Long-term effects of last year’s planned electricity outages in California are still being assessed, but some technology companies are questioning whether staying in vulnerable areas is wise.
Companies having to deal with California electricity service that is as unpredictable as high winds would do well to look at Arizona as a backup, at a minimum, to keep operations going.
Together, utilities PG&E in northern California and Southern California Edison cut power several times in October 2019 to millions of customers so that their above-ground transmission equipment wouldn’t spark wildfires.
While most giant technology companies weren’t affected—they use higher-voltage equipment that wasn’t shut off—many small and medium tech firms had to scramble to adapt.
For those who had a plan, the adjustment may not have been severe. They could relocate employees to work remotely. They could transfer critical systems to states with more reliable power, such as Arizona.
The future may be just as disruptive as last fall as power utilities grapple with trying to avoid sparking devastating wildfires while providing dependable electricity.
Manufacturing companies are economically hit hardest in power outages. E Source, a research firm for the utility industry, estimates that it costs a company $10,000 to $20,000 from a four- hour outage.
If deliberate California electricity outages become the new normal, as PG&E officials have suggested, then manufacturing companies may flee or shun the state for those with more reliable power.
Arizona, including Tucson, is one of those places. Climate and geography, especially in the Southern Arizona desert, make wildfire danger less common than in California. Tucson Electric Power has an active, year-round program to protect service during wildfires. These include:
- regularly clearing away vegetation from transmission lines and other equipment
- air and ground inspection of transmission facilities
- sophisticated methods of getting fire-threat alerts as soon as they are reported
- having ready incident command sites where TEP employees coordinate with firefighters
when wildfires burn near transmission resources.
TEP also continually upgrades its equipment and facilities. This includes replacing wooden utility
poles with metal ones that can better withstand high winds and storms.
While reliable power is a recent consideration for California companies deciding whether to move to Tucson and other parts of Arizona, there are plenty of other reasons to take a look.
There are attractive local and state incentives, plus affordable cost of living and cost of doing business—including low electricity utility rates compared to California. Tucson has several Opportunity Zone areas, as well as commercial property and infrastructure to support a number of industries and sectors, including defense and aerospace, mining technology, data centers, bio and logistics.
Workforce development is a crucial activity in the Tucson area, rooted in efforts by the University of Arizona and Pima Community College to meet current and future needs of local businesses.
Commercial Real Estate Group of Tucson can show how Tucson offices—whether in a relocation or expansion—for your business could mitigate problems with unreliable California electricity service. Contact me for a free consultation.