Quite some time back, I wrote an article about how the Y2k issue was being dealt with from a public relations perspective. Part of the problem in communicating a credible Y2k message is credibly communicating the message (is that an oxymoron?).

The most recent example I've run across is a news article from the Duluth, Mn. News. There's a short synopsis and link to the article in the euy2k.com newsroom (note that the Duluth News article will probably go to archive in a day or two, so get it while it's hot). Here's a synopsis:

The company (Minnesota Power) spokesman says they're 60% complete as of the date of the article, May 13th. They expect to complete the remaining 40% by the end of June. According to the article, they've been working on the problem for six years.

Capers Jones would love this one.

-- Anonymous, May 16, 1999

Answers

Perhaps they meant that 60% of their individual plants or facilities are already fully compliant and the remaining 40% are each close enough to being compliant that they will be finished by June.

-- Anonymous, May 16, 1999

Could be - but the whole point was that this is just another example in a long list of PR faux pax's surrounding the Y2k issue in the electric industry. For better or worse, people's opinions are formed by PR, whether from lousy reporting or ill considered comments from industry representatives. I'm not sure which category this particular article falls into. But I'm also sure that I'm not the only one who picked up on the math and timelines not making sense.

-- Anonymous, May 16, 1999

Rick, the whole PR issue becomes even more interesting when you compare what was said in the Duluth article to what Minnesota Power wrote to their stockholders and the SEC. You can really see the PR forces at work in the comparisons!

In the Duluth article: "Lucero told a group of community leaders in a Wednesday meeting at Boswell Energy Center in Cohasset that Minnesota Power will by June 30 have all of the utility's electrical supply systems repaired and ready for the year 2000 change."

In the recent 1st quarter, 1999 10Q filed on May 7: "The Company is on schedule for substantial Year 2000 readiness by June 30, 1999, with certain systems reserved for final integrated testing during scheduled maintenance outages at certain Company generating facilities in the second half of 1999."

("all" and "substantial" with exceptions, are two different things.)

Duluth article: "Minnesota Power has been working to solve the problem for six years, said Lucero"

Recent 10Q: " The Company has been addressing the Year 2000 issue for five years. In the ordinary course of business, it has replaced, or is in the process of replacing, many of its major computer systems with new systems that have been designed to be Year 2000 compliant." Then farther down the 10Q Year 2000 statement we find: "Formal Year 2000 readiness plans were established in March 1998."

(I've run across a lot of statements to the SEC where a company intones that they "began looking" at the Y2K problem through regular purchases of new equipment and then admit they didn't actually begin a Y2K "project" until much later. It's like someone saying they were "thinking about" getting married for five years, but, well, they actually didn't get a license until recently. Laughable, really, if it didn't smack of a cover-your-butt rationalization.)

Duluth article: "..spent roughly $4.5 million on hardware and software."

10Q: " Since that time (March, 1998), the Company has incurred $1.7 million in expenses primarily for labor associated with inventory, evaluation and remediation efforts. The Company estimates its remaining costs to prepare for the Year 2000 will be $5 million to $7 million, the majority of which are non-labor costs that will be incurred during the second and third quarters of 1999."

(So if you don't count the pre-Y2K project, "ordinary course of" business upgrade purchases, Minnesota has spent either 25% of its Y2K estimated budget, or 20%, depending on which figure you use of the extra $5 or $7 million remaining costs. And since part of the "majority" of expense will be expended in the third quarter, how they can say with a straight face that they will have all systems repaired and ready at the end of the second quarter, I don't know.)

Duluth article: "Roughly 60 percent of Minnesota Power's systems are ready for the changeover."

10Q: " The Company estimates that as of May 7, 1999 the remediation phase is approximately 57 percent complete based on the number of systems remediated."

It would be helpful to the public if reporters bothered to access the Edgar database of SEC filings and cross-checked information, but few seem to do that.

I also noted that the Minnesota rep advised people to "do what they would do if they heard about a big storm coming." Knowing from personal experience what people do when they hear a big storm is coming, I personally would rather be well prepared ahead of time, and not wait to find store shelves empty in a last minute rush to get supplies.

-- Anonymous, May 16, 1999

Lovely area with many fine people. I spent my first tour in the Air Force at Duluth. I really wish them luck. The coldest winter I ever spent was a summer in Duluth. Average August temperature was 55 degrees F.

-- Anonymous, May 18, 1999

Bonnie,

When I read the "translation" of the reports, as you have done above, I honestly get a nervous twitch for awhile. It's not so much that the news is shown to be not quite what was publically stated, but rather the realization that there is serious mistatement of facts being issued. Little lies, big lies, any kind of lies just make me doubt the "good" news too. Worst of all, these disconnect statements on the part of infrastructure providers, keep pointing in the wrong direction. It's like the public statements during the Viet Nam war, versus the reality of more troops, more money, less success, eventually just try to get out with whatever assets you can. Sigh.

-- Anonymous, May 18, 1999