Biggest industry sectors couldn’t escape power outages in 2019

Posted by Eaton on March 16, 2020

There’s just no downplaying our ever-escalating reliance on electricity ─ nor the resulting consequences from an unexpected loss of power. For organizations lacking adequate power protection, even a momentary blip in power has the propensity to trigger serious ramifications, including potentially devastating downtime, equipment damage, data loss and wounded reputation. 

While the average cost of downtime can vary dramatically by industry, the sectors with the highest risk are typically banking/finance, government, healthcare, manufacturing, media and communications, retail, and transportation/utility sectors. In fact, one 2016 study found that the average cost for downtime in these industries was upward of $5 million per hour. 

For data centers, the toll rings up at about $9,000 per minute, according to a report by the Ponemon Institute. Meanwhile, a recent survey of the Fortune 1000 by IDC tallied the average cost of an infrastructure failure at $100,000 per hour, and the total annual cost of unplanned application downtime at $1.25 billion to $2.5 billion. While the price tag for small businesses is comparably lower ─ the IDC study estimated it between $82,200 and $256,000 per incident ─ consider that in many cases, a small business will be forced to close its door in the aftermath of an extended blackout. And profits aren’t the only negative consequence of power outages; in the medical world, for instance, the briefest disturbance in electricity can also cost lives. 

In tracking blackouts over the past decade, Eaton has reported on some of the most severe, bottom-line-affecting outages. Consider a handful of 2019’s most notable power cuts by industry:

The price of one missed “9” ─ Collaboration and messaging software company Slack surrendered $8.2 million in revenue after its work-communications platform went down for about two hours over a 92-day period. The hefty sum was issued in credits to users after the company achieved only 99.9% service uptime for the quarter — short of its 99.99% commitment (which allows just 52 minutes, 36 seconds of downtime per year). 

Outages offer no immunity to health care sector ─ Sometimes losing electricity can be dangerous ─ even deadly. With technology now driving the practice of medicine, power anomalies have the ability to induce significant pain across the industry, from disrupting patient care to causing equipment damage, data loss and injured reputation. Even more, healthcare entities face a steeper financial toll than other industries: a recent Ponemon Institute report tallied the typical amount at $690,000 per outage. Sadly, the additional cost for the potential loss of life is a figure that cannot begin to be calculated.

This past year, a 45-minute fault at OneNeck's data center in Bend, Ore., caused local provider St. Charles Health System to postpone elective surgeries on Feb. 7. And in Redding, Calif., the Shasta Community Health Center endured a brief outage Nov. 25 after a bird hit a power line. Although the health center's emergency generator kicked in within a few seconds, the blackout triggered a reset of computers, which caused a delay in accessing the Internet and patient information.

Retail havoc ─ The effects of power outages in the retail sector can extend far beyond ruined goods or lost sales; a business’ reputation is often tarnished when it is unable to effectively serve customers, making them less likely to return. A report conducted in collaboration with Frost & Sullivan found that one in three retailers lost power at least once a month in 2017, with about 40 percent of those outages lasting longer than an hour. While a single supermarket might endure hundreds of thousands of dollars in losses from perishable goods being spoiled by lack of refrigeration, the cost to large retailers is even higher ─ reaching upwards of $5 million. In fact, for an organization like Amazon, whose entire business model relies on uptime, estimated costs are around $13.22 million per hour. 

Case in point for 2019 holiday shoppers: Black Friday turned into Blackout Friday at South Coast Plaza in Costa Mesa, Calif., after an electrical-vault explosion triggered an outage Nov. 29. Those eager to scoop up holiday deals were instead blocked from stores on the busiest shopping day of the year by the power cut, which suspended cash registers for about two hours. The following day in nearby Yorba Linda, Costco was forced to close its doors because of another outage. By 7 p.m., crews still hadn’t resolved the problem. Then on Dec. 3, a transformer fire left 15,000 people without power in another area of Southern California, which included the Brea Mall. Things got tense for holiday shoppers there, as they were stopped in their tracks when the center went dark. 

Airline industry outages: brace for turbulence ─ From comping flights to having to put passengers up in hotels, power outages can significantly clip the wings of the airline industry, according to the findings of a report from the nonpartisan Government Accountability Office. Although it is difficult to completely assess damages because airlines aren't legally required to disclose IT outages, the agency determined that between 2015 and 2017, there were at least 34 IT outages affecting 11 major airlines. Even more, the GAO found that about 85 percent of identified cuts resulted in flight delays or cancellations. At least five outages caused more than 800 delays or cancellations, and at least 14 resulted in a ground stop, meaning all flights destined for a particular airport were halted or delayed ─ some for several hours. 

Last year was no exception. On Jan. 6, a 55-minute outage grounded all flights for Seattle-based Alaska Airlines ─ resulting in 27 delays and five cancellations ─ after wind gusts topping 75 miles per hour raked the Pacific Northwest, knocking out power to hundreds of thousands. Meanwhile, a 90-minute blackout disrupted the pre-Thanksgiving travel rush at Oakland International Airport on Nov. 26, forcing delays, flight diversions and the halting of security screenings. And at Los Angeles International Airport on June 5, a three-hour outage caused dozens of planes to be delayed, diverted or cancelled. These incidents represent just a handful of the airport blackouts tracked by Eaton last year. While the resulting costs were not immediately available, consider that Delta Airlines’ five-hour operation center outage in August 2016 resulted in 2,000 cancelled flights and an estimated loss of $150 million.

Public safety state of emergency ─ A blackout cut 911 landline service in Washington County, Ore., on Dec. 20, prompting Forest Grove Fire & Rescue to issue the following tips during outages: If phone service goes out, try to establish communications with family and neighbors; look out for those that might not have cell phones; and be aware you might have to drive to a fire or police station to get assistance. While no injuries were reported around this particular outage, the potential for a major crisis caused by the inability to reach emergency personnel cannot be understated. 

Data center outage stalls operations for car manufacturers ─ Personnel at Nissan and Infiniti dealerships endured a bumpy road following an August 18 power outage that knocked out key systems. The blackout, which occurred at the firm’s Colorado data center, halted functions that dealers use to perform essential tasks at franchise locations. While some systems were restored within a couple of days, others remained offline longer, preventing dealers from ordering new cars and parts for vehicles, checking incentives and rebates, filing warranty claims, checking for recalls, and even determining how much customers owed on a loan or lease.

Vital research melts away ─ When Santa Ana winds prompted California’s largest utility company to preemptively shut off power to more than a million people across the northern part of the state on Oct. 10, the outage sent local scientists scrambling to save specimens and experiments. The absence of power at the University of California, Berkeley’s labs forced some researchers to take drastic measures to preserve samples and supplies that required refrigeration. One metabolic researcher loaded his lab’s freezers onto trucks and moved them to facilities at the nearby University of California, San Francisco, which still had power. At nearby Lawrence Berkeley National Laboratory, colleagues stocked freezers with dry ice after being warned of the impending outage. One synthetic biologist visiting from another university revealed that the outage made her lose an entire week’s worth of work, ruining her very first experiment there.

Power cut takes a bite out of the Big Apple ─ They say New York is the city that never sleeps, but the power supply was the exception on July 13, when electricity was lost to much of Manhattan in a New York. The five-hour blackout plunged subway stations, Broadway theaters and skyscrapers into darkness, affecting 73,000 residents in a 60-block area. The cut left traffic lights dark up and down the avenues, while police responded to 60 stuck-elevator emergencies and EMS rushed to check the homes of 18 patients on life-sustaining machines. Meanwhile, disappointed audience members had to ushered out of a Jennifer Lopez concert at a darkened Madison Square Garden, as did Broadway show-goers.

Super(Bowl)-sized advertising loss ─ While it certainly lacked the magnitude of the infamous, 22-minute Super Bowl XLVII power outage that struck New Orleans in 2013, a 2019 outage during the big game gave some fans cause for despair. On Feb. 3, parts of Concord, Mass., lost power right as the New England Patriots and the Los Angeles Rams were taking the field. While electricity was restored to two-thirds of those affected a short time later, the remaining residents were unable to cheer their team on to victory. Aside from fan adoration, consider what advertisers lost in the absence of power: Super Bowl ad spots are by far the most expensive on commercial TV, with a 30-second slot costing around $5.25 million.

Fear factor ─ Sometimes power outages are just plain scary. Imagine the terror endured by those with a fear of heights when a blackout struck Vermont’s largest ski resort Dec. 28, leaving skiers and snowboarders dangling on a lift for over an hour. While a resort representative was unable to say exactly how many people were aboard at the time, the affected lift had a capacity of 2,000 people. Similarly, on Dec. 20, a power cut at Silver Mountain resort in Kellogg, Ida., halted the facility’s gondola cars with passengers inside for about 45 minutes.

Tags:  Power LossUPSBackup Power

Posted in: News


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