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What Happens When the Lights (Even Briefly) Go Out? Businesses Lose (a Lot of) Money.

What does this mean for the future of the electrical grid?

 

While working from home over the past year, many of us have experienced the unique disruption of a work-hours power outage. A blackout as short as one minute can erase an important file, require an equipment reboot, or cause us to suddenly drop out of an important meeting.

Now apply that experience to the facility of a company in a field such as healthcare, manufacturing, or education. These facilities may have sensitive machinery, pinpoint-accurate timing processes, fragile biological materials, and more.

A power outage here can lead to more than derailed productivity; it can result in a potential loss of vital data, life-saving time, and tens or even hundreds of thousands of dollars per power blink.

So, it’s no wonder these companies are tracking their outages and attendant costs—a powerful tool to have if and when they decide to approach their utility in search of compensation. S&C Electric Company interviewed 253 companies in the commercial and industrial (C&I) space to ask about this and other trends related to power reliability, producing the “S&C 2021 State of Commercial & Industrial Power Reliability Report.

Reportage of Monthly and Momentary Outages Doubled Since the Previous Year …

The frequency with which these companies experience power loss is rising: 44% of respondents said they lost power at least once a month—up from 21% that did a year earlier.

And 40% of C&I Report respondents reported momentary outages (those lasting less than five minutes) as their most common outage type in the past year—up from 20% in the previous report. But many utilities don’t even include these momentary outages in their standard reliability metric reporting, opting instead to count only longer-duration outages.

Contrast this with the experience of a healthcare respondent—“Power outages affect a healthcare organization equally, whether it is for a minute or for an hour”—and it’s evident customers’ expectations aren’t meeting utilities’ realities.

… And Because More Outages Mean More Money Lost for C&I Companies …

As noted above, a power loss of any duration can have major consequences for C&I companies across all areas of operation.

“Our production stops due to short-duration outages,” one manufacturing respondent said. “It doesn’t matter whether the outage is short, it has an impact on the production and increases the downtime.”

For many organizations, the costs of outages can add up quickly. A full 22% of respondents said a typical outage costs more than $100,000. So, if those companies are among those that experience monthly outages, they stand to lose $1.2 million or more over the course of a year because of loss of power.

… These Companies Are Tracking Outages and Their Associated Costs …

Considering all this lost productivity and revenue, it comes as no surprise many C&I companies are using outage-measuring systems to gather quantifiable evidence of power-loss impacts.

Nearly three-fifths of respondents reported having a system in place to measure outages, and 77% of those companies said they either presently have or soon will have outage-expense tracking capabilities.

Armed with this information, these companies can make data-based arguments when approaching their utilities for compensation.

… And Moving Forward, C&I Customers Expect Better Reliability and Resilience from Their Utilities

Obviously, power outages are often outside of a utility’s control—major events and natural disasters will happen. But the C&I Report revealed a disconnect between the types of outage-related goals that utilities set for their system performance and the needs C&I companies reported.

For instance, 52% of companies surveyed said they expect power to be restored within one minute—a considerable challenge when most utilities don’t track outages lasting less than five minutes.

One respondent may have summed it up best, saying: “That’s [utilities’] obligation to give me full service and bring back power as quickly as they can … so I can get back to business faster.”

The main findings of the C&I Report show that, while C&I companies place great importance on improved reliability and resilience, their everyday realities have not improved. This disconnect has big implications for the U.S power industry and overall economy as we chart the future path of the electrical grid and beyond.