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Regarding SAP AG in the utility software business, the press release below gives a good overview of their activities. There's also a Thursday Reuter story running about SAP looking to Russia for talent and savings.

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-- Customers Cite Business Process Integration, Decision

Support, Improved Customer Service

As Key Determinants in Selecting the SAP Utilities Solution --

SAP America Inc. today announced the recent signing of four significant new customers in the utilities sector, underscoring the momentum of SAP Utilities(TM), an industry-specific solution based on the successful SAP R/3(TM) suite of client/server business applications.

The most recently signed customers - GPU Energy, PacifiCorp, Puget Sound Energy and Elizabethtown Water Co., all headquartered in the United States - cited SAP Utilities integration as a key determinant in their selection of the enterprise solution to manage their growing businesses. Year 2000 compliance was also a common factor.

SAP has offered solutions for the utilities industry for over a decade, with more than 350 utilities customers worldwide. Other U.S. customers include Pacific Gas & Electric Corp., Delmarva Power & Light Co., Oklahoma Gas & Electric and Public Service Electric and Gas Co.

Driven by ongoing deregulation in the utilities industry, these customers see diversification into new services and expansion into new markets as core elements of their business strategies. They share a common goal to leverage SAP Utilities to provide their employees access to real-time information and a unified view of business processes, which in turn supports business decisions that improve customer service and competitive advantage.

"Information is critical to our ability to make prudent business decisions on a daily basis," said Dennis Doll, controller for Elizabethtown Water, based in Westfield, N.J. "In order to do the best job we can for the customer, we need information that is timely, relevant and accurate. R/3 is the core technology in realizing our strategy to expand our business through acquisition, privatization and joint ventures."

Elizabethtown Water, a provider of water services to 207,000 customers throughout central New Jersey, selected R/3 as part of a corporate initiative to optimize business processes. With R/3, Elizabethtown Water expects to provide increased decision support for all levels of its organization, resulting in a range of benefits from improved customer service to better management of the company's value chain, including hundreds of construction and maintenance projects and suppliers.

Elizabethtown Water is implementing R/3 to manage general ledger, accounts payable, accounts receivable, fixed assets, materials management, purchasing and project costing, and anticipates a go-live date of Jan. 1, 1998. Elizabethtown Water chose to work with the AcceleratedSAP(TM) program for a rapid implementation.

PacifiCorp, a Portland, Ore.-based global utility company with $4.3 billion in annual revenues, selected R/3 after its internal search team found that an integrated enterprise solution best suited the company's goals for business growth. The team selected SAP for its breadth of functionality, ease of use, integration and fast-track implementation program. PacifiCorp also plans to use the AcceleratedSAP program.

PacifiCorp will implement R/3 to manage its financial, controlling, purchasing, project management, human resources and payroll functions on a client/server platform and expects to go live beginning in mid-1998. Planners at PacifiCorp knew the company faced limitations on its legacy mainframe system, not the least of which was the year 2000 issue, but were particularly encouraged to use an integrated solution such as R/3 to manage the company's growth plans, which include international acquisitions. About 18 months ago, PacifiCorp acquired Australian-based Powercor, which is set to go live soon on R/3. PacifiCorp provides electric utility services to 1.9 million customers in Oregon, Washington, California, Idaho, Montana, Wyoming, Utah and Australia.

GPU Inc. is a worldwide electric utility holding company headquartered in Parsippany, N.J. with $4 billion in sales. Its principal business unit is GPU Energy, an electric utility headquartered in Reading, Pa., serving over 2 million customers in Pennsylvania, New Jersey and New York states.

GPU Energy's selection of the SAP solution is part of a corporate initiative to integrate information shared by several GPU companies and become a highly responsive organization capable of adapting rapidly to change brought about by deregulation of the electric industry.

GPU Energy's strategic goals include emphasizing world- class customer service, aggressively pursuing opportunities for growth, attaining organizational flexibility and increasing employee contribution to daily decision-making.

"We were looking for the right software systems company to handle a wide variety of technology issues critical to our business, especially as they relate to our ability to provide enhanced customer service capabilities in an increasingly competitive electric industry," said Doug Howe, GPU Energy vice president of information and planning. "We found that SAP was a company with depth, resources and vision, and was willing to partner with us to help us meet all of our corporate objectives." GPU Energy expects to go live on R/3 4.0 by early 1999.

Puget Sound Energy, Washington state's largest energy utility providing electric and natural gas service to more than 1.1 million customers primarily in the Puget Sound region of western Washington, selected SAP following the Feb. 1997 merger of Puget Sound Power

Light Co. and Washington Energy Co., parent of Washington Natural Gas Co. Puget Sound Energy recognized that neither of the companies' predecessor systems could support operating as a fuel- neutral energy company or had the flexibility to accommodate the changes the combined entity must make to effectively compete in deregulated markets. Puget Sound Energy selected the financial, materials management, work management, human resources and payroll R/3 modules from SAP. The company will go live with its first phase implementation in Feb. 1998, completing its rollout by the third quarter of 1998.

Puget Sound Energy chose SAP largely because of the integration of R/3, as well as the commitment of SAP to the applications business and its support of the utility industry, as demonstrated by its R&D investment, according to Allyn Hebner, SAP project manager at Puget Sound Energy. Among the many benefits Puget Sound Energy expects to realize from implementing SAP Utilities are increased flexibility in tracking and managing its finances and operations. The IS-U/Federal Energy Regulatory Commission industry-specific component (IS-U/FERC), which frees utility customers from having to use the FERC chart as a native chart of accounts, enables the company to decouple management reporting from regulatory reporting requirements.

SAP Utilities: A Comprehensive Solution

Enabled by the flexible SAP Business Framework(TM) architecture, SAP Utilities integrates utilities industry-specific functionality with enterprisewide business process and information management tools in the successful SAP R/3 system. SAP Utilities provides the solid infrastructure and functionality for utilities to better manage their businesses today, and the flexibility to grow and succeed in a future of global change.

In addition to the standard R/3 functionality, SAP Utilities includes two recently introduced industry-specific components that address the most compelling needs of utilities companies:

-- IS-U/Customer Care and Service industry-specific component (IS-U/CCS) is the first client/server customer care and information system that is fully integrated with standard enterprise business applications software.

-- IS-U/FERC regulatory reporting system includes guidelines for the U.S. Federal Energy Regulatory Commission, streamlining the cumbersome regulatory reporting process and ensuring compliance with interstate regulations.

SAP is a market and technology leader in client/server enterprise application software, providing comprehensive solutions for companies of all sizes and all industry sectors. Cultivating innovative technologies on a solid foundation of business experience, SAP delivers scalable solutions that enable its customers to continually improve upon best business practices. SAP products empower people to respond quickly and decisively to dynamic market conditions, helping businesses achieve and maintain a competitive advantage.

Founded in 1972, SAP is based in Walldorf, Germany, and employs more than 11,000 people at offices in more than 40 countries who are dedicated to providing a high level of support and service for the more than 11,000 installations of R/3 worldwide. SAP's World Wide Web site can be found at . -0-
SAP, SAP Utilities, R/3, AcceleratedSAP, Business Framework and all SAP product and service names referenced herein are trademarks or registered trademarks of SAP AG.

Other product and company names herein may be trademarks of their respective owners.

BW1116 SEP 17,1997

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