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Summary and Comments

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Category: 

Power_Grid

Date: 

1998-05-15 15:04:45

Subject: 

Largest Utilities in Texas: $300,000 Budgeted Per Utility

  Link:

http://www.house.gov/science/laakso_05-14.htm

Comment: 

Citicorp has budgeted $600 million to repair its systems. On average, the seven utilities that supply 85% of the electrical power in Texas have budgeted $300,000. What's missing from this picture? Approximately three zeroes.

The same day this testimony was presented, a representative of PEPCO, which supplies the nation's capital with power, testified that PEPCO expects to spend $10 million.

Gov. George W. Bush instructed all regulatory agencies last November to find out about y2k in Texas. Last November. That's November, 1997.

The Public Utilities Commission has begun to establish a dialogue with the utility industry. Here's the present status:

"The current level of Y2K plan completion ranges from a low of 5% to a high of 60% of the identified testing or remediation activities. Three IOUs report 30% or greater completion and four report less than 30% completion of Y2K activities."

Not too good, is it?

Mr. Laakso thinks the report sounds rosy. I do, too: all thorns, no flower. He thinks things may be worse than they sound. Let's hope he's wrong.

"The picture painted by the IOUs’ survey responses appears very rosy. However, considering the scope of work that lies ahead within the IOUs’ own systems, and the related issues dealing with inter-connections and suppliers, there is still a potential minefield of unknowns."

He spoke of "the high possibility of system interruptions due to Y2K problems."

* * * * * * * * *

TESTIMONY BY MR. JOHN L. LAAKSO, EXECUTIVE DIRECTOR, TEXAS PUBLIC UTILITY COMMISSION, TO SUBCOMMITTEE ON TECHNOLOGY, COMMITTEE ON SCIENCE, U.S. HOUSE OF REPRESENTATIVES, WASHINGTON D.C. 20515, May 14, 1998

INTRODUCTION

Last November Governor George W. Bush issued a letter to Texas state agencies urging them to assure that agency systems are prepared for the Year 2000. Each regulatory agency was asked to evaluate its legal authority to pursue Y2K compliance efforts with its regulated industries. The group met in January to respond to the question presented and to update the Governor’s staff and the Department of Information Resources on each agency’s plan to address the impact of the Y2K problem on regulated industries. . . .

The focus of the Year 2000 External Project is to foster cooperation between the PUC and regulated entities to resolve the Y2K issues facing Texas’ utilities, without diverting resources to deflect threats of liability or administrative penalties. In addition the PUC hopes to utilize the tools of publicity and persuasion to bring all Texas utilities, whether or not regulated by the agency, into the discussion in order to resolve Y2K-related problems to the benefit of all Texas utility customers. Business continuation through January 1, 2000, is in the best interest of both the utilities and Texas’ utility consumers.

In January 1998, the Commission approved a project plan designed to initiate dialogue with the electric and telecommunications industries regarding the Y2K problem through means of a survey instrument. PUC staff developed a survey instrument with three goals: to open the lines of communication between the agency and industry on Y2K issues; to educate industry members on potential Y2K problems; and to gather information regarding the industry plans to identify and eliminate Y2K problems.

Staff mailed the survey to 548 entities on March 16, 1998. . . .

Most survey questions focused on assessing the level of preparation that has taken place to date among the state’s utilities for arrival of the Year 2000. . . .

Staff’s full report and survey are available on the PUCT web page.

Highlights of the Electric Utilities’ Responses to Y2K Survey

Seven investor-owned electric companies provide service to 85% of Texans. All seven IOUs responded to the survey. Those companies have detailed Y2K plans and a good deal of resources devoted to solving the problems. Most report having budgeted greater than $300,000 and have assigned an average of 30 employees, per utility, to problem resolution. IOUs have the greatest vulnerability due to the comprehensive nature of their systems, which include generation, transmission, and distribution facilities. . . .

Only ten municipally-owned electric utilities responded to the PUC’s survey, probably the result of the PUC’s limited jurisdiction over those entities. . . .

All of the IOUs [Investor-Owned Utilities] that supply electric energy to Texas customers were surveyed to determine how prepared they are to handle the problems associated with the upcoming millennium. All of the IOUs reported that they have developed detailed plans and/or testing methodologies to support the timely completion of Y2K activities prior to January 1, 2000. A small number of those utilities have noted that they will not be able to complete the required testing and repair until the last quarter of 1999. Delays are largely due to outage schedules that do not have generating units being removed from service until those time periods. This is particularly true for utilities with nuclear facilities, which are typically on eighteen month refueling cycles. Each of the IOUs has completed at least some Y2K testing. The current level of Y2K plan completion ranges from a low of 5% to a high of 60% of the identified testing or remediation activities. Three IOUs report 30% or greater completion and four report less than 30% completion of Y2K activities. Still, with this significant task in front of them, each of the IOUs has stated that it expects sufficient completion of Y2K testing and remediation to avoid any major impact on generation and/or transmission capabilities. . . .

The picture painted by the IOUs’ survey responses appears very rosy. However, considering the scope of work that lies ahead within the IOUs’ own systems, and the related issues dealing with inter-connections and suppliers, there is still a potential minefield of unknowns. . . .

Considering the high possibility of system interruptions due to Y2K problems, the responses from the cooperatives on contingency planning were disturbing; only 53% reported having a plan to maintain continuous operations if not Y2K compliant or if Y2K efforts fall short.

In summary, most of the cooperatives have informal, unwritten plans for dealing with Y2K issues. They are concentrating their efforts on billing systems and most are relying on third-party vendors to handle potential Y2K problems. . . .

After reviewing the responses and talking to representatives of several of the cooperatives, staff feels that the cooperatives have a somewhat complacent attitude about potential Y2K problems. Since most cooperatives do not generate or transmit power and billing is done by third-party vendors, most do not perceive great exposure to Y2K problems. As a result, the co-ops are relying heavily on others to take care of any potential problems. This attitude is most apparent in the responses to questions on contingency planning and relationships with vendors. . . .

Of the ten responding municipalities, two, the City of Austin and City of New Braunfels believed it would cost more than $50,000 to address Y2K issues while one responded that it would cost less than $10,000. The remaining responding municipalities offered no response to this question. . . .

Conclusions

Generally, Texas utilities seem well aware of the Y2K problem. Larger utilities have active programs in place to deal with potential Y2K problems and many of the smaller utilities could be assisted by access to more information.

The commission intends to continue a staff group monitor Y2K issues and the utilities’ progress in solving their Y2K problems.

It will also establish a site on the PUC homepage for exchanging information on Y2K issues. . . .

Finally, the PUC will continue to provide information on Y2K issues affecting service to electric and telephone service consumers through the PUC web page and other available media.

Link: 

http://www.house.gov/science/laakso_05-14.htm

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