From: Kenoli Oleari Subject: Power Grid Date: Mon, 11 Jan 1999 11:16:34 -0800 (PST) To: local list

I am doing electrical work for a commercial cabinet shop in San Francisco that has had to go to a lot of expense buying transformers to drive 480 volt equipment because PG&E has said it can only provide 240 volts in that area. I had an interesting conversation with a G&E engineer in the process of finding out why the higher voltage was not available.

He told me that since de-regulation in California, PG&E has done a significant amount of downsizing which included laying off their entire engineering department. This is the department that works with users to set up new services or make changes in service. He was the last one working there and he was not supposed to provide any technical information to customers. In the past, this department has been available to let customers know what kinds of power was available to them and to solve technical problems. In addition, he told me that management had come into his office and physically removed all of his technical journals and reference material to make sure that he didn't cost them money by providing information to customers. Also, he no longer was able to access information about what kind of power was available in different parts of the city. If a customer neded that information they have to fill out a form and submit it and they will get a response in from 2-6 weeks.

Apparently, there are 4, 8 and 12 Kvolt lines to different parts of the city and PG&E used to stock transformers to reduce that voltage to the needs of customers. They have decided to only stock equipment for 12 KVolt areas and have gotten rid of the equipment they used to use foor the other voltages. This means that if commercial customers need anything more than 240 volts in those areas, they are out of luck.

As far as I can tell, if power goes down, PG&E is very shorthanded in terms of engineers, knowledge of its own network and replacement equipment for a large part of its system.

How is an agency like this going to deal with a number of bugs at once?

posted for Kenoli Oleari by Critt Jarvis

Kenoli Oleari, LEAP (Long Range Education, Empowerment and Action Project)1840 Woolsey Street, Berkeley, CA 94703

-- Anonymous, January 11, 1999

Answers

Thanks Critt.

About to have a personal blackout moment. Brought to you by PG&E. Again.

---- ZAP ----

Okay. Solar power. Right. Okay. Sunlight works. Learn more. Study PG&E more too.

Diane *Big Sigh*

-- Anonymous, January 12, 1999

PG&E has been downsizing now for about a year. Middle management has especially been hit hard. In our district, about 20 supervisors/managers have been terminated. The union contract is up Jan. 1, 2000. We expect to see hundreds of jobs eliminated, especially those that are not directly responsible or related to delivering safe/reliable service. Expect to see offices closed state-wide. If you need service you will simply call the 800 number, if you want to pay your bill, mail it in or go to an authorized pay station. The new CEO is a bean counter, he was the CFO at one time and has made it his mission to cut costs and to bring the value of PG&E stocks up, he has to make the shareholders happy. Don't be surprised if you see some unpleasant things happening, everyone will be clenching and clawing their way to keeping their job at PG&E.

-- Anonymous, January 12, 1999

Thank you, Critt. The information you've provided does give some possible clues about certain statements made by Pacific Gas & Electric Co. in their SEC 10Q Year 2000 report:

"We plan to develop contingency plans for our critical software or embedded systems for which we determine Year 2000 repair or replacement is substantially at risk. For example, if the schedule for repairing or replacing a non-compliant system lags and cannot be re-scheduled to meet certain milestones, then we expect to begin an appropriate contingency planning process. These contingency plans would be implemented as necessary, if a remediated system does not become available by the date it is needed."

That doesn't sound like they have complete confidence critical repairs will be finished, now does it?

In PG&E's cost estimations section, they also had this to say:

"Further, we expect to incur costs in the year 2000 and beyond to remediate and replace less critical software and embedded systems."

This is an admission that they will be in a fix-on-failure mode for "less critical" systems. It would seem the various puzzle pieces are not fitting together in an optimistic pattern.

-- Anonymous, January 12, 1999

Bonnie:

I was running the numbers of PG&E and saw from their 10Q that total estimated Y2k costs were $260 million. I understand that is for the entire company and extends beyond their California service area, but it impresses me as rather large for a power company that purchases 42% of its power.

In your research, did you come across many costs figures in that range? The numbers seem out of scale compared to other 10Qs. Thanks.

-- Anonymous, January 12, 1999

Charlie, you're right. The estimated costs spent to date and estimated final costs for PG&E were the highest of any reporting company. There is a posssible explanation for this, however. Several corporations stated they had recently done major technology upgrades to their business systems, but that they did not include the costs of these in their Year 2000 project because they had planned on doing these upgrades anyway - or they were planned for but just done a little sooner. (The idea being that they killed two birds with one stone, so to speak.)

PG&E, however, wrote: "From 1997 through September 1998, we have spent approximately $80 million to assess and remediate Year 2000 problems. About $60 million of this cost was for software systems that we replaced for business purposes generally unrelated to addressing Year 2000 readiness, but whose schedule we advanced to meet Year 2000 requirements."

So the difference is that PG&E included all the costs which were impacted in any way by the Year 2000, then explained what went where, while the others labeled some costs as normal IT expensing. For all the difficulties PG&E has, I personally approved of the way they handled their cost reporting.

This type of situation also points out the difficulty of determining accuracy about any self-reported progress, whether it's costs or completion percentages. Unless you know the criteria and/or definitions the reporting company or overseeing agency is using, then there can be a lot of seeming inconsistencies. For instance, if a generating facility had plans to upgrade their SCADA system prior to discovering it needed to be because of Y2K, then do they report that the old one was not compliant or is the new system being installed classified as a "normal technology upgrade" which is already compliant? I think quite a lot of the Y2K reporting is a maze of varying data because of different standards of definition. Just trying to get an individual definition of "compliancy" or "readiness" or "critical systems readiness" is sometimes a tough job! I've noticed some companies seem to think that if they've installed an upgrade for a system, then they've achieved "readiness" even if that system has not been tested yet. It's no wonder confusion is rampant.

-- Anonymous, January 12, 1999

You are correct, Bonnie. Normal upgrades that also encompass Year 2000 renovation can influence interpretation of 10Q Y2k cost figures in both directions. Many company 10Qs state that normal upgrade costs that include Y2k upgrades were not considered in their Year 2000 remediation estimates.

In my view, this presents a challenge to the "percentage spent" formula used in determining Y2k progress of individual utilities. Companies that "hide" Y2k costs made have made more progress than their listed Y2k expendtiures to date imply. Conversely, others may have more to spend than projected since they deem it beneficial to mask the total cost of repairs, presumably in an effort not to alert investors as to the magnitude of the problem.

This is not meant to impugn your research to date, however. Your anaylsis is most helpful in setting a benchmark from which we will use later to determine the overall progress of the industry. Pitted against the same numbers from future 10Qs, your work set the stage for judging the industry's improvements. Thanks again.

-- Anonymous, January 12, 1999