Energy & Utilities: Mother Nature Puts Utilities To Test - InformationWeek

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9/17/2003
02:43 PM
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Energy & Utilities: Mother Nature Puts Utilities To Test

IT deals with ice storms and floods while keeping projects on track

Energy and utility executives usually describe their toughest challenges as the ones thrown at them by Mother Nature. But the blackout in the Northeast in August was a reminder that they can't take anything for granted.

While the cause of the massive outage is still under investigation, Diane Bunch, senior VP of IS at the Tennessee Valley Authority, says preventing blackouts or reacting to them effectively depends on timely information. Many utilities use subsystem-control and data-acquisition systems to monitor large parts of the electrical grid. While there will be growing pressure to improve those systems in the wake of the blackout, Bunch predicts that most utility infrastructure investments still will be based on demand for power and profitability and on what Mother Nature throws at them.

A devastating ice storm last December affected around a million and a half people, says Cecil Smith, CIO at Duke Energy Corp. Duke prides itself on technology that lets it give customers accurate restoration times after an outage.

"Two to four hours is something people deal with, but two to four days changes lives," Smith says. "And many people want to talk to a person."

Ice storms aren't uncommon in many parts of the country, and utilities have to plan for them, says Ray Johnson, CIO at Entergy Corp. "It's not unusual for ice storms to put peak pressure on our outage-management and workload-management systems."

Floods are also a factor. The Tennessee River System, the fifth-largest river system in the country, faced its second-worst flood last winter. "Automated systems told us when to let water in or keep it out, and divert it to reservoirs where it would do the least amount of damage," Bunch says.

Still, all three utilities kept their business-technology projects on schedule. Duke deployed a Web-based system that lets its large customers access energy alerts. It also implemented a supply-

chain application for its suppliers. Entergy retooled its internal financial systems. TVA upgraded 4,000 desktop systems to Windows XP and created a software repository to get rid of a lot of paper.

INDUSTRY LEADERS
Rank Company Revenue in millions Income (loss)
in millions
IT
employees
36 Halliburton Co. $12,498 ($998) 1,040
41 Duke Energy Corp. $15,663 $1,034 1,648
68 Edison International $11,488 $1,077 330
79 People's Energy Corp. $1,483 $89 183
114 Progress Energy Inc. $7,945 $528 780
137 Tennessee Valley Authority $6,835 $73 683
150 Alliant Energy Corp. $2,609 $107 223
183 Pinnacle West Capital Corp. $2,637 $150 416
187 PacifiCorp $4,259 $327 830
191 Calpine Corp. $7,458 $119 168
210 Entergy Corp. $8,305 $623 830
227 Occidental Petroleum Corp. $7,338 $989 370
233 Amerada Hess Corp. $11,932 ($218) 240
235 CenterPoint Energy $7,923 ($3,920) 449
272 Exelon Corp. $14,955 $1,440 807
275 Xcel Energy $10,341 $2,006 86
280 Mirant Corp. $6,436 ($2,428) 327
356 Pacific Gas & Electric Co. $10,462 -- 1,200
366 Great Plains Energy Inc. $1,010 $103 146
390 Southern Co. $10,549 $1,318 940
391 CMS Energy Corp. $8,687 ($620) 474
409 Peabody Energy Corp. $2,717 $106 71
451 Unocal $5,297 $331 340
452 Truman Arnold Co. -- -- --
457 TXU $10,034 ($4,210) 875
472 AGL Resources Inc -- -- --
474 Consol Energy Inc. $2,183 $12 145
489 Enterprise Products Partners LLP $3,585 $96 --
495 American Water Works Association -- -- --
Financial data is from public sources and company supplied.
Revenue is for latest fiscal year.
Employee data is from InformationWeek 500 qualifying survey.

SNAPSHOT
INSIDE COMPANIES
Average portion of revenue spent on IT 2%
Average percentage of industry applications and business
processes that have Web-based front ends
37%
Companies with real-time business processes in place 78%
HOW COMPANIES DIVIDE THEIR I.T. BUDGETS
Hardware purchases 13%
Services or outsourcing 17%
Research and development 2%
Salaries and benefits 35%
Applications 19%
Everything else 14%
INDUSTRY FINANCIALS
Average year-over-year revenue change -44%
Average year-over-year net income change -145%
DATA: INFORMATIONWEEK RESEARCH
See year-over-year shifts in business-technology practices for this industry. Compare and contrast this year's data with last year's.

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