Natural disasters and accidents have always been part of our world, and most large firms have both insurance and a plan for dealing with such issues. Recent events, however, have demonstrated the need to go beyond that typical level of preparation. When examining a firm's disaster recovery plan, one area that may need attention involves security of its energy supplies, at both the technical and organizational levels.

Problems Exposed In The WTC Attacks

The day after the Towers collapsed, several energy supply problems became apparent. Customers whose buildings had been damaged but whose electric and gas services remained intact (or were quickly reestablished) could not return and restart their businesses. As a result, minimum usage requirements of power and/or gas contracts came into play, unless the customer invoked a force majeure clause.

Employees managing those contracts were, however, dispersed to other locations and lacked access to their records. Since the attacks occurred near mid-month just before payments for the prior month's use were due, any unpaid invoices could also become subject to late payments.

When natural gas delivery service was knocked out, boilers in undamaged buildings downstream on the pipeline automatically shut down. Several had dual fuel (oil/gas) capability, but natural gas pilot lights used for oil ignition became inoperative. While such problems pale next to the death and destruction that occurred on September 11, they made a return to normalcy even more difficult.

Early Lessons Learned

Many large firms and institutions have disaster recovery plans. Those lacking them should immediately engage a professional with background in creating such plans. Since this form of recovery typically involves restoring building services (such as electric, hvac, and water supplies), contractors serving such customers should ask their clients when those plans were last reviewed, and offer assistance in updating them. Following are some steps to consider:

  • A duplicate set of up-to-date base building/utility plans and energy account data (e.g., contracts, account numbers, contact names) regarding major utility services should be stored at a protected site, with access available to a consultant or contractor when needed by the customer.
  • The customer should designate an energy contracts manager and a backup person to handle such issues from an alternate location. Contact information on all personnel (employees, suppliers, and consultants/contractors) involved in handling those issues should also be available at the alternate location. Such information should include home telephone numbers, mailing, and e-mail addresses, etc., because operation from home offices may become necessary for an initial period following a disaster.
  • A means to pay outstanding bills from another location should be set up to avoid late charges or confusion. Likewise, invoices covering the billing period up to a disaster need to be routed to an alternative location for payment. Attention is needed regarding any attempts to create estimated bills due to inaccessible or destroyed metering.
  • Dual-fuel boilers using natural gas pilot lights should be immediately upgraded to electronic ignition, or a supply of bottled gas/propane should be made available to maintain gas-fired ignition.
  • If operation from an alternative location is to continue for an extended period, energy supply contracts should be amended to include new (or expanded) power/gas accounts at such locations under the same pricing previously in effect. Some changes (such as a newly defined usage commitment, load profile, and contract term) may require negotiation.
  • To be ready for a major disruption, the firm should have ready for use within 24 hrs its contract's force majeure language and a letter template invoking it to avoid confusion or problems due to delivery failures, billing issues, and usage commitments, etc.

    Making a Terrible Situation Easier to Handle

    Being prepared for disasters makes good business sense. Doing so can mitigate economic damage. When disasters become intentional, however, being prepared should also be seen as one way to blunt the impact sought by America's enemies. ES