FYI I confirmed today, with an actual sight visit, that Virginia Electric Power Company now in the process of refurbishing the Mt. Storm North Branch Power Plant. The plant came under the ownership of VEPCO when purchased the original owner. I spoke with workers, both company and trade union, and work began last month on this plant. They said that there is a "sense of urgency" about getting this plant on-line by June 1st. The North Branch Power Plant is located near Bayard, W.VA. It was shut down in 1995 because it was not profitable. The plant was built in 1989 and will be fired by waste coal trucked in from the local coal mines. It is a 90MW, single turbine unit that will have seperate control capability from the Mt. Storm plant. It is a fairly low tech plant by todays standards. The workers I spoke with where surprised by the suddeness of the decision to bring this unit back on line and the speed with which VEPCO negotiated and contracted with local trade unions for the refurbishing work.

Any tea leaves here that we should be reading? Rick, would like to get your thoughts.

-- Anonymous, March 16, 1999

Answers

Bonnie, This confirms your info gathered from the VP website.

-- Anonymous, March 16, 1999

What's the old saying, actions speak louder than words. Here we have a coal fired plant that is sitting within trucking distance of large coal supplies and it is being reactivated. Doesn't that speak volumes? This is actually "good news" as far as I can see. This is the sort of realistic contingency planning that will provide some comfort to the folks/businesses in that local area. We can struggle thru some pretty difficult times if we have a little electricity during our adjustment phase. But the deeper concern is that maybe, just maybe, the electric utilities are not as prepared as their public statements would lead you to believe. Of course the regualar posters on this forum already know that.

-- Anonymous, March 17, 1999

I hate to interject some speculation that is boring, reality based stuff but...consider the possibility that if a unit is shut down for economy, increased sales in de-regulation make the unit profitable and necessary???

If this "revelation" is consistant with the utility's SEC filing and/or web site info - could it be possible that the tea leaves tell of a utility being as open and truthful as lawyers will allow???

Naah. Too boring.

-- Anonymous, March 17, 1999

CL's point that the North Branch Unit may now be considered a profitable asset to Virginia Power is a valid consideration. There are indications, however, which suggest the reopening of this unit may indeed be part of a Year 2000 contingency plan.

First, Virginia Power built a new coal-fired plant (Clover) with two generating units. Both units were newly online in March, 1996, with a total capacity of 882 megawatts. The North Branch Unit, with a maximum generating capacity of only 74 megawatts, was closed down at the same time the Clover units got up and running -- early 1996. It's unlikely in my mind that in three years the need for an extra 74 megawatts has become vital to Virginia Power's economic plans. (Mark's info stated North Branch is a 90 MW facility, while the Virginia Power news release stated 74 MW. Perhaps there's a difference in the seasonal output.)

When this data is put together with NERC's "Defense In Depth" contingency plan, specifically # 4, it becomes more likely that reopening the North Branch facility is indeed Y2K involved. Number four of the "Defense In Depth" plan states in part:

"Examples of precautionary measures may include reducing the level of planned electricity transfers between utilities, placing all available transmission facilities into service, bringing additional generating units on-line, and rearranging the generation mix to include older units with analog controls."

-- Anonymous, March 17, 1999

Ahhh Bonnie you really are a master diplomat. And a top line researcher to boot. What a winning combination. We are all lucky to have your inputs and steering to keep us on a steady course.

-- Anonymous, March 17, 1999

What I take from this is that VP (now well into its remediation) remains uncertain of its situation at rollover. Enough so to undertake this expense, just in case. Very prudent.

Can this uncertainty be industry-wide?

-- Anonymous, March 18, 1999

Gordon, thank you for the kind words! I honestly think, however, that everybody who posts views on this forum, no matter how they vary, helps all the rest in understanding the broad picture. We're all doing just what the Senate and all the oversight agencies are attempting to do -- gather the puzzle pieces and see if we can put them together into a picture which makes some sort of sense to us. The only problem is that Y2K appears to be the mother of all jigsaw puzzles, double-sided and with irregular borders to boot! Which is why we need as many pieces as we can gather, and why I'm so glad for each and every poster here.

Tom, I think that "uncertainty" is the most operable word about the Year 2000 problem that there is. It most definitely applies not only to the electric utility industry, but to all infrastructure industries, governments and businesses.

When Senator Bennett mentioned that everyone would be "holding their breath" come the rollover, it was an honest expression of the situation. Anyone working in a remediation project, even those who are very confident about the work they have done, will at some point have thoughts such as, "What did we miss?", "Did we do everything correctly?", "Did anybody make a mistake somewhere else that will impact us?", "What about the interfaces with other companies, will they work?", "What about the systems we couldn't test?", "Did we assess correctly? Are there any non-critical systems we didn't get finished which will come back to haunt us?". The list of such questions is long and varied.

Everyone is shooting in the dark when it comes to trying to assess the impact of problems outside of their own area of control, and in areas to which they are indispensibly connected. It pleases me to see utilities and businesses making contingency plans, even while they are proclaiming the projected completion of their own critical systems. In my opinion, anyone who doesn't think Murphy isn't waiting in the wings with a few surprises just hasn't lived long enough!

I completely agree that what Virginia Power is doing is very prudent, as are all the other contingency plans being made in various places, regardless of how optimistic an individual entity's status may or may not look.

In the military, logistics is an unheralded and generally overlooked field of endeavor, but it's absolutely vital to any mission. If you don't have the gas where you need it, the tanks don't roll. If the food and ammo doesn't get to the soldiers they aren't going to do any fighting. It's a simple concept but often difficult to plan for and execute. Gathering information, asking not only what is likely to go wrong, but what *could* go wrong, what can I do about it, what assets will help mitigate possibilities and planning for the same, is a basic strategy for success which has not changed throughout history. The more scenarios planned for, the less surprises Murphy can throw at you and the better your chances for successfully negotiating any pitfalls.

The only thing which upsets me is that individuals/families who put their own logistical thinking into practice are often categorized by the media as being flaky, while businesses which do the same are lauded. If a hundreds-of-years old strategy works for top planners in all fields, then it's not logical that the same strategy becomes undesirable on an individual level. Here's to contingency planners everywhere! May their numbers increase.

-- Anonymous, March 18, 1999

The June 1st target date sugests to me that they are concerned about meeting their summer peak demand with reasonally priced power. Remember normal $38/mW power hit $7,000/mW last summer. That range of price risk makes a border line plant look a little better to the finance guys. If you get a little Y2K cushion as well, great.

Jim

-- Anonymous, March 20, 1999