Extended Power Outages Require Business Continuity Planning

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Jan 28, 2013

In October 2012, nearly 8.1 million homes and businesses lost power, many for an extended time period, due to Hurricane Sandy. According to Jersey Central Power & Light (JCP&L) spokesman Ron Morano, the storm created the worst damage in the company’s history. As a result, power restoration was slowed and businesses across the northeast region suffered.

"In New Jersey alone, nearly 19,000 small businesses sustained damage of $250,000 or more with total business losses estimated at $8.3 billion as a result of Hurricane Sandy, about 1.0 percent of New Jersey Gross State Product in 2012." Economic Impact of Hurricane Sandy - Potential Economic Lost and Gained in New Jersey and New York (U.S. Department of Commerce).

When infrastructure disruptions occur, such as an extended power failure, companies operations can endure significant challenges and potential financial losses. If operations, equipment, or supplies are affected, companies must seek alternate ways to remain operational, or as in Hurricane Sandy’s case, attempt to recover quickly. A power outage business continuity plan (BCP) is a vital tool that prepares organizations for incidents that could impair their ability to operate as a result of temporary or permanent loss of infrastructure, critical staff, software, and vital records.

Although Sandy’s vast devastation was unprecedented, companies must ensure precautionary actions are in place to sustain the viability of their business. By pre-identifying critical processes and the equipment necessary to function, alternatives can be explored and a BCP can be developed. The process of creating and implementing a BCP may reduce the impacts of infrastructure disorder and associated supply chain disruptions. Business continuity preparedness can prevent unnecessary downtime, increased recovery efforts, and protect the financial bottom line.

Identifying critical utility and technology related operations is the first step in mitigating and combating the potential threat of an extended power outage. Possible critical utility and technology involved in business operations include, but are not limited to:

  • Utilities including electric power, gas, water, hydraulics, compressed air, municipal and internal sewer systems, wastewater treatment services
  • Security and alarm systems, elevators, lighting, life support systems, heating, ventilation and air conditioning systems, electrical distribution system
  • Manufacturing and pollution control equipment
  • Voice and data communication systems and computer networks
  • Air, highway, railroad, and waterway transportation systems

Once utility and technology related operations are identified, the following planning considerations should be taken into account in order to safeguard critical systems during a power outage and develop a business continuity plan with effective procedures :

  • Determine the impact of service disruptions and mitigate if possible (generators, fuel, relocating inventory, back up suppliers etc.)
  • Ensure that key safety and maintenance personnel are thoroughly familiar with all building systems, such as alarms, utility shutoffs, elevators, etc
  • Establish company-wide computer security, download, and backup practices in order to secure technologies and communications networks
  • Establish procedures for restoring systems
  • Establish preventive maintenance schedules for all systems and equipment

Updating a BCP should be a continuously evolving process capturing changes in personnel, contractors, stakeholders, operations, and equipment. Each department should evaluate current critical processes, mitigate identified deficiencies, and update the plan as necessary. In the event of an extended power outage, a business continuity plan should identify recovery time objectives for the following concepts:

Supply Chain: Pre-selected alternate resources to ensure consistent delivery and continued operations in the event primary suppliers are not able to provide required services.

Essential Personnel: Identify necessary minimum staffing levels to remain on-site during a storm (if deemed safe) and for recovery operations. As the storm passes, ensure staff, contractors, and suppliers understand their individual responsibilities and recovery time objectives.

Equipment needs: Identify and procure necessary equipment, and establish processes for continued operations and recovery. This will prevent unnecessary downtime and additional recovery efforts after a hurricane. Relocating equipment or inventory prior to a storm may be an option. After a storm, repairing and replacing these essentials can be slow, labor intensive, potentially costly.

Data and computer needs: Companies may examine data center outsourcing to ensure continuity and accessibility. Identifying the procedural details of computer backups, data restoration methods, and minimum software requirements are crucial to re-establish technology related critical business processes.

Communication needs: Clear and effective communication channels must remain available in order to disseminate information to employees, assess and relay damage, and coordinate a recovery strategy. A mass notification system may assure a reliable method to communicate to key individuals, company employees, or an entire client base.

No storm preparedness, whether for a hurricane or blizzard, goes wasted. Every “close call” storm provides a real-time test of the effectiveness of your business' power outage preparedness procedures. No matter how far a storm veers off path, company facilities, employees, and coordinating responders can gain planning insight by the act of initiating business continuity plans.