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No Real Problems Seen in Gas Industry's Y2K Transition

No Real Problems Seen in Gas Industry's Y2K Transition

One of the "biggest issues" facing the natural gas industry in the upcoming year with respect to Y2K will be the readiness of "key providers and dependent players," namely the electricity and telecommunications industries, said pipeline and LDC officials last week.

The majority of gas companies, including pipelines, LDCs and producers, report they expect to be Y2K ready by June 1999, and electric utilities are said to be following a similarly aggressive path. "I think that for electric and gas we're on very similar tracks as far as being ready. The electric side is going to be doing some full industry-type testing in April that the gas components hope to get involved with," noted Gary Gardner, chief information officer for the American Gas Association (AGA).

As for telecommunications companies, "I think the big players are probably going to be there. And the concern is [over] those local carriers out there because there's thousands of them. We haven't seen any warning signals or big problems so far," he told NGI following a press briefing in Washington D.C. on the challenges that the oil and gas industries face with computer and electronic software and hardware when the clock strikes Jan. 1, 2000.

"We're pretty much all in the same stage of readiness, which is where we want to be - about half way at this point" through testing and correcting the problems, said Skip Horvath, executive vice president for the Interstate Natural Gas Association of America (INGAA), a major pipeline group. "The reason for all of us to be together is if any one sector or any one industry is behind, then all the others are behind because they rely on that one. So we're all pretty much making sure we go lockstep together..."

In 1999, "we're going to be contacting and working with the electric and telecommunications industries to make sure our...plans make sense with where they are in their plans," Horvath said. Toward that aim, the Natural Gas Council is scheduled to host a meeting in Houston on Jan. 27 for gas, electricity and telecommunications to provide updates on their Y2K preparedness.

The entire gas industry presently is surveying companies about their Y2K readiness. The results of an LDC survey will be presented at a FERC technical conference scheduled for Feb. 18th, AGA's Gardner said. "So far, from the initial responses that we've gotten progress is still being shown. The majority of people are moving into what we call the later stages of remediation and validation," and they see "no major challenges" ahead. "That's a good sign," he said.

The news also is encouraging from the quarterly statements on Y2K readiness that publicly traded investor-owned utilities (IOUs) have filed with the Securities and Exchange Commission. Both Merrill Lynch and Moody's Investor Service have reviewed these statements and "feel pretty confident that based on what they've seen that the energy industry, and specifically the LDCs, should not be at risk," Gardner noted.

"I think the general feeling we're getting is there could be some little nuisances here and there" come Jan. 1, 2000. "But from those working close to the issue, we don't see a big problem" on the horizon, he said. Gardner noted that Montgomery County in Maryland conducted a "dry run" of emergency-response capabilities last week by "pushing the clock forward" on its systems, and "apparently everything ran smoothly."

Pipelines and LDCs have similar Y2K "vulnerable" areas. The first is the SCADA (Supervisory Control and Data Acquisition) system, which "basically is our communications system," said INGAA's Horvath. "It's a bunch of pieces of equipment scattered around - some at the control area and some at the customer sites." The other area of vulnerability is the control panel of compressor stations, he added.

The vulnerability stems from the fact that some systems or electronic devices contain embedded chips or processors that may be date-sensitive, Gardner said. The chip "may have some kind of clock to it," which could cause it to reach the "wrong assumption" that it's 1900 rather than 2000 when Jan. 1 dawns. So far, LDCs are finding that chips used in their operations basically "don't have that date type of sensitivity."

The Y2K issue has gone from being "a software traditional information systems type of problem" to more of a hardware concern, where "anything that has a chip in it may have a vulnerability," Gardner noted. He conceded it's been a "laborious process" to locate these chips and test them. But "right now I think the consensus is that they're feeling pretty good across the board at what they're finding. They're not finding that much of a problem." He said the chips in some cases can be replaced, but he cautioned that companies that wait too long could be "shut out."

Susan Parker

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