Just a couple of snippets from the PSE&G Y2K statement (took them long enough to post one!) For those of you who don't know PSE&G is a MAJOR electric company in the North East.

------------------------------- [snip on] Project Status
Approximately 90% of our utility companys critical systems were made ready in 1998. By July of 1999, all utility critical systems are scheduled to be Y2K compliant, except for a small percentage of our nuclear systems, which will be remediated during planned maintenance in November 1999.
[snip off]

And from another section of the website:

[snip on]

Recent News
PSE&G MEETING Y2K CHALLENGE
Approximately 90 Percent of Critical Systems Ready
April 12, 1999

Public Service Electric and Gas Company (PSE&G) announced today that its inventory and assessment process, in preparation for potential Year 2000 (Y2K) problems, is nearly complete. With approximately 90 percent of the Company's critical systems Y2K ready, remaining remediation and testing efforts are proceeding on schedule, and will continue until all Y2K issues are resolved.
[snip off]

And from their Q&A section:

[snip on]

Have you verified the compliance of your suppliers?
We have surveyed our supplier base and are targeting our key suppliers to gain the necessary assurance that they are Y2K compliant.

When will the project be completed?
We expect to complete all critical systems before the year 2000. Non-critical systems, which operate correctly but need cosmetic fixes, may be remediated in 2000.
[snip off]

-------------------------------

Hmmm...so they were 'about' 90% done at the end of 1998, and more than three months later they are still 'about' 90% done. Also, in April, with less than 9 months to go, they were 'nearly complete' with 'inventory and assessment process'. They also won't be fixing some of their nuclear plants until NOVEMBER!!! Yeah, they'll be able to keep the lights on. Right.

Man o man, I sure am glad I got my generator....

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), May 16, 1999

Answers

YO TECH32:

There ARE some things that require a reactor be down to remediate. If you have the choice of bringing down a cash flow source once now to do remediation, and again later, when you have SCHEDULED it to come down, I'm sure you would only take one hit, too.

This is actually GOOD news for a couple reasons. It indiates that they KNOW there are remediations that they need to do, and it shows a rational plan to do them, rather than a knee-jerk, I-just-found-out- and-gotta-DO-sumpin' reactivity. I would rather my utility co had this approach than the latter.

Chuck

-- chuck, a Night Driver (rienzoo@en.com), May 16, 1999.

A few details from PSE&G's 10Q:

Many of PSEG's and PSE&G's systems, which include information technology applications, plant control and telecommunications infrastructure systems, must be modified due to computer program limitations in recognizing dates beyond 1999. Management estimates the total cost related to Year 2000 readiness will approximate $83 million, to be incurred from 1997 through 2001, of which $8 million was incurred in 1997, $27 million was incurred in 1998 and approximately $36 million is expected to be incurred in 1999. $5 million was incurred in the quarter ended March 31, 1999. A portion of these costs is not likely to be incremental to PSEG or PSE&G, but rather, represents a redeployment of existing personnel/resources.

The schedule to replace certain systems was accelerated for Year 2000 purposes. Analysis of these systems is continuing and costs identified to date are approximately $5 million, which are not included in the estimates above. Additionally, PSE&G is continuing its installation of programs (SAP) from SAP America, Inc. to replace certain major business systems. SAP America, Inc. has represented that SAP is Year 2000 compliant, and thus, installation of SAP will eliminate the need to modify those business systems for Year 2000 compliance. The phased implementation of SAP is scheduled to be completed before January 1, 2000. The cost of implementing SAP is not included in the above cost estimates since SAP implementation has not been accelerated for Year 2000 purposes.

Let's see now, they're 90% ready, but of the $83 million, they've spent $40 million so far. Hmmmmm. And the SAP installation is going to be completed before 1-1-2000. Hmmmm.

Jerry

-- Jerry B (skeptic76@erols.com), May 16, 1999.

Chuck,

I know, but friggin' November is cutting it a bit close wouldn't you say? I mean, it may not be profitable to take it down sooner, but how profitable will they be if something goes wrong and they aren't generating juice?

Jerry,

Hmmm....approximately $36 million is expected to be incurred in 1999 yet they only spent $5 million in the first quarter. Suuuure they're on schedule....

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), May 16, 1999.

Tech32:

Before making such an assumption, wouldn't you need to examine their remediation schedule with respect to their budgeting schedule? I am not an accountant, but I know they have all these different terms like incurred, encumbered, expensed, amortized, etc. I'm sure all these accouting practices have some meaning. If you purchase a vehicle on an 5-year note, you certainly haven't *paid* for it, but you are actually driving it. Yet the way you describe it, you are still walking until the entire note is paid off.

Certainly it would seem to be in the best interests of any utility to actually perform the fixes as soon as possible, and postpone actually paying for them as long as possible. I believe you are jumping to a congenial conclusion without any understanding of what's really happening.

-- Flint (flintc@mindspring.com), May 16, 1999.

Flint,

Both TECH32 and I used the colloquial "spent", but the term "incurred" refers to events that precede paying the bill. Incurring the expense may refer to an event as early as sending a purchase order to a vendor, but the latest event to which it may refer is receipt of the goods.

While it would seem appropriate to raise questions on such matters, the gratuitous assertion of "jumping to congenial conslusions" seems merely obnoxious.

Jerry

-- Jerry B (skeptic76@erols.com), May 16, 1999.

Flint,

....approximately $36 million is expected to be incurred in 1999. $5 million was incurred....

They seem to be using the same accounting term 'incurred' here.

To use your example of the car, if I have a 5-year note, I do NOT expect to incur the entire cost of the car in the first year, even if I am driving it now. I expect to incur 1/5 the cost of the car (plus interest) each year.

What their numbers tell me is that, as of April 1, they have 31 million dollars worth of work left to do this year. That's a a whole lot of work left for a company that's 90% done...

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), May 16, 1999.

Jerry:

I didn't mean to be obnoxious. You point out (I think?) that you can incur expenses long before you actually spend them. Tech32 said they expected to incur $36 million, but had SPENT only 5 million. Would it be possible that some expenses have been incurred but not yet spent?

Yet Tech32 implies (suuuuure they are, he says) that incurring and spending are simultaneous, and therefore they are way behind in the actual remediation. In addition to this assumption of simultaneity, Tech32 is assuming that the expected expenses accurately describe future spending requirements. Finally, I infer (perhaps wrongly?) that Tech32 is saying that if all required remediation expenses are not SPENT before the end of the year, this will negatively impact actual power generation.

Because all three of these assumptions are open to question, his conclusion is in some reasonable doubt. Yet he admits to no such doubt. I don't think I'm that far off base in pointing out that the technique of stacking assumptions to arrive at dire conclusions is common practice on this forum. And why would anyone choose to do this if they didn't find such conclusions congenial? Certainly this technique is neither logical nor accurate, and can be used to arrive at almost *any* chosen conclusion.

-- Flint (flintc@mindspring.com), May 16, 1999.

Flint,

One more time:

....approximately $36 million is expected to be incurred in 1999. $5 million was incurred....

That is not an assumption.

They were approximately 90% done at the end of 1998. Three months later they are still approximately 90% done (AND not yet complete with their inventory and assessment).

That is not an assumption.

They expect to incurr $83 million in Y2K related costs but have only incurred $40 million as of April 1, 1999, despite having started OVER two years ago.

That is not an assumption.

They are installing SAP which, as I've explained in other threads, is rarely (if ever) implemented on schedule.

That is not an assumption.

They are either hopelessly incompetent or they are feeding us a bunch of sh*t.

That is not an assumption.

The only thing that might be an assumption is that any of this has to do with power generation. Does it? Who knows, but their credibility is certainly in question.

And as I stated in other threads, even if they can generate power, if their internal systems are screwed up because they are only halfway done with their SAP installation, how will they remain in business?

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), May 16, 1999.

Flint,

PSEG, aka PSE&G, used the term incurred. If they have received goods (and/or services) that they have ordered, they have indeed incurred the expense. If they had not incurred the expense by March 31, that means that they had not, as of March 31, received the goods and/or services. By their published current estimate, they hade not, by March 31, received $31 million of the $36 million of Y2K goods and/or services that their plans require for 1999, above and beyond the SAP expenses.

Jerry

-- Jerry B (skeptic76@erols.com), May 16, 1999.

I see I'm being summoned. Here's my take on all of this.

First, at face value it does appear that something is awry, particularly with the 90% figure not changing. It could be that one portion of their web site is not quite up to date. I would recommend that if you are a customer of PSEG, that you contact them, and give them a chance to explain the apparent discrepancy.

Regarding the $ figures, Flint already pointed out that you can't necessarily use monies spent as an indicator of progress. For example, at my utility, we have spent less than 10% of our original total budget, yet we are more than 95% complete with our remediation efforts. This is because the Y2k bug in power companies has turned out to be a much smaller problem than was originally thought. Again, the 10Q information might be out of date and in need of an update.

Regarding the nuclear plants not being remediated until November, this also creates a common misconception that it means trouble for utilities (although I can see why this concerns many). Most large power plants are on a fixed overhaul schedule which can be up to 10 years in advance, and they may not be scheduled for an outage for 2 years at a time. Perhaps these plants haven't been down since late 1997. Now, think of it this way. Say you have 3 large nukes at one power facility. You've already successfully remediated and upgraded some equipment in units 1 and 2, tested them, and found them to be y2k compliant. But the third unit isn't scheduled for an outage until late 1999. You know how long it will take to fix, and you've done it twice already. Further, even if you don't get that third unit remediated, you know that there is more than 50% excess capacity available come January 1 (albeit at a higher $ rate). As Chuck indicated above, to take a special outage early would cost tens (perhaps hundreds) of thousands of dollars, all of which would have to be paid by your customers (and I know how happy you all are to pay higher power bills). So what would you do? This is more than just a technical issue.

In my opinion, the real deal comes down to July 1. If PSEG is still only 90% complete at that time, they will have some explaining to do to NERC and their customers. Like I said, if you are one of their customers, by all means contact them if you have these concerns.

-- Dan the Power Man (dgman19938@aol.com), May 16, 1999.

Dan, The 10Q was "signed" by PSEG's controller (principal accounting officer) on May 6, i.e. ten days ago. The data are about as up to date as you can get. Jerry
P.S. The 10Q does not mention any percentage complete numbers.

-- Jerry B (skeptic76@erols.com), May 16, 1999.

Hi Dan,

I haven't read the details of the latest NERC report yet, I've been swamped at work and home. However, my understanding is that an average of 75% of the industry is "ready." Last week, we read that FPL had a successful test, and they are at the 95% mark, and another company reported 94%. This tells me that other companies are at the 55% level, to get an average of 75%. FLP started in 1995, before most, and are at 95%, not yet done. Rumor has it that many started much later. This is what worries me. We are at the 7.5 month mark. What is going to be over-looked in the last minute rush? Like most complex digital things in our world these days, the power grid walks a thin line between work and not, even without Y2K, in my humble opinion.

That's part of why I'm here. I really do respect your opinion Dan, and I salute you for making the offer to have Drew verify your ID. That really says something in my book. I am on your side, and really do hope that what you are finding at your company, will turn out to be true for the whole industry. But then again, I look at the arguments of Mr. Cook, Mr. Cowles, and Dr. Altman, and to be honest with you, I'm not so sure. I look at my 31 years in the computer business, having nothing to do with power, and I'm not sure. I look at the arguments of the dozens that make this forum, and I'm not sure.

Dan, please keep us posted on your progress vs. the Y2K monster. You, sir, have an A ticket. <:)=

-- Sysman (y2kboard@yahoo.com), May 16, 1999.

Dan,

They only recently (w/in the last few weeks) put up ANYTHING on Y2K so the info is about as fresh as it can get. I understand what you are saying about the $ figures, but really, if you guys are only at 10% of your estimate, how come so many others are at the %40+ mark? Not to sound nasty here but do you know something they don't about repairing systems? Also, if things were going so swimmingly shouldn't they have reduced their estimated Y2K expenditures before now and disclosed such a reduction in their 10-Q reports?

I also understand what you are saying about nuclear plants, but still, November is damn late to be doing any kind of remediation work.

>In my opinion, the real deal comes down to July 1. If PSEG is still only 90%...

What if they are at the 95% mark? How would -you- interpret that?

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), May 16, 1999.

Hi again. Up late and watching...

Nuke plants flip me out. I look at a control room, and I think COMPLEX SYSTEM! Yea, I hear about the "analog" systems, but I still wonder how much is digital? How much is date "sensative?" Now many CPUs and RTCs, or other "timers?" What is the "big picture?" What does 75% mean? <:)=

-- Sysman (y2kboard@yahoo.com), May 17, 1999.

Hello again, TECH32 and Sysman.

Sysman, thanks for your respectful post. I appreciate it. Yes, the 75% number was an average as of March 30, so there would be entities reporting less than that value. Yes, I'll keep people updated as to our progress...there isn't much going on right now, since most of us are finishing up our work on testing/remediation and writing contingency plans. The next "big" date for power companies is June 30, and I'm sure you'll get an earful of information at that time.

TECH32, if what you posted from PSEG is the latest, then there does appear to be a discrepancy...again, give them a call. Any utility that does not report 100% completion July 1 must give a list of the exceptions to NERC. I believe that information will be made public at some point, but I'm not sure.

Why has my company only spent 10%? Two reasons: Back in 1997, our management took Y2k very seriously and did not want budgeting matters getting in the way of solving this problem, so they were very generous in their initial budget estimates. Secondly, our company decided that we could do our Y2k program internally, without the use of consultants. Most consultants, as you know, carry a very high price, and those utilities who used them generally spent a lot more.

I conclude with a concession that it is obvious that there are some who sincerely believe that being done July 1 is "too late"; after all, it does appear that people have wanted to make preparations before the industry planned to finish (i.e. generators are in short supply already). This issue will probably go down as a "lesson learned", hopefully only discussed internally in March 2000 because there were no major problems caused by the Y2k bug.

-- Dan the Power Man (dgman19938@aol.com), May 17, 1999.

Thanks Dan,

I look forward to "The next "big" date for power companies is June 30." And I also look forward to a whole bunch of "good" Y2K news this summer. We need it. We want it. I really am on your side. Later... <:)=

-- Sysman (y2kboard@yahoo.com), May 17, 1999.

Still - a little troubling those two pesky issues with the PG&E numberss - very low (at this date) on percent spent (without changing the budget - seems they'd do that as soon at it appeared to money wasn't needed!) and about that "nice and clean" 90% done figure.

90% is so easy to report, it sounds nice and implies "almost done" but is far enough from "complete" to still justify losts of quiet spending and remediation without raising alarms.

NASA, on the other hand, issued straight-forward counts of number of systems, number repaired, what was spent, what was behind schedule, what was finished. Detailed numbers make it harder to "accelerate" progress, harder to conceal problems, but show that the compeny really knows what is going on. Here, with contradictory numbers that don't change with time (like the FAA's reversing precent complete over time) and with budget figures that don't match precent complete - something's funny.

On the nuclear repairs - yes, it's close, but the pre-planning on those things is extensive, and very closely controlled to the neaest 1/2 hour. That schedule is very closely followed, if they intend to operate the plant the next few weeks (after shutdown in November), the schedule to finsh the last few replacements in November is okay. Could be too, that the startup is scheduled after the first January......

-- Robert A. Cook, PE (Kennesaw, GA) (cook.r@csaatl.com), May 17, 1999.