To: John Mansfield who wrote (215 ) 3/14/1998 11:55:00 AM From: David Schoenbach Respond to of 618
I've been concerned about deregulation of electric utilities in California, and would appreciate any thoughts on what if any connection it has to Y2K. Some thoughts and questions: 1. Under deregulation, two quasi-governmental organizations have been formed in California: Independent Service Operator (ISO) and Power Exchange (PX), to serve a middle function between sellers and buyers of electricity. Does formation of these groups have any impact on who's responsible for reliable delivery of electricity? Do these groups have the resources to deal with Y2K? Can they be sued if they don't? 2. Software problems have been the cause of delays in switching to ISO and PX, which was originally scheduled for January 1, 1998, now for later this month. Is the new ISO/PX software going to be better or worse suited for Y2K compliance? 3. Under deregulation, California's "big three" electric utilities are divesting themselves of some or all of their power plants; and my electric company, PG&E, is about to close escrow on sale of three plants this month, with hopes of selling some others by the end of the year. After the sale(s), who is responsible for Y2K? Does the seller divest of all liability along with the assets? What if the buyers don't have as deep pockets for remediation (or to sue)? 4. Duke Energy is the purchaser of the three power plants being sold this month by PG&E. What's Duke's record for responsible approach to Y2K? What's PG&E's? Is there any significance in the fact that three of the directors of Duke are also directors of First Union Corp., which is trying to buy CoreStates, a Philadelphia bank in distress due to Y2K? phillynews.com :80/inquirer/98/Mar/04/business/CASS04.htm Could there be a strategy, spearheaded by one or more of these common directors, to buy big companies or plants in Y2K distress? Why - are they just betting it will go away, or do they have a plan for massive remediation efforts? 5. What are State and Federal governments doing about Y2K here in California? What's the California PUC doing to assure that Y2K doesn't cause significant disruption of electric service? What is the Federal DOE doing? Their Y2K web pages make reference only to fixing their own systems; are they providing no oversight to utility companies? It has been said that there's no payback for a successful Y2K project other than staying in business. If a company is getting out of a business anyway, as the big three California electric utilities are largely getting out of the power generation business, there may be simply no payback at all, from a corporate perspective. How can we assure that those we have entrusted don't simply walk away just before the lights may go out. Thanks, -David Schoenbach