Utilities Brace for Y2K

0 Comments | Insight on the News, August 30, 1999 | by William Glanz

North America's worst power outage occurred in January 1998, when more than 5 million people lost electricity for up to a month. Utilities hope January 2000 won't be a repeat.

The good news is nothing much may happen. Executives expect gas, electricity, telephone, water and sewer service to flow uninterrupted on Jan. 1, 2000 -- Y2K's ground zero, when the now-infamous computer glitch will kick in -- having taken the proper steps to keep their plants running. But they won't make guarantees. Nothing like Y2K has ever happened before.

"People should consider themselves vulnerable," says William Ulrich, president of Soquel, Calif.-based Tactical Strategy Group Inc., a Y2K consultant. "No homeowner should assume everything in their area will be okay, but people don't like to think about things like that."

The average American home has 50 microprocessors to help with everything from cooking to cleaning. Most of them don't care if it's 1999 or 2000. Unfortunately, computer chips at the nation's utilities do care. Those chips help electric utilities produce heat, telephone companies run their networks and water plants treat drinking water. Critics' main concern is that a single power failure at one utility would create a domino effect, leading to other service interruptions. "What we're finding out is that nobody stands alone anymore," said Charlie Siebenthal, manager of Y2K programs for the Electric Power Research Institute, a nonprofit research and development group in Palo Alto, Calif., funded by power companies.

Most fears revolve around the readiness of electric utilities, which are the base of the pyramid -- providing the power to prop up other utilities, which in turn deliver services to homeowners. "If there was one area where we should focus, it would have to be electricity," says Edward Yardeni, chief economist at Deutsche Morgan Grenfell Inc. in New York. "If the lights are on, year 2000 will have far fewer negative consequences."

Electric utilities understand their role. "We recognize that we probably are everyone's No. 1 supplier," says Robert W. Cornelius, Baltimore Gas and Electric Co.'s Y2K coordinator. Following an April test of equipment, the North American Electric Reliability Council found just 44 of 248 electric utilities reporting Y2K problems, but none would affect energy production.

Ulrich thinks there's a 25 percent chance homeowners will suffer a short-term power outage Jan. 1. Critics complain that there has been too little public scrutiny of utilities' efforts to correct the problem. "I'm not saying utilities aren't ready," says Fred Millar, director of environmental and public safety policy at the Center for Y2K and the Public, a nonprofit, nonpartisan group raising awareness about the Y2K bug. "I'm saying I'm not reassured, and I don't have the information I need to figure it out."

Utilities are worried most about "embedded" computer chips -- chips like any other except that they are programmed for a single function. Experts predict billions of embedded systems -- many of them in place for as long as 15 years -- are used throughout the world and, well, difficult to find. In the United States, utilities will conduct a nationwide test Sept. 8. If they do miss faulty chips that cause malfunctions, plants can produce power the old-fashioned way, using coal, oil and natural gas to produce electricity. Plants typically keep up to 90 days worth of coal on hand for such emergencies.

Ironically, the nation's 103 nuclear plants, which produced 23 percent of electricity used in the United States in 1996, are so old that their safety systems don't rely on the chips. The Nuclear Regulatory Commission has stated that computers at its plants are free of bugs that could cause radiation leaks.

If the Y2K computer glitch causes problems anywhere, it will be at the nation's 2,000 small, municipally owned utilities, says John Castagna, spokesman at Edison Electric Institute. Most municipal utilities, which provide electricity to 14 percent of the nation's population, simply buy energy rather than produce the commodity. And they often buy it from investor-owned utilities, which provide energy to 75 percent of the country. Indeed, power companies are connected through a giant electric grid that reaches into Canada. If one utility suffers problems, some fear others could, too.

Meanwhile, electric utilities are concerned about the preparedness of telephone companies such as Bell Atlantic Corp., which operate continuously and have been unable to adequately test their systems. Phones don't have date-sensitive chips, but telephone networks rely on circuit packs and central switching centers that do. Bell Atlantic has replaced chips in its network, but it has run equipment tests only on prototypes in labs.

"It's our biggest Achilles' heel, but we're not trying to make phone companies the fall guy," says Siebenthal of the Electric Power Research Institute. Bell Atlantic, which has 27 million customers in 13 states and the District of Columbia, will conduct limited tests of its public network the rest of the year, says spokesman Jim Smith. If electricity stops, the company would rely on battery systems and generators for backup power. The network can operate for up to 10 hours without a working electric grid.