Why Planned Power Outages Are Creating Real Financial Risk Across Colorado
Across Colorado, businesses are increasingly experiencing power interruptions during high-wind events. These outages are often implemented as planned safety shutoffs by utilities to reduce wildfire risk and protect grid infrastructure. While the intent is prevention, the outcome for many businesses has been unexpected and costly.
In recent events tied to high winds along the Front Range, businesses lost refrigeration, production time, data continuity, and perishable inventory. When insurance claims were filed, many were denied. The reason was not damage or negligence. It was classification.
Because these outages were not technically weather-triggered failures, insurers have determined they do not qualify for coverage under many business interruption policies.
This is creating a growing gap between real operational risk and insurable risk.
Planned Outages Are Not the Same as Storm Damage
Utilities such as Xcel Energy and other regional providers have increasingly relied on proactive shutoffs during extreme wind events. These are not emergency failures. They are intentional actions taken to reduce wildfire ignition risk and equipment damage.
From an insurance perspective, that distinction matters.
Many policies are written to cover losses caused by direct weather damage or unexpected grid failure. Planned brownouts often fall outside those definitions. As a result, businesses are learning after the fact that lost revenue, spoiled inventory, and halted operations are not reimbursable.
Local reporting has highlighted multiple Colorado businesses that assumed they were protected, only to discover coverage exclusions once claims were submitted.
The Impact on Colorado Businesses
For commercial and industrial operations, even a short outage can have significant consequences:
- Refrigerated and frozen inventory loss
- Production shutdowns and missed delivery deadlines
- Data and system interruptions
- Safety and compliance concerns
- Lost revenue with no insurance recovery
The risk is amplified for food production, agriculture, manufacturing, healthcare support services, and any facility that depends on continuous power to protect products or processes.
The key issue is not how long the outage lasts. It is whether the outage qualifies for coverage. Increasingly, these planned safety shutoffs do not.
Why This Changes the Backup Power Conversation
Historically, many businesses viewed standby power as protection against storms, accidents, or grid failures. What is happening in Colorado shifts that mindset.
Backup power is now also protection against non-insurable outages.
If a utility intentionally shuts down power during a wind event, and insurance denies the claim, the only thing separating a business from operational loss is preparedness. That preparedness comes from having a properly sized, maintained, and tested standby generator system that can carry critical loads when the grid is unavailable, regardless of the cause.
Standby Power as a Risk Management Tool
For Colorado businesses, standby generators are no longer just an emergency asset. They are part of risk mitigation and continuity planning.
A properly implemented standby system can:
- Maintain refrigeration and environmental controls
- Keep production and processing lines operational
- Protect inventory and perishable goods
- Reduce revenue loss during planned outages
- Provide certainty when insurance coverage does not apply
In many cases, the cost of a single outage can exceed the investment required to deploy backup power.
Planning Ahead Matters More Than Ever
The recent brownouts tied to wind events are not isolated incidents. They reflect a broader shift in how utilities manage risk across the West. Businesses that rely solely on insurance coverage are finding that policies may not respond when outages are intentional and preventive rather than reactive.
That reality makes proactive power planning essential.
Understanding your exposure, reviewing your insurance language, and evaluating standby power options before the next wind event can prevent costly surprises.
Supporting Colorado Businesses Through Changing Grid Conditions
At Generator Source, we work with Colorado businesses to assess power risk, identify critical loads, and implement generator solutions that align with real-world operating conditions.
From system sizing and equipment sourcing to service, maintenance, and load testing, our focus is keeping facilities powered when the grid is not available, regardless of why the outage occurs. If your operation cannot afford to lose product, production time, or revenue during planned outages, it may be time to reassess how prepared you are for the next wind event.
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Sources for this article:
- https://www.cbsnews.com/colorado/news/colorado-businesses-denied-insurance-coverage-planned-outages/
- https://www.cpr.org/2026/01/15/businesses-impacted-xcel-wind-power-outage/