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Power Lines Dreamstime March

Power Reliability Continues to Hinder Business Growth, Finds Report

March 4, 2020
Power reliability is stagnant, yet C&I companies are expecting significant improvements in tandem with the evolution of today's business operations.

S&C Electric Co. has issued its 2020 State of Commercial and Industrial Power Reliability Report (C&I Report) for the third consecutive year. Written and researched in collaboration with Frost & Sullivan, the 2020 edition surveyed 255 commercial and industrial (C&I) companies, and was developed to better understand how poor power reliability affects these companies and what considerations they have given to alternative energy options as a means to improve power reliability.

"As C&I companies rely more and more on technology and automation to remain competitive, they naturally have a greater need for highly reliable power. Even a few seconds without power can end up having a much longer impact on their business," said Brian Levite, S&C regulatory affairs director. "We're seeing that these C&I companies are expecting utilities to improve power reliability in tandem with the evolution of today's business operations — and yet power reliability remains stagnant. This gap is widening quickly and could really come to a head in a matter of a couple of years."

Breaking the research into four primary U.S. geographic regions, the 2020 C&I Report reflects the sentiments of five major industry categories: manufacturing, healthcare, small franchises, education, and retailers.

Among the most noteworthy findings from the C&I Report are:

Reliability is stagnant, yet C&I companies are expecting significant improvements.

Measuring the duration and frequency of outages over three years, survey data show little improvement. Nearly a quarter of companies (21%) experienced outages monthly, and 35% of companies noted power blinks occurring at least weekly or two to three times a week. And yet, 55% of companies expected power reliability to improve, indicating a growing divide between what C&I companies expect and how utilities are performing.

An unreliable grid continues to impact business’ bottom line.

Outages are proving to be costly for C&I companies. In 2020, 79% of companies experiencing weekly outages estimated their loss to be at least US$50,000 per outage, and 45% of companies experiencing an outage once a week or more estimated their annual loss to be between US$5.2 million and US$104 million. These high costs of unreliable power are spurring 61% of companies to install backup energy sources.

Companies are tracking and seeking compensation for outages.

Unreliable power has a direct impact on C&I company profitability, so much so they're willing to take drastic measures to mitigate revenue loss. More than one-third of companies (35%) were willing to pay more to guarantee electricity during a natural disaster or periods of inclement weather, while a similar percentage (38%) would pay more for power to be restored within five minutes. In addition, more than half (57%) of C&I companies were planning to track outage expenses or were already doing so, and 21% had sought compensation from their utilities for the resulting impacts outages had had on their operations.

To view the complete 2020 C&I Report, visit here.

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