The role of computers, electronic devices and other equipment that relies on computer guidance has expanded into nearly every facet of our daily lives with breathtaking speed. This “electronic age” has produced huge benefits in terms of increased productivity and unparalleled access to information. However, our growing reliance on computers (in their many forms) comes at a price. Every style and form of a computer, from standard desktop computers to heavy industrial machinery, relies on “clean” electric energy.

As a result of this growing dependence on such sensitive equipment, electric utilities and transmission services are coming under increasing attack from businesses claiming to be victims of “poor power quality.” Not surprisingly, utility customers often cast blame for computer or electronic equipment-related problems on the electricity provider. However, an appropriate and timely response by a utility to such a complaint can be instrumental in avoiding or limiting a potentially enormous claim for damages down the road.

The stakes for a utility faced with a power-quality claim can be staggering. Power-quality claims generally involve allegations of three types of harm resulting from so-called poor power quality: physical damage to computer hardware or other equipment, damage to stored data, and corruption of data that was being processed during the power-quality incident.

The heavy reliance on computers by most — if not all — businesses also creates the potential for enormous business interruption claims when a business is forced to shut down for a period of time if its equipment is inoperable or its data are lost.

The Origin of Power-Quality Complaints

The typical power-quality claim arises when an electricity consumer experiences problems with the operation of sensitive computer equipment. Customers may notice flickering lights or flickering computer screens, experience brownouts or lose power altogether.

To the unsophisticated customer, these incidents are likely to be interpreted as clear evidence that the quality of the power delivered by the utility is defective in some manner. However, in reality, it is far more likely that the power-quality problems originate on the customer side of the meter than on the utility side. Simple events, such as the cycling of an air-conditioning unit, can generate voltage fluctuations, which could appear to be significant power-quality events. The mere operation of a desktop pencil sharpener can generate a subcycle1 spike in excess of 400 V. Even sophisticated customers often do not understand either the origin or effect of such events, and will interpret them as unusual and dangerous occurrences, which can be attributed only to the utility service.

It is beyond the scope of this article to discuss the many circumstances that can create power-quality issues or the many complex technical methods of dealing with them. However, some key considerations in evaluating the technical aspects of a power-quality issue include:

  • The duration of the events.

  • The frequency of the events.

  • The magnitude of the events.

  • Whether there is a discernible pattern or frequency to the events.

  • What equipment the customer has in place.

  • What businesses are served on the same circuit as the customer.

Each of these factors can play an important role in evaluating a power-quality issue and determining what recommendations to make to the customer.

More often than not, the cause of such claims can be traced to problems on the customer's side of the meter — substandard wiring, inadequate grounding, excessive loads, harmonic distortion, faulty computer equipment, software errors — or to some event outside of the utility's control, such as an “Act of God” weather event. Because it is difficult for business owners to accept that the utility is not at fault for these problems, it is often up to the utility to undertake a comprehensive investigation of a customer complaint.

Investigation, Analysis and Communication

The three most important elements of appropriate power-quality claim management are timing, investigation and record keeping, and communication. Many utilities now have fully staffed power-quality departments to investigate claims of power disturbances. In fact, the failure to have adequately trained personnel who can respond to such claims may be viewed as a failure to meet the industry-wide accepted standard of service. Such a failure can be an independent source of “inadequate service” complaints.

Timing of Response: A prompt response to any complaint of poor power quality by utility engineers or other personnel is essential to determining the cause of the customer's complaints and limiting the utility's potential exposure in any subsequent litigation. Timing is important for two reasons. First, in attempting to prevent a complaint from turning into a lawsuit, building a relationship with the customer is critical. A customer who believes that the utility is responding to its complaints appropriately is far less likely to file a lawsuit than a customer who it is being ignored. Second, it is important to conduct an investigation before circumstances change at the customer's place of business. For example, seemingly minor alterations in the equipment layout can have significant impacts on the power-quality issues.

For these reasons, it is important that utility personnel be dispatched to investigate the complaint as early as possible after notification of a potential problem to obtain detailed analyses of the voltage entering the building through the placement of metering devices.

Investigation and Record Keeping: The utility must ensure that persons sent to investigate the customer's complaint have the appropriate technical expertise to analyze the data and to search for other potential causes of the disturbances. Furthermore, if an investigation is undertaken, it is important that the investigation be thorough and professional, and that a record of the elements of the investigation and its findings is made. An effective investigation may include any or all of the following:

  • A comprehensive site visit to study the internal wiring, load type and general electrical service to the building.

  • Obtain a full history of the electrical wiring of the facility. Computer-intensive businesses should be specially wired so that computer equipment is isolated from other machinery or lighting.

  • Investigate whether any other businesses or residences in the vicinity have experienced disturbances. If the neighbors have no complaints, it is a good bet that the problems are internal to the plaintiff's facility.

  • Evaluate all of the electrical equipment in use in the facility — from air-conditioning compressors to copiers to pencil sharpeners. Also note the circuits that serve each piece of equipment and the relationships between the circuits.

  • Conduct utility- and customer-side voltage tests, and conduct circuit-specific tests on the customer side of the meter to identify and assess the impact of customer equipment operation.

  • Retain any damaged computer equipment for examination by experts early in the proceedings. What at first appears to be damage related to a voltage surge may turn out to be faulty equipment or improper use by the business.

  • When data loss and corruption is at issue, obtain copies of all software in use for possible examination by a computer expert. Requests should be made for all versions of the software if it is a program that has been upgraded or altered. Also request a hard copy of printouts, which are typical of any “corrupted data” problems.

  • Conduct a thorough study for extreme weather over the time period in question, especially storm, wind and lightning events.

  • Evaluate the type, model and rating of all surge suppression and UPS (uninterruptible power supply) equipment in use. Many times, the installed protection devices and equipment are inadequate and below the standards recommended by computer manufacturers.

It is also important to make and maintain good records of the investigation. Those records may someday become important tools in helping the utility's attorney defend a lawsuit based on power-quality claims. Furthermore, in many jurisdictions, a customer may have as long as four years after a power-quality incident to file a lawsuit. Therefore, the records, once made, should be maintained and remain accessible, if needed.

Communication: The utility personnel conducting the investigation are an integral part of the customer contact team. Proper communications with the customer can eliminate potential lawsuits and make the customer a part of the team. Careless communications or a lack of communications with a customer will make the customer an adversary.

It is important that only properly trained personnel have direct contact with the complaining customer. Furthermore, those personnel must be careful in their communications with the customer regarding the technical issues. There is a natural desire to give a customer an immediate answer, in response to the customer's natural desire to have an immediate solution. However, until an investigation is complete, information communicated to the customer might be inaccurate or even completely wrong. A customer is likely to seize on any statements made by utility personnel to lay blame for its problems squarely on the shoulders of the utility.

On the other hand, the investigative team must undertake to communicate to the customer that the utility is concerned about the problems being experienced and is doing all it can to resolve those problems. In undertaking this task, it is crucial that both oral and written communications be carefully framed. Careless or inaccurate statements by utility personnel can come back to haunt the defense of a power-quality claim.

For this reason, if it becomes apparent (as it sometimes does) that the customer is likely to file a lawsuit based on power-quality claims, legal counsel for the utility should be engaged and should become an integral part of the team, monitoring all communications with the customer.

Conclusion

Litigation arising out of power-quality claims likely will increase as our reliance on voltage-sensitive equipment rises and the demands on the power grid increase. However, if utilities recognize and adhere to the three simple guidelines — timing, investigation/record keeping, and communication — they will significantly diminish the likelihood of a lawsuit, and will be better prepared to defend themselves if and when one is filed.

1 “Transients” measuring several hundred or even more than a thousand volts can be created by the operation of simple electronic devices. Such transients are typically of very short duration and have almost no energy. Therefore, they normally will not have any impact on customer equipment.

Gary P. Hunt is managing shareholder and Christopher W. Cahillane is a shareholder at Tucker Arensberg, P.C. (Pittsburgh, Pennsylvania). A significant part of their practice involves complex litigation, including representation of public utilities and independent power production companies in a broad range of litigation.
ghunt@tuckerlaw.com ccahillane@tuckerlaw.com