S&C Electric Co. recently released the 2021 State of Commercial and Industrial Power Reliability Report (C&I Report). Now in its fourth year, the C&I Report was written and researched in collaboration with Frost & Sullivan. The 2021 edition surveyed 253 C&I companies that have yearly revenue averages of US$75 million. The report was created with a variety of objectives in mind, including measuring the duration and frequency of outages C&I companies have experienced and subsequently quantifying the organizational and monetary impacts of those outages.
Dividing the research into four primary U.S. geographic regions, the C&I Report reflects the sentiments of five major industry categories: manufacturing, healthcare, education, small franchises, and retailers. Among the most notable findings from the C&I Reliability Report are:
- Companies reporting monthly outages doubled over the past year: Survey data revealed a dramatic increase in companies reporting short-duration outages as their most common power outage. Companies affected by momentary outages lasting less than 5 mins jumped from 20% to 40% in one year, signifying outages are becoming more prevalent and noticeable because of their impact on operations. The report also uncovered that 44% of companies lost power monthly or more frequently — double the percentage from 2019 — indicating companies are seeing more negative impacts that could jeopardize critical operations and potentially risk their reputations as reliable goods-and-services providers.
- Companies stand to lose more than US$1 million in yearly revenue: The increased frequency in power outages is proving to be costly for C&I companies. They have started implementing new systems or installing equipment to measure outages and track outage expenses. Survey data showed a typical outage cost US$100,000 or more for nearly one-quarter (22%) of companies. Most (80%) of these C&I companies experienced monthly outages, resulting in an annual loss of US$1.2 million. This is an overwhelming cost and underscores C&I companies' need to mitigate outages. The high-cost impacts of poor reliability triggered 58% of companies to install a system or equipment to measure outages. Of the companies measuring outages, 77% have, or will have, an outage-expense tracking system or equipment.
- Pressure grows to alleviate issues: The survey found more than half (52%) of companies deem it very important for power to be restored within one minute. However, many utilities do not report power interruptions lasting less than five minutes, which represents a disconnect between utilities' priorities and customers' needs. With C&I companies' high expectations for power reliability and resiliency, it's apparent they are willing to invest in solutions to mitigate outages. In fact, a portion of companies would be willing to pay their utilities a premium for a 20% reduction in outages, yet nearly one-third (31%) of companies felt they were not given the opportunity to talk with their utility directly about their reliability concerns. This presents an opportunity for utilities to discuss the extent of C&I companies' power concerns and gain an in-depth understanding of the solutions these businesses need.
"It's evident power outages have been a constant pain point for C&I companies over the last four years, and these businesses are placing an even greater importance on improved power reliability and resilience," said Brian Levite, S&C Regulatory Affairs director. "Even a few seconds without power can have a costly impact on a business, and we're seeing these C&I companies invest in new systems and equipment to measure outages and track the corresponding expenses as a result. However, there are opportunities for C&I companies and utilities to address reliability concerns and work together to mitigate these issues."
To unpackage this report in detail, S&C and the National Association of Manufacturers will be hosting a webinar discussing the important role reliability plays in businesses' operational success as well as strategies to move the needle on reliability improvements. To register for S&C's C&I Perception of Power Reliability webinar on April 13 at 11:30 a.m., CST, visit here.
The complete 2021 State of Commercial and Industrial Power Reliability Report is available here.
