9/9/99: Power Industry Stages Another Drill September 9, 1999

If you haven't already, check out the New York Times article that says, "28 Utilities Faulted on Year 2000 Readiness." This article just barely touches on the truth of what's happening with our electric industry. Through various investigations -- some of which have been made public here on Y2K Newswire -- we have learned that much of what the electric utility industry creates for public consumption is nothing more than spin. The real story has yet to be told. In this feature article, we attempt to tell it.

CONFLICT OF INTEREST First, we have the conflict of interest issue that remains unmentioned in the mainline press: that the operating funds of the North American Electric Reliability Council (NERC) are provided by the power companies. Salaries of NERC employees are paid by the power industry. And yet the nation seems to be relying on NERC to police the industry that gives it money. This is like allowing cattle ranchers to directly pay the salaries of beef inspectors.

That aside, most of the people at NERC are sincere people. They are serious about their work and they strongly believe they are improving the Y2K compliance of electric utilities. We find no fault with the specific individuals at NERC with which we've spoken. But the organization, as a whole, lacks a culture of skepticism for the industry it is policing. This becomes obvious, for example, in the NERC explanation that internal payroll and accounting systems are not considered "mission critical" systems. A NERC spokesperson told Y2K Newswire that NERC doesn't even look at whether an electric utility can actually pay its salaries or its creditors. That's not even on the radar. The only thing NERC looks at is whether that power generation or distribution facility can physically create and distribute power.

In all fairness, this was the whole point of the NERC organization to begin with: to make sure electric utilities can generate and distribute electricity. But for NERC to be implying electric companies are ready for Y2K even though they admittedly have no intention of determining whether an electric company can even stay in business seems rather strange. It is hardly reassuring to hear that an electric company can run its boiler but can't pay its employees.

DRILL TIME! It is well known by informed Y2K commentators that NERC works with electric utilities to practice and then publicly perform various "drills." These drills appear to be designed to create a public perception, not to rigorously test the power infrastructure. As a result, they tell us very little about the Y2K redundancy of the power grid.

Because of these staged drills, to this day, no rigorous test of the industry's ability to produce and distribute power beyond January 1, 2000 has ever been conducted. But yet, they've hosted "drills!" The press has picked up on the drills, too, and published headlines that misled most people into believing they actually tested the Y2K readiness of the power industry. Nothing of the kind is true. In fact, other aspects of the drills lead intelligent people to wonder...

The timing of today's drill, for example, is probably no concidence. We think NERC placed the drill on 9/9/99 for a specific reason. Most notably: if anything goes wrong, it can be blamed on the mythical "9/9/99" problem rather than NERC.

The simple fact that NERC stages these drills in order to achieve a "public relations victory" isn't even in question. Documents from NERC's own web site describe it in explicit detail. Y2K Newswire grabbed a document from the NERC web site earlier this year and maintains a copy on our own servers. The document, in PDF format, is entitled, "Session 2-C Y2K Drill Preparations." Point #1 says, flat out, "The April 9 drill is intended to instill public confidence through success and at the same time be a real test of our ability to operate with limited communications capabilities." What does this mean?

First, it means they did nothing to test the Y2K reliability of power generation and distribution, which is, according to most level-headed people, the whole point of having electric utilities. Instead, they tested the "communications capabilities." For some electric utility workers, that means firing up the walkie talkies and saying, "Can you hear me?"

This document also contains instructions like, "Prior to [the] drill, test the systems that will be exercised during the drill." In other words, work it all out ahead of time. Even more bizarre, the document instructs participants to, "[Consider] what will the final report look like. Work backwards from this in the development of the drill procedures." Or, paraphrased, design the test to achieve the desired outcome.

The document spells it out again on a later page when it says, "Do not make the drill too complex. We want to have a successful and meaningful story for publication."

Even the timing of this April drill was certainly no coincidence. Just like the 9/9/99 drill, the 4/9/99 drill was placed on a day that would explain away Y2K failures: April 9th was the 99th day of 1999.

Some critics would say NERC had no idea this was the 99th day of 1999. Just a coincidence, they say. Then why does the NERC document say, "Was NERC aware that April 9th is a real Y2K sensitive date? Answer: Yes, April 9th is the 99th day of 1999."

COMPLIANT WITH EXCEPTIONS Further obfuscating the compliance issue, NERC made a decision that, at the very least, is misleading. This is called the "Y2K Compliant With Exceptions" rule, and here's how it works: an electric utility that is not Y2K Compliant and might, for example, be waiting on spare parts that won't arrive until October, can be officially designated as "Y2K Compliant With Exceptions" simply by listing the non-compliant systems with NERC.

This, of course, contradicts the whole idea of the phrase, "Y2K Compliant." To be "compliant" is to have resolved all exceptions. Therefore, the phrase, "Y2K Compliant With Exceptions" really means not Y2K compliant. But that's not how NERC wants to describe it. This is how language is manipulated to mislead the American public: a non-compliant utility can be officially called "compliant with exceptions."

To put this into perspective, consider food-labeling laws. What if a product was labeled, "Fat Free! (with exceptions)" but really had 25% fat? The "Fat Free" part would appear in really large, red letters, while the "with exceptions" part would be in light gray fine print, somewhere near the bottom of the label. Most consumers would be misled into thinking the food was, in fact, fat free. Any food labeled this way would be subjected to severe penalties from the FDA, but when the power industry uses the exact same tactic to imply a state of compliance that has not been achieved, nobody seems to blink.

But that's not all: Y2K Newswire verified NERC has no system or protocol in place to downgrade utilities that do not resolve their outstanding exceptions. In other words, an electric utility company that is not Y2K compliant -- but is called "Y2K Compliant with Exceptions" -- can move right into January, 2000 without resolving these issues. There is simply no system in place to either warn the American public about this or to enforce full compliance at the electric utilities.

These are just some of the many problems surrounding the current claims from both NERC and the power industry about the Y2K compliance of the industry in general. Every explanation, every phrase and every drill seems to have loose ends.

THE POWER INDUSTRY TEMPLATE DOCUMENTS You may recall how Y2K Newswire broke the original story about the NERC power industry template documents. We were able to confirm that industry participants agreed on a "common language" well ahead of time, and NERC distributed Y2K compliance claim documents, in template format, to the power companies. NERC then accepted the return of those very same documents as partial evidence of Y2K Compliance.

If you're skeptical that this took place, read our original report that broke the story. Next, read the follow-up story. Then, ask yourself why various press releases share exact copies of phrases that claim Y2K readiness. Why were power industry officials from different power companies issuing statements on exactly the same day that sounded exactly the same?

BEYOND COINCIDENCE All this is beyond coincidence. Not only was the April power industry drill staged, the September power industry drill is also being staged. We believe the industry is intentionally misleading the American public through the top-down distribution of pre-approved phrases, an under-the-table agreement to use "common language," and the distribution of the template documents that taught electric utilities exactly how to claim Y2K readiness.

DOES THAT MEAN WE'LL LOSE POWER? Not exactly. Strong evidence points to a power industry cover-up, but this evidence says nothing about whether the power grid will stay up when Y2K arrives. Although a national grid failure is possible, we aren't betting on a total collapse of power. Certainly, compliance has not been proven, but neither has an outright collapse. Our best guess: some people will have power, some won't. The people who don't will be caught unprepared because they were told they would always have power.

The sad fact is that we'll probably never know the true status of the industry's compliance until January 1 (and even our own prediction on power is just an educated guess). It's beyond sad, really: it's a tragedy that an industry so critical to the economic livelihood of this country can't conduct a real test and solicit honest statements from power companies (instead of distributing canned phrases).

Will the lights stay on when January 1 rolls around? Not only does the public not know the real answer, the power industry people who could have known the answer seem determined not to give it to you. But they seem to forget this simple fact: in 113 days, you'll find the answer on your own.

-- Anonymous, September 08, 1999

Answers

Sean,

I sure wish I had better information about the power industry readiness. I can tell you this though, Philadelphia, nearby, is putting in about a million dollars worth of backup generators for their water and sewer systems. Vanguard, the mutual fund giant, just west of Philadelphia, is putting in 6-7 backup generators. What do they know, and who do they know, that I *don't* know? They sure must have some very good reasons for doing this. They didn't have this equipment on-site before, even for "a bad winter storm."

-- Anonymous, September 08, 1999

Sean, I generally agree, and am concerned. However, has Y2knewswire put a list up of all Congressmen and Senators Telephone Numbers, on a state and federal level, so concerned citizens can Telephone, and not be ignored by autoresponders for email?- No, Why Not?

The Nerc drill according to Rick was for communication purposes, as seen in a thread a few lines down.- Like a fire drill.-Great, but will the phones work, cellular, sattelite, or hardline?

Did any one demanded or suggested that Ted Koppel or Geraldo do a week long piece on the power industy?

Why wasn't that suggestion done a year ago, or in January '99?

Do you really believe that any substantial remediation can be done betweeen now and 1/1/2000?

Has any body told their Senators about the "Hot Standby" at Indian Point Last week?

This is a great forum, but does anyone here reach outside of cyberspace? Or do we get little quips from anonomous factfinders as responses to concerned questions and comments from people who don't know where to go to affect change?

Perhaps some direction for the viewers / readers as to how to raise a fuss in the ears eyes and offices of the entities who can make a change would remove some of the powerless feelings from the lied to public.

I personally subscribe to Y2k newswire alertsend email, and have been reading it since January, Daily.- I think a list of phone numbers and emails would be well recieved.

Lastly, it appears the government doesn't understand the Y2k problem, and therefore the Department of energy subbed out their authority to the NERC.- Personally, I believe that rather than passing laws to shield companies from liability, they should strengthen them and charge these self serving clowns with Treason.

I believe if this Y2K issue isn't handled correctly, it could be the downfall of the US.- I hope not.

-- Anonymous, September 09, 1999