Hi I live in Delaware and I have seen some rather alarming news on the front page of the Wilmington paper recently concerning Connectiv and the recent heat wave. It seems that Connectiv experienced a failure in their indian river generatting facility which resulted in 60,000 customers losing power. The Delaware PUC is investigating whether Connectiv purposely shut off power without warning hospitals and other critical users in advance. It also seems that part of the reason for the outage was the high cost of repalcement power. In other words Connectiv may have shut off the power to avoid high replacement power cost not because they could not buy replacement power. Connectiv also recently announced that they would sell their generating facilities (to duke energy or southern corp.) I understand that this is part of deregulation and competition, large conglomerates can generate much more cheaply due to economies of scale. The PUC is concerned as am I, that this impending sale has led Connectiv to neglect critical maintainance and system upgrades. Connectiv's web site and their most recent 10Q indicate that they were only 15-20% of the way completed on remediation for generation and distribution with respect to Y2k.

The state of Delaware seems to be extremely friendly to big business and this includes the PUC with respect to its regulation of all utilities. Recently it came out that the state failed to tell the customers of TIDEWATER a water utility that there were high levels of herbicides in the drinking water. This is despite numerous compalints to the PUC concerning the poor quality of the water and visible iron and sediment. The herbicide problem came to light publicly when the levels exceeded EPA standards (2 years after state testing revealed high levels)

Given this history of poor communication I am deeply concerned that the state of Delaware PUC is not keeping a close eye on Connectiv, and they are not sharing the information they do have with the public.

I know that Rick Cowles is a Connectiv customer and I would like to know what is going on is Connectiv going to leave us in the dark so they can concentrate on their phone, and internet business?

Rick How do you feel about Connectiv's ability to finish remmediation and testing by 01/01/2000?

Will they be able to provide power?

i know that rick

-- Anonymous, July 21, 1999

Answers

Well Rick, how many requests do you need before you give us your opinion on this particular company? I'll bet Bonnie could do a good overview that would be informative without being too condemning. :-)

-- Anonymous, July 21, 1999

Gordon, Bonnie can only access public documents and do some data comparisons which Rick probably doesn't have time for. *wink*

Andrew, I can give you the SEC Year 2000 data that Conectiv has filed, beginning with their status as of September 30 last year. (End of third quarter)

At that time the estimated completion percentage of mission-critical systems was:

(The percentages in order will be for I&A = Inventory and Assessment, CA = Corrective Action or component remediation, T&C = Testing and Compliance, as Conectiv has decribed its process.)

Business Systems: .............95%.......70%........60%

Power Production: ............ 90%........0%...........0%

Electricity Distribution: .......50%........5%...........5%

In this 3rd quarter filing Conectiv stated they had incurred $3 million in Y2K costs of an estimated total of $10 to $15 million.

Three months later, the 10K filing for the end of 1998 shows this data:

Business Systems..............95%........85%.........65%

Power Production..............95%........30%.........30%

Electricity Distribution.........95%........10%..........5%

The data on costs was exactly the same in the 10K as it was in the prior 10Q filing.

The next SEC filing was the first quarter 1999 10Q with data as of the end of March this year:

Business Systems.............100%.......95%........ 75%

Power Production.............100%.......55%.........40%

Electricity Distribution........100%.......55%.........15%

Incurred costs to date are estimated at $5.7 million and the total cost estimation remained at $10-$15 million.

Going to Conectiv's web site, under the Y2K progress update link, this is what Conectiv had to say:

"Overall, Conectiv's Year 2000 Project covers approximately 140 different systems (some with numerous components) that had been originally identified as high or medium priority. However, only 21 of those 140 systems have been identified as essential for Conectiv to provide utility service to its customers. The Year 2000 Project Team is focusing on these 21 "Mission Critical" systems, with additional work on the other systems continuing based on their relative importance to Conectiv's businesses."

"As of June 30, 1999, an overall total of 96 percent of Y2K tasks had been completed in the major business groups with respect to mission critical items. Final remediation and testing will be completed well ahead of the Jan. 1, 2000 rollover date."

This most recent info is full of weasel words and doesn't really tell us much. "Overall total" means an average of the Y2K "tasks" and we don't know if that means the majority are at 100% and some other few are at 30% or 50% or 85%. Averages do not let us know about specific systems. They did say that final remediation and testing will be completed before the end of this year.

In the "Conectiv's Plan" section of their general Y2K info, they state:

"Our goal is to have substantially all Mission Critical Systems Year 2000 Ready by June 30, 1999. Testing of critical system components will be done as modifications are completed. A small portion of our generating capacity - between 5% and 8% - is scheduled for remediation and testing in September of 1999 (to coincide, for economic reasons, with scheduled maintenance outages)."

I personally find "goals" admirable but would prefer to have seen an outright statement that they met that goal - even if the goal does involve "substantially all" mission critical systems and not just plain "all". The "substantially" probably refers to the work to be done during the September scheduled maintenance outage, but it is worded in an ambiguous manner.

On Conectiv's web site is also a new section on the recent heat wave and attendent power outages. Some pertinent sections are:

"Our region experienced a nearly unprecedented heat emergency in recent days. This is only the fourth time in this century that temperatures in this area exceeded 100 degrees for three days in a row....

Some customers lost power during the heat wave. Others were out of power for longer than we originally predicted. In both cases, this occurred because we had to act decisively to keep electricity flowing and minimize problems for our one million customers throughout our four-state service region. As a result of this fast-changing situation, we weren't always able to announce our actions in advance.

We apologize for the difficulty and inconvenience our neighbors and friends may have experienced. We wish to thank those of you who took steps to conserve power...

During the last week, Conectiv personnel did all they could to cope with demand that far outstripped all expectations. They made every effort to keep the power on at hospitals and other essential public safety and service operations.

While we believe we did our best under extreme conditions that taxed the capacity of Conectiv and all neighboring utilities, I have ordered a full examination of this event, including discussions with public officials and those customers most affected by this experience to determine if there were additional steps we could have taken or things we should do differently in the future."

In a June 23, 1999 press release Conectiv did announce " its intention to sell over 2,000 MW of fossil-fired and nuclear assets located in Delaware, Maryland, New Jersey and Pennsylvania. The generation assets offered for sale operate primarily as baseload and intermediate units. Materials regarding the nuclear assets will be issued to qualified parties later this month."

This move is described as a realignment of Conectiv's generation business as part of strategic initiatives designed to put the company in a stronger position re deregulation issues. The growth focus will be on Conectiv's utility transmission and distribution system (versus generation) and other business investments, such as telecoms.

That's all the info I could come up with right now, Andrew. I hope it's of some help to you. Compared with other utility statements, Conectiv is certainly not leading the pack as far as Y2K readiness goes, but exactly where in the pack they are right now is more guesswork than anything else.

-- Anonymous, July 21, 1999

Andrew,

Although I am aware that Connectiv serves approximately 1 million customers in four states, I am not familiar with their generation mix. The Indian River Unit #4 tube rupture that precipitated the loss of 60,000 customers apparently occurred during a three or four day heat wave where the temperatures reached up to 100 degrees. I have only visited Delaware once in my life during the early summer and found it to be both beautiful and pleasantly comfortable in terms of the weather. I can see that the early July heat wave was, most probably, not very welcome. Much like the white Christmas of 1989 here in Florida. Frankly, Florida just doesnt deal very well with snow, frozen rain and temperatures that remain in the 12 to 20 degree range for days on end.

While I cannot know for sure, based on the press releases posted to Connectivs website from June 6 through the 8th, it appears the entire Northeast region was in the grips of the heat wave. Most of the releases dealt with energy advisories, alerts and I believe one emergency. At least it was characterized as a very serious situation in one release. See http://www.connectiv.com/news/pr/99_releases/990706b.htm .

I presume from these releases that PJM acts as the equivalent to the regional Security Coordinator here in Florida. It appears that Connectiv was coordinating operations with PJM as was all other regional control areas. Based on what I have read from their site, I would think that the loss of those 60,000 customers had less to do with their reluctance to ante up the money for additional power and more to do with extraordinarily high demand, generation levels dipping into reserves and a transmission system that was stretched to capacity and possibly with transmission line constraints in place to limit energy transfers. By constraints, I mean to say that generation may have been available somewhere in the region but they were unable to transfer the power to where it was needed without placing a large portion or the entire regions network at risk. Clearly, economics plays a vital role in the utility business. But when customers are out, economics go to the bottom of the concerns list and if energy is obtainable. you do or pay what you have to in order to serve your customers.

Help me here Bonnie, what was it Spock said to Captain Kirk before he died Sometimes you have to sacrifice something, something, something. I dont think Spock had cash on his mind!

-- Anonymous, July 21, 1999

Andrew,

So, how do you like them apples? Great company, huh? It's my supplier too, so I have been watching them same as you. Be still, my heart. Does the fact that as of the end of June they had only achieved 96% remediation on 21 (out of 140) of their business systems make you feel more, or less, comfortable? Personally, I plan on having some real good contingency plans and backups for January 2000. Also, bear in mind that when Atlantic City Electric (the previous name of my supplier) was merged/bought-out last March 1998, they became part of this massive "holding company" called Conectiv. Now, no doubt our own local operators are just as dedicated as before, but will they get the revenue and commitment from the "parent"? So far, it doesn't look too hot. Notice that virtually *all* their time and money last year (9 months work) was spent on the *accounting and billing systems*. Great, just great. Sigh. Bonnie, another great research post on such short notice. Thanks. And Andrew, I'm glad you asked this question here, as I think you were the straw that broke the logjam, or some such thingy. Right Rick? ;-)

-- Anonymous, July 22, 1999

JT, is this the part of the death scene in The Wrath of Khan that you wanted? *smile*

Spock: "Ship? Out of danger?"

Kirk: "Yes"

Spock: "Don't grieve, Captain. It's logical. The needs of the many outweigh.."

Kirk: "the needs of the few.."

Spock: "or the one."

For what it's worth, I also don't think that fiscal considerations contributed to the Conectiv outages either. The Eastern transmission corridor is congested and the industry studies I've seen only indicate that things will get worse before they get better. Anytime above-normal demand is reached, there will continue to be problems. That situation is outside of any Y2K considerations, except perhaps in the sense that a more long-sighted industry approach to the growth situation would have helped.

-- Anonymous, July 22, 1999

Bonnie,

For what it's worth. I'm not sure if Conectiv decided not to supplement power with outside purchase. There are some stories that Conectiv is being investigated by the PUC for just that matter. Things got pretty dicey here, and voltage was dropping all the way down to 107, yes I was watching it go that low for some hours, over the July 4th heat wave period. So, why so low? Reaching into brownout territory. Obviously Conectiv couldn't supply the demand. Did they also elect to dump some loads and not buy outside power? Had the "lines" reached their max carry capacity? Bonnie, Conectiv is now a bottom line only business. They are playing some hard line business games here. No more Mr. Nice Guy about power supply expenditures or investments.

-- Anonymous, July 22, 1999

Bonnie,

Thats the one! Thanks. tell us the truth Bonnie youre really Commander Datas sister, right! :)

As I said in my earlier post, I cannot be sure why Connectiv was unable to import power. I only suspect it was due to those factors I mentioned. There was no reference in any of the press releases of any other failures beyond the Indian River Unit 4 tube failure or demand levels other than unprecedented. There was some cautionary language to customers that brownouts (low voltages), rotating blackouts (systematic cycled outages) MAY become necessary. This is certainly no surprise given the conditions at the time.

Regardless, I would be very interested in the outcome of the PUC investigation if anyone hears of the results. While I have serious doubts, if there is any evidence that they deliberately chose not to import power for financial reasons, I can think of no better way to painfully get out of the electric business. I'd certainly love to hear the fiscal justification to NERC and DOE.

OK Bonnie. As he was painfully crawling his way to the Genesis countdown trigger, what were Khans last words before he passed to the great beyond and who was he quoting? No fair using stored memory! :)

-- Anonymous, July 22, 1999

JT,

While Bonnie is searching the memory banks for that answer, I have a question for you. How did they get all that power for those Star Ships? I heard Scotty mention "crystals" a number of times, but it was never real clear to me. We sure could use that technology now though, huh? And they certainly didn't have any lingering Y2k problems, embedded chips or not.

-- Anonymous, July 22, 1999

Ah, JT, no positronic brain here, and I'm rather partial to my emotions. *grin* If I didn't have to sleep or eat, though...now that would save one heck of a lot of time!

Khan: "From hell's heart I stab at thee. For hate's sake I spit my last breath at thee."

He was quoting Ahab from Melville's Moby Dick. (And I loved the way Montalban did it!)

Gordon, Gordon...dilithium crystals are what power the warp drives! As it turns out, after a few years scientists discovered that going at speeds over warp 5 created space anomalies, so they had to put the brakes on -- so the spaceships didn't pollute the universe and maybe cause TEOTUAWKI. Hey, nobody's perfect. Even Scotty didn't figure out there was a flaw in the warp drives. Those unsuspected little glitches can pop up in the best of systems....

-- Anonymous, July 23, 1999

Bonnie, you astound me! Youre obviously very intelligent and well educated, rational in conceptualizing , incredibly unbiased though discriminating in your research, yet indiscriminate in your understanding of peoples concerns and you appear to be boundlessly empathetic. On top of all this youre a Trekkie of the highest order. You have my undying admiration and envy.

Gordon, you have raised a fascinating point here. Clearly, warping from one point to another at x times the speed of light would raise havoc with any date-time dependent microprocessors. Not only did Kirk and Jean Luc have to worry about where they were at any given time surely they needed to know when they were!!! Hmmmmmmmm uh Bonnie? :)

-- Anonymous, July 23, 1999