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Technology Stocks : Year 2000 (Y2K) Embedded Systems & Infrastructure Problem

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To: John Mansfield who wrote (517)7/18/1998 5:57:00 PM
From: John Mansfield   of 618
 
INTERESTING - Worrysome news from Roleigh Martin


I post this with allowance of Roleigh Martin, who emailed this to me.

John
________________________

'
From roleigh.martin-1@tc.umn.edu Wed Jul 15 18:03:08 1998
....

'FYI -- My summary of yesterday. Please correct if you know of any
errors.
=====================================================================

I attended the Minnesota Joint House-Senate Hearing yesterday and the
co-chair, Rep. Bill Hilty, graciously had his assistant keep a copy of
all of the prepared testimony (except for that of the utility company,
Alliant which is a new utility created out of a merger of utilities in
Wisc., Iowa, and Southern Minnesota--not enough of Alliant's testimony
was distributed).

Most interesting of the testimony for United's Minnesota operations
purposes is that of the testimony of the Minn. Dept. of Public
Service. After my repeated email suggestions that the Dept. perform a
survey, and after Rep. Hilty joined in with the pressure, they mailed
out a survey to 320 Minnesota utilities (electric, natural gas,
petroleum, and telephone companies) dated April 27, 1998.

The preliminary results are as follows. They will be formally posted
to the Minn. Dept. of Public Service web site at the end of this month
or early next month. (I have the names of the organizations that
responded and did not respond--if you can tell me who are the
utilities for our non-Twin-City Minnesota operations, I'll let you
know if they responded--eg, such as Duluth, International Falls. Also
if you want the entire list of those who responded and those who did
not, as well as the full questionnaire and cover letter, I can make a
copy of that for you. -- please provide your mailing route number if
you request this.)

320 telephone, natural gas, electric and petroleum companies in MN
queried

182 number of those queried who responded two months after mailout
(midway after mailout a followup letter was mailed to increase
responses)

Of those responding, these answered:

Percent Number Percent of all Queried

57.00% 103.74 32.42% Yes to "Has your organization established a
Year 2000 project team"

58.00% 105.56 32.99% Yes to "Has your oganization identified a
Year 2000 project manager"

38.00% 69.16 21.61% Yes to "Has your organization developed a
detailed Year 2000 plan"

49.00% 89.18 27.87% Yes to "Does your organization's Year 2000
plan include a separate test for (e.g.,
computer, piece of equipment, etc.) that
you believe may be subject to a Year 2000
problem

Examples of those who did not respond (even after the second
===================
mailing--and the mailing was a joint venture of the Minnesota Dept. of
Public Service and the State of Minnesota Public Utilities Commission).

TELEPHONE COMPANIES WHO DID NOT RESPOND (SELECT EXAMPLES OF ABOUT 44
WHO DID NOT RESPOND)
AT&T
U.S. Link, Inc.
Hutchinson Telephone Company
Metro Fiber Systems of Mpls/St.Paul
Northland Telephone Company
Redwood County Telephone Company
Twin-Valley Ulen Telephone Company
West Central Telephone Company

Redwood County Telephone Company
Worldcom Network Services Inc

ELECTRIC COMPANIES WHO DID NOT RESPOND (SELECT EXAMPLES OF ABOUT 87
WHO DID NOT RESPOND)

Chaska Water and Light Dept
Elk River Municipal Utilities
Hutchinson Utilties Commission - Electric
Minnesota Valley Cooperative
Mountain Lake Municipal Municipal Utilities
MN Valley Electric Cooperative
New Ulm Public Utilities Commission
North St. Paul Utility Dept.
Owatonna Municipal Public Utilities
Redwood Electric Cooperative
Rochester Public Utilities Commission
Tri-County Electric Cooperative
Tyler Municcipal Light and Power
Wright Hennepin Cooperative Electric Association

GAS COMPANIES WHO DID NOT RESPOND (OF ABOUT 12 WHO DID NOT RESPOND)
Hibbing Public Utilities - Gas
New Ulm Public Utilities - Gas
Owatonna Municipal Public UTilities - Gas
Western Gas Utilities
Northwest Natural Gas

PIPELINES/OTHER COMPANIES WHO DID NOT RESPOND (full list -- although Koch
did testify at the May 18 hearing)
Murphy Oil USA
Marathon/Ashland Oil
Koch Refining Company
AMOCO
Mid America Pipeline Company

More interesting tidbits:

* Alliant reported about 170,000 embedded systems they are concerned
with and investigating and of these about 3 percent are found to be
noncompliant

* The League of Minnesota Cities spoke and their report is very
alarming -- the cities are very concerned with utmost concerns on
how they are going to fund the upgrades and avoid litigation; they
asked the legislature for funding and litigation relief that would
require an emergency session of the legislature to help them in
time. You might want to ask me for a copy of their testimony -- I
have it. (Provide your mailing route number if you do request it.)

* NSP says they will have at a minimum one month spare supply of coal,
perhaps more on hand. They burn about 4 trainloads of coal a day.
NSP says they should be at the stage of placing all their
replacement orders within another month -- this will be a a major
milestone in embedded systems remediation for NSP and any other
utility who gets to this point in their project -- prior to doing
this, nobody can say whether one is on schedule or not, because the
turn-around-time with vendors will differ vendor to vendor and
because of the following reason--my most pressing concern about this
issue is this next paragraph.

I asked NSP project manager, MAPP (Mid-Continent Power Pool), and
Minnesota Power, and although they did not have precise data, they
felt I was pretty much on the mark using a typical 15 year lifespan
for typical equipment that has to be upgraded for Y2K reasons (the
typical lifespan if Y2K was not an issue). Normal market supply and
demand forces would therefore indicate that the servicing
vendors/engineering firms are setup to replace 1/15th of the
industry in any one year. However, 100% of the industry will be
needing to do this upgrade in about an 18 month timespan, due to
almost all utilities are not yet in the order phase or are just
getting around to it of their Y2K project. Now with working double
shift, overtime, and hiring extra help, perhaps the industry could

handle threefold their normal load (an optimistic hope--because
normal non-y2k repairs/replacements can't stop in the meantime due

to normal wear and tear and storm damages), and over an 18 month
window, this would mean that 1/3rd of the industry could be serviced
in an optimistic best-case situation. This means that 2/3rds of the
industry will have to face the Year 2000 using manual workarounds or
kludges to deal with the problems in their equipment. The engineer
from MAPP told me that my assessment made sense and that is why, he
felt, that NERC -- the North American Reliability Council is
advocating that utilities are Y2K-Ready for the Year 2000.
Y2K-Ready in this context means that the equipment will not be year
2000 compliant except with manual workarounds and kludges. Then the
question becomes -- can two/thirds of the industry find the extra
help and will they do the proper manual work around training so that
the troubleshooting and workarounds that have to be done in January
2000 adequately handle the job -- and we're talking about similar
situations in all the core infrastructures here.

Bottom line: none of the utilities stated they had placed all of
their orders yet for replacement equipment -- none of them are at
that stage yet.
Alliant mentioned they had approached some of their
suppliers only to be told by some of them "go away." They were
quite concerned about the order problem.
Rep. Bill Hilty, the
co-chair, asked this question of each utility. Only 3-4 utilities
testified (Alliant, Minnesota Power, NSP--I forget whether UPA
testified or not, the meeting was cut short although it lasted 1.5
hours longer than planned--not everyone got to testify). It is a
concern about all utilities until they at least get to the order
placement phase of their project--none of them are there yet. It is
a real concern about those utilities who did not respond and about
those utilities who did respond who do not have a detailed Y2K plan
(which means there is a real concern about 79% of the utilities in
Minnesota!).


----------------------------------------------------------------------
Roleigh Martin marti124@tc.umn.edu (home email)
ourworld.compuserve.com
(A Web Site that focuses on Y2k threat to Utilities & more!)
....
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