Building Operating Management

How Unreliable Power Can Affect the Bottom Line

Although it can be difficult to put a price on electrical outages, the Electric Power Research Institute estimates that U.S. economic losses due to power problems reach $100 billion per year. One way to estimate the effect of an outage is to tally the cost of sensitive computer or IT systems that might incur damage during power outages. Of course, the economic impacts of outages can be direct and indirect, including loss of production, loss of clientele, cost of recovery and loss of earnings.

At the end of the day, deciding to increase or improve power reliability may be a response to experience.

"It becomes a question of interruption," says Mike Kirchner, technical support manager at Generac. "In other words, how much value does an organization assign to reliability? If they've had lots of outages, or lost business, then they've had some pain, and they might be willing to invest more."

History shows that to be the case. "In many cases the decision to configure higher reliability network power comes in direct response to a major event where the existing power infrastructure was found to be less than fully adequate to meet the business needs of the user," says Rich Feldhaus, Tripp Lite UPS product manager.

Note that for new construction, many decisions about power reliability have already been partially made for facility managers by code requirements. "If an office building has elevators above 12 floors, it must have back-up power," says Bhavesh Patel, marketing director for Emerson's ASCO division. "And if nothing else [life-safety concerns] like a fire require that buildings with an electric fire pump have backup power."

How Do You Secure Reliability?

Once facility managers have established rough cost estimates on revenue loss due to outages, they should begin planning how to combat those losses and retain power reliability. As with any situation in which there are liabilities — safety, revenue loss and more — facility managers should first hypothesize outage operating scenarios and then determine critical power needs.

One factor to examine in an analysis of risks is the practices of the local utility.

"Some utilities spend more to make sure distribution lines are reliable —trimming tree branches and such so that there aren't interruptions after a storm," Kirchner says. "But when the utility invests less on reliability, sometimes there's a greater need for reliability on a business' part."

After assessing the impact of outages, facility managers should compare it to the cost of reliability-enhancing equipment, a cost that should include considerations — and expenses — of operating those systems.

"Choosing the type of generation technology or application should start with a feasibility study," Cavallaro says, "and usually requires assistance from a professional engineer."

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  posted on 10/10/2011   Article Use Policy