And we wonder WHY the public doesn't believe...

greenspun.com : LUSENET : Electric Utilities and Y2K : One Thread

Quite some time back, before EEI and EPRI and NERC and NEI and all of those other industry association acronyms got involved in Y2k, I opined that Y2k was going to turn into a public relations nightmare for the industry. IMHO, the electric industry as a whole has never been adept at dealing with negative public relations issues, and like many things Y2k (say, IT program metrics) there was no reason to expect that publicly dealing with the Y2k issue would be any different.

Here's a prime example of what I'm talking about. I think just about anyone following this forum could pick apart the following PR release from EEI. Public relations is supposed to be about instilling public confidence. And, maybe, this particular press release is targeted toward the 90% of the population who just doesn't give Y2k a second thought, not the small percentage of us who do follow the issue closely and understand the nuances of disclosure.

Maybe I'm just too sensitized to the issue. None the less, these are poorly written press releases, authored by people who clearly do not understand the nuances and due diligence required of simply telling the public the status of the corporate Y2k program. If they do not understand the nuances enough to write a good press release, are we to expect that the companies the PR folks represent understand the nuances of Y2k enough to adequately deal with the actual problem itself?

Here's the release:

1. MERRILLVILLE, Ind., Aug. 3 /PRNewswire/ -- Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc. (NYSE: NI) and a provider of natural gas and electrical service to the northern third of Indiana, announced today that the North American Electric Reliability Council (NERC) has determined that NIPSCO is ready to meet the energy needs of its customers on January 1, 2000.

NERC, in its last quarterly report released today to the Department of Energy (DOE) on the Year 2000 (Y2K) readiness of electric utilities, said NIPSCO and 251 other North American electric utilities are already Y2K compliant in the critical functions needed to deliver electricity to their customers. NERC is a non-profit industry group that sets electric reliability standards for the electric systems of North America.

NIPSCO, with the exception of three Y2K projects to be finished in tandem with scheduled maintenance work this fall, has successfully completed its remediation of all mission critical Y2K systems.

"Based on our diligent evaluation and testing of NIPSCO's plans, personnel and equipment, we believe it will be highly unlikely that our customers will experience service interruptions based on the Year 2000 computer issue," said Patrick Mulchay, NIPSCO's president and chief operating officer. "In addition, contingency plans have been developed as added insurance and will be in place to ensure the reliability of energy service to our customers during the transition to the Year 2000."

Since 1996, NIPSCO has spent in excess of $18 million rigorously inventorying, testing, remediating and evaluating all of its Y2K sensitive systems. In addition, NIPSCO has locally tested its contingency plans and will participate in a national Y2K drill sponsored by NERC on Sept. 9, 1999, which will further test NIPSCO's contingency plans and communications systems.

Additionally, NIPSCO, as a part of its Y2K contingency planning, will have extra personnel on duty over the New Year's holiday weekend to handle any unplanned events.

A copy of the last quarterly NERC Y2K status report to DOE, "Preparing the Electric Power Systems of North America for transition to the year 2000: A Status Report and Work Plan, Second Quarter 1999," is available from the NERC website, http://www.nerc.com/y2k .

Additional information on the Y2K efforts of NIPSCO and NiSource Inc. is available on the World Wide Web at http://www.nipsco.com .

Northern Indiana Public Service Company (NIPSCO), a subsidiary of NiSource Inc. (NI), is a regulated utility that provides natural gas service to nearly 700,000 customers and electrical service to 416,000 customers across the northern third of Indiana. NIPSCO is the largest natural gas distribution company and the second largest electric distribution company in the state of Indiana. More information about NIPSCO and other NiSource Inc. subsidiaries is available via the Internet at http://www.nipsco.com .

SOURCE Northern Indiana Public Service Company Web Site: http://www.nisource.com http://www.nipsco.com http://www.nerc.com/y2k

2. WASHINGTON, Aug. 3 /PRNewswire/ -- Status reports on electric power supply and delivery into the Year 2000 indicate that the nation's cooperative electric utilities are on track with the rest of the industry in preparing to keep the lights on when the calendar changes over.

Eighty-six percent of the electric cooperatives participating in the most recent survey of the electric utility industry reported that they had achieved Year 2000 readiness by the June 30 goal set by the U.S. Department of Energy (DOE). Another 13 percent said they would be ready before the end of the year.

Data from 96 percent of 858 electric cooperative distribution systems were compiled as part of a comprehensive assessment of electric distribution readiness contained in Preparing the Electric Power Systems of North America for Transition to the Year 2000: A Status Report and Work Plan, delivered today to DOE by the North American Electric Reliability Council (NERC). As requested by DOE, NERC is the official coordinator of Year 2000 readiness, risk assessment, and contingency planning for the electric utility industry.

The survey of electric co-ops, fourth in the series begun last year, was conducted by the National Rural Electric Cooperative Association (NRECA), Arlington, Va., the trade association representing private, consumer-owned cooperative utilities. NERC had asked the electric utility trade associations to participate in a quarterly assessment effort of their member distribution utilities to accelerate the reporting process to DOE.

"Electric cooperatives are on track in testing and fixing their mission- critical systems and in preparing contingency plans as defined by NERC," said Ron Greenhalgh, NRECA chief engineer and chairman of NRECA's in-house Year 2000 Task Group. "Cooperatives that reported plans to achieve readiness later in the year will be surveyed further to track their progress." NERC said in the report that it would continue to update DOE as 1999 draws to a close.

"In order to serve 11 percent of the U.S. population, electric cooperatives own and maintain more than 40 percent of the electric distribution lines in the country, so they are well aware of their critical role in preparing for reliable and sustained operation of their electric systems, which are, after all, owned by their consumers," said Glenn English, NRECA chief executive officer.

"Although no business, utility or otherwise, can make 100-percent guarantees, electric cooperatives are showing themselves diligent in shoring up their service reliability and participating in this voluntary reporting effort," he said.

Electric cooperatives' high response rate throughout the NERC assessment effort indicates they have taken the appropriate steps to minimize disruptions in electric service when the millennium rolls around, according to Greenhalgh.

The electric co-op data submitted by NRECA to NERC concerned the readiness of distribution systems, or delivery of power to the end-use consumer. Distribution cooperatives had previously indicated overall satisfaction with the readiness efforts of their wholesale power suppliers. Cooperative data on those generation and transmission functions are being handled directly by NERC in its role as coordinator of the various regional electricity grids in North America.

Greenhalgh noted that NERC has pointed out that distribution systems may be the "least sensitive to Y2K anomalies," because most equipment is mechanical, meaning there are few digital controls and relatively few embedded chips.

The nation's nearly 1,000 private, consumer-owned cooperative electric utilities serve more than 32 million people in 46 states. Stated another way, electric cooperatives serve 13 million businesses, homes, schools, churches, farms, irrigation systems, and other establishments in 2,600 of 3,128 counties in the U.S. Visit NRECA's Web site at http://www.nreca.org SOURCE National Rural Electric Cooperative Association END



-- Anonymous, August 04, 1999

Answers

I agree Rick. If they are as good at remediation as they are at writing press releases then we are in a heap of trouble.

-- Anonymous, August 04, 1999

There is a most interesting part of the first press release which is different than anything I've seen before and may indicate a radical shift in the industry legalese.

"... announced today that the North American Electric Reliability Council (NERC) has determined that NIPSCO is ready to meet the energy needs of its customers on January 1, 2000."

Notice that readiness has now become * NERC's* determination, placing the responsibility outside of this individual utility! The press release may be full of holes and mis-defining of the situation (and I think it is) but the clear implication they're presenting -- that of NERC being an outside judge, rather than just a gatherer of status info the utilities give themselves, positively shouts a legal CYA pass-the-buck ploy.

I remember reading some comments, back when the DOE asked NERC to take over the coordination and monitoring of the industry Y2K projects, which postulated that NERC was in effect being made an intermediary legal scapegoat. It will be interesting to see if any other utilities pick up on NIPSCO's trick of using a "THEY determined" message. I also wonder if NERC has picked up on this and how they feel about having their head put on the block?

-- Anonymous, August 04, 1999


Bonnie,

What head on what block? NERC is an amorphous entity comprised of smoke and mirrors. How do you capture something like that. Even Koskinen, who has an actual head, doesn't seem concerned about it going on any block. This is professional politics and bureaucratic games at it's finest.

-- Anonymous, August 04, 1999


North American Electric Reliability Council (NERC) has determined that NIPSCO is ready to meet the energy needs of its customers on January 1, 2000.

Talk about smooth. Whew!

-- Anonymous, August 04, 1999


Gordon, NERC may be an amorphous entity, but it IS a valid organization which was given oversight responsibility, and whose staff is still subject to subpeona power (and the attendant legal fees involved). The smoke and mirrors part is going to come in if/when any lawyers want to try to pin down any liability. I tend to agree that it's "professional politics and bureaucratic games at its finest". You know what I don't see reported on much? How the legal profession and judicial systems are doing in their remediation....should be interesting to discover if all their office computer systems function properly, huh?

-- Anonymous, August 04, 1999


Bonnie,

Trying to capture and pin down NERC will be like one of those greased pig events at a county fair, perhaps with even the sounds, IMHO. As to the judicial system, I see commentaries from time to time that they are not getting the work done. Since the legal arena is *so* dependent on records and dates it will be interesting to see if they can cobble together anything solid during the next few months, and then after the Y2k bug starts to bite. I think there are going to be a lot of GIGO problems for them, for quite awhile.

-- Anonymous, August 04, 1999


Bonnie,

Because you raised the question: Page 7 of Gartner Group's Lou Marcoccio's March 5, 1999 testimony to the U.S. Senate Y2K Subcommittee includes slide 5 - which portrays the y2k remediation status of 27 'industries'. Law Practices were 27th out of 27. I consider this to be good news. And just to relate this post to the topic of this forum; it is clear to me that the American legal system and American lawyers are doing great harm to the American people by inhibiting electric utilities ( and other organizations )from truthfully communicating in detail about their y2k remediation efforts and status.

-- Anonymous, August 04, 1999


jeff, i would like to make a comment on something that has been bothering me for months on this 'the lawyers won't let us' issue.

law firms fight for clients the way sharks go into a feeding frenzy... ferociously, frenetically, and they show no quarter. they are not demi gods and they do not have the final say... they would not risk alienating a large client under 'any' circumstances.

they advise, they do not run the companies nor do they own them. i am sure this issue was discussed ad nauseum, behind closed doors, and the general consensus of opinion... the lawyers won't let us say we are 'ready.' the client always has the final say.

how's that for a no answer to any question you care to pose... and it's all those 'bad lawyers' who made me do it. we, the good guys would love to tell the truth ... but we can't... we are not allowed.

-- Anonymous, August 07, 1999


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