For Colorado businesses, the discussion around power outages has shifted from a theoretical risk to a recurring operational reality. Whether it’s a heavy spring blizzard burying the Front Range, a Public Safety Power Shutoff (PSPS) during wildfire season, or a summer thunderstorm knocking out a substation, grid interruptions are now a predictable part of our business landscape. The question is no longer if an outage will happen, but how much it will cost you when it does.
For many, the answer is far more than they think. A power outage is a hidden liability on the balance sheet of every Colorado business. This guide moves beyond a simple checklist to provide a framework for calculating your true financial risk and making a strategic investment in operational resilience, aligning with preparedness recommendations from the Colorado Division of Homeland Security & Emergency Management (DHSEM).
Calculating Your “Downtime Cost”
Before you can plan, you must quantify your risk. The first step is to calculate your facility’s Cost of Downtime (CoD) per hour. This number reveals the true financial impact of an outage and serves as the baseline for any investment in backup power.
Here’s how to break it down:
- Lost Revenue: This is the most direct cost. If your business generates an average of $100,000 in revenue during an 8-hour workday, your lost revenue is $12,500 for every hour you are down. For a ski resort in the High Country, a weekend outage could mean hundreds of thousands in lost lift tickets and lodging.
- Idle Labor Costs: Your operations may stop, but your payroll doesn’t. Calculate the hourly wage of all employees who are unable to work during an outage. If you have 50 employees with an average loaded cost of $40/hour, that’s an additional $2,000 per hour in unproductive labor costs.
- Inventory and Material Loss: This is a critical factor for many Colorado industries. A restaurant in Cherry Creek could lose thousands in refrigerated and frozen goods. A manufacturing plant in Adams County could lose an entire batch of product if a temperature-sensitive process is interrupted.
- Recovery and Repair Costs: When power is restored, it often creates a surge that can damage sensitive electronics. Factor in the potential cost of repairing or replacing servers, control systems, and other critical equipment.
- Reputational Damage: While harder to quantify, this is a real cost. For a data center in the Denver Tech Center, a single outage can violate service-level agreements (SLAs) and erode client trust, leading to long-term revenue loss.
When you sum these factors, a seemingly small business might discover their true Cost of Downtime is $5,000, $10,000, or even more per hour. An 8-hour outage isn’t just an inconvenience; it’s an $80,000 financial disaster.
The Colorado-Specific Risks To Your Bottom Line
Understanding your CoD is critical because the threats in Colorado are unique in their nature and duration. You can monitor the real-time impact of these events on the grid by viewing the Xcel Energy Outage Map.
- The Multi-Day Blizzard: A heavy spring snowstorm can cause outages that last for days, not hours, especially in foothill communities. The primary business risk here is duration. Your financial exposure multiplies with each passing day, and logistical challenges can make it difficult to get fuel or emergency service.
- The Wildfire & PSPS Threat: Public Safety Power Shutoffs are a new reality. Utilities like Xcel Energy may implement a PSPS, a planned, multi-day event during high-risk fire conditions. The business risk is predictable interruption. You may have advance warning, but you will have zero power. This requires a long-term, reliable power strategy, as these events will become more common.
- High Winds & Summer Storms: The primary risk from these events is unpredictability and equipment damage. A sudden, violent thunderstorm can knock out power without warning, and the subsequent power surges upon restoration pose a significant threat to unprotected electronics.
A Strategic Approach To Backup Power
With a clear understanding of your financial risk, you can make a strategic investment in resilience. This isn’t an expense, it’s a capital investment to protect your revenue stream.
The ROI of a standby generator Let’s reconsider the business with an $80,000 cost for an 8-hour outage. If a professionally installed, automatic standby generator system costs, for example, $100,000, the Return on Investment (ROI) is realized after just over one major outage. The generator pays for itself by preventing a single catastrophic financial loss, and then continues to protect your business for decades.
Choosing the right asset for Colorado conditions A generator for a facility in Brighton faces different challenges than one in Vail. Key Colorado-specific considerations include:
- High-Altitude Derating: Internal combustion engines lose power at higher elevations due to the thinner air. A generator installed in the mountains must be specifically sized to account for this power derating to ensure it can handle your full critical load.
- Cold-Weather Packages: A robust cold-weather package, including engine block heaters and battery warmers, is non-negotiable to ensure your generator starts reliably during a winter storm.
- Fuel Type and Logistics: For remote mountain locations, a large on-site diesel tank offers the most reliable solution when roads may be impassable. For facilities along the Front Range with secure utility access, natural gas can offer a lower long-term fuel cost.
Beyond the Generator: The complete resilience package A generator is the heart of the system, but it relies on two other critical components:
- The Automatic Transfer Switch (ATS): This is the brain. It ensures a safe, seamless, and automatic transfer of power, protecting your equipment and ensuring continuity without manual intervention. It also prevents dangerous backfeeding, a major hazard outlined in Xcel Energy’s electrical safety guidelines.
- A Proactive Maintenance Plan: This is the insurance policy for your investment. A rigorous maintenance plan, including annual load bank testing, ensures your system is always ready. This is particularly critical in Colorado, where the system may sit idle for months and then be called upon to run for days on end in extreme conditions.
Turning a Liability Into a Manageable Investment
Power outages are an unavoidable reality of doing business in Colorado. By quantifying your financial risk and viewing preparedness as a strategic capital investment, you can turn an unpredictable liability into a manageable part of your operational plan. A robust emergency power system isn’t just about keeping the lights on; it’s about protecting your revenue, your reputation, and your future.
Ready to build your facility’s resilience? Contact the experts at Generator Source to discuss your emergency power needs, from a detailed financial risk analysis to a complete, turnkey installation.