Subject: Sighting: Southern Company: SEC Reporting on Y2K
The following is a email I received from a Y2K representative from the Southern Company regarding the preparations for Year 2000 Compliance.
Southern Company - the parent firm of five electric utilities in the Southeast - established a team of employees in late 1996 to work on the Millennium (Year 2000) Project. This group is analyzing, testing and fixing the company's computer applications and devices that are controlled by computer chips or processors. Southern Company retained IBM Global Services to assist in the overall effort. Considerable internal resources are also being used to test and renovate affected devices and systems.
Southern Company's Millennium Project is divided into two phases:
* Phase 1 consisted of identifying and assessing the software systems and devices that contain a computer/clock chip. This first phase was completed on schedule June 30, 1997.
* Phase 2 consists of testing and fixing high priority problem areas. Completion is scheduled during 1999.
Southern Company does not want its customers to experience power outages when clocks turn over to the year 2000. Our top two priorities are: 1) to make sure that our power plants continue to generate electricity and 2) to make sure that we're able to continuously deliver that electricity to our customers in the future.
That's why we are testing in our 278 generating units during planned outages in 1998 and 1999. During those planned outages, we are making modifications necessary to successfully transition to the year 2000. As of early 1998, we had already tested key systems, such as combustion controls, at two of our 70 plants and have a good understanding of what needs to be done to renovate units with similar equipment. Of course, not all units have digital control systems.
We are working with our major vendors to determine how to fix critical systems, and we are working with other utilities to maximize our efforts and learn from theirs. We will have contingency plans in place to handle problems that could arise on Jan. 1, 2000.
Southern Company has committed the resources necessary and is doing everything possible to ensure a smooth transition to the year 2000.
In response to your question about SEC reporting, the following statement is found in the 1997 Southern Company Annual Report. Similar statements appear in individual Company filings and reports.
"Southern Company is heavily dependent upon complex computer systems for all phases of its operations. The year 2000 issue - common to most corporations - concerns the inability of certain software and databases to properly recognize date-sensitive information related to the year 2000 and thereafter. This problem could result in a material disruption to the company's operations, if not corrected. Southern Company has assessed and developed a detailed strategy to prevent or at least minimize problems related to the year 2000 issue. In 1997, resources were committed and implementation began to modify the affected information systems. Total costs related to the project are estimated to be approximately $85 million, of which $8 million was spent in 1997. Most all remaining costs will be expensed in 1998. Implementation is currently on schedule. Although the degree of success of this project cannot be determined at this time, management believes there will be no significant effect on the company's operations."
As we make additional progress in overcoming Year 2000 problems for Southern Company, further information will be released publicly. Please contact me directly with additional questions.
Thank you for your interest.
Mike McClure Millennium Project Executive Southern Company