This article was originally posted by the New Hampshire Business Review and can be found here.
Having Energy When Everyone Else’s Power is Out
By: Tom Burack
November 8, 2019
Some 15 to 20 years ago, a representative of a New Hampshire electric utility was speaking to an audience about customer service and the reliability of electrical supplies. He explained that if a utility provides service 99% of the time, each year its customers would be without power for three to four days. The message was that utilities must strive for 100% reliability because that’s what their customers expect, but it’s hard to accomplish that goal, especially in rural areas and in the wake of major
Over the past couple of decades, extreme weather events have become both more common and more severe across New Hampshire and are having very real consequences for all electric utility customers — businesses, nonprofits, municipalities and homeowners. Little surprise that more and more of these customers have been installing backup generators, uninterrupted (battery-based) power supplies, and are looking seriously at distributed generation (making their own electricity). And it’s not because the utilities aren’t working very hard to make their systems more resilient and restore power quickly — it’s because many organizations simply can’t compete, let alone operate, without computers, lights and other electric-powered tools and equipment.
Facing significant potential financial, reputational and other losses when the power goes out, organizations are recognizing that they can’t afford to take the risk of an outage or to wait for their power to return.
While there certainly are expensive measures that can be taken to install a backup power supply, there are also some fairly low-cost, practical measures that everybody can take to help lessen the likelihood that a severe storm will knock out their power.
For example, Rhode Island is highly susceptible to major storms and has developed a set of practical guides to help small businesses reduce the risks that natural hazards and extreme weather will put them out of business. These guides cover a five-step process: consider key business features; identify vulnerabilities and strengths; select risk reduction strategies; consider insurance options; and access useful resources.
Consideration of key business features includes understanding how hazards could affect your access, building structure, site, documents and records, employees and vendors, customers, tenants, inventory and storage, supply chain, utilities and equipment, and what risks your insurance will cover.
By identifying the vulnerabilities and strengths associated with each of these key business features, you can find ways to reduce risks through carefully selected strategies. For instance:
- If you determine that your building is highly important to operations, you may choose to install flood doors or hurricane-proof windows or to trim large trees that are near the building in order to help reduce the risk that storm damage could cause a short-circuit or otherwise cut off power supplies.
- If your documents and records are kept mainly in paper form and stored on the first floor of a building susceptible to flooding, you may take measures to convert them to electronic formats and ensure that they’re stored in the cloud or backed up at a secure off-site location.
- You may find that by having a business continuity plan you can keep doing business if your main building loses electrical power because your employees are equipped and trained to work remotely, often in places where the power hasn’t gone out, and you also have made arrangements with other vendors to help you serve your customers when things get tough.
- Having a backup generator or battery system is a wonderful thing. However, if it’s not properly installed, permitted and maintained, if staff aren’t trained in its operation, or if you don’t have an adequate, safely stored supply of fuel and replacement parts, that lifeline will be useless in an emergency. Just as important, make sure your backup power supply and electrical panels are installed in elevated locations where they can’t be flooded or knocked out.
- To have the financial energy to keep going after a storm, make sure your insurance includes coverage for significant potential losses — standard policies may not protect against flood damage or losses due to business interruption. Your liability and auto insurance may not cover your vehicles against damage or loss due to severe storms.
The good news is that by taking the basic steps of developing an inventory of your key business features, identifying your vulnerabilities and strengths, and implementing appropriate risk-reduction strategies, you’ll have a clear picture to share with your insurance broker so they can steer you to the right coverages to help you keep the lights on. You’ll also know what other resources you may need and where else to turn for help. It turns out that by planning ahead for major storms and power outages, you gain a competitive edge and can have energy when everyone else’s power is out.