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Claim denied: The high cost of substation outages

A single substation outage can result in equipment and labor costs that total hundreds of thousands of dollars – not to mention lost business for commercial customers and inconvenience for homeowners. A recent case underscores how significant those costs can be — and reveals a new twist that should have us all thinking about safeguarding substations from animal entry.

Last September, a squirrel caused significant damage to a city-owned substation in West Liberty, Iowa, resulting in the need for generators to provide power for two days. Now, the bad news has gotten worse, according to a report in the local Quad-City Times:

“The city’s insurance agent told the council EMC Insurance has refused to pay for damage to the substation, estimated at $400,000. But he said the city could likely recover the estimated $100,000 spent to fuel the diesel powered generator while the substation was off line.”

The lesson: Insurance may offer some coverage, but prevention is the best protection. Every substation operator should weigh the substantial costs of an outage — in this case $400,000 — against an investment in preventive measures like TransGard substation fencing.

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