Small Business Finance News
The Real Business Cost Of Severe Weather
Written by Tim Morral
The Business Journals reports that power outages from severe weather cost the U.S. economy as much as $33 billion per year; calls for improvements to the national electric grid.
Small businesses have always existed at the mercy of Mother Nature. Severe storms and other weather events can inflict a devastating toll on all businesses, but especially on small companies that lack the reserves or resources to quickly recover from an unexpected natural occurrence.
With the threat of large storms constantly looming on the horizon, weather is having a real dollar impact on scores of small businesses each year. According to a recent report in The Business Journals, White House statistics show that weather-related power outages cost the U.S. economy between $18 billion and $33 billion each year in lost output, wages, ruined inventory, production delays and electric grid damage.
In addition to highlighting the vulnerability of the economy and small businesses to weather-related disasters, the report makes a renewed case for repairs to the nation's electric grid. Approximately 70 percent of the grid's power lines and transformers are more than 25 years old, leaving the entire grid susceptible to outages during severe weather scenarios.
"Developing a smarter, more resilient electric grid is one step that can be taken now to ensure the welfare of the millions of current and future Americans who depend on the grid for reliable power," the report states.
Currently, many small business owners invest time and resources in maintaining business equipment as well as capacity planning and other activities designed to prevent operational disruptions. But despite their best efforts, these activities may prove ineffective during power outages caused by aging infrastructure and weather.
Although Congress has already allocated $4.5 billion for upgrading the electric grid with advanced grid sensors, smart meters, updated distribution circuits and other improvements, more investment will be required to fully modernize the electric grid and to insulate businesses from the impact of prolonged, weather-related outages.
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