Power Generation Panel Discussion Questions

1. Describe how your condition monitoring program is structured, its responsibilities and
goals. How does it interact within the maintenance department and with other
departments?

Gene White: We have 35 production and support employees that operate and maintain
our plant. The condition monitoring program is basically a support function. We have no
dedicated resources. We have a CBM coordinator who doubles as a project manager
and maintenance engineer. We have technicians that are responsible for the various
CBM activities in addition to their other responsibilities. We schedule vibration routes, oil
routes, IR routes, and ultrasonic routes at regular intervals.

Our responsibility is to provide information on the condition of our equipment so that

informed decisions can be made so that the “right maintenance” is performed at “the
right time”. This is a shared responsibility for the entire facility. The point being to keep
reliability and performance high while lowering bus-bar costs.

Ted Johnson: Our program is structured similar in many ways to the “typical” utility
PDM program, however, we are currently adapting to the new challenges of the
deregulated world. “Lean and Mean” is the general rule. We don’t have the luxury of
specializing in a particular technology. Everyone has to be capable of functioning in all
of the PDM technologies: balance a turbine today, laser align a boiler feed pump
tomorrow, do a vibration or thermography survey the next day…and so on. Another
example is that in an effort to keep our overheads down we don’t utilize a conventional
supervisor. Everyone is capable of working in the field. One measure of our success is
for everyone to be “billable” as much as possible.

In terms of responsibilities we are organized to be “customer focused”. Each person is

responsible to be the lead PDM rep for one or more customers. Channeling the
predictive maintenance services through one person tends to result in better
communication with the customer facility. Our primary interaction is with the
maintenance department, however, we also tend to work closely with the operations
department.

Deregulation has simplified our goals significantly. In essence we now have three goals:
work safely, satisfy our customers and make a profit for the company.

Mike Kelly: The Ontario Power Generation (OPG) nuclear Predictive Maintenance
(PdM) program is part of an engineering program improvement project in OPG nuclear.
It is being implemented simultaneously at three four-unit CANDU sites. There are
presently two engineers in the head office doing project management, budget and
project coordination, arranging training, aiding with procedure preparation and
supporting technical project work. At the end of 2000, this will decrease to one.

The sites have three PdM engineers in components engineering designated as the
leads, responsible for the interface with maintenance, with other engineering groups,
operations, and the head office. Maintenance performs data collection and initial
analysis for three technologies: infrared thermography, lubricant sampling and

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 screening, and vibration monitoring and analysis. Balancing is also performed by the
maintenance team, as is a portion of alignment work at one of the sites. The
maintenance organizational structures vary somewhat among the sites, but a unified
dedicated team is the model being pursued for the future. The present model calls for
ten technicians on the maintenance team to handle the data collection and analysis for
four units.

Beckie Loeve: Our Condition Based Maintenance (CBM) group, a sub-group of the
Maintenance Department, is responsible for all vibration and thermographic analysis and
for most oil sample collecting. Currently, we sample 211 points. CBM brings the oil
samples they gather to the on-site lab, a sub-group of the Operations Department, for
analysis. The analyses performed are: Particle Count, Viscosity, Crackle, Hach water
test, and Patch test. Particles contained on the patch are viewed under a microscope.
After these tests, the analyst will determine if further testing is needed and will make all
necessary recommendations.

Both mechanics and electricians rotate through the CBM Group. A CBM Senior Analyst
directs this group. The Lab is responsible for sampling the turbines on a biweekly basis
and running a few minimal tests to determine if further testing is needed. Monthly
samples on other critical equipment are taken and sent to an outside lab for a thorough
battery of tests.

We handle all responsibilities concerning our critical equipment from sampling, to

communicating with outside lab representatives and making any needed
recommendations. In-house, we communicate any concerns and/or recommendations
to the Area Specialists, who are responsible for coordinating needed maintenance and
to our CBM Group.

We started our program taking turbine samples on a weekly basis and running particle
counts and sending 22 critical equipment samples to an outside lab for more in-depth
analysis. As our knowledge increased, we began installing sampling points. Our
condition monitoring program at the Sandow plant relies greatly on an excellent level of
communication between the departments.

Rich Wurzbach: I currently work as a consultant for Maintenance Reliability Group. I

continue to provide services to the Power Generation Industry, in particular, Peach
Bottom Atomic Power Station. I have answered these questions as they pertain to
Peach Bottom.

The responsibilities for the condition monitoring program fall primarily within the
Predictive Maintenance Group, which reports to the Maintenance Planning Manager.
The group is a composite of operators, technicians from the craft ranks, and engineers.
The primary responsibilities for data collection and analysis fall to the trained and
experienced craft technicians, including electricians, machinists, and other crafts. Some
analysis, root cause investigations, and programatic development is the responsibility of
the engineers on the team. The program development issues include technical training,
pro-active maintenance (design, methodology, part reviews) and Maintenance
Optimization. The hybrid nature of the team allows for better interaction with the
engineering department and the operations department. The team is part of the
maintenance department, and the interactions with other maintenance staff is usually
quite good. Rotation of technicians from the craft through the Predictive Maintenance

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 Team helps to strengthen the understanding level of the Maintenace craft teams and
affords greater opportunities for cooperation.

Dr. George Staniewski: Ontario Power Generation succeeds Ontario Hydro Crown
Corporation but deals only with production of electricity. The current total generating
capacity is over 32 GW from nuclear, thermal and hydraulic units, however the
corporation has to significantly reduce its assets in the future.

Due to government deregulation policy, the corporation is currently in a transition period

to adjust its operation for the competitive market. Corporate senior management has
initiated a number of improvement projects including integrated Predictive Maintenance
(PdM), initially based on vibration monitoring, lubricant analysis and IR thermography.
A budget was approved and a team of internal and external experts was established to
re-engineer the PdM Program.

In the past, the maintenance department coordinated the station PdM program and the
primary technology was vibration monitoring. Although oil analysis and IR thermography
were also performed, different groups executed those programs. Their focus was also
different. The oil analysis program was limited to equipment with large lubricant volume
mainly to monitor the chemical characteristics of the oils, while the IR thermography was
only used to monitor the condition of some electrical components. Poor program
coordination, inadequate monitoring frequency, lack of trending and lack of engineering
support resulted in poor prediction rates and high corrective maintenance work.

Unfortunately the corporate PdM team did not receive administrative authority to
coordinate the station implementation process and therefore the PdM program has to
compete with other ambitious improvement programs currently assigned to the stations
by the corporate management. In practice, the PdM program is driven from the bottom
up and this creates some problems. Of particular concern are staff and space allocation,
coordination of different departments and their commitment for implementing PdM tasks.

Although the maintenance department should benefit the most from an efficient PdM
program, engineering was selected as the lead for this program. This decision has also
created a number of limitations since engineering, maintenance, operations and
chemistry personnel report to different lines of management and the PdM program is not
the most important issue for the station VP. As a result, it is difficult to get a common
focus and agreement.

These problems have been reflected during the implementation of the program
schedule. The original scope of the project was developed by the corporate PdM team
with limited consultation with the stations. The project was divided into two
implementation phases. The intention of the first phase, set for the first six months, was
to implement one PdM technology per site to develop all required documentation,
processes and practices and share the experience with other stations. The second
phase, set for twelve additional months, was to implement the full PdM program among
all three sites.

Although pilot sites were carefully selected based on their past expertise, the ratio of
time between the pilot project and the full implementation was too optimistic. Due to lack
of administrative authority, pilot projects were not completed on time. Also the schedule
scope proved to be insufficient and has been redesigned. Two of the site development

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 projects are now planned to end in December, 2000, while the third site will continue
with development through 2001.

The PdM program has a governing document describing the corporate policy on PdM
roles and responsibilities of different departments. In addition, each PdM technology
has technical standards describing the particular technology and its application for the
station PdM program. The standards include generic acceptance limits.

Common database software, Odyssey, was purchased to allow integration across the
different technologies. The Odyssey software still requires modification in order to
utilize its capabilities for lubricant and IR thermography data and analysis to the same
extent as it is now capable of for vibration. For this reason, other software is being used
to fill the gaps.

The Odyssey software is the primary tool for scheduling all routine PdM tasks, while the
station work management system is used to schedule non-routine tasks and to track
resource usage.

The initial selection of the equipment for the PdM program was based on the nuclear
safety related systems. Station performance engineering, together with the components
and equipment staff, developed a list of critical equipment to be monitored by the routine
PdM program. Specific design data has been collected and input into equipment
database templates. Finally, baseline data is being collected by each PdM technology
for all equipment included in the PdM program.

Currently, the Maintenance Production Department is responsible for executing the PdM
routine tasks as scheduled in Odyssey and for non-routine tasks, if required. In addition,
they are also responsible for the initial screening. The screening task is to compare the
obtained results with the baselines and acceptance limits and to notify engineering of
any anomalies. The maintenance technicians also make first pass evaluations of what
the problems may be. The training, skill levels and competence of the technicians in the
maintenance staff are therefore crucial to the success of the program.

Engineering has overall responsibility for the conduct of the station PdM program. The
PdM engineers coordinate work across different departments but the most frequent duty
is to resolve all problems identified by the PdM maintenance crew. Engineering can
modify the PdM schedule and the performed tasks to obtain additional information on the
equipment. Usually, the less complex cases are solved by the station engineering
group, while the more complex, time-consuming problems are sent to specialized
corporate groups for solutions.

2. What condition monitoring technologies have worked best for you? What
technologies have been unsatisfactory or need improvement? What new
technologies would you like to see developed?

Gene White: We use most of the standard inspection techniques at one level or another.
I believe oil and vibration work the best for us now because these programs have been
developed the most.

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 I believe that motor testing is an area where some improvements can be made; if not
industry-wide, then at least at our plant. We are also trying to utilize IR testing more
effectively.

Ted Johnson: Vibration analysis has been the central monitoring technology for us for
many years now. Lube Oil Analysis is a close second place followed by Thermography.
We also use a technology that we call “Advanced Alignment Techniques” which employs
LASER alignment and position measurements with ACCULINE. In addition to these we
occasionally use a number of other minor technologies, such as Motor Current Analysis,
Diesel Engine Analysis and Compressor Analysis and others.

We are also trying to integrate the various electrical tests which are predictive in nature.
In the past there has been a “silo” mentality between mechanical and electrical PDM
technologies. To be successful in reliably predicting a machine's time to maintenance, it
is imperative to consider all parameters of that machine's condition: mechanical,
electrical and performance.

I don’t think I would call any of the technologies unsatisfactory, however, every
technology needs to be enhanced and upgraded almost continuously to stay abreast of
changes.

I think the most important new technologies that I need are related to Information
Technology. Coming from a utility background I’m used to fairly advanced network
connections to my customers facilities. Deregulation is changing that. The utility that I
work for has sold off most of its generation facilities. This change from being “part of the
family” to being a “competitor” organization results in significantly diminished
communications and, as I’m sure you know, good communication is one of the most
important elements of a good PDM program. Presently, we’re exploring ways to use the
Internet to improve communication and data transfer.

Mike Kelly: Vibration technology has been used traditionally, but the past payback
achieved is unclear. Thermography and on-site lubricant screening are just now being
used to a greater extent and to greater effect. All three technologies still require
improvement. Integration of the technologies is in its infancy. Ultrasonic detection and
analysis and motor current monitoring are used occasionally, but are not yet subject to a
more rigorous programmatic approach. Cost benefit and value analysis began in 1999.

There is a need to develop the use of motor current analysis and advanced on/off-line
motor monitoring and other electrical technologies. A motor PdM initiative has begun,
and there has been some discussion of how to improve transformer monitoring and
diagnostics.

Beckie Loeve: With the onset of a competition due to deregulation it is extremely

important that we increase the efficiency of our manpower. Reliable automatic
monitoring systems will become relied upon. I would also like to see a greater
availability of reliable and accurate quick tests, ones that can be used in the lab and in
the field with minimal effort and time. For example, we run a few tests on-site that we
use as "equipment indicators", and only spend additional time and money if conditions
warrant.

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 Rich Wurzbach: Infrared Thermography, Vibration Analysis, and Oil Analysis are the
"Primary Technologies" of the team. This means that routine routes exist to perform
these technologies on designated plant equipment, and to develop and analyze the data
trends. Each of the Primary Technologies has afforded significant savings to the
company from higher reliability, decreased maintenance costs, and reduction of
preventive maintenance tasks. Secondary Technologies are utilized to help pinpoint
problems identified with primary technologies, or further classify the severity or nature of
a problem identified by other means (observation, plant process parameters, etc.) The
technologies which have been utilized successfully as secondary technologies include
Motor Current Monitoring, Fiber-Optic Inspections, Passive Ultrasound, Laser and
Optical Alignment, HFED Bearing Analysis, and Laser-assisted Infrared Leak detection.

Dr. George Staniewski: Currently vibration monitoring is the primary PdM tool.
Traditionally, this technology has been used to monitor safety related rotating
equipment. Initially, there were a few maintainers with relatively good vibration testing
and analysis background. Over two dozen individuals have been trained in the past
year, but only about eighteen of them are actively involved in the program at present. In
addition, there is a strong corporate group specializing in vibration and noise control.
The vibration program has been relatively easily accepted and implemented by the
station management. In addition, there is some past history database on some
equipment.

On the other hand, lubricant analysis technology has been applied mainly to monitor
chemical and physical characteristics of the lubricating oils. For each application, a
predetermined oil change interval was established and the main focus of the oil sampling
and testing program was to confirm the stage of oil degradation. Although oil
contamination determination was a part of the testing program, inadequate sampling
frequency, poor sampling techniques and lack of trending in the past practically
eliminated this technology as a strong condition monitoring tool.

Oil analysis was also used as a second tool to confirm problems which had been
identified by vibration analysis. Very rarely, oil analysis itself was able to detect and
predict operating problems of rotating equipment. One of the main reasons for such a
poor record was that the oil analysis program was not performed at the station but at the
central research laboratory. Due to provincial regulation, all samples from nuclear
stations, regardless if they have been obtained from nuclear or conventional systems,
have to be checked for radioactivity (including tritium content). Usually it takes up to 30
minutes per sample to complete such a test. Samples were saved for long periods prior
to radiation screening and shipment. Analysis at the central facility often was delayed
for weeks. Therefore, in most cases the time between sampling and test results was too
long to be an efficient PdM tool in a highly corrective maintenance environment.

There is another important restriction in the oil analysis program. Most of the end users
do not have a contamination control program at the station. Typical contamination level
of most power equipment is ISO 16/14 or greater and therefore a small increase in
concentration of solid particles cannot be easily detected. The oil system has to be
relatively clean (ISO 14/11 or better) to take the full advantage of monitoring particle
count distribution. This requires improvement in the oil handling, storing and purification
processes of new oils and in some cases even improvement to equipment design (more
efficient air breathers, oil filters or seals).

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 To make a clear interpretation, the composition of the solid particles also has to be
identified. Trace element analysis, ferrography and in extreme cases X-Ray
fluorescence or SEM/EDX are used. Lubricant analysis without some of these test
results cannot deliver meaningful information and be a strong partner for vibration
analysis.

Another improvement requires a better grease analysis program. Typically, more than 60
percent of pump and motor bearings are lubricated with grease. Unfortunately only a few
end users try to monitor grease conditions.

IR thermography has been proved to be a successful method for predicting condition of

electrical components and its use is being extended to mechanical systems. Similarly,
motor current analysis, ultrasound detection and analysis, and fibre optic inspection are
tools which have to be applied to predict equipment condition. The limitation appears to
be neither on PdM technologies nor the size of the PdM crew but on the PdM crew
knowledge. The preferred approach would be to cross-train the PdM staff in these
technologies and ask them to apply the technologies as required to determine
equipment condition.

One of the important elements of PdM is to verify the initial hypothesis with a real image
of the worn components. This would allow correlation between PdM results and the
stage of component wear. Therefore all worn components should have proper
documentation of their orientation in the equipment before removal and be inspected by
the PdM engineer. Images should be saved in the PdM database for future reference.
This sort of post-mortem evaluation is improving.

3. Given the increasing focus on labor reductions due to the a new inter-market
competitiveness being brought on by deregulation, what is your company doing to
assure qualified and trained personnel are available to maintain and operate your
power plants?

Gene White: Training is a real issue. We have lost significant expertise over the years
through various staff reductions. Like most people we have access to both in-house and
outsource training. We try to leverage our training needs through cooperative efforts
with our alliance partners and our sister plants. We have a plant reliability group that
supports some of these needs. Our corporate training group has in large measure
ceased to exist. Even our in-house training for the most part utilizes outside sources.

Ted Johnson: I currently work for a service company which is a deregulated spin-off
from a utility company. At the present time we don’t have a problem getting qualified
and trained personnel. This is partly because some of our nuclear plants are being
retired and it is possible to get highly trained PDM personnel that are looking for new
challenges or have been displaced by plant closings. I do expect some problems in the
next five years, though. There are several factors for this:
1.In the new cost driven world of power generation there is a trend to operate
and maintain plants with a minimum staff. It is becoming a luxury to have an on
staff PDM person, not to mention the instrumentation costs. This may eliminate
or reduce the pipeline of trained individuals that get their start learning predictive
maintenance at a plant.

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 2.With the rush to build the next generation of merchant power plants there will
be an increased demand for qualified, trained personnel to maintain and operate
them as well as provide technical services.

3.Lastly, people like myself, who got involved with predictive maintenance back
in the 70’s or before will be retiring.

4.Specialty training may be required to qualify the technical staff for new and
emerging technologies, such as gas turbines, etc.

Mike Kelly: Training has been one of the principle focus areas of the PdM improvement
project. Certification in the technologies is considered part of the training requirements
for engineers and technical staff. Long-term retention of trained personnel, continuity of
the program and continuous improvement are stated project goals.

Beckie Loeve: The trend is to transition from the classical craft and technical disciplines
to 'multi-skilled' employees who are cross-functional. In order to do this successfully,
significant effort must be expended in identification of skills and training needs, and
effectively delivering these to the employee. We have transferred responsibility for
training from Human Resources to the Generation Support organization.

As specific training needs are identified by each plant location, training courses will be
scheduled utilizing a combination of interactive computer-based training, in-house
resources, and outside contract resources as required to support this effort. Additionally,
there is documentation of specific skills and demonstration of these for each employee
to attain the next level of multi-skill certification. Training and development of each
employee is key to our success in a competitive environment.

Rich Wurzbach: PECO Energy has adopted an aggressive policy of nuclear asset
acquisition, as evidenced by the purchase or pending purchase of no less than 4 nuclear
sites, and the in-progress merger with Commonwealth Edison to form one of the largest
utilities in the US.

Part of the strategy for success in this new configuration will be resource sharing in
regional areas of the companies assets. This will be especially true in outage resource
sharing. In Predictive Maintenance, the size of the Peach Bottom predictive
maintenance team was doubled to 14 during 1999, reflecting management's
commitment to the success of the Maintenance Optimization effort which relies heavily
on accurate and consistent condition monitoring data.

Dr. George Staniewski: Training is an important element of the PdM program

development. A corporate training qualification guide was developed to provide
guidelines on different technology courses, workshops and conferences for the PdM
staff. In addition, the guide indicates certification requirements for all personnel involved
in the data collection, sampling, testing and analysis process.

In addition to the more than two dozen persons trained in vibration technology in the
past year, about the same number have been trained in lubrication technology and IR
thermography. An aggressive training program and schedule is also planned for 2000 in
order to round out the training of the team members. Cross-training is also being
emphasized.

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 The PdM program should be seen by station management as a tool to change the ratio
of corrective to preventive/predictive maintenance thus improving equipment availability
and at the same time reducing maintenance costs. An effective PdM program requires
stability of PdM personnel with appropriate knowledge, experience and motivation.

Stronger focus should be placed on improving management involvement so they can

better understand the need for PdM activities. The PdM team has to document its
activities in a form clearly accepted and understood by management. There should be
an effort to produce more widely accepted metrics to evaluate and control PdM program
performance. Currently, there are several different methods available to document
program value and demonstrate real and potential savings.

4. Describe how your company, or department, has benefited this past year from your
condition monitoring program. What type of Return on Investment metrics have you
used to justify past, present, and future condition monitoring programs?

Gene White: Our condition-monitoring program has benefited our plant this year chiefly
in that it is the rationalization for restructuring our preventive/predictive activities.
Eliminating timed activities and replacing them with condition based activities and thus
reducing or eliminating costs. We do not have a formalized “return-on-investment”
metrics at our facilities. We do have a “cost-to-benefit” program that we use to evaluate
all expenditures. It compares alternatives, factoring in the cost of money and other
factors for all kinds of expenditures. We recently completed a review of practically all
activities that we do in the plant and the resources necessary to perform those activities.
The idea has been to evaluate the need for activities and alternative methods of
accomplishing these activities. This included a review of our CBM activities. We
basically want a 2-year return on investment or better.

Ted Johnson: If you had asked me this question a year ago I would have answered it
completely differently than today. A year ago we were part of a typical utility-based
service company. The metrics of our success were not in “hard” dollars but in how well
we were able to keep our generating plants on-line. Today we are part of a deregulated
generation service company and now we “live or die” by the bottom line. Future
enhancements and expansion will be largely determined by their ability to have a
positive return on investment.

Mike Kelly: Documented cost savings using EPRI cost/benefit calculation techniques
totaled over $2M (CDN) for the first full year of the project. This figure is based primarily
on reduced or avoided maintenance costs. A number of other saves were also
documented for which no value analysis has yet been done. Other metrics are to be
developed as the program matures.

Beckie Loeve: We have documented numerous 'saves' over the past several years at
nearly every generating plant location due specifically to the condition monitoring
program. Our plant locations are at different levels of program maturity in each of the
technology areas, and lean staffing in a competitive environment will present a
significant challenge to continue to allocate adequate resources to the program.

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 To date, we have not expended significant time and energy on economic justification or
ROI for the program; however, transitioning to a competitive environment, and increased
competition for O&M and capital dollars will drive us to do a better job here. We are
currently looking at several models including the Johnson-Maxwell method.

Rich Wurzbach: Numerous findings have resulted in significant savings for the
company in the application of oil analysis, vibration analysis, and infrared thermography.
Oil analysis identified a number of lubricant deficiencies, including depletion of anti-
oxidant additives in critical turbine system oils, and high particulate counts which were
monitored as special filtration was used to ensure required cleanliness levels were
achieved. Vibration analysis was used to identify a number of pump and motor vibration
issues which were corrected by laser alignment, balancing, or bearing replacement.
Infrared thermography had the most impact in the substation equipment where an
overloaded 220kv circuit jeopardized a key transmission path for plant-generated power.
Failure in previous years of the same equipment resulted in extended outages of both
units until the failed equipment could be repaired.

The ROI analysis currently does not attempt to equate savings to program incurred costs
due to the difficult nature of determining the exact costs of the program (when
considering sunk costs, overhead, depreciation of assets, etc). Instead, the group has
revived a detailed cost-benefit program it developed with EPRI in the early 1990's to
quantify the costs of the most likely failure scenario based on a weight-averaging
system. These resulting figures are reported periodically to plant management to
reinforce support for the significant expenditures in funding and manpower for the group.

Dr. George Staniewski: Program health reports which associate PdM findings with
availability and reliability measures help assess the impact and value of PdM efforts. A
technical description is not always the most effective way to present PdM activities. A
better way to justify the cost of the PdM program is to prepare cost benefit analyses and
present the results in cost savings form. Cost is the bottom line for management and
we should accept this as our common language of communication.

For utilities, the EPRI cost benefit program appears to be the best option. Further work
has to be done to get more generic acceptance of this economic model for different
stages of plant operating conditions.

The PdM program is still not fully implemented at Ontario Power Generation. The
documented 1999 cost benefit of PdM activities totaled over $2M (CDN) dollars at two
stations. There is clear evidence that the other station also achieved similar savings,
but the analysis has not been done. It is anticipated that in the next two to three years
the total savings will be much greater as the PdM program matures. However, later on
the program savings will be lower as stations experience fewer emergent and chronic
problems. Different calculation models have to be developed to address this
measurement problem.

One of the benefits of the current PdM program is that some chronic equipment design
problems are finally being corrected due to better analysis. Awareness of typical
problems, such as initial oil cleanliness, and efforts to resolve the issues improve
equipment reliability.

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 Another important benefit of the current PdM program is that post-maintenance tests
are performed more frequently at the stations. As an example, in one case, use of the
wrong oil type was identified; in another case, a loose electrical connection was
detected. Post-maintenance tests should be one of the routine elements of the PdM
program.

More rigorous standards of world class performance should be determined and made
public so management can benchmark their programs against the best. Real
improvement can only be made if management and employees work as a team to
achieve the best standard.

5. Where does your company's condition monitoring program need to be five years
from now and what steps are you taking to get there?

Gene White: I believe condition monitoring in the future will be pushed down and
broaden at the base so that much of the basic monitoring is performed by the people
operating and maintaining our equipment. They will be augmented by some in-house
expertise and further supplemented by system level and outside experts. I do not see us
developing an elaborate centralized program.

Ted Johnson: In five years our PDM program must meet several challenges to exist let
alone succeed:

1.Transition from a “traditional” utility service company to a “for profit” service company.
To achieve this we will have to control our overheads and, above all, keep our
customers happy.

2. Transition from a service area of three states to eleven states, or more. We hope to
accomplish this through the establishment of several technical “satellites” to provide
local services and supported by a core group of technology experts.

3.Expand our technical base in the generation field to service the next generation of gas
turbines and combined cycle units. Also, expand our technical basis from our core
business of generation facilities to a wide variety of industrial facilities.

4.Continue to expand our technology platform, by adding new and emerging PDM
technologies to our list of services and also utilizing information technology, such as the
Internet.

5.And to make things interesting, continue to be productive and create synergies through
the ongoing corporate mergers in the energy field.

Mike Kelly: The goal is to have a firmly established PdM program by the end of 2000 at
two of the sites, by the end of 2001 at the third. Long-term plans (for 2001-2003) will be
developed later this year. A continuous improvement plan will be developed by the end
of 2000 to support the long-term goal of entrenching PdM in the daily operation of the
sites. The present expectation is that the program will be continuously maintained at or
near state-of-the art for the remaining life of the operating units.

Beckie Loeve: Increased automation of the data acquisition effort is vital to make
efficient use of manpower resources in a competitive environment. Fixed remote

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 surveillance systems such as Entek's Enwatch are examples. Additionally, much better
use of the power of filtering and alarming capability of the analysis software is critical.
We must invest the time and energy to optimally configure alarms which allows the
software to provide much of the initial monitoring; requiring analyst's intervention only in
truly exceptional cases. Of course, advancements in technology will continue to provide
additional means to assess machine condition and minimize life cycle costs. Finally,
uniform application of all of the available technologies is key to maintaining a competitive
edge in the new market.

Rich Wurzbach: Five years down the road, the predictive maintenance program will be
more important than ever, as the combined effects of equipment aging and
discontinuation of PM tasks raise the probability of equipment and component failure.
The nature of the scheduled maintenance model requires minimal perturbation to the
work schedule, and emergent (unplanned) work of any type becomes the most costly
component of plant repairs. The ability to continue to detect impending failures, and to
intervene prior to failure and without emergent work is critical to the success of the
station. Also, advances in technology will permit more automation in data collection and
transmission. This also allows for a future of remote monitoring and data analysis, in
which the data can be filtered and reviewed continually by technology experts in diverse
geographical locations. This will lead to the development of core technology expert
groups, who will be responsible for driving a company-wide reliability effort that will
include composite database review, shared data trends, roll-out of new technology, and
pro-active equipment improvements.

In order to achieve these goals, the company has hired and appointed a Director of
Maintenance Optimization who oversees the policy for all stations. He is in the process
of selecting and building a team of core experts in each of the technology disciplines.
Various oil analysis programs on and off-site at the different stations are being reviewed
for integration to a common laboratory or database system to service the organization.
Common software platforms and reporting templates are also being developed. These
plans will ensure that PECO Energy continues to lead the industry in the application and
integration of monitoring technologies.

Dr. George Staniewski: My personal vision of the mature PdM program is that the team
will consist of cross-trained, highly experienced predictive maintenance technicians
working together with at least one PdM engineer within the maintenance department.
This group will apply different technologies to detect and monitor the rate of change of
equipment condition. Their experience would allow them to report the technical findings
in the form of predicted remaining life of the particular equipment. Based on this
prediction, management will be able to plan the required maintenance based on a
preferable time from the operational demand point of view, rather than based on
emergency repair or solely time-based requirements.

I also anticipate a significant improvement in the proactive maintenance approach,

particularly with regard to oil cleanliness and moisture ingress. I would like to believe
that in five years new plant equipment available on the market will have already installed
proper sampling valves and be equipped with other improvements, such as mounting
points for probes and transducers and inspection windows in electrical cabinets, that will
facilitate in-situ inspections and monitoring.

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 I think that we will be in a better position to monitor the safety related stand-by
equipment so we can insure our management that those components are truly available.

Finally, I assume that Odyssey will allow for better interaction with other technologies,
such as IR thermography, and there will be more expert software programs available on
the market to assist in evaluating equipment condition.

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