Electricity Is Even More Indispensable

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Electricity Is Even More Indispensable In The New Economy Source: St. Louis Post-Dispatch Publication date: 2000-08-21

* More companies - especially dot-coms and Internet-related firms - - are investing in backup power sources to keep electricity flowing. Unless you want to find yourself lugging a generator up seven flights of steps to keep your company humming during the next power outage, heed the advice of Jim Lammers.

"Just think about it" ahead of time, said Lammers, who is vice president of technology for SportsHuddle.com.

Lammers spoke about the need for backup power just a few days after his bosses dragged a 100-pound generator up the stairwell at the International Building downtown, where the dot-com company recently moved. The bosses w ere trying (and did succeed) in keeping critical functions of their high-school sports Web site flowing in the wake of a major disruption in electrical service from AmerenUE to the downtown area. The Aug. 10-11 outage occurred when the utility's power plant in Venice caught fire.

SportsHuddle had been prepared for any kind of "hiccup" in electrical service, Lammers said. The company already had a battery backup system that could have kept critical functions running for at least 30 minutes, if not a few hours. But executives never thought they would need -- especially in a business district -- to be prepared for an outage that would last nearly 24 hours.

Now, thinking about such disruptions is becoming a higher priority for Lammers and other company executives in the area.

The Venice outage, unusual in its scope and duration, and power outages from storms late last week, are just the latest impetus for such thoughts, however.

"When Y2K came around, the fear of losing power and computers going down made most businesses acutely aware of their power needs," said John Costello, who runs CK Power Products in Ferguson, one of the largest generator dealers in the metro area.

A second reason for many to consider buying a backup power system has been the trend to deregulate electric utilities, Costello said. (Illinois has deregulation; Missouri doesn't.) Under dereg, utilities can buy and sell power outside of their territories. That leads some companies to fear that their needs won't be met as their local utilities seek buyers elsewhere who will pay more for electricity.

Also moving the power issue to the front burner is the increasing demand for electricity, thanks to all the high-tech gadgets everyone has and the mushrooming of Internet-related companies.

Although AmerenUE hasn't noticed a surge in the use of generators and other backup power systems, Costello sees otherwise. His own business, which does nothing but sell generators, has seen revenue triple to $45 million a year in five years.

All kinds of businesses are investing in backup power these days, not just hospitals, hotels and financial institutions, as in the past, Costello said. Even "old-economy" plating companies in the city are buying generators to make sure their computers can always communicate with one another.

"Any business with over $15 or $20 million in revenues is getting generators," said Costello.

The trend is even spreading to wealthy homeowners here, he said. People who can afford to build $400,000 homes in Ladue and Wildwood are spending an additional $20,000 to $100,000 for backup power, he said. Sales like this used to happen once a year; now, it's 10 to 15 times a year, Costello said.

But the main growth in backup power is coming from the sort of company that provides the computer foundation for Internet-related businesses. These infrastructure companies can't afford a sag, surge or even a blip in their power source, much less an outage. A disturbance of just a fraction of a second can corrupt or destroy important data as it zips across the globe.

Such failures can snowball into a loss of trust in all companies involved. And Wall Street can be quick to punish anyone involved in such failures. When the online broker E*Trade had an outage of three days in early 1999, not only did it lose money on trades, but investors started dumping the stock, leading to a 22 percent loss in market capitalization. Ebay, the online auction company, took a similar hit after it lost power for almost a full day a year ago.

Among the Internet backbone companies here is Level (3) Communications. Colorado-based Level (3) is building a fiber-optic network around the globe that will use the new, cheaper Internet Protocol for moving all kinds of communications. The company is spending about $15 million on its hub here, almost all of which is on the third floor of the Cass building downtown.

Besides serving its own needs, Level (3) here rents out secure, environmentally perfect space for the routers, servers and other electronic equipment that run hundreds of other Internet-related companies, such as ISPs and ASPs.

Any power outage here would be "catastrophic" and "completely unacceptable," said Don Poskin, head of the St. Louis hub.

That's why the company has not just backup power supplies, but backups for its backups. For example, it has two UPS (Uninterruptible Power Supply) systems. If electricity from the utility would fail, the battery-operated UPS system would maintain the flow of power seamlessly. A UPS can provide power for the few minutes needed for a generator to kick into gear.

And when Level (3) bought its generator, it went after far more power than it needs. The trailer-sized generator, which sits on the roof, produces 2500 kilo volt amps, enough to power an entire traditional office building downtown.

And Level (3) made sure it would never be short of diesel for the generator. Besides a 600-gallon tank on the roof, the company installed a 4,000-gallon tank in the alley. Level (3) paid to reinforce the pavement so it could support the tank, which weighs 35 tons when full, Poskin said.

Together, the tanks have enough fuel to keep the generator humming for 30 hours without a refill. A diesel supplier is on call to top off those tanks at least once a day during an outage.

But the company's "just-in-case" scenario doesn't end there. Level (3) also has built twin 10,000-amp DC power plants inside its headquarters. About 500 batteries -- bigger than the type in your car -- are the source of power in these plants, and more batteries are on the way. If all else fails, the batteries can keep the gateway running for a week.

None of these backups was needed during the recent AmerenUE outage, however. The rest of the Cass building went dark, but Ameren's electricity continued to flow to Level (3). That's because Level (3) paid extra for an additional line from the utility, Poskin said.

Such redundancy is available from AmerenUE to anyone willing to pay. That cost can vary wildly, anywhere from $10,000 to hundreds of thousands of dollars, said Tom Voss, senior vice president for customer service for AmerenUE.

Being able to get a second line is enough backup for some companies; they feel they don't need a generator, too. Others are so confident that Ameren can meet their needs that they are giving up their generators, Voss said.

AmerenUE isn't knocking generators. It has three of its own at its headquarters downtown, although Voss is quick to note they've never been needed.

But he said generators have problems, too. They can be noisy. If used indoors, their exhaust must be vented. And they can be time- consuming to maintain. If not run weekly, they might not work when needed, he warned. In addition, the electricity from a generator costs at least five to 10 times more than that from a utility, he said.

Despite these downsides, some businesses that were hit by the outage earlier this month said they feel they must do something in order to keep their operations running the next time AmerenUE has a major outage.

CPI, which processes photos for Sears, had to send 800 people home that Friday. The St. Louis Brewery and its Tap Room had to shut down on its busiest night of the week; not only did it turn away customers but it had to scramble to find a new location for a 70-person wedding rehearsal dinner.

"We never had a power outage that lasted this long before," said Dan Kopman, vice president of the brewery.

Executives at SportsHuddle, the brewery and CPI said they would be meeting soon with co-workers and contractors to figure out what to do.


-- Martin Thompson (mthom1927@aol.com), August 21, 2000

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