tight race.

KeySpan has spent $11.3 million thus far, about a third of what they expect their Year 2000 project to cost. While it would be more optimistic if they had spent at least half or more of expected costs, the one-third is better than the percentage for some other utilties. One good point is the percentage of their total IT budget spent on Y2K fixes is above many others. I do believe this company is taking the problem seriously.

If they say they have the capacity to take themselves off the grid, then I would believe them. It's my understanding that some utilities can do this; for others it's much more difficult.

As to your concern about the risks being really unlikely, I don't think anyone could answer that. All the disruptions listed are possible, but there are too many factors involved for any predictions. KeySpan was by far more upfront in detailing the risks than any other 10Q I've read, and I give them credit for that. I would much rather read that kind of risk assessment than the standard "issues could result in abnormal operating conditions" so many others are putting out. At least you know the company has thought about all the possible risks and are aware of them! This is a good thing.

If it's any consolation, I've read worse utility 10Q's. Personal preparation is still the wisest insurance against an uncertain outcome.

All best wishes to you.

-- Anonymous, December 02, 1998