How much will a utility outage cost per hour in terms of unrecoverable fixed cost, lost production, labor compensation and customer dissatisfaction. And, how much is reasonable to invest in a standby or on-site power system to reduce and totally eliminate these risks?

Outage Cost
Every wire & cable facility has electrical loads that are deemed essential because they are all necessary for the normal continuation of business. But how much stand-by power is needed depends of course to a large extent on the kind and length of the outage. The cost of a nuisance outage of 60 seconds or less is generally limited. However if frequently occurring there are measurable costs involved. Frequent power interruptions are often a sign of a weak power grid and often accompanied by an unstable voltage resulting in erratic performance of the mills drive systems.

Brownouts whether scheduled so called rotating brownouts or sudden interruption in the power supply of 3 hours duration or more are often caused by a shortage of generating capacity at the utility during peak power periods and weak transmission grids. The cost of such brownouts can be easily assessed. These kind of brownouts have become regular occurrences in North America and in areas of rapid industrial expansion such as India, China and South East Asia.

Scientists and engineers with the U.S. National Research Council has warned the White House and Congress about the vulnerability of the power grid, saying that the nationwide weaknesses needs to be repaired -- and fast. Little has been done, despite a chorus of experts pushing the authorities to fix a grid that's riddled with threadbare links and plagued by chronic shortages.

According to research by contingency planning organizations, the cost of an electrical outage can exceed $1 million per hour for the average large business. In certain industries such as semiconductor manufacturing, and telecommunications, losses may reach $2-$3 million per hour. While the cost for unscheduled shut downs in the average wire mill is considerable less, hundreds of production hours are presently lost by wire & cable producers.    Given these high-stake risks, facilities managers worldwide are being forced to evaluate new options for providing a continuous supply of power. While extended utility outages of days sometimes weeks caused by ice storms and hurricanes are rare occurrences -at least in Western Europe and North America - 24/7 dependence on electric power virtually necessitates that every business have some level of standby power.

Based on a company's exposure to financial risk in the event of a utility outage, the need for standby power should be assessed. As the financial losses due to an outage escalate, so does the justification for standby power.