Overnight Power Outages Threaten 10-20% Revenue Loss for Island Businesses

Extended overnight power outages are imminent statewide due to severe weather, posing a significant risk of operational disruption and financial loss for businesses across Hawaii. Hawaiian Electric (HECO) has issued a warning of potential extended outages as weather conditions are expected to challenge power grid stability.

The Change

Hawaiian Electric has alerted customers to the possibility of significant, extended power outages occurring overnight. This warning stems from the anticipated severe weather patterns that are expected to impact the islands in the coming days. While HECO routinely manages power during adverse weather, the severity and prolonged nature of projected conditions heighten the risk of prolonged disruptions to electricity supply. This means businesses should prepare for scenarios where power could be out for several hours, particularly during periods when staff may not be on-site or able to respond effectively.

Who's Affected?

Small Business Operators

For small businesses such as restaurants, retail stores, and service providers, overnight outages can be catastrophic.

• Inventory Loss: Refrigerated and frozen goods can spoil, leading to immediate financial losses estimated between 10-30% of perishable inventory value per incident.
• Operational Stoppage: Businesses relying on powered equipment (e.g., point-of-sale systems, kitchen appliances, machinery, lighting) will cease operations. Overnight, this could mean missed sales windows in the early morning or late evening if businesses typically open during those hours.
• Staffing Challenges: Employees may be unable to report to work if traffic lights are down or if their own homes lose power. Communication can also be hindered.

Tourism Operators

Hotels, vacation rentals, and tour operators are particularly vulnerable, as guest experience is paramount.

• Guest Discomfort: Lack of power means no air conditioning, limited lighting, non-functional elevators, and disabled entertainment systems. This can lead to significant guest dissatisfaction, negative reviews, and demands for compensation.
• Service Disruption: Restaurants within hotels, front desk operations, and communication systems can be disabled, impacting service delivery.
• Reputational Damage: In a competitive tourism market, consistent service delivery is crucial. Extended outages can severely damage a business's reputation, leading to future booking declines.
• Safety Concerns: Ensuring guest safety in darkened hotels and resorts becomes a significant challenge.

Healthcare Providers

Private medical practices, clinics, and any facility with critical medical equipment face life-threatening risks.

• Patient Care Interruption: Power is essential for life support, diagnostic equipment, lighting for procedures, and refrigeration for medications and samples. Outages can directly endanger patient lives.
• Data Loss: Electronic health records and billing systems rely on power and network connectivity. Loss of power without adequate backup can lead to data corruption or loss, impacting continuity of care and compliance.
• Telehealth Disruption: Telehealth services, increasingly vital, rely on stable internet and power. Outages render these services inoperable.
• Regulatory Compliance: Failure to maintain critical services or patient safety during an outage can have severe regulatory and legal ramifications.

Second-Order Effects

These localized power disruptions can have cascading effects on Hawaii's already constrained economy. A prolonged or frequent series of overnight outages could diminish Hawaii's appeal as a reliable destination for tourism, potentially leading to reduced visitor arrivals over time. This, in turn, could decrease demand for hospitality services, impacting employment in the sector and leading to slower wage growth for tourism workers. Furthermore, increased reliance on expensive backup generators and fuel for businesses translates to higher operating costs, which may be passed on to consumers in the form of higher prices for goods and services, contributing to Hawaii's high cost of living and potentially impacting the viability of smaller, independent businesses.

What to Do

Small Business Operators

Action: Secure backup power solutions or adjust operating hours immediately.

• Assess Critical Needs: Identify which equipment and services are essential for your operation (e.g., refrigeration, POS, lighting, security).
• Implement Backup Power: For critical needs, invest in or ensure the functionality of generators, UPS systems, or battery backups. Test these systems frequently.
• Develop Contingency Staffing & Communication Plans: Have a plan for how staff will manage during outages, including communication protocols if phone lines or internet are down.
• Adjust Operating Hours: If consistent overnight operation is impossible without power, consider temporarily adjusting hours to avoid the predicted outage windows, communicating any changes clearly to customers.
• Inventory Management: Prioritize the use of perishable inventory that could be at risk. Consider temporary storage solutions if feasible.

Tourism Operators

Action: Proactively communicate with guests and ensure backup systems are operational.

• Guest Communication: If an outage is anticipated or occurs, immediately inform guests about the situation and restoration efforts. Provide alternative amenities or services where possible.
• Backup Power for Critical Areas: Ensure hotels have functioning backup power for essential services like emergency lighting, elevators, and guest communication systems. Vacation rental owners must assess if their properties have any backup power capability.
• Staff Preparedness: Train staff on emergency procedures for power outages, including guest communication, safety protocols, and operation of backup systems.
• Review Insurance: Check insurance policies for coverage related to business interruption due to power outages.

Healthcare Providers

Action: Verify and test all backup power and emergency operational protocols immediately.

• Generator Readiness: Ensure backup generators are fully fueled, tested regularly, and capable of powering all critical equipment and life support systems. Schedule immediate maintenance if testing reveals issues.
• UPS System Verification: Test all Uninterruptible Power Supply (UPS) systems for critical diagnostic equipment, servers, and communication devices.
• Emergency Protocols: Review and drill emergency protocols for power loss, including patient evacuation plans if necessary, and procedures for maintaining sterile environments and critical functions.
• Data Backup & Recovery: Confirm that all patient data is regularly backed up off-site and that recovery procedures are robust and accessible even without primary power.
• Communication Systems: Ensure backup communication methods (e.g., satellite phones, HAM radio operators) are available if standard phone and internet fail.