Selections from Ray Humke Remarks Annual Shareholder Meeting, April 15, 1998

Ray Humke

President of Indianapolis Power & Light Company

Our long-term "visitors" include 25 or so consultants from the firms of Deloitte & Touche and Oracle Consulting. They have joined with more than 50 of our own employees to take part in a $30-million project ... the largest such endeavor currently planned for IPALCO over the next five years.

This effort has been nicknamed Project Delta by its participants. Delta is used to symbolize "change" or the rate of change, and the delta triangle is part of an employee-designed project logo. The delta symbol is particularly appropriate because massive change is the focus of this undertaking. In the end, the work practices of the entire company will be revamped, and every employee will be affected by what we are doing.

The reasons we're taking on this project are numerous: to improve customer services; increase productivity and efficiency from streamlined processes; to improve our ability to tap into more useful, timely and accurate information; to decrease costs of doing business in the areas of operations, inventory and overtime; to improve our ability to make timely strategic and management decisions; to enhance relationships with our suppliers and to increase the staff's skills and capabilities.

All this may seem like a tall order for one project. But this immense effort is critical to our future, and so we have committed all the resources we think are necessary to make it a success.

Now, many of you have heard about the Year 2000 issue. Y2K -- as it has come to be called -- could impact most of us in one way or another. Not only our computers, but elevators, watches, phone systems...and even pacemakers...contain mechanisms that could be affected by the Y2K issue.

*****Many of the systems at IPALCO require modification to resolve the Y2K problem ******** , and Project Delta is a big step in that process.

This problem, which for obvious reasons has attracted the attention of businesses and industry around the world, results from the decisions that were made to take shortcuts in some computer hardware and software designs in order to conserve capacity which was a very expensive component. These decisions are having a very broad impact upon our systems as we approach the next century. Worldwide, the repair bill for this problem is estimated to cost $3.6 trillion dollars.

The difficulties occur when a computer stores only the last two digits of the year and the "19" is assumed to be the century. When the clock rolls from 12-31-99 to the next day, many computers will go back in time instead of forward, to 1-1-1900.

At IPALCO, our Information Systems organization has been working on this issue with other Company departments for some time. So Project Delta will be year 2000 compliant, helping us make the transitions necessary to protect IPALCO from major computer problems two years from now, and to ensure that our basic business operations continue to operate smoothly.

Just a glance at one power utility.

Mike

-- Mike (knierman@lilly.com), August 20, 1998

Answers

Interesting...no mention about embedded systems in the power production/delivery systems.

-- Buddy (buddy@bellatlantic.net), August 20, 1998.

Mike,

The posted selection of remarks contains practically no information about IPALCO's Y2K plans or progress -- only that their Y2K system modifications will cost more (probably a _lot_ more) than $30 million.

Do you have any other IPALCO details?

-- Richard Woods (ribwoods@execpc.com), August 23, 1998.

At this time I have no futher info.

-- Mike (knierman@lilly.com), August 24, 1998.