Winter Back-upWhen we think about the Sunshine State and electricity consumption, we are inclined to picture high demand for energy on a steamy July afternoon. It seems logical to pay special attention to safeguarding your business from power outages during the summer months. While it is important to make sure that energy demand on an exceptionally hot and humid summer afternoon doesn’t stop your workday, winter demand can be just as high. As Floridians we get cold when the temperature drops much below 70°. You’d be surprised how many space heaters and electric blankets get turned on in our state, not just up north in Jacksonville but down south in Miami and Melbourne also. In fact TECO and Progress Energy, the utility providers for the majority of central Florida, report record single-day electricity usage records as being the result of a cold front in January of 2010, not one of our notoriously hot summers. Winter Electricity Demand As always, record demands can easily lead to blackouts. Power outages caused by high demand for energy tend to happen at the beginning of the day. Think about it: demand will be high all night when thermostats are set to warm the house along with other heating elements. Then everyone wakes up and turns on televisions, radios and hot water heaters that all need even more energy without turning off the heat. This surge in demand can cause the utility provider to scramble to supply enough power and often results in multiple power outages to start the day. By the time the utility provider has mobilized their staff to fix the first outage, several others likely pile up, leaving some without power for the entire day if not longer. That is why electric companies make pleas to the community to limit consumption on a cold day. Think about it: power companies sell electricity for profit, so if they are asking you to use less electricity, they are basically admitting an inability to cover demand and warning that you will likely experience some form of disruption in power supply. Can your business afford to be put on hold for a day? Especially at a time of year where vacations are likely, so you need to get as much work done in a day as possible. Or at a time of year where your sales increase to the point that you become profitable? The bottom line here is that at some point, your bottom line will depend upon your ability to produce electricity, at least for a limited amount of time. To do this you need to have a standby system or set of generators on hand that can handle your electricity demands. Don’t confuse winter months and lack of electrical demand. Yes, we are lucky enough in Florida to be able to turn the air conditioner off during many winter days. Don’t forget the peak days that create surges for the utility providers and ultimately everyone who needs electricity. We will leave you with a couple of facts. Florida Energy Facts
Sources: U.S. Energy Information Administration
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Power Outage 101A lot of people are willing to gamble when it comes to backup power. They feel that power outages are rare occurrences that don’t really pose a significant threat. But ask anyone who operates a data or manufacturing facility that has lost power for say, more than five minutes, if power outages do not pose a threat, and you are likely to get a response that uses stronger words than “significant.” The truth is that power outages cost thousands of dollars for every minute that a medium or large facility goes without power, and that they are more common than most people tend to think. Why Does the Power go out? Let’s begin by reviewing the most common reasons for power outages. According to information from some actual power providers the top causes of power outages include:
These are the most common reasons for disruptions in power. While other factors can play a role, more often than not the culprit is on the above list. What about Blackouts in the Future? As our population grows in numbers and the use of electrically powered technology becomes an increasing part of everyone’s lives, it would be unrealistic to think that increased power outages are not going to be a probable side affect. More people, who all have increased demand for energy, will likely cause problems for utility providers. Currently the energy industry is looking into new ways to create electricity that is both better for the environment and able to meet upcoming demands. The truth is, those sources of electricity are largely in experimental stages and are not widely adopted. If you disagree, look at the bottom of your next power bill. It lists how your utility provider sourced electricity during the previous billing period. You will see that the majority of our power still comes from fossil fuels and coal, not new technologies. Recently CNN reported on the findings of a team of researchers out of the University of Minnesota. These researchers studied power disruptions and blackouts. They found that over the past 20 years power outages that are not caused by natural disasters but do end up affecting at least 50,000 people are up 124%. This evidence shows that our demand for energy is currently increasing faster than the utility companies’ ability to provide power. What Can We Do about It? This is not the easiest question to answer. Some would argue more funding for research and development of new technologies, while others would back finding ways for each individual to use less power. In the end it will probably be a combination of both ideas. Regardless of what happens, everyone who values energy, or who values their business that needs energy to operate, can purchase insurance. The insurance we are talking about isn’t an intangible contract sold to you by someone who will likely try to argue you out of payment when you need it. This type of insurance is a tangible piece of proven machinery that when set up correctly can power parts of your business, if not the entire facility. The other benefit is that this “insurance policy” does not necessarily cost you more based on location. An identical standby system costs the same for a data center in Jacksonville as it does for a manufacturing plant in Orlando. Sources:
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A Little Pro-activity Goes A Long WayManaging a business takes a lot of work and attention to detail. If you are starting a new business or changing the location of your current business you have a lot of bases to cover. One of them is an emergency plan. Emergency plans are your go to guides when something unexpected arises. It might be a natural disaster, like one of our famous Florida hurricanes, or a man made mistake that affects your business. It really doesn’t matter what causes the shift from normal operation, you must be prepared to recover as quickly as possible and get back to business. Power needs will be an issue. Every business needs electricity to function. You can guarantee yourself power with a standby system. Not every commercial property that you rent will already have one installed, in fact most won’t. This is because, as necessary as they are, standby systems represent an expense to your business. It’s understandable that you are trying to keep your costs down but every business needs insurance. You take out worker’s compensation insurance for your employees; you might even pay a monthly premium for disaster insurance for your business. Think about a generator like tangible disaster insurance that won’t make you fill out a million forms when you need it to get to work for you. In order to properly plan for a disaster you should make a standby system a part of your business plan from the beginning. Expect to include it in your financials so that you can budget accordingly. Yes, you will pay for the equipment up front but ask your accountant how he or she plans to depreciate it. A generator is an asset and depreciation means that you can allocate the cost of the asset over the useful life of the equipment. In realistic terms this means that every month, you can reduce your taxes a little bit by reporting that you spent a portion of the cost of the standby system. It will take a little longer for you to realize the tax benefits but remember you are investing in your business. Once the equipment is part of your financial plan you will see how easily it becomes a part of your disaster plan. Plan what you will need to have powered and make sure that your generator is hooked up to the breakers that power those areas. You will need to decide what is most important to your business. If you have a data center you will obviously need to make sure that your servers do not go down. Beyond that you will want to consider:
If you think about it, your emergency plan is next to useless without power. You will have to wait for the utility company to restore power in order to get back to work. Unless you are a gas station along an escape route, a hospital or a government building don’t expect to be near the front of the line to have your utilities put back on line. Sources:
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Transfer Switch: Automatic or ManualWhen it comes down to it, your generator needs a little help from its friends. One of its best friends is a transfer switch. Transfer switches control the flow of electricity into your facility. They “transfer” the power source for your facility from the utility provider to the standby system. The standby system then takes over your electrical load and makes sure that you weather the storm. Transfer switches are a good thing to have. Not only do they make changing power sources easy and help kick your generator into action, but they are also helpful to utility workers. Most of the time power is sent from the power lines to your house. Sometimes your standby system can send power back through the power lines, a process called backfeeding. If this happens, a utility worker who comes into contact with the line may be injured by the unexpected electricity. Transfer switches help to alleviate this risk and make things safer for everyone. Think about transfer switches like electrical middle men, they communicate between different sources of electricity and make sure that everything runs smoothly. You have two options when it comes to transfer switches:
So which one is best for you? While either option can work and ensure that you have access to power when you need it, we will make a case for automatic transfer switches. They have some distinct advantages:
The type of switch that you use is a matter of personal preference. While automatic transfer switches can make things a little easier, a manual one will do the job if used correctly. If you are making a purchase we would recommend that you go with an automatic switch. If you have an older system, you can have a manual switch replaced with a newer automatic version. If you have more questions about switches we address them here. Sources:
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