The Rise of Emergency Power Service Organizations

The Rise of Emergency Power Service Organizations

To maximize reliability, many facilities are outsourcing emergency backup power services. Emergency, standby, and auxiliary power systems are definitely not what they used to be. Once seen as a luxury to only select segments of industry, such as hospitals and high-end financial institutions, backup emergency power systems are quickly becoming the norm in more sectors of the business world. Commercial

To maximize reliability, many facilities are outsourcing emergency backup power services.

Emergency, standby, and auxiliary power systems are definitely not what they used to be. Once seen as a luxury to only select segments of industry, such as hospitals and high-end financial institutions, backup emergency power systems are quickly becoming the norm in more sectors of the business world. Commercial and industrial power users no longer view power outages as just an inconvenience. Today, interruptions are unacceptable. Downtime is forbidden. Productivity is paramount. And customer satisfaction is everything.

Reliability standards have been pushed to the point where they're almost unrealistic, says Don McClanahan, vice president of commercial and industrial services at Capital Electric, a large commercial and industrial electrical contracting firm based in Kansas City, Mo.

“When you ask customers what level of downtime they expect, you always hear ‘zero,’” chuckles McClanahan. “They want to know: In the event of a thermonuclear explosion, how are we going to maintain power?”

Although he's joking, McClanahan isn't exaggerating as much as you might think. These days, he says it's not uncommon for customers to ask for double, triple, and even quadruple redundancy.

“It really comes down to how critical their loads are and how deep their pockets are,” he says. “If they can afford it and if it's that important to them, it's often worth it, especially in the case of high-speed financial data transfers. Primarily at those levels, when you get into quadruple redundancy, you're talking about financial management companies or billing operations for large companies like Sprint.”

Considering society's dependence on 24/7 communications, including the high-speed processing of data, Internet access, e-commerce operations on the Web, and currency exchanges through data and credit transfers, McClanahan believes maintaining the electrical systems that power these critical operations becomes even more essential. But when time is money, accessibility gets tricky. When do you schedule routine maintenance inspections and service? Usually, the answer is after business hours.

This reality has fueled the recent rise in emergency power service organizations throughout the country and contributed to increased outsourcing of all types of emergency power services (including installations, maintenance, testing, inspection, modifications, and upgrades) to a manufacturer, contractor, third party, or combination of the three.

Steve Hespe agrees the need for preventive maintenance is more important today than ever. As the vice president of service operations at Generac, a manufacturer of power generation equipment including gen-sets and transfer switches based in Waukesha, Wis., he offers the following analogy to illustrate the importance of maintaining mission-critical emergency power equipment.

“Fifteen years ago, when you pulled into a gas station there was a good chance it was full service,” he says. “The attendant would ask you what type of gas and how much you would like. Then they would wash your windows and check your oil. If the oil level was low or dirty, they would bring it to your attention. Who does that now? If you check the oil every time you fill up with gas, you truly understand the importance of maintenance and protecting your investment. You are also from another planet. Let's be honest, if it wasn't for that little sticker in the upper lefthand corner of the windshield as a constant reminder of when to change the oil, we would forget. That little one-cent reminder sticker can save you hundreds of dollars in repairs and lost time.”

“Where's the little sticker for our emergency power? Placing it on the equipment won't help because who looks at it? In some cases, the emergency power is remote from the building or even on the roof — it's generally not in plain view or in regular traffic patterns so it's out of sight, out of mind. Just like the car service example, maintaining peak-performance and on-demand emergency power must never be overlooked.”

Emergence of outsourcing.

Given the recent economic climate coupled with the fact that emergency power systems continue to become more complex to meet customer demand, outsourcing seems to be the latest answer to maintaining and servicing these systems.

John Meuleman, the vice president of sales and marketing at Hingham, Mass.-based Russelectric, a manufacturer of automatic transfer switches and generator control switchgear, says the trend toward outsourcing maintenance services is being driven by two things: economics and specialization.

“Most facilities would rather have maintenance of emergency power systems as an outsourced item than an in-house situation,” he says. “In many cases, they may feel that their own in-house staff has far too many pieces of equipment to deal with and can't be an expert in all of them. They would rather go back to someone who is a specialist in that particular area.”

Hespe says that when companies are faced with the decision to outsource emergency power services they must first define the core part of their business.

“Depending on the size of the facility, the catch is can you handle keeping your internal staff properly trained? If building maintenance people are supposed to maintain the integrity of all the equipment in the building, you're going to have to send them out for training. But there's a cost involved — not just the training, but the cost of them not being on site,” Hespe says. “And if that's not your core competency, it doesn't take too long to sit down and figure out somebody else needs to be doing this work.”

Recent corporate downsizing has also taken a toll on many facilities' maintenance staffs. “Usually there's one guy, Mr. Guru, jack of all trades, master of none,” Hespe says. “He's the guy that's generally bald and pulling his hair out on a regular basis, going nuts trying to keep up with everything.”

Joe Bahnatka, sales and marketing manager for ASCO Services, Inc. (ASI), a national service organization headquartered in Florham Park, N.J., has seen a significant increase in business since ASCO created this separate business unit 5 yr ago. The company employs 80 technicians at regional service locations throughout the country.

Agreeing that the stakes are exceptionally high for facilities managers and in-house maintenance personnel, Bahnatka says these people are at risk of losing their jobs on a daily basis over outages. He says 24/7 uptime reliability is becoming so critical that facility owners are having a hard time performing monthly or quarterly tests because the tenants of the building or IT groups refuse to accept any type of interruption or to consider the possibility of an outage by doing a test.

“This is kind of a backend door problem,” Bahnatka says. “If you don't test the equipment, when you actually do have an outage and it doesn't work, that guy's job is on the line. Unfortunately, no one wants to admit it.”

From the facilities manager's or building owner's point of view, Bahnatka says it all comes down to supporting the demands of tenants. They're making that business more marketable through emergency power services and 24/7 uptime with the combination of the emergency power generator systems.

“As they're trying to attain a higher level of reliability, the equipment becomes more sophisticated, it costs more, and now they're no longer using in-house people because of the realm of complexity of the equipment,” he says. “That's why they're doing more outsourcing.”

Choosing a service provider.

As outsourcing becomes more popular, the next issue for facilities managers is to decide who does the work. This is where things gets a little complicated. What are the advantages of hiring a manufacturer, contractor, or third-party energy company? To a certain extent, Meuleman sees these parties working against each other.

“One of the advantages customers might have in going with a contractor or through a third-party service organization is they'll take on multiple pieces of equipment within the facility whereas the manufacturer is going to be more inclined to want to do maintenance work only on the equipment he manufactured,” he says. “So from the client's perspective, he may have certain items he thinks are critical enough that he would prefer to have the manufacturer come in and work on it. Since the rest of his distribution equipment might be pretty generic, he's more content with a third party or contractor doing that work.”

This isn't the case with ASI, says Bahnatka. “A lot of our technicians are also cross trained on other manufacturers' products,” he says. “So not only can we service our transfer switches or equipment, but we can also service our direct competitors. This gives us a great advantage because most facilities have a different variety of emergency power systems.”

Another important factor to consider is workload, Meuleman says. “If a facility is relying on some outside source to do the maintenance and service work inside his facility but they also are contracted out to other facilities, what is their availability in a particular situation?” he asks. “Say you have bad weather or some kind of catastrophe that wipes out power in a wide area. Are these people going to be stretched out so thin that they can't do it? In that kind of situation, a manufacturer would be more available.”

Bahnatka agrees. He maintains that although some third parties do a great job, they may have only three of four local guys. And what happens if they're in the hospital or on vacation?

“We're dealing with a lot of companies that are looking for a single-source emergency service provider that can help them in California as well as in New York and maintain the same capability of the technician showing up in both locations,” he says. “In a smaller third-party organization, you have to ask yourself, What formal training do they have, what's the competency of their technicians, and are they trained on all the products?”

Hespe says his company has been trying to improve the relationship between the manufacturer and the contractor over the last several years. “Otherwise, there's two camps,” he says. “I think the problem is everyone is trying to protect their own side. You're trying to be flexible, but the ultimate goal here is to try and take care of the customer.”

On the horizon.

Although it's difficult to determine where the expanding on-site generation market is headed, most industry veterans agree emergency power system management is moving toward remote monitoring.

Bahnatka thinks the speed to maintain and repair uptime reliability will inevitably drive business in the next 5 yr.

“The manufacturers are going to develop more diagnostic capabilities like remote monitoring, creating the virtual technician in a sense,” he says. “Basically, someone could be able to see what's going on with the product via the Internet, get the diagnostics, and hopefully dispatch a technician before the customer or end-user is even aware the problem exists.”

Although Meuleman sees the trend toward outsourcing continuing, he says anticipating problems on this equipment before it occurs takes the business to a whole new level of service.

“We've seen this in some locations where basically a company sets up an entire program where they go online over the Web, take data from a site, and may be able to detect a trend before there's any indication of a problem,” he says. “Of course that's a fairly expensive deal, but given the nature of some of these installations, it's important enough for some customers to do that.”

Do these remote monitoring capabilities seem like distant realities? So must have the current proliferation of emergency, standby, and auxiliary power systems. But the same need for maximum productivity and fully protected critical loads that fueled the spread of these systems — and of the organizations that service them — will drive the development of systems that respond to emergencies in ways not yet imagined. And as long as these systems occasionally fail, there will be emergency power service organizations around to fix them.

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