April 12, 1999

A False Bull Market.

Dow 10,000...A great bull market, but where's the beef and what is the reality? The reality is, the majority of stocks are in a bear market, and have been so since April 1998. Most NASDAQ stocks have been in a bear market since July 1998. The Value Line and Russell 2000 unweighted stock indexes, more typical of the behavior of the average stock, are about 7% below their January 1999 levels, and about 20% below April 1998's highs (by definition, in a bear market!). Unless your mutual fund(s) are tracking the indexes, you may be suffering similar nonperformance.

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Power utilities
prepare wide-scale drill
Y2K compliance not expected on June 30 deadline
By David M. Bresnahan (from) © 1999 WorldNetDaily.com

The nation's power companies have Y2K problems and they admit they are purposely keeping the facts from the public and from the government.

A Y2K drill will be conducted by the nation's power suppliers tomorrow, which some claim is an attempt to portray that all is well when it is not. Electric power officials say that is not true, and they deny the claim that they are purposefully refusing to report Y2K problems.

The North American Electric Reliability Council (NERC) is a non-profit organization which works with the nation's power suppliers to keep America's lights on. The Y2K computer problem has given them an additional challenge -- to prevent power outages caused by Y2K computer failures at the start of the new year.

NERC's board of trustees is run primarily by executives from various power companies and reports to the Department of Energy, which must assess their compliance with directives pertaining to Y2K.

A recent memo from NERC to the nation's power suppliers was provided to WorldNetDaily by a concerned source. A call to an electric company worker confirmed that the document was real and that there may be reason for concern.

"It seems clear to me that there is a direct effort to cover up the problems in this industry. The public is not being told the truth, and there is an official plan to deceive them even more," he stated on condition of anonymity. "They are cooking the books to look much better than they are. This test on April 9 is nothing more than a public relations stunt," he charged.

The memo was also verified as genuine by Gene Gorzelnik of NERC public affairs. That memo tells power companies to withhold information about Y2K problems from the public and from the Department of Energy.

"All identified exceptions will be held in strict confidence and will not be reported to DOE or the public. The exceptions will be reviewed by NERC Y2K project staff for reasonableness and reliability impact on operations into the Year 2000," the memo said in part.

"It's perfectly true what it says," Gorzelnik confirmed, but he defended that plan by saying the information being kept from the public and the government would only complicate rather than help the process.

"When we were working on the January report (required each quarter detailing progress), one of the things that we realized was that there were a number of utilities that weren't going to be making the June 30 target date we had established (to be Y2K ready)," Gorzelnik explained.

NERC learned that many utilities would not be Y2K ready by the June 30 deadline, but that they would become Y2K ready at a later date. A decision was made to permit power companies to report that they are Y2K ready by June 30 if they list separately any exceptions to being ready.

Those exceptions might include things such as not being able to fix a Y2K problem until a scheduled maintenance period that falls after June 30. Power companies will also be permitted to claim Y2K readiness on time if their mission critical systems are ready even though other systems are not ready. Companies waiting for vendors to provide new software or hardware which will not be delivered by June 30 will also be able to claim they are Y2K ready on time. Such exceptions are not considered necessary to report to the Department of Energy or to the public.

"We came up with the idea of the Y2K exceptions report. 'I will be Y2K ready except for XYZ piece of equipment that will not be available because the vendor won't be able to supply the hardware for it until August 17,'" Gorzelnik gave as an example.

"We felt that to put out raw data, it could very easily be misunderstood," he explained of the need to keep the details under wraps.

Companies have been sending NERC exception reports since January. The reports are not specifically a part of the drill on Friday. NERC is questioning utilities that have large exceptions lists to be sure that their reliability to provide power to their customers will not be impacted by those exceptions.

"One of the concerns was that if it went in to DOE it would become public knowledge and the whole process that we have been working with is one where we want the utilities to be frank with us to tell us exactly what is going on so we can work back and forth and get the problem solved," said Gorzelnik.

"If information was made public then we and the utilities were concerned that the utility itself would be spending so much time answering questions from reporters and their customers that it would divert from the actual job of getting the facility ready for Y2K. That's all that was behind that. They are taking a statement out of context and blowing it up without looking at all of the factors that went into that statement being there in the first place," he complained.

A NERC document used in a workshop for power suppliers working on Y2K problems was also sent to WorldNetDaily. Gorzelnik said the document is real, but that it is being used out of context by those who wish to discredit his organization.

That document appears to tell participants in tomorrow's drill that the main purpose of the drill is to provide a positive public relations event. Tests of complicated and questionable systems are to be left out, and everything is to be kept simple.

"Do not make the drill to (sic) complex. We want to have a successful and meaningful story for publication. Identify the 'success parameters' before the test. What are the weaknesses we are looking for," states the NERC instructions.

Gorzelnik does not deny the statements in the document, but he says they are being misinterpreted. Power companies are being asked to test and prepare all aspects of the drill in advance, but that is to provide a successful training environment for participants, not create a public relations event.

"One of the concerns was that people would be making the drills so difficult that they would take an extremely long time to complete, and it would also have them stumbling over each other," Gorzelnik described. "The idea was, you want to accomplish the goal of identifying your key facilities and which ones you needed to exercise, but don't develop so many different scenarios that it becomes a problem to try and run through all of the scenarios. Don't make it too complicated.

"This statement here was a shorthand version of saying, Get to the point. Make it understandable to the public. Get the information out. Don't have a drill that is so complicated that it fails of itself because of its complexity."

Gorzelnik also denied that there will be any chance that power could go off during the drill. He said the drill is actually a form of training for power company workers, and that it is all simulated.

The drill "will focus on sustaining reliable electric system operations during a simulated partial loss of voice and data communications. This drill does not involve customer electric facilities," said Gorzelnik.

The drill does not involve testing Y2K readiness or compliance. Those tests are separate and ongoing.

The purpose of the drill is to have a system in place that will enable power companies to communicate if the telephone system fails when the new year begins. Shortly after the completion of the drill an assessment of the results will be posted on the NERC website.

Gorzelnik also denied any significance to the fact that the drill is being conducted on a date that has been identified by the Federal Emergency Management Agency as a potential date for early Y2K problems.

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