Serveron Corporation Launched to Monitor the Performance of Critical Electric Power Transmission and Distribution Equipment.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--Feb. 5, 2001

Today at the DistribuTECH 2001 show in San Diego, Serveron Corporation announced its launch as the electric power industry's first dedicated provider of turn-key equipment and services to monitor the health of electric generation, transmission, and distribution substation equipment.

As the world's utility equipment ages while homes and industries become increasingly dependent on electric power, Serveron, with offices in Portland and Bend, OR, was founded to meet electric utilities' need for critical information on equipment operating conditions, performance, and potential fault conditions. Serveron is a privately held, venture capital financed enterprise.

Using comprehensive proprietary technology, high-speed communications, and Web-based analysis systems, Serveron monitors the operating condition and changes in the performance of critical transmission and distribution equipment. Serveron's Monitoring Centers, to be established by the third quarter of this year, will immediately communicate indications of developing problems to subscriber utilities with information that assists utilities in making better preventative operations and maintenance decisions, helping them avoid costly failures and optimize maintenance scheduling.

"There's never been a greater need for continuous, reliable monitoring of the electric power systems on which the world's economies rely," said Jim Moon, Serveron president and CEO. "Serveron was founded to help utilities anticipate and prevent equipment failures, improve overall system reliability, and reduce maintenance costs. Our proven, patented equipment, software, and monitoring services will provide complete, continuous information and diagnostics so that utilities can economically deliver reliable power."

EPRI is early investor in technology

The Electric Power Research Institute (EPRI) provided early support for Serveron's technology development. EPRI, headquartered in Palo Alto, Calif., is a nonprofit organization that provides science and technology-based solutions to the global energy industry. More than 1,000 energy organizations and public institutions worldwide draw on EPRI's global network of technical and business expertise.

"In the Digital Economy, we're seeing an unprecedented worldwide demand for reliable, reasonably priced electric power," said Stan Lindgren, formerly Manager of Power Transformers at EPRI. "Today on the US West Coast, we're seeing very clearly the clash between that demand and circumstances that combine deregulation, environmental factors, and aging equipment. Recognizing the value of Serveron's underlying instrumentation technologies, EPRI invested years ago in the development of those technologies."

Serveron products and services

Serveron's technologies address utility equipment characteristics that have traditionally been difficult or impossible to measure.

Serveron's TrueGas(TM) analyzers monitor the levels of volatile dissolved gases in the insulating oil inside large transformers and other oil-filled equipment. Over the life of a transformer, degradation of the oil or insulating materials causes transformer "fault gases" to form. The type and concentration of these gases are primary indicators of transformer condition and types of transformer faults. TrueGas analyzers are the only instruments available today that detect and separately analyze even trace levels of all eight fault gases of interest. Other instruments detect only a subset of these gases or provide only combined gas data that may not accurately predict equipment failures. Serveron's rugged on-site equipment and Web-based analysis software provide continuous monitoring under actual operating conditions. Serveron's ongoing monitoring of fault gas levels provides early identification of transformer conditions that require maintenance or that could lead to catastrophic failure of the equipment. With specific information on transformer conditions, utilities can minimize maintenance costs and achieve the highest levels of system safety.

Serveron's CellSense(TM) battery monitors dramatically reduce the maintenance activity and costs required to ensure that critical battery systems are fully operational, while improving battery charging and performance. All power generation facilities and distribution substations have multiple large banks of batteries. These batteries provide back-up power that is required to start up substation equipment after a shutdown, and that provides critical short-term power to gracefully shut down substation equipment and prevent equipment destruction in the event of an unplanned outage or equipment failure. Substation battery banks are typically composed of 50 to 70 truck-battery-sized cells in each bank, for a total of tens of thousands of individual battery cells within a mid-sized utility. Inspection and maintenance for these extensive systems form a significant cost to utilities, which may have hundreds of remote locations with battery banks.

Serveron's CellSense monitors are the industry's most comprehensive battery system monitors, providing continuous measurements of all key physical and electrical parameters needed to characterize the condition of individual cells as well as the battery system as a whole. CellSense instruments monitor the batteries on-site, and graphical data can be viewed from any remote location using any common Internet browser to access Serveron's secure Web site. With CellSense monitoring, battery maintenance and inspection can be reduced from a monthly to an annual activity.

Serveron's turn-key monitoring service includes monitoring equipment installation, operation, and maintenance; monitoring service; alert notification; and online information delivery. Operating around the clock 365 days per year, Serveron ensures the highest level of utility system performance and reliability under safe operating conditions. By providing aggregate and trend information, Serveron also provides useful life expectancy information, which helps the utility make critical equipment maintenance and replacement decisions. By obtaining the longest useful life from these expensive assets, utilities achieve their financial goals and meet consumers' needs for reasonably priced electric power.

Serveron products in use at US utilities and worldwide

Serveron is committed to an aggressive research and development program to continue to bring the most advanced monitoring products to the utility infrastructure. Serveron instruments are currently in use at many U.S. utilities and customers worldwide.

TXU, a major utility in the Dallas-Fort Worth area, has been an early user of Serveron's TrueGas analyzers. "Online monitoring of transformer gases can provide operating engineers with vital information necessary to achieve continuous, reliable operation of their transformer assets," said Don Rose, TXU Transmission System Analyst. "Our data taken from an evaluation of TrueGas products suggests that it can be effective in gathering this information."

About Serveron

Serveron Corporation was founded to help electric power utilities worldwide deliver reliable power at the lowest cost. Serveron's innovative instrumentation, continuous monitoring services, and Web-accessible data analysis promise to improve reliability and maintenance efficiency across the grid. Serveron offers CellSense battery condition monitors, TrueGas on-site dissolved gas analyzers, and remote, on-line monitoring services for power utilities. More information can be found at http://www.serveron.com.

Serveron, TrueGas, and CellSense are trademarks of Serveron Corp.

Transformer Facts:

-- There are approximately 115,000 large transformers in the United States
alone and 400,000 worldwide, worth in excess of $200 billion. The average age
of these transformers, which cost $500,000 to $5 million each, is 35 years,
with an expected life span of 40-50 years, according to Newton-Evans Research
Company, Inc.

-- Approximately 1% of large transformers, or 1,000 transformers in the United
States alone, will fail this year, according to The Hartford Steam Boiler
Inspection & Insurance Company (HSB), the largest underwriter of transformer
insurance. HSB anticipates that the failure rate will rise to 2% by 2008.

-- Utility equipment monitoring and diagnostics programs have not been readily
available or cost-effective, requiring utilities to perform maintenance of
major equipment on arbitrary schedules. Current estimates are that 30% to 50%
of maintenance activity is unnecessary according to CIGRE, the International
Council on Large Electric Systems, while unexpected failures continue to occur
at increasing rates.

-- When a transformer unexpectedly fails, costs to the utility (and ultimately
to the consumer) include replacement equipment, cleanup and repair (for
instance, if the failure resulted in a leak or explosion), loss of revenue, and
possible replacement power costs for a total cost that can easily reach tens of
millions of dollars.

-- Additional impact includes overloading other equipment until the failed
equipment can be repaired or replaced, the power quality impact on critical
customers (such as semiconductor foundries, metals refining and processing, and
chemical processing and manufacturing plants), and disrupted scheduled
maintenance of other equipment, leading to the possibility of additional
failures.

-- Industry consolidation and deregulation has led to smaller maintenance staff
for total combined assets, disparate maintenance records and practices, and
loss of knowledge of equipment status. Reliability Centered Maintenance (RCM)
is known to achieve higher reliability at lower cost, by analyzing equipment
condition information to guide appropriate operations and maintenance
decisions. RCM requires continuous monitoring and diagnostic activity in order
to show individual and aggregate equipment status and trends.