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Calculate Your Costs

What is your business paying for unreliable power?

Every business suffers when the power goes out. But for some businesses, the losses can be staggering. Overall, the Electric Power Research Institute estimates that power outages cost this country more than $150 billion a year. As the economy goes increasingly digital, this figure could skyrocket. Digital technology is extremely sensitive and can be disrupted not only by a power outage — a complete loss of voltage for any length of time — but also by otherwise imperceptible shifts in the quality of power being delivered. These include voltage sags and surges that last less than a fraction of a second. These “power quality events” cost the U.S. economy between $15 billion and $24 billion a year.

To get a sense of what power outages cost your company each year, considering the following factors:

  • Net lost production/sales
  • Labor
  • Materials loss or spoilage
  • Equipment damage
  • Backup generation
  • Overhead
  • Other restart costs
  • Miscellaneous

Now, calculate possible savings that result from an outage. These may be minimal, but they do exist, and include:

  • Unused materials
  • Savings on energy bills
  • Unpaid labor

To get a sense of where your business stands in comparison to others, consider the following data from a nationwide survey on the cost of power outages.

Among the hardest hit segments of the economy are:

  • Digital economy businesses — including telecommunications, data storage and retrieval services, biotechnology, electronics manufacturing and the financial industry
  • Continuous process manufacturing (CPM) businesses — industries such as paper, chemicals, petroleum, rubber and plastic, stone, clay, glass and primary metals
  • Fabrication and essential services — all other manufacturing industries, plus utilities and transportation facilities such as railroads and mass transit, water and wastewater treatment, and gas utilities and pipelines

Together, these approximately 2 million companies account for only 17 percent of all business establishments in the United States, but 40 percent of the United States’ Gross Domestic Product.

Collectively, industrial and digital economy business are losing

  • $45.7 billion a year to outages
  • $6.7 billion a year to power quality disruptions

In total, each year:

  • Digital economy businesses lose $13.5 billion to power outages
  • Continuous process manufacturing businesses lose $29.2 billion to power outages

When the power goes out, each one of these businesses loses an average of:

  • $1,477 for a one-second outage
  • $2,107 for a three-minute outage
  • $7,795 for a one-hour outage

How a business suffers depends on what that business does and its industrial equipment and processes. For example, digital economy businesses that do data processing are extremely hard hit by even the briefest outages. Other highly affected processes, technologies and functions include:

  • Refrigeration
  • Electric process heating
  • Variable speed drives
  • Computer-assisted production systems
  • Electronic controls

Power quality fluctuations are also a serious drain on our economy. In total, the three sectors surveyed lose a total of $6.7 billion a year to power fluctuations or “events” that may be imperceptible at the times they occur.

Hardest hit among the sectors are fabrication and essential services businesses, which suffer equipment damage as a result of these shifts.

  • Individual businesses lose an average of $9,600 a year
  • The sector as a whole loses $5.7 billion annually