Can it Get Any Worse? Oh Yes, Much, Much Worse!

The growing frequency of power outages in the U.S., driven by extreme weather and utility grid issues, is bringing businesses across industries to their knees. The operational, financial, human, and reputational costs are devastating, especially for businesses that rely on continuous power to operate. The question that every business leader must ask is: How prepared are we to survive when the grid goes down?

The final week of September 2024 saw Hurricane Helene devastating large portions of the Southeastern U.S., causing catastrophic flooding and leaving over 4 million homes and businesses without power. With impacts stretching across Florida, Georgia, and the Carolinas, the power outages could last for several weeks, plunging thousands of businesses into chaos. Businesses such as grocery stores, hospitals, and manufacturers are scrambling to protect their operations, but many face steep losses due to the inability to keep their lights on. In Florida alone, hospitals and critical care facilities are being forced to shut down due to their dependence on grid power.

For example, the Citrus Memorial Hospital in Florida, a facility that had no energy resiliency infrastructure in place, had to cease all non-essential operations, evacuating patients and losing potentially hundreds of thousands of dollars daily due to power failure and logistical nightmares. The cost of downtime in critical sectors like healthcare can be astronomical; it's estimated that every minute of downtime in these industries can cost thousands of dollars and put lives at risk. Moreover, small- and medium-sized businesses across the affected states, like local breweries and vineyards in Georgia and South Carolina, reported losses in perishable goods and productivity, potentially pushing some to the brink of closure.

And only a few months back, nearly an identical weather event hit Texas, when Hurricane Beryl struck in July.. Beryl caused, what at that moment, was the year's most significant power outage, impacting over 2.7 million businesses and households. The storm knocked out at least 10 transmission towers and downed power lines, particularly affecting the Houston metropolitan area. More than 80% of the region's electricity customers, including those served by CenterPoint Energy, were without power for days. Even a week after the storm, around 200,000 customers were still in the dark, dealing with sweltering heat and damaged infrastructure.

The impact on businesses was severe. For example, Houston's liquefied natural gas (LNG) industry, including companies like Freeport LNG, saw a significant slowdown in operations, and several public terminals at the Port of Houston were temporarily shut down. These delays led to a sharp increase in logistical costs, and the downtime crippled local and international commerce. For many small and medium businesses, the lack of backup power meant a complete halt in operations, leading to a loss of productivity and revenue that stretched into the millions​.

Similarly, healthcare facilities were hit hard. Seventeen hospitals had to rely on generators, while five were completely shut down. The loss of power exacerbated the extreme heat, leading to multiple heat-related deaths in Harris County​ alone.

And Easily Forgotten After Back-to-Back Overwhelming Hurricanes, the Central and Southern Severe Weather Disaster of April 2024

In April 2024, severe weather outbreaks across the Central and Southern U.S. caused widespread power outages across the states of Missouri, Arkansas, Texas, Kentucky, and Oklahoma. The storms were devastating due to their intensity and the widespread  damage caused to the power grid and other critical infrastructure. 

According to reports, over 500,000 customers lost power across the affected states as high winds knocked down power lines, transformers were damaged, and large hail caused structural damage to buildings and electrical infrastructure​. The lucky ones saw power restored in a few days. Others, it was weeks in the dark!

Highlighting just a few of the hardest hit businesses:

1. Manufacturing and Logistics Disruptions: In Missouri and Arkansas, manufacturing facilities reported closures due to power loss. A food processing plant in Missouri had to halt operations for 72 hours after high winds damaged nearby power lines, leaving the facility without power. This resulted in a loss of hundreds of thousands of dollars in perishable products. The delay in resuming operations also disrupted the company’s supply chain, as shipments of food products were delayed, impacting retailers and distributors across the region.
2. Retail and Hospitality Losses: In Texas, large retail stores and hotels were severely affected. A Walmart distribution center in central Texas was forced to suspend operations due to extended outages caused by damaged transformers. The outage lasted for only 48 hours, but even in that short time frame losses were substantial due to disrupted distribution schedules, delayed shipments, and increased operational costs. Hotels in the region also faced significant challenges, as power outages led to room cancellations and refunds, particularly during peak travel periods.
3. Healthcare Facilities: Hospitals and healthcare facilities across Kentucky and Oklahoma were also hit hard by the severe storms. While many facilities had backup generators, the extended outages strained their resources. For instance, a regional hospital in Kentucky had to transfer patients to other facilities when its backup generators failed to provide sufficient power after prolonged use. This resulted in operational disruptions and increased costs for patient care, as well as reputational damage as reports of the situation spread through local media.

‍The Catastrophic 2021 Texas Power Crisis

Perhaps no recent example illustrates the catastrophic impact of power outages better than the 2021 Texas power crisis. Triggered by a historic winter storm, the Electric Reliability Council of Texas (ERCOT) saw demand for electricity surge beyond capacity, causing statewide blackouts that affected 4.5 million homes and businesses .

One high-profile business hit hard was H-E-B, Texas’ largest grocery chain. With stores and distribution centers across the state, H-E-B faced immediate operational chaos when their power supply went down. Without refrigeration, millions of dollars’ worth of perishable food items were spoiled. According to industry sources, each H-E-B store potentially lost tens of thousands of dollars in sales every day they were closed. One Texas business analyst noted, “H-E-B was prepared to deal with high demand during the storm, but they couldn’t have anticipated the prolonged power outages. The loss in perishable goods alone was staggering.

Additionally, the Texas Medical Center in Houston, the world’s largest medical complex, narrowly avoided catastrophe as backup generators kicked in to maintain life-saving systems during the blackout. However, many other businesses, from manufacturers to tech companies, were not so fortunate. A report by McKinsey highlighted that the total cost of the crisis to Texas businesses ranged between $80 and $130 billion, impacting everything from productivity to supply chains​(.

The California Blackouts: PG&E’s Proactive Shutdowns

Some grid issues result from trying to prevent a disaster. In California, proactive measures by utility companies to prevent wildfires are creating an additional burden. In 2019, PG&E shut off power to hundreds of thousands of businesses and homes during hot, dry weather to prevent their power lines from sparking wildfires. One of the hardest-hit industries was wine production in Napa Valley.

During the blackout, local wineries lost millions of dollars in operational downtime, storage losses, and delays in production. Wine Industry Network, in a survey of its members, reported that 88% of wineries experienced operational disruptions, with some estimating a loss of $5,000 per day in operational downtime. A local vineyard owner was quoted saying, “We can survive a day or two of power loss, but when it stretches into a week, we start losing product and time that we can’t get back.

Financial and Operational Impact: When the Grid Fails, the Costs Skyrocket

Businesses without energy resilience measures in place, especially those dependent on refrigeration, supply chains, or real-time services, often face staggering losses when the grid fails. The American Society of Civil Engineers estimates that U.S. businesses lose $150 billion annually due to power outages​

Data centers, healthcare facilities, and retail businesses are particularly vulnerable. For example, data centers can lose up to $8,000 per minute during an outage, while grocery stores may lose tens of thousands of dollars in spoiled products each day.

A Microgrid, the Solution

The question becomes, how do businesses prevent these crippling losses? The answer lies in energy resiliency, and the best defense is a microgrid—a self-sufficient energy system capable of operating independently from the main grid. And ClimaFi is leading the charge by designing, funding, and financially optimizing Microgrids that help businesses maintain operations during power outages.

And with ClimaFi’s microgrid technology, companies can get critical infrastructure online in months, not years, bypassing utility interconnection delays. For businesses facing grid-related delays in electrification efforts (such as installing EV charging stations), ClimaFi’s Bridge Microgrids provide an immediate solution. 

Once installed and grid connected, if the grid goes down, businesses can continue to function, protecting their people, revenue, and assets.  Plus ClimaFi’s financially optimizes each Microgrid through energy arbitrage, where excess energy is sold to the grid, creating new revenue streams for businesses, turning an initial investment into a long-term financial asset.

A microgrid offers:

• Operational Resilience: Keep operations running during an outage.
• Financial Benefits: Energy arbitrage creates cash flows turning energy costs into profits.
• Quick Deployment: ClimaFi’s Bridge Microgrids bypass lengthy utility delays, going live in months, not years.

Conclusion: It’s Time to Armor Your Energy Infrastructure

In an era where grid instability and weather extremes are now the norm, you must be proactive and armor your energy infrastructure with a Microgrid. Businesses that fail to prepare for power outages are one weather event away from catastrophic losses. As the examples in this article highlight, the cost of inaction is severe!

At ClimaFi, we specialize in helping businesses armor themselves from these events. Whether you’re looking for energy resiliency or to bypass utility delays, our microgrids keep the lights on when everything else goes dark. Contact ClimaFi today and learn more.