Do you know what “interruptible tariff” means. Most people, industries, and institutions did not know, or forgot, until it occurred to them. It occurred to them when their power was turned off. Yes turned off!
Interruptible tariff agreements are fee schedules (contracts) that an industrial company, an educational institution, or another large power consumer will sign with their electric utility to contract for lower electricity rates. The interruptible tariff electricity rates are substantially lower that the regulated tariffs set by local and state regulatory boards. But interruptible tariff rate agreements allows the power grid manager to shut off those power consumers who have signed these interruptible tariff agreements when demand is beginning to outstrip supply, in order to avoid system wide power blackouts or brownouts.
This came to light in California this past several months as everyone from students and industrial plant works were sent home when the power at their places of study and work were turned off. One university student is so irate she is suing for a return of her tuition. She is a film and theatre student who cannot even do her homework in the dorm – let alone do her homework at the film laboratory or act in the theatre since all of the power keeps getting turned off.
What are the technical issues – well several. One do you know if your employer or land lord (if power is part of the tenant agreement) has signed a interruptible tariff agreement. Further – if you derive power from one of the Electrical Co-Ops has you co-op signed an interruptible tariff agreements. Next, call you local power grid manager and find out what the likelihood for power interruption could be and if there is any short fall in supply of electrical power line capacity to meet forested demand. If you could fall into the category of electrically challenged than review all of the following.
A. Backup systems – if they are in place such as battery and backup generators are they all in working order and can they run for, not just several hours, but several days. If not is it a questions insufficient emergency generation capacity, not enough fuel etc…. Find the fatal flaws. You don’t have to cure them – but you need to be aware of them – prevention!.
B. How does your security system react when the power fails? Is their an automatic message sent to police, do battery powered alarms ring, do all of the fire doors close and or lock – does all of the water go off because you pumps are electrical, what happen? If possible – turn the power off and find out – if not ask all of the building systems people what happens when the power goes out after a weather event.
C. Computers – not just main frames and desk top PC’s are affected. Don’t forget copiers, fax machines, telephone systems, monitoring equipment, overhead cranes. Also how do you charge all of your emergency systems batteries if the systems could be down for an extended period of time.
D. Insurance. You may have business interruption insurance that would cover power loss for an act of god. It may not cover you for an act of contract whether or not it is you fault.
The losses then can occur from business interruption, for power or other means, can be an ongoing problem for many years, not just a few days. You fixed costs don’t go away just because the power went out. Salaries must be paid, taxes, rent, interest payments on loans, etc., all go on with or without the power.
Was this problem foreseeable. Yes! In the 1980’s when the state of California discussed de-regulation, many of the utilities stopped building power plants and quit honoring PURPA power purchase agreements (agreements by the utilities to purchase electricity generated by a co-generation facility or a renewable resource). When asked why these wouldn’t be honored, a representative of PG&E told this editor “ We don’t need and don’t want your power, and if you don’t like it you can sue us.” He then showed me a room with literally stacks of litigation. The public relations side gushed about how profitable they would be when new power supply capacity would be expanded through savings and conservation. When the utilities were deregulated the utilities had all of the power generation and wholesale deregulated but most of the demand was still at regulated fixed prices. Hence, the only component of the equation that could respond to “market forces” was the cost of the supply. Dumb. Really dumb. And predictable.