An S &C report in collaboration with Frost & Sullivan
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S&C’s 2018
State of Commercial & Industrial
Power Reliability Report
An S &C report in collaboration
with Frost & Sullivan
TABLE OF CONTENTS Introduction............................................................................................................................................. 3 I. Outage Audits: The Truth about C&I Power Reliability............................................................. 4 II. Drivers of Satisfaction and Dissatisfaction.................................................................................... 9 III. C&I Customers are Looking for Better Reliability.................................................................... 15 Research Background and Methodology........................................................................................... 23
State of U.S. Commercial and Industrial Power Reliability
INTRODUCTION
In S&C Electric Company’s first “State of Commercial & Industrial Power Reliability” report, conducted
in collaboration with Frost & Sullivan, facilities and energy managers of commercial and industrial (C&I)
businesses across the United States were surveyed regarding their perspectives on power reliability
and future energy needs.
Averaging $4 billion in revenue, these companies comprise the majority of the metered revenue for the
utilities serving them. Respondents’ opinions authentically portray the industry’s current conditions,
and their long-term needs heavily influence the future grid.
These respondents are the key decision-makers who select electricity commodity suppliers across
the Manufacturing, Data Center, Healthcare, Small Franchise, and Education sectors. They were
screened and selected according to their relevance and authority to make power-related decisions
and, consequently, 76% come from facilities management, corporate management, or operations. Their
companies represent a balance in size, with their monthly energy consumption ranging from 10 MWh
to more than 50 MWh. In total, the 251 survey respondents were pulled equally from the four census
regions of the United States, and along with their targeted job function, they make up a statistically
significant sample size that depicts the true state of C&I reliability.
THE RESEARCH SET OUT TO ASSESS THE FOLLOWING:
• What has been their experience with power outages, and do outages matter?
• What are the costs and business impacts of outages?
• To what degree do C&I companies accept the existing state of power reliability?
• How receptive are C&I companies to raising the bar for reliability?
• Are C&I companies acting on their own to improve their reliability?
This report discusses findings in detail, particularly the differences observed within five distinct
industry categories and by geographic region. Regional breakdowns include:
• Northeast: Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, New York,
Pennsylvania, and New Jersey
• Midwest: Wisconsin, Michigan, Illinois, Indiana, Ohio, North Dakota, South Dakota, Minnesota, Iowa,
Kansas, and Missouri
• South: Alabama, Kentucky, Mississippi, Tennessee, Arkansas, Louisiana, Oklahoma, Texas, West
Virginia, Virginia, District of Columbia, Maryland, Delaware, North Carolina, South Carolina, and
Florida
• Pacific: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New Mexico, Washington,
Oregon, California, Hawaii, and Alaska
3
State of U.S. Commercial and Industrial Power Reliability
I. OUTAGE AUDITS: THE TRUTH ABOUT C&I
POWER RELIABILITY
Chart 1: U.S. C&I Average Duration Outage, 2017
Total Sample
Total Sample
41%
26%
21%
12%
One hour and more 5 to 59 minutes Less than 5 minutes Never/Don't know
n = 251
A9n. On average, how long do your power outages last?
To create a backdrop for the findings in this report, the survey asked respondents about the average
duration of their outages. More than a quarter of respondents experienced outages that lasted an hour
or more. See Chart 1.
Chart 2: U.S. C&I Outage Frequency, 2017
Total Sample
49%
21% 18%
9%
3%
Once a week Once a month Once a year Once every 2 Never/Don't know
or more or more or more years or more
n = 251
A6a. How frequently do you lose power?
In analyzing how frequently C&I customers lose power, nearly half of C&I customers experienced a
power outage at least once a year, and 21% had an outage at least once a month. See Chart 2.
4
State of U.S. Commercial and Industrial Power Reliability
Chart 3: U.S. C&I Outage Frequency, by Region, 2017
Northeast
Northeast Midwest
Midwest South
South Pacific
Pacific
42%
54%
24% 46% 25%
20% 13%
2% 19%
18% 7%
5% 48% 8%
2% 24%
22% 15%
2% 4%
Once
Once a week Once
Once a month
month Once
Once aa year
year Once every
every22years
or Never/
or
or more
more or
or more or
ormore
more more years
or more Don’t
Don't know
know
n = 251
A6a . How frequently do you lose power?
For outages once a month or more, this frequency was fairly even regionally across the entire United
States, with each region hovering around 20%. See Chart 3. This even split holds true for once-a-year
outages or more, but with the South coming in slightly higher and crossing into the majority at 54%.
While weekly outages are much less common, this view shows that 5% of C&I customers in the South
reported outages on a weekly basis.
Chart
Chart 4: 1:U.S.
U.S.C&I
C&IOutage
Outage Frequency,
Frequency, by
byIndustry,
Industry,2017
2017
Manufacturing Data Centers Health Care Small Franchise Education
37%
62%
45%
30%
11%
7% 12% 48% 22%
18% 15%
4% 0% 22%
3% 19% 12%
5% 49% 5% 23%
26% 9% 14%
2%
Once a week Once a month Once a year Once every 2 or Never/
or more or more or more more years Don't know
n = 251
A6a. How frequently do you lose power?
5
State of U.S. Commercial and Industrial Power Reliability
By industry, Education experiences the most in terms of outage frequency, with 7% of that sector
encountering an outage once a week. See Chart 4 on page 5. More than a quarter of the Manufacturing
industry deals with an outage at least once a month, and Data Centers and the Healthcare industries
are not far behind at 19% and 18% respectively.
The majority of Small Franchises are affected by outages once a year, and almost half of the
Manufacturing, Data Center, and Healthcare industries are as well.
With this baseline, the survey explored extreme cases, and the results follow.
Chart 5: U.S. C&I Worst Power Outage in the Past 12 Months, 2017
TotalSample
Total Sample
50%
23%
16%
11%
1 1hour
hour or
or more
more 55to
to 59 min
59 min Less
Lessthan
than 55 min
min Never/Don’t
Never/Don't know
know
n = 251
A7. What was the duration of the worst power outage that you experienced in the past 12 months?
In 2017, 50% of C&I customers surveyed reported experiencing a power outage that lasted more
than 1 hour. See Chart 5. In the previous 12 months, 84% of respondents recalled some form of
power interruption.
Chart 6: U.S. C&I Worst Power Outage in the Past 12 Months by Region, 2017
Northeast Midwest South Pacific
40%
62%
29%
46%
25%
21%
6% 11%
20% 6%
44% 14% 20%
24%
16% 16%
11 hour or more
hour or more 5 5toto
5959 min
minutes Lessthan
Less than 5 min
5 minutes Never/Don’t know
Never/Don't know
n = 25
A7. What was the duration of the worst power outage that you experienced in the past 12 months?
6
State of U.S. Commercial and Industrial Power Reliability
Regional details of the responses show the South endures the longest power outages, with 62% of
respondents affected by an outage lasting more than an hour. See Chart 6 on page 6. Close to a
majority of C&I customers in the Midwest also dealt with these long power interruptions. The rest of
country registered their outage duration as slightly lower, but still in excess of 40% of customers.
Aging infrastructure and weather-related issues can partially be blamed for these interruptions, as seen
later in the report.
Chart 7: U.S. C&I Worst Power Outage in the Past 12 Months by Industry, 2017
Manufacturing Data Centers Health Care Small Franchise Education
34%
50%
36%
15%
52%
31%
44%
24%
58% 7% 7%
25% 12% 19%
21% 18%
23% 5%
8% 11%
1 1hour
houror
ormore
more 5 5toto5959
minutes
min Less
Lessthan
than5 minutes
5 min Never/Don't know
Never/Don’t know
n = 251
A7. What was the duration of the worst power outage that you experienced in the past 12 months?
From an industry-segment perspective, long-duration outages were seen most often within the
Manufacturing industry in 2017, with 58% reporting an outage of an hour or greater. See Chart 7.
Close behind were Data Centers and Small Franchises, the majority of which also experienced outages
lasting an hour or more.
7State of U.S. Commercial and Industrial Power Reliability
At the other end of the spectrum, 44% of C&I customers in Education either were not aware of or
reported zero outages.
These interruptions are part of a foundation for strong interest in improving weather resilience and
minimizing power interruptions detailed by respondents later in the report.
Chart 8: U.S. C&I Financial Impact of the Worst Power Outage, 2017
INDUSTRY REGION
Total Sample Manufacturing Data Centers Healthcare Small Franchise Education Northeast Midwest South Pacific
$100K+ 18% 21% 29% 12% 12% -0% 28% 14% 17% 13%
$51K to $100K 19% 21% 24% 12% 12% 22% 12% 23% 19% 20%
Less than $50K 28% 29% 24% 18% 46% * 22% 24% 29% 32% 24%
None 26% 18% 23% 39% * 30% 41% * 26% 21% 24% 36%
Don’t know 9% 11% -0% 19% -0% 15% 10% 13% 8% 7%
n = 251
A8. What was the financial impact to your business because of this single event?
* Significantly larger at 95% confidence level
Power outages affect businesses in many ways, and most involve unplanned expenses or other costs.
Some additional costs remain hidden or otherwise unrepresented in the responses in Chart 8, but
the figures serve as a baseline for additional analysis. In examining the resulting costs of outages on
businesses, 18% of C&I customers suffered a financial impact of $100,000 or more. For another 19%,
outages inflicted costs of $50,000 or more.
Of the industries and regions with the costliest outages, 29% of Data Centers and 28% of the
respondents from the Northeast lost more than $100,000. On the other hand, 41% of Education and
49% of Healthcare, as well as 36% of those from the Pacific region, did not encounter any financial loss
as a result of an outage.
While this survey did not directly correlate costs to cause, typically financial loss falls in line with the
industries’ or regions’ duration and frequency of outages. For the industries and regions with little or
no financial impact, these categories have a tendency to prepare their facilities and systems in the event
of an outage, as is explored later in this report.
8State of U.S. Commercial and Industrial Power Reliability
Section Comments on the Outage Audit
The outage audit of C&I customers’ frequency and duration of outages sets a baseline for utility
producers’ ability to deliver their product: energy. Many of the industries represented in this
survey hold a better position, electrically, within the natural hierarchy on a typical utility grid.
Their physical location on the grid tends to result in a better service level than an average
residential tract. In that light, half of companies experienced a power outage lasting more than one
hour, and a quarter of them experienced a power outage at least once a month. The impact of this
plays out in subsequent responses.
Disruptions to any process, industrial or in commercial transactions, will cause loss. Indeed, losses ran
the entire spectrum, but 18% of the respondents experienced financial loss greater than $100,000.
II. DRIVERS OF SATISFACTION AND
DISSATISFACTION
Although this survey sought statistically to determine the drivers of customer satisfaction and
dissatisfaction, the impacts of reliability and costs naturally materialized.
Chart 9: U.S. C&I Customer Satisfaction with Power Reliability, 2017
Total Sample 48% 52%
Manufacturing 47% 53%
Data
Centers 48% 52%
Healthcare
36% 64%
INDUSTRY
Small Franchise
58% 42%
Education
56% 44%
Northeast 40% 60%
Midwest 48% 52%
REGION
South 54% 46%
Pacific 44% 56%
Very Satisfied Not Fully Satisfied
n = 251
A4_1. How would you rate your power provider in terms of the following? - Overall Reliability of Power
Asked about their level of satisfaction with their power providers’ reliability, 52% of C&I customers
stated they are not fully satisfied. See Chart 9. These findings suggest an unmet need or greater
expectation of their current service provider.
9State of U.S. Commercial and Industrial Power Reliability
The analysis also shows variation in responses by region and industry, which is not entirely reflective
of their actual experience with power outages. For instance, customers in the Healthcare sector
surprisingly jumps up the list in terms of being less fully satisfied with their power reliability, even
though other industries, especially Manufacturing and Data Centers, report longer and more frequent
outages. Similarly, customers from Small Franchises and those from the South appear more content
with their power reliability, even though they typically have longer and more frequent outages, as seen
in the previous charts.
Chart 10: U.S. C&I Power Provider Attributes that Drive Overall Satisfaction, 2017
Ability to support the Outage duration also Cost matters but is less
business is most important matters important
1 2 3 4
Capability to Responsiveness to the Reliability-Ability to
generate power to needs of commercial, minimize the Cost of Power
support our business industrial, and other duration of outages
in the next 5 years corporate customers when they occur
The model explains 35% of Overall Satisfaction with the - Relative impact on
variance in over satisfaction Experience with the Power Provider overall satisfaction
n = 251
The model is the result of a step-wise linear regression to check the impact of various power provider attributes in A4 on the A1 Overall satisfaction
with company’s experience with power provider in the past 12 months. Scores above are the relative impact on overall satisfaction based on the
standardized beta coefficients of the predictors derived from linear regression.
Conversations with these customers sought to determine the key drivers for satisfaction with their
power provider. The two prevailing attributes were (1) the power providers’ ability to support their
business in both the long and short term through their capability to generate adequate power over
the next five years and (2) their responsiveness to commercial and industrial needs. See Chart 10.
Subsequent were power reliability itself and cost of power.
10State of U.S. Commercial and Industrial Power Reliability
While steady and cost-effective power are logical drivers for C&I customers’ satisfaction with their
power provider, this reveals that customers value even more highly their power providers’ attention
to C&I priorities and their ability to evolve alongside their industries.
Chart 11: U.S. C&I Response excerpts about Overall Satisfaction, 2017
Areas of
Responses from Customers
Improvement
“Enhance smart automation of power and renewable energy”
“Better reliability in bad weather, quicker response to outages”
1. Infrastructural “The biggest issue in my area is power outages, I would hope they would make
Improvement their services more reliable.”
and Reliable “More fleets to better manage weather-related issues”
Service “More reliable generator during hurricane season”
“More money into infrastructure and storm preparedness and better tech to
manage usage and savings”
“Pricing could be better. It’s reasonable, but it could always be better. Their
profits are probably more than they need to be.”
2. Billing and Cost “Less pricing tiers and less differential between peak and off peak tiers”
“Lower cost”
“Lower the cost and make it easier to pay”
“Sustainable solutions, enhancing power and energy”
3. Sustainable “Better efficiency and utilization of renewable resources to be the greatest
and Renewable extent with sustainable and environmental friendly technologies”
Options “I would expect our power provider to focus on using solar power and
providing it to customers.”
“More centric notification during power interruptions”
4. Customer
“Faster fix time; notification of possible downtime; lower prices for heavy
Service
users”
Even among those respondents who expressed they were very satisfied, C&I customers recognize key
areas of improvement needed from their power providers. Asked to relay their observations, common
themes included infrastructure improvements, faster and more transparent customer service, better
pricing, and broader sustainability options. See Chart 11.
11State of U.S. Commercial and Industrial Power Reliability
As C&I customers plan for future growth, they are seeking long-term partnerships with their power
provider to ensure continuity in operations. C&I customers’ needs require their power provider to
grow with them and adapt to change, necessitating a collaborative and proactive approach to demand
that leverages technologies needed to keep pace with rapidly changing industries.
Hence, C&I customers value providers with clear, long-term strategies to modernize their
infrastructure and are looking for reassurance and visibility into infrastructure upgrades and
power capacity enhancement. As a result, power providers’ investments into grid hardening and
modernization will help solidify customer retention and improve satisfaction.
Chart 12: U.S. C&I Satisfaction Level with Power Service Provider, 2017
Good company/no problems/satisfied
Company is reliable/dependable
Good service/customer service
Good services (unspecified)
Easy to work with/deal with
Good communication
Long relationship with the company
Satisfaction with power provider 39% No/few power
outages/disruptions/downtime
Outages corrected quickly
Satisfaction with power delivery 35% Service/power is
reliable/dependable
Efficient power supply
Satisfaction with financial impact 16%
Good/low/reasonable rates/cost
Miscellaneous sources of satisfaction 2% Good/reasonable value/cost-effective
Consistent rates/few increases
Neutral 8%
Dissatisfaction with financial impact 12% Expensive
Rates keep increasing
Dissatisfaction with power delivery 9% Has power outages/disruptions/downtime
Service/power is not reliable/dependable
Dissatisfaction with power provider 6% Outages took too long to correct
Poor service/customer service
Miscellaneous sources of dissatisfaction 1% Poor communication
n = 251
A2 . Why are you [A1] with your power provider?
Drilling down into these overall drivers of satisfaction, C&I customers were also asked to recall why
they were satisfied or dissatisfied with the overall aspects of their power providers’ service.
For the 39% of C&I customers satisfied with business operations, these factors included power
providers’ customer service, communication, reputation, and smooth working relationship. See
Chart 12. For the 35% of C&I customers satisfied with power delivery, specifics included an
acceptable frequency and duration of outages, as well as the ability to restore power quickly. This
shows that C&I customers consider both their providers’ system and people skills, assessing both
their providers’ capabilities to deliver power as well as the day-to-day management and the long-
term strength of their business partnership.
The most common reason for dissatisfaction with overall service from their provider was the financial
impact to their business, with 12% of C&I customers citing expensive and continually rising rates as the
source of their sentiment.
12State of U.S. Commercial and Industrial Power Reliability
Chart 13: U.S. C&I Reason of Dissatisfaction with the Reliability of Power, 2017
Outages/too many outages/unpredictable 45%
Outages cause problems for our business 23%
Weather/storms cause outages 18%
/power lines are not buried
Power is poor/unreliable 14%
Not told how long outages will last 9%
/when power will be restored
Other 14%
None 5%
n = 22
A5 . Why are you dissatisfied with the reliability of power?
Shifting focus to reliability, 45% of customers were dissatisfied with outages that occurred too
frequently and with unpredictable power delivery. See Chart 13. Following in line with this
sentiment, at 23% the next main cause for dissatisfaction was because power outages caused
problems for their businesses.
Chart 14: U.S. C&I Impacts because of Power Outages, 2017
INDUSTRY REGION
Total Sample Manufacturing Data Centers Healthcare Small Franchise Education Northeast Midwest South Pacific
Productivity Loss 76% 86% 57% 64% 62% 70% 70% 82% 74% 80%
Delays in Service/
69% 71% 81% 67% 73% 52% 68% 72% 67% 71%
Production/Deliveries
Cost of Switching to/ 46% 44% 48% 42% 54% 67% 46% 58% 40% 42%
Operating Backup Power
Equipment / Materials
40% 42% 38% 48% 12% 44% 42% 37% 42% 38%
Damage or Spoilage
Lost Sales/
32% 33% 43% 15% 62% 11% 32% 22% 37% 36%
Cancelled Orders
Loss of Customers/
30% 18% 33% 58% 35% 48% 32% 28% 32% 29%
Customer Dissatisfaction
Other 6% 7% 0% 6% 4% 7% 10% 2% 9% 4%
n = 251
A12 . The following are possible types of impact that your company may have experienced due to power outages in the past 12 months.
Please select the 3 most significant types of impact that your company experienced. - Ranked
13State of U.S. Commercial and Industrial Power Reliability
Honing in on the problems outages cause for C&I customers, productivity loss has the greatest impact
on 76% of C&I businesses. See Chart 14 on page 13. The next greatest is the delay caused within
service, deliveries, and production, which affects 69% of C&I businesses. These two impacts are the top
two problems faced by C&I customers in any industry and region.
Other notable reasons for dissatisfaction vary by industry. For the Healthcare industry, 58% of these
customers share that outages resulted in losing customers and affecting their patients’ satisfaction. For
Small Franchises, the aftermath of outages for 62% of these customers meant lost sales and cancelled
orders. For Education, 67% faced significant costs from switching to or operating a back-up power
system. This issue ranks third for the overall C&I market.
Chart 15: U.S. C&I Customer Anecdotes regarding Dissatisfaction with Reliability of
Power, 2017
WHY ARE YOU DISSATISFIED WITH THE
RELIABILITY OF POWER?
COST (apparently has a negative halo Poor quality of support
Frequent outages effect on satisfaction with reliability) and infrastructure
“Because we have many outages” “Quality of power is poor,
Healthcare, Northeast – Middle Atlantic “Very expensive” and support of resources is
Manufacturing, South – South Atlantic
very poor”
“Too many outages caused by IT Company, Northeast – Middle Atlantic
‘small’ storms”
Healthcare, Northeast – Middle Atlantic “No underground wiring. Every
time a windstorm is present, the
“We have more power outages power is not”
in my area than I’ve had in any Small Franchise, Pacific - Pacific
other area in my life.”
-Manufacturing, Pacific - Mountain “They don’t have new
technology”
“There are far too Manufacturing, South – South Atlantic
many outages”
-Manufacturing, Midwest, East North Central
Customers were asked to recount interactions with their power provider and what caused their
dissatisfaction. These anecdotes trended into three themes: outages, cost, and infrastructure. See
Chart 15. These quotations bring to light how C&I customers are attentive not only to outages and
their cost, but to how power providers approach strengthening and modernizing the grid.
14State of U.S. Commercial and Industrial Power Reliability
Section Comments on Satisfaction Drivers
At a high statistical confidence level, this survey identified the main drivers for C&I customer
satisfaction with their power provider. Of the respondents surveyed, 52% expressed dissatisfaction
with existing power-reliability levels. However, the extent of their dissatisfaction varied, indicating a
gap in the overall perception of reliability.
Improving overall satisfaction is driven by a perceived ability of power providers to support the future
business needs of the company. This includes an ability to control costs, minimize outages, and upgrade
infrastructure—a proactive approach to meeting changing energy demand, weather conditions, and
system age.
III. C&I CUSTOMERS ARE LOOKING FOR
BETTER RELIABILITY
One additional step this survey took was to determine what, if any, next steps C&I customers are
taking given the current state of power reliability.
Chart 16: U.S. C&I Customer’s Review about Power Providers, by Region, 2017
REGION
Total
Sample Northeast Midwest South Pacific
Power providers should be held responsible for providing
power at all times 88% 86% 92% 86% 87%
Power providers should be held responsible and
accountable for ensuring an acceptable minimum 86% 82% 86% 86% 89%
standard of power reliability
The State or relevant regulatory agencies should hold
power providers responsible and accountable for 81% 84% 83% 78% 80%
providing power at all times
If power providers are truly held responsible and
accountable for standards of reliability, companies should 78% 78% 85% 77% 69%
never have to pay a premium to improve power reliability
Power reliability is currently an important cause for
concern in our company 70% 80% 65% 70% 64%
We are actively seeking options to improve power 60% 58% 64% 56%
reliability outside what our power provider can offer. 60%
Power reliability has improved these past 2 years,
56% 52% 57% 59% 53%
compared to previous years
We would likely be willing to pay a premium to improve 46% 40% 43% 47%
power reliability in our company 43%
n = 251
A21. Please indicate to what extent you agree or disagree that the following statements represent your company’s
view about power providers, based on your company’s experience. - Top two box scores
* Significantly larger at 95% confidence level
15State of U.S. Commercial and Industrial Power Reliability
The vast majority of customers across all industries and regions feel power providers should be held
responsible for providing power without interruption, totaling 88% of C&I customers. See Chart 16
on page 15. This sentiment is strong across all regions, but particularly in the Midwest, where 92% of
customers felt power providers should be held responsible for providing power at all times. Most also
feel strongly about regulatory agencies holding power providers accountable, and if power providers
are truly held responsible for reliable power availability, C&I customers should never have to pay a
premium for power reliability.
Despite a significant sector of C&I customers who claimed to be satisfied with power reliability in
earlier findings in this report, 70% of these same respondents see power reliability as a cause for
concern within their companies. Respondents from the Northeast feel most apprehensive about
the state of power reliability, with 80% believing their reliability is a concern.
With 60% of C&I customers seeking options to improve power reliability outside of what their power
provider can offer, this unveils that their concerns with reliability are far more than alleged; the
majority of these customers have determined they need to take their own actions to achieve the level
of power reliability they need.
Chart 17: U.S. C&I Customer’s Review about Power Providers, by Industry, 2017
INDUSTRY
Total Data Small
Sample Manufacturing Center Health Care Franchise Education
Power providers should be held responsible for 88% 90% 86% 82% 88% 81%
providing power at all times
Power providers should be held responsible and
accountable for ensuring an acceptable minimum 86% 89% 86% 76% 81% 81%
standard of power reliability
The State or relevant regulatory agencies should hold
power providers responsible and accountable for 81% 85% 76% 73% 77% 78%
providing power at all times
If power providers are truly held responsible and
accountable for standards of reliability, companies should 78% 81% 67% 70% 96% * 67%
never have to pay a premium to improve power reliability
Power reliability is currently an important cause for
concern in our company
70% 72% 81% * 67% 65% 67%
We are actively seeking options to improve power
reliability outside what our power provider can offer
60% 59% 81% * 61% 54% 56%
Power reliability has improved these past 2 years,
compared to previous years 56% 59% 67% 52% 62% 41%
We would likely be willing to pay a premium to
improve power reliability in our company 43% 46% 67% 36% 38% 33%
n = 251
A21. Please indicate to what extent you agree or disagree that the following statements represent your company’s
view about power providers, based on your company’s experience. - Top two box scores
* Significantly larger at 95% confidence level
While C&I customer reviews about their power provider were relatively even from region to region,
more variance in reviews are apparent across industries. See Chart 17. At 96%, Small Franchises feel
very strongly about not having to pay a premium to improve power reliability. At 81%, Data Centers
16State of U.S. Commercial and Industrial Power Reliability
cite that power reliability is a major concern, with the same percentage seeking options to improve
power reliability outside of what their power provider can offer—indicating Data Centers are looking
for a higher standard for power reliability compared to what they currently experience, and they
believe procuring their own solutions will best guarantee the level they need.
Chart 18: U.S. C&I Annual Expense for Guaranteeing Power Reliability, 2017
INDUSTRY REGION
Total Sample Manufacturing Data Centers Healthcare Small Franchise Education Northeast Midwest South Pacific
Less than $1,000
43% 42% 10% 55% 42% 67% 48% 48% 38% 42%
$1,000 to $9,999
16% 20% 19% 6% 19% 4% 10% 14% 21% 18%
$10,000 to $49,999 17% 27% 7% 10% 18%
21% 19% 6% 22% 18%
$50,000 to $99,999 6% 5% 14% 3% 8% 0 8% 3% 7% 4%
$100,000 and higher 22%
18% 12% 38% 30% 4% 24% 14% 16% 18%
n = 251
B12. What is your annual expense spent for guaranteeing power reliability?
Although most C&I customers indicate they would not like to pay a premium to their power
provider to ensure better reliability, the majority of respondents still have annual expenses
allocated for guaranteeing their own power uptime and availability themselves. See Chart 18.
Almost a quarter of respondents spend $50,000 or more per year, and a third spend between
$1,000 and $49,000. Data Centers pay the most of any industry, with 52% spending $50,000 or
more for improved power reliability.
17State of U.S. Commercial and Industrial Power Reliability
While customers do not want to pay premiums, the fact that they are reserving funds to do so shows
power reliability is a true concern and priority for their businesses. As mentioned in Chart 8 on page 8
earlier in this report, these measures indicate a preparedness within facilities and systems in the event
of an outage.
Chart 19: Choosing Alternative Electricity Energy Providers, by U.S. Region, 2017
REGION
Total Sample Northeast Midwest South Pacific
I am satisfied with my current reliability and the
reliability of my utility and do not see needs for 36% 32% 43% 30% 42%
alternative sources of energy.
I currently own alternative energy sources such as
35% 32% 37% 33% 38%
on site generation or battery storage systems.
I would prefer to have my local utility offer premium 34% 40% 37% 33% 24%
power as part of their services.
I currently own alternative energy sources such as
on site gene ration or battery storage systems and 25% 32% 18% 26% 27%
will likely expand them.
I am not satisfied with my current reliability but am 10% 18% 12% 10% 0
not considering action to improve.
Other 2% 2% 3% 2% 0
n = 251
A22. If you had choices, would you choose alternatives to your current electrical energy provider? Select all that apply
With the majority of C&I customers taking measures to ensure power reliability, 35% currently own
alternative energy sources, such as on-site generation or battery energy storage systems. See Chart 19.
Another 25% also own these same power-reliability solutions and will likely expand them.
18State of U.S. Commercial and Industrial Power Reliability
The Northeast ranks highest among the regions in preferring to have local utilities offer premium
power as part of their services, as well as plans to grow their own on-site generation.
Chart 20: U.S. C&I Choosing Alternative Electricity Energy Providers, by Industry, 2017
INDUSTRY
Total Sample Manufacturing Data Centers Healthcare Small Franchise Education
I am satisfied with my current reliability and the
*
reliability of my utility and do not see needs for 36% 34% 19% 45% 27% 56%
alternative sources of energy.
I currently own alternative energy sources such as
35% 34% 57% * 30% 19% 33%
on site generation or battery storage systems.
I would prefer to have my local utility offer premium 34% 30% 62% * 36% 42% 26%
power as part of their services.
I currently own alternative energy sources such as
on site generation or battery storage systems and 25% 25% 43% 27% 19% 22%
will likely expand them.
I am not satisfied with my current reliability but am 10% 10% 10% 12% 12% 15%
not considering action to improve.
Other 2% 1% 0 6% 0 4%
n = 251
A21. Please indicate to what extent you agree or disagree that the following statements represent your company’s
view about power providers, based on your company’s experience. - Top two box scores
* Significantly larger at 95% confidence level
Looking at alternative energy providers through the industrial lens, there is more variance in
responses. See Chart 20. Data Centers take a far more active role in guaranteeing power reliability.
The majority, at 57%, own on-site generation, and another 43% own on-site generation and are seeking
to expand it in the future. The majority also would like their local utility to offer premium power.
19State of U.S. Commercial and Industrial Power Reliability
Chart 21: U.S. C&I Measurements to be included for Reliability, 2017
of respondents
of respondents
agreed or somewhat
agreed or somewhat
agreed that the bar
72 % agreed that the bar
for reliability should 67 % for reliability should
be raised to include
be raised to include
major weather
loss of generation.
events.
of the 67% of
respondents that
of respondents
agreed to the
agreed or somewhat
inclusion of outages
agreed that the bar
67 % for reliability should
be raised to include
80 % under 5 minutes, 80%
agree that the bar
should be raised
outages under 5
further to include
minutes.
outages under one
minute.
In addition to customers taking on generation sources themselves to guarantee higher power reliability,
there is a general consensus to improve overall power reliability measurements and for utilities to take
more ownership around the issue.
The U.S. energy industry measures utilities on their ability to provide power. These reliability
measurements exclude major events (loss of generation or weather-related issues), as well as outages
lasting less than 5 minutes. In this survey, C&I customers were asked whether the industry should
take a stricter stance on utility performance. In response, 67% believed the bar for reliability should be
raised to include both major events and outages lasting less than 5 minutes. See Chart 21.
20State of U.S. Commercial and Industrial Power Reliability
Chart 22: U.S. C&I Reason of Agreement to raise the bar for Reliability Measurements, 2017
• We need consistent/uninterrupted
power to operate our business
• Outages slow down/stop
production/harm productivity
• Power should always be on/should
• Outages cause disruptions/interruptions not be outages
• Outages have an impact/a business • Power provider should be prepared
impact/result in lost business for outages/have a backup system in • Major weather events
• Outages have multiple place • Need to keep/have records of all
consequences/affect multiple things • Power outages should be • Cost (unspecified) outages
• Outages cost us lost time short/restored quickly • Outages cost us • Good/like the idea
• Outages can damage equipment • Power provider should be money/time is money • Clear/precise indicator
• Outages can cause harm/injury to responsible for any outages • Good measure of reliability
people • Weather-related outages should be • Good measure of safety/security
• Outages mean equipment has to be short/limited
reset/restarted • Problems with power providers/
• Outages can ruin research/controlled the grid
experiments
35% 27% 15% 21%
Need/usage Power provider Financial Miscellaneous
n = 206
A18f. What are the key reasons why you agree that reliability measurements should include everything that causes outages (loss of generation, major
weather events, outages under 5 minutes, outages under 1 minute)?
When asked why, 35% of C&I customers explained that outages are too disruptive and costly to their
business. See Chart 22. This supports the earlier findings related to the costs C&I customers incur as a
result of outages. See Chart 8 on page 8. Another 27% stated that no-outage goals are the expectation
and the responsibility of power providers.
21State of U.S. Commercial and Industrial Power Reliability
Section Comments and Overall Conclusions:
This survey reveals there is a variance and gap in the services utilities offer today. Key findings within
this report include:
OUTAGE AUDITS:
• 50% of companies experienced a power outage that lasted more than one hour in the past year.
• 25% of companies experience a power outage at least once a month, and 86% of respondents
have experienced at least one power outage in the last 12 months.
• 18% of companies experienced a loss of more than $100,000 as a result of the worst outage.
DRIVERS OF CUSTOMER SATISFACTION:
• 52% of respondents expressed dissatisfaction with existing power-reliability levels. However, the
extent of their dissatisfaction varied, indicating a gap in the overall perception of reliability.
• Improving overall satisfaction is tied to a perceived ability of power providers to support the
future business needs of the company. This includes an ability to control costs, minimize outages,
and upgrade infrastructure—a proactive approach to meeting changing energy demand, weather
conditions, and system age.
LOOKING FOR BETTER RELIABILITY:
• 71% of companies own or plan to develop alternative energy sources, supplementing their
existing provider’s generation and power reliability.
• 67% of companies believe major events (weather or generation loss) and outages lasting less
than 5 minutes should be included in reliability measurements.
• 70% of companies see power reliability as an existing cause for concern, and 40% would pay
premiums to improve it.
Although the majority of C&I customers claim to be content with their power reliability, their
behaviors and concerns indicate otherwise, and in the same breath admit that power reliability is a
concern. Many are incorporating on-site generation, turning away from their power providers for
solutions, and are calling for the industry to take a stricter stance on power-reliability standards.
This survey reveals that this so-called customer satisfaction is merely the acceptance of the status quo,
when in reality C&I customers need services with higher performance and future-proof technologies.
Utilities can no longer afford to continue business as usual but must rise along with C&I customers
who aggressively seek survival in their competitive marketplaces.
22State of U.S. Commercial and Industrial Power Reliability
RESEARCH BACKGROUND AND
METHODOLOGY
Between October and December 2017, Frost & Sullivan conducted a customer survey of 251 C&I
customers across the United States to determine customer perception of power reliability.
The quantitative and qualitative analysis consisted of telephone interviews across five industries.
See Charts 23 and 24. These industries were chosen because of their high energy use.
Chart 23: U.S. Respondent Profile Industry and Region, 2017
REGION
Total Sample Northeast Midwest South Pacific
Manufacturing 54% 48% 58% 57% 47%
Healthcare 13% 24% 14% 10% 7%
Education 11% 8% 8% 9% 22%
Small Franchise 10% 6% 6% 12% 18%
Data Centers
8% 8% 11% 9% 4%
(Site owner for storage and/or server)
Others 4% 6% 3% 3% 2%
n = 251
S1 . Which of the following industry sectors best describes your company?
Chart 24: U.S. Respondent Job Title by Industry and Region, 2017
INDUSTRY REGION
Total Sample Manufacturing Data Centers Healthcare Small Franchise Education Northeast Midwest South Pacific
Facility Director or Manager 30% 34% 24% 30% 31% 26% 30% 37% 33% 16%
Director of Operations 23% 22% 33% 24% 38% 7% 20% 22% 22% 29%
Energy Management Manager 12% 11% 33% 3% 4% 26% 14% 8% 14% 13%
Purchasing Manager 4% 4% 5% 9% 4% 0% 8% 3% 2% 4%
Property Manager 3% 4% 0% 3% 8% 0% 4% 2% 3% 4%
Other 28% 25% 5% 31% 15% 41% 24% 28% 26% 34%
n = 251
S6. Please indicate your job title or position.
23About S&C Electric Company S&C, with global headquarters in Chicago, is applying its heritage of innovation to address challenges facing the world’s power grids, thus shaping the future of reliable electricity delivery. The mission of employee-owned S&C is to continually develop new solutions for electricity delivery, fostering the improved efficiency and reliability required for the intelligent grid. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. LEARN MORE AT SANDC.COM 100-T120 April 23, 2018 © S&C Electric Company 2018, all rights reserved
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