TRANSCRIPT: PRIVATE/PUBLIC COORDINATION FOR Y2K PREPAREDNESS (WorldNet program with reporters in Tegucigalpa) (7980)

WASHINGTON -- Following is the transcript of a March 22 U.S. Information Agency WorldNet satellite broadcast of "Dialogue."

Reporters in Tegucigalpa, Honduras, questioned Jon Arnold of the Edison Electric Institute and Sonny Siegel of the Montgomery County, Maryland, Y2K program on the extent of private and public coordination to prepare for potential computer problems on January 1, 2000.

(Begin transcript)

WORLDNET "DIALOGUE" UNITED STATES INFORMATION AGENCY Television and Film Service of Washington, D.C.

GUESTS: Jon Arnold, Chief Technology Officer, Edison Electric Institute

Sonny Siegel, Y2K Program of Montgomery County, Maryland

TOPIC: Public and Private Sector coordination

POST: Tegucigalpa, Honduras

HOST: Walter Androtti

DATE: March 22, 1999

MR. ANDROTTI: Hello, and welcome to another Worldnet "Dialogue," I'm Walter Androtti. On today's edition of "Dialogue," we will revisit the Y2K computer syndrome, focusing on the coordination needed between the public and private sectors.

In order to ensure a smooth as possible transition to the year 2000, it is imperative for counterparts in the public and private sectors to work together to solve challenges faced by both.

I am joined here in our studio by two experts on Y2K readiness and preparation and coordination. Jon Arnold is chief technology officer for the Edison Electric Institute, whose member companies serve about 70 percent of all ultimate electricity consumers in the United States. And Sonny Siegel is the head of the Y2K program of Montgomery County, Maryland. Mr. Arnold, Mr. Siegel, a warm welcome to Worldnet's "Dialogue."

If you agree, I think we should begin by describing what both of you do. Mr. Arnold, the Edison Electric Institute, what are the efforts that it is making to solve the Y2K problem?

MR. ARNOLD: Well, I have been working with electric utilities in the United States and Canada since 1994 on the year 2000 problem. And the Edison Electric Institute has been working as a partnership with several other organizations and with the Department of Energy and the President's Y2K Conversion Council to put together a plan and an assessment to move really the electric systems of North America to a successful transition. I have been working as part of that assessment team, and have worked since May of 1998. It's a continuous process that we have been undergoing as far as collecting data, working with the utilities, working with the Y2K program managers throughout North America. We are releasing reports. We did our first report in September. We did a second report in January. We'll have another report coming out in May, and we will release a final report in July. And all our work has gone into getting our critical systems ready by the end of June this year, 1999.! And we feel we are going to be successful in that effort.

A lot of work still remains to be done. As we have gone through the issues there was a great deal of uncertainty early on. But as the more work we do and the more testing that we do, the more we do with our systems, both in a single utility and all the neighboring utilities that work together to make the North American system, we are becoming very confident that we will be able to meet successfully the year 2000 transition.

MR. ANDROTTI: In Montgomery County there is a large Spanish-speaking population. Could you tell us what you are doing to try to solve the Y2K problem there?

MR. SIEGEL: Yes. The County of Montgomery is one of 3,124 counties in the United States, and one of 80,000 jurisdictions -- includes government and quasi government. Now, we have had a year 2000 formal program from 1996, and have been working on critical systems -- most critical ones of which have to do with emergency response, public safety education, health and welfare. We have some 300 projects currently underway with funding already been appropriated to the tune of $30 million.

Now, in reaching our ethnic communities, and we recognize that our Spanish-speaking population in quite a large minority -- about 17 percent in one region of the county -- we are carrying messages out to those groups, and we hope to work with them in person in town hall meetings coming up.

MR. ANDROTTI: Before going to our participants in Latin America, I'd like to ask you to tell us something about the importance of the coordination between public and private sectors regarding the Y2K problem. Also, maybe you could give us some examples of where coordination has really made a difference in your efforts to comply with the Y2K requirements.

MR. ARNOLD: Well, in the United States probably over 70 percent of electricity consumed, it comes from private companies -- (inaudible) -- utilities. Early on when we started this whole process we realized that the utilities, even though they are private companies, they couldn't do this alone, that it was a partnership, and a lot of it was being driven from the U.S. government, between the Department of Energy and the President's Y2K Conversion Council. And we really made a successful effort. It was more than just a technical problem -- trying to find and fix the problems. It was a corporate issue, it was a business issues, it was a communications issue and it was a partnership issue, because everybody -- all the players needed to work together as team members to really make this thing work.

Working with the Department of Energy on the federal side, we are in constant communication. There is a constant coordination of efforts. The Department of Energy is supplying some resources as loaner resources to the industry efforts. Their laboratories are working to do some modeling for us. They are providing the congressional interface to Congress. Congress has its ongoing own investigations as far as Y2K. So we are working through the Department of Energy, with the Congress, the U.S. Congress, on those issues.

If you move down to the individual utility level it really gets to working with the state and local governments, which is really critical. In many cases the utilities are on say a governor's task force on year 2000. And so -- because obviously without electric power, businesses, the economy, consumers and businesses are all at risk. So having electric utilities involved with the local and city governments is very important to get a clear exchange of information, to have the link of emergency services, because utilities are that vital link, and there has to be communications with both the local government communication folks and with the emergency services and what the expectations are. And of that occurs normally when there are power outages. On a normal bases emergency services have to be brought up first. But having that joint communications and joint partnership is really vital, and many utilities are working across the country in doing that.

MR. ANDROTTI: How does the Montgomery County group see its cooperation between the public and private sector?

MR. SIEGEL: In fact, in the case of the Y2K problem, the cooperation between the public and the private sector is imperative. The example of electric utility power is a clear example of how one must collaborate and partner to ensure that the many, many residents, the many, many businesses as well that are in our communities will be well and safe.

Now, to use an example, most of our hospitals as an example will become compliant using technology remediation methods that are becoming better and better understood all the time. Our water and sewer people will supply water and sewer services. Education will be open as well to provide kindergarten through grade 12, and then higher education.

However, power is going to be one of the things they are going to need to continue to survive and to keep their business delivery open.

So would the power industry as an example for the power providers in Montgomery County -- and there are three of them, one being as much as 80 percent of the power that's provided, the other two are rather small. We are meeting with them regularly. We are actually going to be jointly at the town hall meetings where citizens may ask questions and the companies may provide the answers.

Now, we are fortunate that at the federal government level industry groups have been testifying, providing a report on their readiness, and that includes power, transportation, manufacturing, and many other sectors. In fact, the federal government is tracking 25 sectors or more. Those testimonies are very helpful to us when we are planning services at the local level.

MR. ANDROTTI: What Sonny Siegel was mentioning makes me want to tell you that Montgomery County recently conducted a test of their year 2000 compliance. Let's look at how this test went.

(Begin videotape.)

ANNOUNCER: On December 21st, 1998, government officials in Montgomery County, Maryland, conducted a day-long test to see if they were prepared to handle a host of problems that could occur if their computer systems failed to work in the year 2000.

MR. : We needed to make sure that our emergency contingency plans were in place and that our managers were well prepared to implement them. And without a back-up plan for each department, we are just as vulnerable to the effects of the millennium bug as someone who hasn't planned at all.

ANNOUNCER: The county's computer-integrated systems were tested by moving up the clocks and calendars to just before January 1st, 2000. Then the computers were allowed to run into the staged new millennium to see if they worked properly.

This exercise involved critical systems, such as the 911 computer-aided dispatch. The emergency communications command center receives 911 calls from people needing fire, police or ambulance assistance. Also tested was the advance transportation management system. It is used to control traffic flow throughout the county.

MR. : So we feel quite good that the systems we selected performed well and give us a reason to be comfortable.

ANNOUNCER: Montgomery County is a large jurisdiction in the Washington metropolitan area. It covers an area of more than 1,300 square kilometers and has a population 840,000. Since 1995 the county has spent $34 million to ensure Y2K compliance of more than 280 computer systems.

MR. : In addition to our own planning, another objective that we had today was to let others know where we are and what we have done so far. If we can help others prepare -- and I hope that we have done a little bit of that today -- then we are all better off.

(End videotape.)

MR. ANDROTTI: We are now going to receive questions and comments from our participants on the line. First Otto Penaida (ph) from the Cresida (ph) Corporation, and Thomas Naida (ph), who is the chief of computer systems for the national electric company, and Rafael Silva (ph) who is involved with the banking system. Mr. Penaida (ph) is first. Please go ahead, Mr. Penaida (ph).

Q: I am Otto Penaida (ph). You've mentioned clear examples where you have participation of both the public and private sector, and where this participation is communicated to these two sectors and to the public in general. In our case we don't have this communication from these sectors, so that we can know what the status of each institution participating is. I'd like you to mention what might be the consequences of this lack of communication for both sectors and for the public in general. I thank you both.

MR. ARNOLD: Well, from my perspective I think that if the public doesn't get a clear message, a coherent message that really takes into account all the -- whether it's banking or utilities -- it paints a picture of the overall readiness -- I think there is going to be a great deal of uncertainty and doubt. And with year 2000 I think we all know it's almost impossible to make a guarantee that there won't be any problems, but I think that if you can come across with a coherent message that really draws from the entire industry all the work that is being done, I think that's very important. Otherwise I think there is going to be a great deal of doubt, there's going to be a great deal of skepticism. It's going to open you up for a lot of rumors, a lot of stories and information that would get passed along that is not based on fact. So you know even though it may not be -- you know, maybe there's not a government mandate or a public emphasis on banding everyone together, I thi! nk that various sectors and private sectors themselves need to pull themselves together into ad hoc councils or some other organized group, and put in place a mechanism so that they can assess the overall industry readiness. I think that's very important for communications, for the public and for the public sector.

MR. SIEGEL: Yes, I agree entirely. In the absence of communications from the private sector to the public sector, and then the public sector having the responsibility to the public, there can be a lot of things that can go wrong that should be avoided. Clearly in the absence of fact you will find the situation to become unmanageable. In other words, if people believe there will be no power, then they may also become paranoid that there may be no food, that there may be no retail goods, those kinds of essentials, and begin to take actions that you don't want them to take.

Now, of course in the political structures of the various governments that we are speaking of -- in other words, in the United States it is possible to do certain things that may not be possible in our country, and vice versa.

I am happy to share with you what we know that works here in the United States, for us in Montgomery County. In other words, there is dialogue between industry groups and individual industries with the government -- it's certainly going on at the national level. And I encourage you to set up the mechanisms by which information can be shared with all the sectors that are important to your economy.

MR. ANDROTTI: There's a sector of special concern to the millennium bug, that is the finance sector. Rafael Silva (ph) I think will probably have a question from Tecuigalpa about the banking and financial sector. Please go ahead, Mr. Silva (ph).

Q: Yes, I am Rafael Silva (ph). Going along with this last question, I'd like to ask the same question. What began beginning the creation of these joint committees? Was there a high level government decision that began or established these committees, or was it a private initiative, or was it a local government initiative? How did the efforts to solve this problem get started, is what I am asking.

MR. ARNOLD: Good question. At the national level for electric power, and actually for all the really critical infrastructures, whether it be telecommunications, gas, electric, it really started with the President's Y2K Conversion Council, because they were charged with really obtaining where the United States, and also internationally also stood in terms of Y2K readiness and try to move us towards a successful plan.

The President's Council on Y2K Conversion chose the Department of Energy to oversee electricity; they chose the Federal Energy Regulatory Commission to oversee gas; and the FCC, the Federal Communications Council, to oversee telecommunications. So it really came out of the federal government here in the United States that at the very high level, that the overall industry, the total industry assessment, the President's Y2K Conversion Council, working through the Department of Energy and then working with the industry trade groups, such as the Edison Electric Institute -- there's another one called the North American Electric Liability Council -- and others -- pulling those together and then having those folks get down into the individual utilities.

MR. ANDROTTI: Does the same thing happen in Montgomery County, Mr. Siegel?

MR. SIEGEL: We are the beneficiaries of the work that was started by the President's Council on Y2K Conversion, and then with the help of all the industry groups we are able to at the local government level see what is being achieved to provide power, transportation, communications and so on in these 25 or more sectors. So in other words we are really benefiting greatly from what the federal government started.

Now, at the local level we have started our own contacts with the power companies are an example that service our area, or the Washington Metropolitan Area Transit Authority, which provides the rail services and the bus services. So we have our own committees. Additionally, we are working with the state, which is our larger government in which Montgomery County resides.

So it's a network of governments. We are working together with a network of private sector partner.

MR. ARNOLD: One thing to add on that. At the national level we have a program in place for overall industry assessment, and we have been encouraging our members to communicate with their local communities, with their business, with their public utility commissions here in the United States. So I think in some cases early on they were reluctant to do so, but I think they found out very early on in the process that it really helped them a great deal by communicating with the local and state governments in terms of what they were doing, the readiness, and then working together in a partnership. We are still working to encourage all our members to do that, whether it's on a formal basis or informal basis, as we consider that very important. And that can only be done by the local utility.

Here in Washington, D.C., the industry trade groups had a handle on the overall national perspective, but at the local and state level it's up to the individual utility to providing the service to get involved in their community.

Q: I am Otto Penaida (ph) once again. Recently I had a conversation with a congressman of ours, and he said that so far there has been no clear action by our Congress on Y2K legislation. My question is: What are the main points that should be included by a congress when it thinks about passing laws regarding the year 2000 problem?

MR. ARNOLD: I guess I'll start with that one. As far as the overall assessment process there really weren't any laws passed. The whole process has been a voluntary initiative. There haven't been any laws passed that you must report on a national level, that you must participate. But through the work of the government of the President's Y2K Conversion Council and the Department of Energy we have been able to create enough peer pressure per se that everyone wants to be ready, but if you are not participating in the industry process then automatically it's going to be assumed that you are not ready. So as far as getting the assessment and getting that process going, there really weren't any laws passed.

Now, at the state level each state here in the United States has a public utilities commission or a public services commission that has some local jurisdiction. Now, there has been some mandates -- I'm not sure I'd exactly call them laws or legislation -- but there has been a little bit more forceful work on the part of the local state governments concerning surveys and readiness information. We really believe that the voluntary cooperation, working together is the way to address the issue.

Now, for liability there is work in this country in terms of year 2000 liability efforts. We have the Year 2000 Information Disclosure Act, which we have worked on extensively, which doesn't protect a utility or any company from having a product or service that doesn't work, but it frees them up from making year 2000 information disclosures. If you talk in good faith -- if you are talking about your program, the work that you are doing, and that is in good faith and you are not lying about the work or making misstatement intentionally, then that cannot be subpoenaed and used in court.

There is work going on to discuss additional liability as far as limits on lawsuits and things like that. Where that goes, that remains to be seen. But that's really the only legislation that I know of that has been put forth in this effort.

MR. ANDROTTI: What do you think, Mr. Siegel? Is it important for the legislative branch to promulgate legislation to deal with the Y2K problem?

MR. SIEGEL: I think if one is starting a program now, in March of 1999, one should look seriously at the opportunity to make it a requirement to declare the readiness status. In the United States the work has been going on for some time, and a lot of progress has been made.

One of the areas that we look at in local government for verification of disclosure is in the Securities and Exchange Commission filings made by the private sector entities, and we look at those forms because they are public documents, and public trust documents.

Additionally, we are required to file with our annual financial statements, both in the public and the private sector, disclosures in accordance with financial accounting standards. So that's another place where we can look for disclosure statements. And that's very helpful. So you may consider something like that.

MR. ANDROTTI: Our panelists in Honduras have more questions, so we are going back to Tecuigalpa.

Q: I am Rafael Silva (ph) once again. Since energy is vital for all operations, and the movement of society as a whole, and knowing the state of regional electric companies, most of them being run by the state or the government, what contingencies could you recommend to the private sector -- contingency measures vis-a-vis the arrival of the year 2000?

MR. ARNOLD: Could you clarify the contingencies a little bit, as far as give me an example of what you are thinking as far as is it stocking up on supplies or stocking up on alternate forms of power, generators or things like that?

Q: I was thinking about electricity as being the motor of society, and I was thinking about energy as the driving force in all the other areas.

MR. ARNOLD: Well, you know, it's difficult. Society is so dependent on electricity for running the daily lives of all our businesses and people, you know, there is -- it's really important to build confidence really for the electric utility industry in any country to make sure that they have achieved a high degree of readiness in terms of their critical systems. You know, while it is possible to buy generators and to make alternate plans, doing those kinds of things are very short-lived. You can't go on very long,a nd it becomes very difficult for large businesses to supply enough generators to keep their facilities and factories and stuff going. So it's really important that the utilities themselves, whether state-run, government-run, have a full program in place, have done the extensive testing on their critical systems, and may have contingency plans in place -- contingency plans being having extra capacity on hand, having people and manpower in place to run manual ope! rations if they can, and also have those people deployed, and maybe practice the deployment and operations prior to the year 2000. One of the most important things is having people in critical places so they can actually execute the plans.

In terms of people and consumers, the normal checklist of things as for contingency plans, such as having water and food and things like that -- and really it's going to be based on how much of that you do and what you do and how long you do it. It's really going to be based on the information and in the confidence you have in your electric power infrastructure in your country.

MR. SIEGEL: At the local level we are of course able to come up with small solutions, not large ones. They are mostly for the use of generators to power essential buildings. Then we have guidelines for our citizens on how they may be able to use small power generation devices to keep essential things going. But there is a lot of caution in using those. And then we are also talking at the regional level with our neighboring jurisdictions who are feeding from different parts of the electrical grid. And there is some discussion about how one may find alternate connections to supply power to certain parts of our county when our grid may not be working. But, again, those require very careful planning and cannot be done at a very broad level.

Now, while we are talking about power, we are aware that the power industry uses telecommunications to the advantage of keeping things working. So please keep in mind that one should also plan contingencies to telecommunications for the use of the power industry. And in that regard one thinks of using wireless communications in addition to wired communications. So that sort of contingency planning can help.

MR. ARNOLD: That's a good point. And not only in the communications -- you know, we are typically electric utilities in this country are very heavily dependent upon telecommunications in terms of operations and collection of data from remote devices. You also have to worry about your fuel supply. So another contingency plan is to make sure you have -- if you use a power plant that uses a lot of coal or that uses a lot of oil, or uses gas, to make sure that you have enough supplies that you can stockpile in terms of coal. Maybe you can switch between oil and coals from your plant. So making sure that your fuel supplies are there also. In this country we look at really the triad. We look at electric power at the top, then gas, natural gas and telecommunications as filling out the other two legs of the triad, because working together is the only way they are going to be successful. Gas and telecom are dependent on electricity, and electricity is dependent on gas and also! telecom.

Q: The effects of the millennium bug require great investment. Are there multilateral organizations or local organizations which are trying to help countries' governments, private enterprise to solve this problem?

MR. SIEGEL: If I may. The World Bank, as an example, has recently published a guide on how developing nations can develop their national year 2000 program. I find that to be very timely. In addition, the World Bank has already started to make loans. They, according to a very recent communique, made loans which don't seem to match the very large dollars amounts that they are usually used to making, but there is a new program for developing nations. So you may consider contacting them.

Additionally, the U.S. Senate Subcommittee on Year 2000 Technology Problems has held hearings in which consultants have reported that many countries have retained consultants from the United States, from the United Kingdom and other countries to jump start their year 2000 programs. So I wanted to offer that as an example.

MR. ARNOLD: As far as in the United States there are a number of utilities that have investments overseas, and they are treating their investments or their power plants overseas with the same year 2000 effort that they are here in the United States. And I know in many cases they are working with the national government on the issues that go beyond their electric power plants in terms of fuel supplies and telecommunications and things like that. So there is work going on there.

We are doing a lot of work recently with videoconferences as far as expertise on what can be done, and also international speaking on -- we have one in China coming up here in the next couple of months, and trying to advise them what to do when you really haven't started yet, and how do you, with the nine months left until year 2000, how do you approach working on your critical infrastructure? There is a lot of work going on in terms of trying to share information. I think really for the past year and a half most of the effort has been -- the talent has been focused internal to this country. Now with I think more confidence with the work that has happened here, having a better handle on things, a lot of those resources are turning externally to the international arena.

MR. ANDROTTI: We will continue with this dialogue. We are talking about private-public sector cooperation for resolving the Y2K problem. Please go ahead, Tecuigalpa.

Q: I am Otto Penaida (ph) once again. You showed the simulations in Montgomery County regarding what might be a Y2K scenario. Could you expand more on your experience with simulations, the critical points that need to be borne in mind when you do simulations? Thank you very much.

MR. SIEGEL: Yes, in the case of simulations we recognize that financial systems are probably at great risk, because they use a lot of dates, and a very large number of transactions are processed. Then, in addition, we in Montgomery County have two fairly advanced systems that are used to manage the traffic signals and to communicate with our buses. That's known as the advanced traffic management system. That was also part of our simulation. In that particular case, and in the case of all these systems that we simulated to work in the year 2000, we actually rolled the dates forward. Now, that has to be done very cautiously. We had previously already tested these systems in the year 2000 date, so we were comfortable in doing it.

The third syste

-- (Busy@the.Top), March 26, 1999