Natural Gas Utilities, Other Energy Companies in Good Shape For Y2K, President's Advisor Says

WASHINGTON, Oct. 28 /PRNewswire/ -- The United States' energy industry is in very good shape for the Year 2000 but must remain vigilant about back-up planning as the date rollover approaches, according to John Koskinen, chairman of the President's Council on the Year 2000 Conversion. Koskinen was the keynote speaker at a conference for chief information officers in the energy industry held here Tuesday, October 26, 1999, by Washington Gas and the American Gas Association (AGA). Koskinen said the public is "increasingly confident" in the Y2K-readiness of the natural gas, electricity and petroleum industries, due in part to the close collaboration among those industries and their business partners, the companies' participation in public meetings and their response to industry surveys. He saluted the "vast amount of time and effort" that individual companies and their industry representatives have devoted to Y2K readiness efforts. During the last six months, Americans have grown more confident in the readiness of local natural gas utilities, according to a public opinion poll conducted by AGA in mid-September. The number of people who believe that there will be Y2K-related disruptions in their natural gas service has been cut virtually in half this year, from 19 percent in May to 10 percent in September, the survey found. Overall, more than three-fourths (78 percent) of those surveyed by the AGA believe that there will be no Y2K-related disruptions to their natural gas service. Lisa Metcalfe, vice president and chief information officer (CIO) for Washington Gas, said Year 2000 preparations have contributed to the changing roles of CIOs in the energy industry. "Year 2000 programs have increased the understanding of the role of information technology and its strategic importance in the rapidly changing energy industry." Washington Gas completed the necessary remediation, replacement and testing of its critical computer and embedded systems before the Sept. 30 benchmark date established by the Federal Energy Regulatory Commission, Metcalfe said. Headquartered in Washington, D.C., Washington Gas provides natural gas and other consumer services to nearly 850,000 residential, commercial and industry customers throughout metropolitan Washington, D.C., and the surrounding region. For more information, please visit the Washington Gas web site at http://www.washgas.com. The American Gas Association (AGA) represents 189 local natural gas utilities that serve customers in all 50 states. AGA members deliver natural gas to over 93 percent of the 60 million U.S. homes and businesses that use natural gas. More information is available on the AGA web site at http://www.aga.org.

The statements contained in this press release regarding Washington Gas's Year 2000 program are designated as a "readiness disclosure" within the meaning of the Year 2000 Information and Readiness Disclosure Act of 1998.

SOURCE Washington Gas Light Company Web Site: http://www.washgas.com

-- Anonymous, October 29, 1999

Answers

These statistics don't mean a thing. They're all about consumer confidence, and not actual industry readiness. According to the Senate Y2K committee's 100-day report, the oil and gas working group had only 20% of companies reporting that their business systems were done, and only 16% of companies reporting that their embedded systems were done. (This is as of June 30, 1999.) Also, these statistics include companies representing only about 10% of all companies reporting, representing approximately 66% of consumption.

The emperor is naked, and the AGA is apparently willing to go along with the ruse. The people on this forum are screaming in a blizzard--nobody hears us!

-- Anonymous, October 29, 1999

I basically agree with Ann. So, Menno, let me ask you why you bring this up in this way? Do you believe that the information coming out of Washington in general, and the Koskinen group in particular, is good information? Since you are from the Netherlands it would be nice to hear what your own area is saying rather than have you post generic spin that we are inundated with every day. I forget, are you concerned that there will be problems, or do you feel it will all pretty much get resolved in, ohhh, 2-3 hours or 2-3 days?

-- Anonymous, October 29, 1999

I also would be far more reassured to hear the gas companies themselves saying they are fine rather then hearing that my neighbor the cab driver and his friends think the gas compnaies are fine. In fact, its a little odd and unnerving that they are reporting this, its not a popularity contest or an election.

-- Anonymous, October 29, 1999

To put it in another way, Menno, Truth is not subject to majority vote.

dave

-- Anonymous, October 29, 1999

Ann, For the natural gas industry, the latest figures from the October survey by the AGA are in. The AGA is reporting that 87% of business systems and 94% of embedded systems are now Y2K ready. According to the AGA, they had a "Record industry response -- survey includes 99% of membership volume which is 94% of all natural gas delivered in the U.S."

A good summary of the latest findings are at:

ftp://ftp.aga.org/naturalgas/y2k/summary1021.pdf (Acrobat reader required)

More information is available, including the aggregate survey results as presented to FERC,at:

http://www.aga.org/naturalgas/y2k/index.html

AGA latest Y2K press release is at: http://www.aga.org/aboutaga/new/pr184.html

INGAA latest Y2K press release is at: http://www.ingaa.org/INFO/1999Press/102099.htm

Regards,

-- Anonymous, October 29, 1999

FactFinder,

Looks like you have done a lot of research on this, judging by all the links you mentioned. To save us all a bit of time, and since you seem so on top of this matter, perhaps you could clarify a few points.

Is the AGA similar to NERC wherein they get a bunch of self reported, not independently validated, data or feedback from these companies and then pass it on in a tabulated form? Is that how they work?

Also, to save some time, if they are claiming that they did get independent audits, IV&V, then will they mention who the auditor was? I asked you that question a long time back, remember? I didn't demand to know who your own utility was, but merely who the auditing company was, but you never wanted to disclose this. I imagine that if I was to question the *accounting* data reported by your company that you would immediately throw out some big name, such as Arthur Anderson, or whatever, to prove it was legitimately audited. Why is that?

Can you imagine a large financial institution that makes a claim that their accounting has been validated independently, but then refuse to name the validating source? Lucky for us, the SEC won't permit such hidden claims in a publicly traded company. It is considered open information to all who ask. Why is it different for the utilities when it comes to validating their Y2k readiness?

-- Anonymous, October 30, 1999

Gordon,

Why ? Because I believe that some groups, like Koskinen or Dutch Millennium Platform, have an overview through several independent audits done by PA or KEMA (kind of dutch EPRI) consultants. If you don't believe them, who can you ? This forum is virtual with players I do not know. Should I trust them instead of official speakers ?

This is what the Dutch Millennium Platform officialy brings out :

Management Summary: National Millennium Survey, October 1999

The Netherlands is doing well!

Final sprint is essential, paying attention to the supply-chain and continuity

Management summary

The Netherlands is doing well!

With less than 100 days left until the end of the millennium, enormous progress in the Netherlands has been made in solving the millennium problem, in comparison with our previous survey.

Six months ago, 65 % of the respondents reported they were finished with their repair and replace activities. The current view is that less than 2 % of the respondents will not be millennium-proof with vital / critical objects or systems by the end of 1999.

For non-vital / non-critical processes, services, products and / or systems or objects, 83 % of respondents report being almost millennium-proof. Of the remaining group, a very small proportion says that more than

10 % of these aspects will not be compliant in time.

With the assumption that gas, electricity, water and telecommunication will be available without interruption, the vast majority of the Dutch organisations have the impression that the residual risk at 1st January 2000 will be very limited. Only 1 % of the respondents stated this risk as extensive. The other 99 % describe the risk as minor or very minor.

Final sprint is needed, with attention paid to the supply-chain and continuity

However in the last three months of this year many sectors still have to complete the final touches. The final activities in these sectors will continue into the fourth quarter of this year. Given the unshakeable deadline (the millennium change can't be postponed), the situation requires full effort.

In order to manage the millennium change, 'roll-over plans' will be made. The preliminary operational testing of these plans demands more attention.

The participants of the supply-chain worked together on a limited scale by describing the risks in their chain. A lot of information has been shared, however this check "on paper" can still result in unexpected situations in the future.

There remain many organisations (mainly medium-sized organisations) that have not prepared specific millennium related continuity plans.

Currents planning to end projects shortly after the millennium-change suggests there are high expectations that there will be no major disruptions.

What else can be done?

Take care that the millennium problem, and (particularly) in the last months of the year, will be handled as a management issue. Be prepared as management to deal with extra uncertainty.

Maintain close contact with main suppliers and customers.

Check all the millennium-proof certificates at the start of the new year to ensure they are substantiated. Identify disruptions in the supply-chain at an early stage.

Management of large and internationally operating organisations needs to keep continuity-centres operational longer than a few days.

Be aware that solving the millennium problem, besides the investment of lots of money, also provided insight and many opportunities to improve your business-processes. Do not close down your millennium projects without having taken advantage of this learning.

-- Anonymous, November 03, 1999

Am I concerned that there will be problems ?

Yes, I think there will be some (minor) problems during the M-night caused by the millenniumbug. I don't think that these problems will cause black regions in the Netherlands. Maybe some extra problems will be introduced during the rollover and on mondaymorning as a result of extreme contingency planning.

-- Anonymous, November 04, 1999

Menno,

Thanks for the lengthy reply. However, I note that you still don't mention the names of independent auditors. As I said, if this was a question about the accounting practices of a corporation, the firm doing the audit would be openly stated, together with their in-depth analysis of the accounting information. This is not happening in the electric utility industry for the most part. I note that while you are very optimistic about the industry, you also have some concerns. And the amount of companies that are *admittedly* not going to make it with their remediation is still way too high. At this point in time there should be *no* company that has not finished working on systems. At most, there should only be companies that are not done testing their work. But obviously testing is not complete, or in fact even started in many systems.

You can't test systems as stand alone. They must be tested in an integrated environment or the test is almost meaningless. To use the simplest example I can give you, I can have a perfectly tested Windows operating system and a perfectly tested software package that the box claims will work on my OS. However, until I put the two together and see what happens, I have no final test. Many times, the new software will not work reliably with other software in the system, crashing some, or all, of the system. Being optimistic that the new software will work is almost useless to you. I'm sure Luscent was optimistic that their new equipment would work until the moment it crashed at MCI. No test, no good. Just wishfull thinking for you. Menno, you work in a shooting gallery, a crap shoot gallery to be specific. Somehow you can't bring yourself to see that.

A year or so ago, Microsoft was saying that all their new systems such as Windows 95, 98, and especially NT, were compliant for Y2k. Now we know that was not true. They have issued patch after patch, fix after fix, and are still doing so right now. I consider their original statements to be those of either liers or incompetents. Not a nice choice, since I'm personally depending on them. I find myself in the same position with electric utilities, starting with my own, Conectiv. And the unwillingness to fully disclose all they have done, and all that remains to be done, just further disgusts me with your industry. You can keep your Koskinen and NERC reports. They stink. I don't know about your own DMP organization, but from what you have told me above they are no better or more reliable than our own bureaucratic answers to where we really sit right now.

-- Anonymous, November 07, 1999

Gordon,

I can tell you that we have done integral tests with units on line a year ago. We are now finishing the paperwork and implementing contingency plans. Your comment is not from an insider because a unit does not run under Windows !

-- Anonymous, November 08, 1999