When Pacific Gas and Electric shut off power last week in a rolling blackout that reached an estimated 600,000 customers throughout Northern California, homes darkened and electronics (including medical devices) and even some cell service were silenced. Streets in areas like Santa Rosa were eerily empty, which was not unexpected given that streetlights and traffic lights weren't working. Supermarkets experienced runs on milk, meat, produce, and other items; what perishables they couldn't sell started to rot. Just like PG&E's reputation.

For California businesses, the shutdown, which PG&E described as a public safety measure to avoid more catastrophic wild fires like 2018's Camp Fire, also meant closures, unexpected costs, and income loss. While most of the businesses that Inc. contacted are committed to California--in the case of wineries in particular, their roots in this region are quite literally deep, and abiding--many find themselves wondering how they can continue here if seasonal power shutoffs become the new normal. 

"It's business as usual, and then all of a sudden you're not getting the supplies."

 

Dominic Carcioppolo, CEO of Quality Mobile Home Services, a company with four locations in California and Arizona, estimated that his Pleasanton, California, office was out about $20,000 in cash flow for the day it lacked power. About $8,000 of that won't be recoverable, he says. "Not because it only affected our office, but because it affected the vendors in our supply chain. It's business as usual, and then all of a sudden you're not getting the supplies. Now you're expending time and energy on that and not being productive."

Carcioppolo, who oversees about 60 employees who do repairs, remodels, and retrofits of prefab housing, says his customers were mostly understanding about the delays. "It's annoying, but it's one of those things," he says. "A lot of people don't think it was the right move."

"The toughest part was trying to find a generator."

 

Power was off from Tuesday night to Friday afternoon for the team at Badass Beard Care, an e-commerce company in Granite Bay, California, throttling its ability to fulfill orders for men's grooming products.

"The first day sucked," says CEO Charlie Moyer. "We had to call off all employees because we're in a rural area. We had to tell everyone not to work." Sanitation at their facility works off an electric pump, so toilets weren't functioning, forcing Moyer to rent a porta-potty. 

He also needed to buy a generator. Good luck, with those and other items suddenly scarce in parts of the state. "The toughest part was trying to find a generator--they were all sold out," Moyer says. A salesman at the camping store he went to claimed they'd sold 2,000 that week.

Using the generator and a cellular hot spot, the Badass Beard crew was able to post explanations for delivery delays to social media. Most customers were understanding, with one writing, "You guys need to take your great company elsewhere." 

Less understanding, according to Moyer, was Amazon. "Amazon holds us to a very strict metric. We need to have orders out in one day," he says. Because of delays, he received an automated warning that Badass Beard's Amazon account was in jeopardy of being canceled. "Once you lose that, customers won't go to your site," he says. "That's worth about a million [dollars] a year."

As a reward to those who came to work, Moyer bought everyone a Five Guys lunch. "We spent $250 on cheeseburgers," he says. That's in addition to the money spent on the generator, porta-potty, and hot spot. "It probably cost us $1,000 to $1,500."

"We lost a full day of work."


Cliff Mitchell, co-founder and CEO of ClockShark, a time tracking software company located in Chico, California, didn't have power for a day. "We lost a full day of work," he says. "We operate a small call center. It was down, and all our calls went to a cellphone instead of agents."

During the shutoff, employees who couldn't make it in because of school closings or other needs were still paid. "We lost wages on our salaried employees," Mitchell says. "There's some serious cost." 

It's an annoyance, but Mitchell is understanding, noting that Chico is right next to Paradise, California, which suffered a devastating loss of life and property from fire in 2018, including the destruction of one employee's home. "We're sensitive to the need for the shutoffs while PG&E fixes its infrastructure. It's an inconvenience, but public safety has to come first."

"When people hear there's a problem in wine country, they stay home."

 

Roadhouse Winery in Healdsburg, California, was dark for three days, according to owner-winemaker Eric Hall--no lights, no internet, and, since his vineyard uses pump-generated well water, no flushing toilets. He lost between $3,000 and $4,000, he estimates, partly because of tourists staying away. "Just like the fires, when people hear there's a problem in wine country, they stay home," he says. "There are 50 wineries up here, and none of them had power."

Hall says his short-term plan is to buy generators; in the long term, he's considering going solar. "I'm learning you can't trust the grid anymore," he says.


"It's $50,000 we really can't afford to spend right now."

 

Before the blackout, Natalie Cilurzo, co-owner of Russian River Brewing Company, rented a two-megawatt generator for her Windsor, California, outpost, at a cost of $30,000 per month. It had to run for 48 hours during the outage to save the beer from spoiling and keep Russian River's offices and retail operations going, at an additional cost of $10,000 per day in fuel. "It sucks, because it's $50,000 we really can't afford to spend right now," she says. "But we can't afford not to. If we lose all that beer, it's tons of lost sales."

She estimates the cost of buying and using a permanent generator at $250,000. 

"If we didn't live here, we wouldn't look to run a business here," she says. But she says she's not going anywhere anytime soon: "We can't imagine living anywhere else." 

Published on: Oct 17, 2019