Kudos to frequent "open forum" contributor Bonnie Camp - she's complied an overview of recent electric industry SEC 10Q financial filings, and provides the first installment of her analysis in a guest commentary column on euy2k.com! Click on the link above, or go to:

www.euy2k.com/guest2.htm

-- Anonymous, December 21, 1998

Answers

Bonnie, Thanks so much. I too am a Corporate-Report-Skeptic. I applaud your thoroughness. At this point in the Y2K epoch, we've heard plenty of emotion and anxiety. We really need evidence. You've given us that. Bless you!

Jim

-- Anonymous, December 21, 1998

Thanks for the review. Clearly, given the money spent/money budgeted ratio, at least 50% of utilities were not even 50% complete as of 9/30/98. I keep wanting to believe that the power disruptions will be relatively minor, but every time I read a 10Q ...........

-- Anonymous, December 22, 1998

Bonnie, How would you respond to the claim that the presumed correlation between budgets/spending and remediation itself are not as direct as many suppose? In other words, just because company X budgeted 50 billion for Y2K and has thus far spent only 5 billion may mean only that the Y2K project was not as expensive as initially anticipated; that the remediation took less time than it was thought. I'm not speaking as an expert but only asking a question. Jim Rose

-- Anonymous, December 22, 1998

In a nutshell, it's very difficult for me to believe that all companies that have reported such expenditures via SEC 10Q filings are that bad at budget planning. I've been involved in such planning in the past. While budgeting for large projects such as Y2k is not an exact science, it's very hard for me to believe that so many companies would be so far off. It's not uncommon to "pad" a budget 10 or 20% to deal with unforseen project difficulties, but even "padding" does not account for the disparity in the numbers.

-- Anonymous, December 22, 1998

Oh, and also - having a budget (on paper) and getting the authorizations to actually spend the budgeted money are two separate things.

-- Anonymous, December 22, 1998

Jim, in addition to the reasons given by Rick, first I would say, "Show me some facts indicating remediation took less time than was thought." If I did see such facts, I'd be very happy - because that would mean they *were* remediated (and hopefully tested). The point being that no one can know if remediation takes less time or costs less than was projected UNTIL they are remediated. Secondly I would point them to recent surveys and articles showing that businesses have UNDER-estimated costs and that the total worldwide estimates for Y2K costs have been steadily rising. In July of this year, there was a story at:

http://www.techweb.com/wire/story/y2k/TWB19980721S0001

which reported on a recent Gartner survey. I don't know if the above link is still active or not, or if the story has been archived. However, the following is a section I copied from it:

"A recent Cap Gemini survey had some good news. Some 86% of large U.S. firms say they have full-scale y2k projects, up from 20% in December.

But 87% reported that they had underestimated the costs. "

I'd find more links about cost underestimation for you, but to tell you the truth I'm really tired at the moment and need to get some sleep. As much as I'd like to delve into this more, I still have Christmas packages to wrap and for the next couple of days need to concentrate on holiday preparations.

I hope everyone has a joyful holiday season!

-- Anonymous, December 22, 1998

Some comments regarding my experience with Y2K budgets vs. actuals

1) IN SOME UTILITIES: The project office budgets for Y2K items, but the functional units are responsible for executing the tasks. Unfortunately, the units do not always agree that the need is real. For example, I budgeted dollars for HW/SW/Labor/Outside Services in the Distribution and Sub-transmission functions, but management in those areas didn't feel the need to perform the tasks to the extent I did. Since the functional units were responsible for executing the Y2K tasks, a variance existed between actual vs. budgeted. In general, upper management sides with the functions.

2) A lot of Y2K related tasks are not charged to the company Y2K project. Instead, the labor/material is charged to a functional unit's internal (existing) work order instead of the Y2K project. They do this for a number of reasons, such as retaining project control (turf issues) and charging to existing maintenance contracts (expediency). These "functional workorders" are not part of the Y2K office's cost reporting because non Y2K work is charged to them.

-- Anonymous, December 23, 1998

Thanks Bonnie. Thats a lot of work. With so much at stake and so little

-- Anonymous, December 25, 1998

Thanks Bonnie. Thats a lot of work. With so much at stake and so

little information available, I, too have taken to "following the

money". Though not very accurate in all instances, it is certainly

the best method I have found. I just don't have enough trust in

Corporate America to believe they would volentarily tell the truth

unless it was good news. They certainly havn't volenteered the

quarterly reports and if they are, as you say, trying to put a

good spin on these then there may be more than a slight problem.

-- Anonymous, December 25, 1998