JIM LORD: WILL Y2K TURN THE LIGHTS OFF?

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X-From_: cii@igc.apc.org Wed Mar 31 18:31:07 1999 Delivered-To: jean@sonic.net X-Sender: cii@pop.igc.apc.org Mime-Version: 1.0 Date: Wed, 31 Mar 1999 10:14:32 -0800

Will Y2K Turn the Lights Off? By Jim Lord March 29,1999

http://www.y2ktimebomb.com/Tip/Lord/lord9913.htm

Last year the North-American Electrical Reliability Council (NERC) was asked by the Department of Energy to determine the Y2K status of the electrical utility industry. In January NERC issued a report on their findings that was very positive about how the power companies are doing with their Y2K efforts.

The mainstream press, without exception, ran with this positive assessment. It was disappointing that they didn't dig a little deeper because there is still much to be concerned about. Some examples:

Cooking the Numbers

The numbers used to substantiate NERC's assessment are questionable to say the least. For example, here is a statement from the instructions on how to calculate the critically important "percentage of Y2K work completed" figure used in the NERC report,

"If no remediation and testing is required in an area that was inventoried and assessed, then show remediation and testing as 100% complete."

(Note: several postings in the "Discussion Forums" area of Rick Cowles' exceptional web site discuss this issue. Rick, of course is a former Westergaard columnist.)

What this statement means is that systems that did not have Y2K problems to begin with are being used to make the percentage of work completed look better than is actually the case.

Let's use an automotive analogy. Imagine your car is towed to a garage with a flat tire. Later, when you call the garage for a status report, the mechanic says your tire repair job is seventy-five percent done. If NERC was your mechanic, their report could be based on the following,

1. Your tire hasn't been touched yet but, 2. Three of your tires don't need repairs so 3. Your tire job is three fourths finished.

In a news conference recently, Department of Energy Secretary Richardson gave this assessment of the electrical utility industry, "...tests and repairs are now more than half done." Using the explicit NERC guidelines, this statement could be interpreted to mean,

"We haven't fixed any of our computers yet but half of them weren't broken to start with so we're half done with the job."

Consider the Source

NERC is a trade association for Pete's sake. Its board of directors is made up of 38 executives from the electrical utility industry. They have a built in bias to make the industry look good. None of the NERC data has been independently validated. Putting all your faith in NERC (or any other trade association) is like letting your daughter go out with some guy because his mother told you he was a nice person.

Number Please?

Many don't realize the dependency that exists between the electrical system and the telephone system. The electrical grids are monitored and controlled by a network of computers connected together by a huge communications system - mostly telephones. No communications - no grid. The reverse is also true, no electricity - no communications. A large-scale failure in either will produce a serious failure in both. Here's a statement from the NERC report,

"Electrical power systems are highly dependent on microwave, telephone, VHF Radio, and satellite communications. If the control centers are the 'brains' of the electrical grids, communications systems are the 'nervous system'...One large electric utility may use as many as 40 to 50 telephone companies in several states."

Telecommunications is the Achilles Heel of the electrical grid. Unfortunately, the electrical industry can't even test this critical component. It is no longer technically possible to do so. There isn't enough time. There aren't enough people. The engineers don't have the training. There's not enough equipment. There's no test plan. It simply can't be done.

>From the NERC report,

"(It) ... will not be practical to perform extensive integrated testing with external voice and data communications service providers...(Telephone) service providers...cannot provide live circuits for end-to-end testing."

Noone's In Charge

Nobody owns the electrical grid. It is a voluntary technical arrangement that has served us well - until now. The federal government does not monitor, regulate or control the grid. Nor does any technical or professional group. The industry itself, in its thousands of entities, performs that task. Again, from the NERC report,

"Who's in charge of the electric industry's Y2K program? In an industry that has about 3200 organizations in North America...that's a tough question."

Loss of Mutual Aid

During natural disasters such as the ice storm that struck Virginia this past winter, local electric companies with service outages depend on mutual aid from other electric companies outside their service area. There is a widespread agreement governing this process. When Y2K strikes next year, all electric companies experiencing blackout or brownout situations will be impacted at the same time. The extensive mutual aid network simply won't be available, thereby exacerbating problems dramatically.

Follow the Money

As of the last round of quarterly reports filed with the Securities and Exchange Commission (SEC), the utility sector of the S&P 500, on average, had only spent 31.4% of its Y2K budget. This was the smallest figure for any industry sector. This suggests that utilities are further behind in their Y2K projects than any other industry. Many experts will say that large companies having more than two thirds of their Y2K project still in front of them are in a perilous position.

(Note: Ed Yardeni has compiled some excellent information on SEC filings and the Y2K status of publicly held companies. See the "Y2K Reporter" section.)

The critical telecommunications industry was in next to last place with just 35.3% of budget spent. Bell South whose service area extends from Florida to Louisiana to Kentucky had spent just eleven percent of its Y2K budget. Bell Atlantic which services all the states from Virginia to Maine had spent only thirty-two percent of its Y2K budget. Ameritech covers Ohio, Michigan, Indiana, Illinois and Wisconsin and had spent only twenty-three percent of its Y2K budget.

That's all the states east of the Mississippi River constituting the telephone service for most of the Eastern Interconnection (or grid). And the utilities aren't even including telephone connectivity in their upcoming, so-called "industry wide" tests.

The bottom line is we're going to sail into totally uncharted waters next January. We won't know if the electrical grids are going to work until we get there. And the NERC report as well as the press coverage of it certainly doesn't make this clear.

My biggest concern with the NERC report is that it does not tell the public about this high level of uncertainty. Why doesn't the government, the utility industry and, most of all, the press give the public the following message - also taken directly from the NERC report?

"Will the lights go out? The answer is that no one knows for certain yet..."

You see, if you take the time to read the source documentation and dig down into it, even NERC admits they don't know if we are going to have power or not. They should stop giving us these unsubstantiated, happy-face reports.

They should just tell us the truth.

My Tip of the Week is to seriously prepare for power outages in your home and in your community. We're not getting the whole truth out of these folks and until we do, you should prepare for the possibility of much worse that any silly three to five day inconvenience.

Good Luck!

Jim Lord

Tom Atlee * The Co-Intelligence Institute * Oakland, CA http://www.co-intelligence.org * http://www.co-intelligence.org/Y2K.html

-- Jean Wasp (jean@sonic.net), April 06, 1999


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