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IP: The big blackout?
From: "Douglas E. Renz" <[email protected]>
Subject: IP: The big blackout?
Date: Thu, 10 Sep 1998 15:50:53 -0400
To: "'Chris Ball'" <[email protected]>, "'En_Agape'" <[email protected]>, "'Kim/Jr'" <[email protected]>, "'Kristen'" <[email protected]>, "'Steve Cortese'" <[email protected]>, "'Tom Young'" <[email protected]>
September 7, 1998
The big blackout?
Regardless of your own Y2K preparedness, the slow-moving electrical industry
could leave you in the dark
By Blaise Zerega
Companies scrambling to bring their computer systems into year-2000
compliance may discover that their time and effort will be for naught. A
lack of preparedness by North America's electrical industry may pull the
plug on many companies' transition plans.
Although many electric companies have already begun addressing year-2000
compliance, some have not. It was only in June that the first industrywide
efforts got under way, which may not leave enough time for testing and
contingency planning, according to experts.
"I can't tell you overall how we stand. Based on the information we receive,
we'll build contingency plans off that," said Jon Arnold, chief technology
officer of the Edison Electric Institute (EEI), a trade organization in
Washington that represents companies supplying roughly 75 percent of North
America's electricity.
The North American Electric Reliability Council (NERC) will present the
first industry report on year-2000 readiness to the Department of Energy
(DOE) on Sept. 14, with public release slated for Sept. 17. Until the
publication of this report, serious questions about the capability of power
companies to generate, transmit, and distribute electric power -- and the
consequences for IT system and business disruptions -- will abound.
Industry experts point to the electric system's interconnectedness as the
potential source of most problems. North America is divided into three
interconnected power grids, which are made up of electric generating,
transmitting, and distribution companies. These thousands of companies
compose a high-level network that is only as strong as its weakest segment.
"If you have a failure in one place, it can affect the power delivery in
many places," said Stephanie Moore, an analyst at the Giga Information
Group, a research company in Westport, Conn.
The risk posed by interconnectedness is made worse by deregulation. For
example, a California company purchasing power from a Tennessee company may
not receive it because of a transmission problem in Kansas.
Unfortunately, companies have very few alternative power options, analysts
say. Large companies should investigate on-site power generation, largely
from generators, while small companies with limited resources might resort
to candles and a return to paper -- until power is restored and IT systems
brought back up.
"The truth is, I don't have any good advice," said Rick Cowles, director of
industry year-2000 solutions at Tava Technologies, in Penn's Grove, N.J.
Many companies have been slow to tackle the year-2000 risks of their power
supply, concentrating instead on their internal computing systems, analysts
said.
A large Fortune 200 manufacturer in the Midwest is taking this risk
seriously, but has yet to cement a plan to manage the risk. The manufacturer
has more than 50 worldwide locations and is urging its local facilities to
contact their electricity suppliers immediately.
"As we start to develop insight to what those providers are capable of,
we'll draw that into business continuity and contingency planning," the
manufacturer's year-2000 project leader said.
Other companies such as credit card provider Household International will
use in-house resources to meet the possibility of power disruption.
"All our major facilities are being prepared to handle any external or
internal failure, [by] having back-up generator and back-up diesel
capability," said Thomas Wilkie, Household International's director of risk
management, in Prospect Heights, Ill.
For now, companies have to wait while the electric power industry as a whole
undertakes the critical steps of gaining and sharing information.
"We can't answer questions on preparedness at this point," said Gene
Gorzelnik, director of communications at NERC, in Princeton, N.J.
NERC is compiling results of questionnaires sent in June to the 200 largest
North American power companies, and to four trade associations representing
3,000 distribution companies. Results will be included in the industry
report delivered to the DOE in September. NERC will follow the report with a
coordination of preparedness plans and scenario analysis ending in July
1999, and a coordination of precautionary operations during the year-2000
transition.
Although NERC and the EEI expect the September DOE report to be positive
generally, it is not clear whether "mom and pop" distributors or large
electric utilities -- generally thought to be more vulnerable -- present a
greater risk.
"In a lot of cases, you can't make the assumption that mom and pops are
going to be the problem, because the larger companies tend to have a lot of
automation," the EEI's Arnold said.
Another risk in need of assessment is the nuclear power industry. According
to the Nuclear Energy Institute, a trade organization in Washington, the
United States depends on nuclear power to generate 22 percent of its
electricity.
"You can't talk about [year 2000] and electricity without including the
nuclear power industry," Cowles said.
In June, the Nuclear Regulatory Commission (NRC) sent a letter the 108 U.S.
nuclear power plants advising the industry of year-2000 risks and requesting
a detailed written statement of readiness by July 1, 1999.
Much like the NERC effort, the NRC information-gathering is a good first
step, but one that leaves companies considering contingency plans in limbo.
"My advice is wait for the [industry] reports and strike up a dialogue with
your utility at the local level," Arnold said.
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