http://www.thisislondon.co.uk/dynamic/news/business_story.html?in_review_id=256676

http://www.thisislondon.co.uk/dynamic/news/business_story.html?in_review_id=256676

-- Homer Beanfang (Bats@inbellfry.com), February 16, 2000

Answers

Bills hitch puts Independent Energy in pain

by JONATHAN PRYNN

Fast-growing electricity, gas and telecoms supplier Independent Energy has been forced to ask its bankers for extended credit after a billing fiasco left it with a huge cash shortfall.

The company said it had only been able to bill for #35 million of the #130 million electricity sales in the six months to end-December because of computer problems. Chief executive John Sulley said its main lender, Barclays, was prepared to tide the company through the crisis.

Extra staff and software needed to sort out the glitches will cost about #2 million. By yesterday, the company had been able to get out bills for #87 million out of a total of #166 million sales in the current financial year. Sulley said: 'We are now on the downward slope and I anticipate that within the next two to three months we will have caught up in billing.'

The problems, news of which wiped nearly #5 off the share price this week, were caused by regional electricity companies passing on poor or late data about customers switching to new suppliers such as Independent Energy, Sulley said.

The four-year-old company, which specialises in supplying small businesses but also has 120,000 domestic electricity customers, reported first-half pre-tax profits of #12.1 million, ahead of market expectations and up from #707,000 for the same period in 1998.

Earnings per share are up from 2.9p to 26.7p. The shares shot ahead 162 1/2p to 2525p.

) Associated Newspapers Ltd., 16 February 2000

-- Homer Beanfang (Bats@inbellfry.com), February 16, 2000.

Ooops. Minor "I told you so" happening here.

Notice that the dreaded "y2k" wasn't mentioned...but it has all the symptoms, doesn't it?

---...---...---...

Puzzle assignment for the detectives in the reading audience:

See if you can find at least 6 things indicating a y2k-related failure in this story.

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), February 16, 2000.

---I'll bite, even though I never could get all #$%&* 5 of the brit spy clues...grumble...anyway:

Fast-growing electricity, gas and telecoms supplier Independent Energy has been forced to ask its bankers for extended credit after a billing fiasco<---1,admitted problem left it with a huge cash shortfall.

The company said it had only been able to bill for #35 million of the #130 million electricity sales in the six months to end-December because of computer problems<---2,obvious date problem,rollover no workee. Chief executive John Sulley said its main lender, Barclays, was prepared to tide the company through the crisis.

Extra staff and software<---3,the y2k patch obviously didn't take needed to sort out the glitches will cost about #2 million. By yesterday, the company had been able to get out bills for {#87 million out of a total of #166 million sales}<---4,nope, it really didn't work in the current financial year. Sulley said: 'We are now on the downward slope and I anticipate<---5,they don't really know that within the next two to three months we will have caught up in billing.'

The problems, news of which wiped nearly #5 off the share price this week, were caused by regional electricity companies passing on poor or late data<---6,other companies had apparent end of the year date problems, too, a domino effect about customers switching to new suppliers such as Independent Energy, Sulley said.

The four-year-old company, which specialises in supplying small businesses but also has 120,000 domestic electricity customers, reported first-half pre-tax profits of #12.1 million, ahead of market expectations and up from #707,000 for the same period in 1998.

Earnings per share are up from 2.9p to 26.7p. The shares shot ahead 162 1/2p to 2525p.

-- zog (zzoggy@yahoo.com), February 16, 2000.

One alternative explaination -- perhaps this is a Y2K effect rather than an existing Y2K problem.

We've seen that sort of thing twice here in Minneapolis, MN. Once prompted by Y2K, the other time about 1995 (so not Y2K). What seems to happen is that someone comes in to the local utility (or in our case, the Y2K related on was a county billing system; the older one a city water billing system) and promises them an absolutely wonderful new system for hardly any money at all.

Then the damned thing takes months and a lot of money to fix. Took them almost a year (and lots and lots of money) to fix the Minneapolis water department billing system -- and this was before Y2K.

So: On the plus side -- given time and money they'll get it fixed. On the Y2K side -- it's probably not a Y2K problem (note, it talks of problems in the last quarter of 1999), but on the other hand they probably wouldn't have needed a new system if the old one had been Y2K compliant in the first place.

Right now, I think that the major bump in the Y2K road will probably be a lot of people trying to debug new Y2K compliant systems all at the same time.

-- E.H. Porter (just@wondering.about it), February 16, 2000.

Folks 'round here are tired, and want a break from prosperity, anyway.

-- Okie Dan (brendan@theshop.net), February 17, 2000.

The HMO Hoods apparently have now planted themselves between the Energie Suppliers and its Customers.Leeches everywhere You look.

-- Alert@making Notes (rrr@rrr.rrr), February 17, 2000.

Bingo!

You're both correct: the symptoms are the result (most likely) of the new program being installed too quickly, too poorly tested, too poorly trained as part of their y2k remediation.

I agree: program faults (in this case) are the result of trying to prevent the failure of the previous system. That's why the cash flow problems began last year...in their "new fiscal year".

That indicates a potential JoAnn effect too from the newer program.

Regardless - they are in big trouble.

-- Robert A. Cook, PE (Marietta, GA) (cook.r@csaatl.com), February 17, 2000.