‘Creative Bookkeeping’ not Exclusive to Energy Trading

Steven M. Brown
Senior Associate Editor

Since energy trading is outside the editorial reach of Utility Automation, I missed out on the Enron/Reliant/Dynegy-type scandals and subsequent media circus. I resigned myself to the fact that, with our publication’s emphasis on the “wires” side of the business, it was unlikely I would get to cover stories about falsification, mishandling or “misplacing” of documents. What’s to be gained through falsification of documents on this side of the business anyway?

Well, I suppose outage records might be fertile ground for some creative bookkeeping…

Although it didn’t receive the degree of attention Enron garnered for its improprieties, recent news of Xcel Energy’s poor handling of outage documentation is no less disturbing.

For those who missed the news–which was documented extensively in Minnesota’s Saint Paul Pioneer Press–here’s a quick recap:

In early Fall, Xcel turned over records on more than 8,300 outages to Minnesota state investigators. At that time, it was found the company lacked proper paper documentation for 61 percent of those outages. Despite Xcel’s initial statement that paper tickets are only “supplemental” to electronic records, it is the company’s policy that paper, not electronic, records are the official documents for the accounting of outages.

Active and former employees of Xcel told the newspaper that because of poor maintenance and repair, old equipment and inadequate work crews, more and longer outages were occurring on the utility’s system. The workers also claimed that the only way the company could meet state standards–and avoid penalty–was by altering the time on repair documents.

Xcel said it does adjust reliability figures, but only to correct worker errors. In an internal company letter, Xcel’s field operations VP admitted that, in some instances, the company had failed to follow proper procedure in documenting outage length and said the company was taking steps to improve the data collection process.

Xcel’s recent problems bring up some interesting points. First, if claims by Xcel’s current and former workers are true, it’s further proof that lack of investment in T&D is leading to a degradation in power reliability.

Second, it puts utility-supplied reliability statistics in doubt and opens the door to increased government and regulatory intrusion if individual utilities can’t be trusted to supply accurate reliability numbers. Newspaper reports out of Saint Paul suggest that some of Xcel’s numbers were off by a significant amount. The question was posed earlier: What’s to be gained through falsification and mishandling of documents on the T&D side of the business? Quite a lot if a utility is subject to performance-based rates and penalties.

Xcel needs very much to resolve this problem and explain the reported discrepancies in outage times. Perhaps the company might also look at changing its policy for documenting outage length. Xcel has been a fairly aggressive adopter of T&D.automation and IT systems, with several noteworthy contracts announced in just the last six months. Why then, with an impressive amount of accurate information-gathering technology at its disposal, should the utility count paper trouble and repair tickets as the “official” documents for recording reliability numbers?

Something doesn’t add up–and there’s no good excuse for the miscalculation.

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