Silicon Crisis? How Info Tech Poses Risk for Electric Restructuring

Fortnightly Magazine - November 1 1998
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ELECTRIC POWER SYSTEMS ARE HEAVILY DEPENDENT ON computers and communications. The electric power industry is reputed to be the third largest user of computers and communications, behind government and the banking industry. When regulators and legislators make decisions regarding the electric power industry, their decisions often carry implications for the industry's computer systems. However, it is rare for these implications to attract significant consideration or influence in the deliberative process.

The result has been the introduction of technical risks into an industry that had previously been considered a paragon of stability and reliability. This discussion will address three areas in which these risks are most serious: the computer system changes required by the restructuring, the confluence of restructuring schedules with the Year 2000 problem, and the information security issues introduced by the restructuring.

Operational Computer Systems

Regulators and legislators have been busy addressing issues of deregulation, market power, stranded costs, taxation, divestiture, and market structure. When their deliberations are finished, what remains is the need for a massive computer project to implement their decisions. Viewed from an implementation perspective, the restructuring of the electric power industry is fundamentally an information technology event. To demonstrate this, one need only look at the changes that must take place on the day of the official restructuring. There are three areas in which changes could take place:

Ownership, financing, and regulation

Generation, transmission, and distribution

ontrol, information processing, and communications

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