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The Effects and Costs of Power Outages

Power outages can be extremely costly for businesses to endure.  For certain types of companies, experiencing minutes of down time can mean thousands of dollars lost.  For industrial and commercial businesses and facilities these costs can quickly add up if you are not prepared.  For example, when manufacturing plants go offline even for short periods of time, production grinds to a halt and costs rack up, ordering systems can stop functioning so customers can’t purchase products, refrigeration units stop cooling and spoil dairy and perishable inventories, farmers and ranchers can lose crops and livestock, computes can be disrupted and data lost.  To fully understand just how massive some of the costs can be (and are currently), it is best to take a closer look at the causes, the current environment you are running in, and what steps you can take to prepare.   

Power Grid Considerations
The electric grid in the United States is one of the country's most important pieces of infrastructure. In fact, some might argue that it is the country's absolute most important system. It allows people, businesses and institutions to function and prosper in today's modern world.

The country's electric grid promotes efficiency, organization and effectiveness. It also allows for comfort, automation and modernization. Without the power grid, the United States would not and could not function as it does. But the system is old. The system is vulnerable. And despite the fact that the system is usually reliable, the system sometimes fails.

Should the Grid be Updated?
There has been quite a bit of talk over the past several years about the power grid in the United States and the fact that it's long overdue for an update and an upgrade. The grid itself is 10-20 years past its original life expectancy and has suffered from a lack of investment for almost half a century.  However, the solution is not easy - upgrading a power grid that currently provides electricity to millions of end-users is complicated, time-consuming and incredibly expensive. Smart grid technology and micro grids are being debated and tested, and partially implemented as possible solutions in certain areas but as of now, there is no national strategy to improve this infrastructure.
  
A White House report was released in August 2013 entitled Economic Benefits of Increasing Electric Grid Resilience to Weather Outages. The report showed that the average cost to the economy (just from weather related outages, the #1 cause) is between $18 billion to $33 billion a year.  The report is thorough, contains an overview of the status and outlook of the electric grid, discusses the impact of severe weather on the grid, talks about potential strategies for achieving grid resilience and modernization and is one of the most recent government documents on the subject.

Another report from the AP in March of 2013 US Power Grid Costs Rise Service Slips also concluded that there is an astounding 500,000 U.S. citizens without power for an hour or more every day.  This report also showed power outages overall cost the economy $80 billion to $180 billion per year.  The wide range for most of these types of reports is due to large storms impacting the averages since they only occur every so often. 

According to a BizJournles.com article entitled, Time to Update the Grid? Power Outages Due to Severe Weather Cost Economy Billions, 'The report is also a reminder of the need to update the nation's electric grid - - high-voltage transmission lines connected to power plants, local distribution systems, and power management and control systems. Seventy percent of these transmission lines and power transformers are more than 25 years old.'
 
Essentially, most published research suggests there is an absolute need for an overhaul to the United States' electric grid. According to an article published on Eaton.com entitled, 'Eaton's Blackout TrackerAnnual Report Shows 14 Million People Affected by Power Outages in 2013', 'The Blackout Tracker Annual Report illustrates the scope and severity of power outages across the country and the serious consequences that can arise for businesses when the lights go out.  With electrical power outages, surges and spikes estimated to cost the U.S. economy $150 billion, it's more important than ever for companies of all sizes to invest in reliable power backup solutions.'

What Makes the U.S. Electric Grid Most Vulnerable?
As stated in the White House report, 'Severe weather is the leading cause of power outages in the United States. Between 2003 and 2012, an estimated 679 widespread power outages occurred due to severe weather. Power outages close schools, shut down businesses, and impede emergency services, costing the economy billions of dollars and disrupting the lives of millions of Americans.'

Little can be done to stop the forces of nature. A report from Climate Central also found that major power outages have increased ten times over since the early 1980s - and extreme weather is by far the biggest culprit.
 
On top of the obvious severe weather threats like hurricanes and super storms there are other considerations such as mechanical failure of aging equipment, plus brownouts from overloaded sections, birds flying into power lines, and today, we unfortunately also have to consider potential terrorist attacks as a legitimate area of concern.

While individuals and businesses in the United States can safely expect the electric grid to provide them with the electricity that they both want and need on a daily basis, there is little that can be done to stop natural disasters from occurring. Unfortunately, our current electric grid has proven that it cannot withstand all types of severe weather conditions. Many parts of the grid are old (construction on the grid originally began in the late 1880s), parts of the grid are exposed (much of the power grid is above ground), and parts of the grid are defenseless against severe weather (it's incredibly difficult for man-made systems of any type to withstand ruthless natural disasters.)

Backup Power Generators Provide Insurance to Businesses
Any business without a back-up source of power is putting itself at risk. Severe weather and natural disasters can be impossible to predict. There is no location within the United States, Canada and around the globe that is immune from the threat of a natural disaster or severe weather. When the power goes out, business can come to a grinding halt. In some industries, an extended power outage can create massive losses if you are not thoroughly prepared.

Today, it's more important than ever for every business in the United States to invest in a back-up power source. More and more businesses are turning to on-site natural gas and diesel power generators to ensure their businesses do not become a victim of a power outage, and have an internal plan to work through outages when they occur.  On top of getting a generator set for on-site power generation, it is wise to include an automatic transfer switch that monitors grid power and will start and stop the generator automatically.  UPS systems and large batteries can also be utilized so servers stay online and no data is lost during the immediate seconds of down-time before the generator can be started up.  Diesel Service & Supply has been helping businesses develop standby power solutions for over three decades.  If you have any questions on this article or would like assistance in assessing your backup plans and are considering a generator purchase just call 800-853-2073 or contact us online.

 

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