Is there a standard definition of compliance that is regulatory in the electric utility industry, and should we expect our utility to achieve 100% compliance, or is being "Year 2000 Prepared" as SaskPower states (http://www.saskpower.com/Year2000/index.html)acceptable? I don't doubt "Year 2000 Prepared" may vary in definition according to specific utilities, therefore, my reference to SPC's website.

-- Anonymous, August 25, 1999

Answers

Val,

My opinion, for what it's worth, is this- The proper definition of Y2000 compliant is the same as Y1999 compliant. All the electric utilities are operating now, in 1999, without any major computor glitches, hangups, lockups, or failures. That is what would need to be achieved to be Y2000 compliant. But that is not possible at this point in time, with about 4 months to go. So they can only say that they think they will be "Y2000 ready". As 1988 rolled in 1999 there was no serious concern on the part of the utilities that their systems would fail them. They do not have that same full confidence in the coming rollover, and will be ready with all sorts of contingency plans. Thus, they say they are ready, Y2000 ready. Is that acceptable? Not to me. But it is the best I am going to get from them.

-- Anonymous, August 25, 1999

Correction: I meant to say "as 1998 rolled into 1999...." Sorry.

-- Anonymous, August 25, 1999

Val, I don't think you could say there's a "standard" definition, but the one most used in U.S. utilities for "Compliance" is summed up by "will perform all date functions correctly through the year 2000".

The term "Ready" is used with utilities and almost all other major businesses however, not "Compliant". System readiness can be summed up by "suitable for use into the year 2000" or "will perform primary functions in 2000".

In other words, compliance is generally accepted to mean completely fixed, no date problems at all, either at rollover or the leap year. Readiness means that the basic function of a system will work, even if a report or other non-critical secondary function comes up with an incorrect date printed on it. I believe Dan the Power Man used a car analogy a while ago as a good explanation of the difference between ready and compliant for utilities. If, after the rollover, your car radio or some of the non-essential niceties failed to work properly, but the car started, ran fine, and got you where you needed to go, it would be Ready. If everything that had a date function worked absolutely correctly, it would be Compliant. (This is just an example and not meant to imply that a radio necessarily has a date function.)

While compliancy is the optimum system status, and was the goal three years ago, late starts and time contraints soon changed the goal to Ready for mission-critical systems. Each business defines their own mission critical systems, although the electric industry does have standard functions that are considered critical by all. To sum up as best I can, the words "Suitable", "Prepared", or "Ready" mean the utility believes it can provide power to its customers. Depending on the individual definition of mission critical, it may also mean they can meter your electricity and/or get a bill to you (assuming the mail works)or accomplish other defined functions. Some utilities state they are now working on making non-mission-critical systems ready, some state that will be an ongoing process into and through 2000.

You asked if we should expect our utilities to achieve 100% compliancy. In one sense the answer is Yes. Any citizen or customer should have been able to expect that from their government, business community or utility, since it was a pretty obvious problem and should have been addressed in plenty of time. Obviously that expectation was not met, so we don't have any choice but to accept mission-critical "Readiness". It's the best we're going to get, and in many cases we won't even get that. (I'm talking about all infrastructure and business readiness here, not just electric utilities, and of course, this is my personal opinion.)

-- Anonymous, August 25, 1999

These guys probably haven't really gotten into the whole "definitional" thingy. They're COMPLIANT! (at least according to the headlines). Isn't it a little late in the game for newswires to be so stupid?

NERC says Hydro-Quebec Y2K compliant QUEBEC CITY, Aug 25 (Reuters) - Hydro-Quebec, North America's largest power utility, said on Wednesday it has received final approval from the NERC regulatory body for its millennium compliance program. "We finished the work last week and obtained final approval on Monday," said Mario Boucher, an engineer responsible of the millennium bug program at Hydro-Quebec. "For us, it is excellent news. We are telling our clients we do not foresee any problem or power breakdown related to the the year 2000," he added. NERC, the North American Electric Reliability Council, oversees the activities of power utilities all across North America and has been mandated by the U.S. Department of Energy to supervise all Y2K activities in the sector. Hydro-Quebec said all its critical operations --real-time operations, computer systems, transport and telecommunications network -- and facilities have been tested without any exception. "If the year 2000 would start tomorrow, we would be confident to go through the year 2000 without any problem," Boucher said. ((Patrick White, Reuters Quebec City Bureau, +418-648-6442, patrick.white@reuters.com)) [CAN] [O] [ELN] [CA] [Y2K] [ELG] [GVD] [LEN] [RTRS]

-- Anonymous, August 25, 1999

NERC regulatory body

Unbelievable. NERC, an industry organization created by and for the industry, whose budget is funded by the industry, is magically transmogrified into a "regulatory body".

Ain't the media just grand?

-- Anonymous, August 25, 1999

Compliant means it should work Ready means it should sorta work but at least nobody should get hurt.

-- Anonymous, August 25, 1999

Bonnie: The definitions you provide are excellent working definitions, and I think they sufficiently answer Val's original question (specific definitions are in the August 3 NERC report also, FWIW). One point of clarification: IMHO, Utilities did not change from attempting to achieve "compliance" to "readiness" because of, as you said, "late starts and time constraints". They did it out of practicality. Taking my car example (thanks for using it), would you replace the whole car just because the radio didn't work? Similarly, several power devices might only use two digit dates in their non- essential functions, but it would cost millions of dollars to replace all of them, for a medium-sized utility. Who would bear that cost? The customers, of course, and I doubt that you'd go for a 10% rate hike just so we can replace a bunch of stuff that will work fine except for a few reporting functions.

Jim Smith and Lane Core: Yes, the media unfortunately uses the terms "compliant" and "ready" interchangeably. Hydro Quebec's site correctly uses the "ready" term (www.hydroquebec.com/year2000/). Lane, since NERC is applying to become a regulatory agency, perhaps the article's author was prophesying?? :)

-- Anonymous, August 26, 1999

Dan, the practicality/expense reasoning might be a contributory aspect if you're talking about mission-critical systems only. However, two or three years ago nearly everyone, government and industry, was talking "compliancy" of _all_ systems. The whole shebang, not just mission critical. The extrapolation of your argument would lead someone to believe that only mission critical systems were addressed because it was decided it was the less expensive way to go and that late starts and time contraints had nothing to do with anything. Sorry, I don't buy that. Not to mention that if the industry had started earlier the expense would have been parceled out over a longer period and been easier to absorb. Finally, nearly all the utility SEC Y2K statements declare "Year 2000 costs will not have a material impact on the company," even if they've spent many millions of dollars. The same SEC filings often mention in the risks portion of the statement a caveat about having time to complete work. Now what would a stockholder think is the greater concern - money or time?

-- Anonymous, August 26, 1999