Read the full episode transcript
00:00:00 Ivan Buckner
Hello and welcome to Power Bytes. I am your host, Ivan Buckner. Today, we will talk about how to be prepared when the worst happens. With recent events that have occurred in Illinois, and even last week in Houston … when these events occur, power supply is often interrupted. This can cause significant challenges for businesses in keeping their operations going. I think this topic is front-of-mind for our listeners. Chris Barth will join us and talk about how to be more prepared when disaster hits. Chris, can you give us an introduction?
00:00:31 Chris Barth
Yeah, Ivan, sure. Chris Barth here! I am the North America and Asia Pacific sales manager for Rental Power here at Caterpillar. I appreciate the invite! I'm always open to having a discussion regarding rental power, when possible.
00:00:45 Ivan Buckner
Thanks, Chris. When we say “being power prepared,” what does that mean?
00:00:50 Chris Barth
Well, I think when it comes to our customers, any interruption to critical utilities is going to have a major impact on their operations, especially when it comes to power. Meaning, when the power goes down, customers definitely have a sense of urgency! They want the power back; they want it back fast. I think preparing for a power failure is a must for any business, and putting together a comprehensive contingency plan is essential.
00:01:17 Ivan Buckner
Man, that seems like a lot, but wouldn't it just be easier to call up a supplier when you're hear a storm is coming? Isn't that just a little unnecessary to create a power plan?
00:01:26 Chris Barth
Honestly, that's what a lot of customers do. They see a storm coming and they call. Unfortunately, most don't even do that! They take a gamble. They don't call until after the storm has already passed – and realize that they've been affected and they need help. Think about the situations where there are no warnings of an impending storm. What about flooding due to excessive rain? Or what about, say, tornadoes that give zero warning before creation? How much warning do customers get before an earthquake hits? The reality is that the vast majority of natural disasters come with little to no warning. In the aftermath of a natural disaster, everyone's asking for help. They're calling every supplier they can think of for equipment. Being prepared with a contingency plan drastically reduces the response time for getting help on site, ensuring the right sizing of equipment (etc.). Before deployment – making sure the customers’ operations are up and running as quickly as possible. I did want to make one distinction here when we're talking about contingency planning: the most common misconception I hear when talking about contingency planning is that it's only needed for natural disasters (or natural disaster planning), and in actuality contingency planning (or “being power prepared”) is an essential process for any customer, regardless of their geography. Unexpected interruptions to customers’ power, temperature control, compressed air utilities happen daily, even outside the effects of natural disasters, so being prepared for all such scenarios, I think it's key.
00:03:06 Ivan Buckner
Yeah, I get that! Being power prepared is a great thing. Let's look at it from another side. What are the financial benefits of this? What sort of savings can a business get by putting together agreement of fixed rates for power disaster plans versus paying on the day that the disaster hits?
00:03:24 Chris Barth
I think when most customers go through the contingency planning process they invite in their supplier. They have discussions on the equipment needed, like you said, the transportation, the logistics … but they also do have those discussions about pre-negotiating prices, as well. There's typically tiered rate structures based on demand and equipment, shift rates based on usage, technician rates for set up and commissioning – all of which can be charged significantly higher in the aftermath of a natural disaster when thinking about the economics of supply and demand once those take effect. So having those pre-negotiated prices, pre-event discussions can mitigate some of those extra costs – all the effects that have a financial impact can possibly be mitigated by a contingency plan that's already in place.
00:04:19 Ivan Buckner
That's some savings from a business standpoint you would get. But let's say I'm a business owner and I already know that I don't want my power interrupted. I probably already have a stationary generator set that's already on site. So why would I need a backup plan or a power plan for the standby generator?
00:04:40 Chris Barth
Yeah, that's a great question. We do get asked this quite a bit. When you think about stationary backup units or backup generators, those are great in times of unexpected outages, maybe on mechanical failures. But there are instances where those backup generators can be affected by the natural disaster itself. I'll give you an example here in Texas where parts of the state are subject to flooding due to excessive rain. It's common at times that [when] this flooding happens, stationary backup gensets become underwater and rendered inoperable. So having a rental generator backup can be placed on higher ground with a length of cable. Essentially it becomes the backup to your backup.
00:05:30 Ivan Buckner
Okay, a backup to a backup. Got it. Last month I did a podcast, and we talked about energy storage systems. Are we seeing energy storage systems being a vital option in disaster planning?
00:05:40 Chris Barth
Yes. Better storage systems are playing a pivotal role in the development of a more modern, sustainable, and resilient power grid. They're definitely a more effective source of providing critical grid support, including peaking capacity, stabilization services, renewable energy, and integration. I expect, when engineered properly, a battery storage solution could definitely be a viable option in disaster planning.
00:06:13 Ivan Buckner
Chris, we're almost out of time. I imagine, when the storm is coming, everyone is looking at mobile power and everyone wants the same product. Does availability become an issue?
00:06:21 Chris Barth
Yes, absolutely. It always becomes an issue. That's why you need a power plan in place to secure the equipment. You need to know that availability is secured prior to the event happening. The power of the Cat dealer network is that they can be relied upon to pull together a collective, global fleet to help our customers out in times of need. So, no matter where in the world Cat is asked to help, we’re there.
00:06:50 Ivan Buckner
Thank you for joining us on Power Bytes. I think you've given our listeners a lot to think about when it comes to disaster power planning, like availability, the cost benefits of having a “backup to a backup” plan (etc.). Is there anything else you would like to add?
00:07:02 Chris Barth
I appreciate being invited to talk about rental power. Obviously, it's something I'm passionate about, and I always enjoy the opportunity to speak [and add] to the conversation. In today's world, there’s aging power grid infrastructures, so backup power plays a critical role in recovery from all manner of disasters (natural or otherwise), so having a contingency plan in place is a key first step to getting our customers operations back up and keeping businesses functioning when they need it the most.
00:07:37 Ivan Buckner
Thanks so much for listening today. If you have any feedback, reach out to us via e-mail at powerbytes@cat.com. We would love to hear your feedback on today's podcast – or ideas for future podcasts.
