Ask most facility managers what power system studies cost, and they can give you a number. Ask them what an unplanned outage costs, and the conversation gets uncomfortable fast.
For a mid-size manufacturing facility, an hour of unplanned downtime can cost tens to hundreds of thousands of dollars, including lost production, labor, spoiled materials, and expedited recovery costs. For a hospital, the stakes shift from dollars to patient safety. For a data center, a single outage event can trigger SLA penalties and permanent client loss.
Power system studies are often framed as a compliance requirement or a one-time engineering exercise. That framing undersells them significantly. When done right, they are among the most cost-effective risk management tools available to facility operators. Here is why.
1. What Power System Studies Actually Examine
The term covers a family of engineering analyses, each looking at a different dimension of how your electrical system behaves under real-world conditions. The most common include:
Load Flow Analysis
Examines how electrical power moves through your system under normal operating conditions. It identifies overloaded conductors, voltage drops, and equipment operating outside its rated capacity. These are the slow-burn problems that do not trip a breaker today but degrade reliability over time and create failure conditions down the road.
Short Circuit Study
Calculates the maximum fault current your system can produce at various points. This matters because every piece of electrical equipment has an interrupting rating. If the actual fault current exceeds that rating, the equipment cannot safely clear the fault. The result can be an arc flash event, equipment destruction, or both. Many facilities are operating with overcurrent protection devices that are undersized for current system conditions, often because the electrical infrastructure has been expanded piecemeal over the years without a corresponding engineering review.
Arc Flash Hazard Analysis
Determines the incident energy at each piece of equipment that workers may operate or maintain. This drives PPE requirements, approach boundaries, and safe work procedures under NFPA 70E. It is also the study most directly tied to regulatory liability. OSHA citations for arc flash violations carry significant penalties, and the civil liability exposure following an arc flash injury is substantial.
Protective Device Coordination Study
Evaluates whether your overcurrent protection devices are set to operate in the correct sequence. Proper coordination means a fault in one section of your facility trips the nearest upstream device rather than a main breaker that takes down the whole building. Poor coordination is one of the most common and least visible causes of larger-than-necessary outage events.
2. The Real Cost of Skipping the Study
The facilities most resistant to investing in power system studies tend to be the ones operating older infrastructure that has never had a formal engineering review. That resistance is understandable. The system has been running for years without a major incident. Why spend money on it now?
The answer is that electrical systems do not fail randomly. They fail along predictable fault lines that an engineering study can identify before the event occurs. The cost of finding and correcting those fault lines is almost always a fraction of the cost of the failure itself.
Consider a few real-world scenarios:
The Undersized Breaker
A facility expands its production floor and adds several large motors without a short circuit study. Five years later, a fault occurs, and the upstream breaker fails to interrupt it properly. The resulting arc flash injures a maintenance technician and destroys a switchgear section. The cost: equipment replacement, lost production during a weeks-long repair, OSHA investigation, and workers’ compensation exposure. A short circuit study and breaker upgrade at the time of expansion would have cost a small fraction of that.
The Coordination Gap
A hospital experiences a fault in a single wing. Because protective device coordination was never studied, the event trips the main service entrance rather than the feeder breaker for that wing. Backup generator transfer occurs, but the transition affects clinical equipment in the ICU and surgical suite. A coordination study would have identified and corrected the sequencing issue for a predictable, contained cost.
The Data Center SLA Breach
A colocation facility suffers an unexpected outage due to a voltage stability issue that load flow analysis would have flagged. Two enterprise clients trigger SLA breach clauses. One does not renew. The revenue loss over a three-year contract term dwarfs what a comprehensive power study program would have cost over the same period.
3. Critical Environments Where the Math Is Most Compelling
Every facility benefits from power system studies, but the ROI calculation is most obvious in environments where downtime is not just expensive: it is operationally or legally intolerable.
Hospitals and Healthcare Facilities
The National Fire Protection Association and the Centers for Medicare and Medicaid Services both impose electrical reliability requirements on healthcare facilities. Beyond compliance, the operational reality is that electrical failures in clinical environments create immediate patient safety exposure. Power system studies support reliable transfer switching, generator adequacy verification, and essential electrical system integrity. They are a foundational element of any serious healthcare facility risk management program.
Data Centers and Colocation Facilities
Uptime tiers are built on electrical infrastructure reliability. Redundancy architectures only work as designed when the underlying system has been engineered and validated. Load flow studies confirm that redundant paths can actually carry the load they are designed for. Short circuit and coordination studies ensure that a single fault event does not cascade into a broader outage. For Tier III and Tier IV facilities, power studies are not optional: they are part of what justifies the tier classification.
Manufacturing and Industrial Facilities
Production environments have a direct, calculable relationship between electrical reliability and revenue. A load flow study that identifies a voltage regulation problem before it trips sensitive CNC equipment pays for itself the first time it prevents an unplanned production halt. For facilities running continuous processes, where a restart sequence takes hours, the value compounds quickly.
Water and Wastewater Treatment
Regulatory requirements around treatment continuity make unplanned electrical outages a compliance issue as much as an operational one. Power studies help identify single points of failure in pump and control infrastructure before they become permit violations or public safety events.
4. How Studies Reduce Insurance and Regulatory Liability
Beyond direct operational savings, power system studies carry indirect financial value that is easy to overlook.
From an insurance perspective, a documented history of engineering studies, corrective actions, and maintained electrical infrastructure demonstrates that a facility takes risk management seriously. Some commercial property and casualty insurers offer premium credits for facilities with current arc flash studies and documented NFPA 70E compliance programs. More importantly, in the event of a claim, documented due diligence limits exposure.
From a regulatory perspective, OSHA expects employers to assess electrical hazards and implement controls. An arc flash hazard analysis is the recognized engineering method for satisfying that obligation. Facilities that cannot produce a current study are in a difficult position when an inspector asks how PPE requirements were determined or when an incident investigation begins.
Across the Atlanta metro area and throughout Georgia, facilities in the healthcare, industrial, and commercial sectors face increasing regulatory scrutiny on electrical safety. A current set of power system studies is one of the clearest ways to demonstrate a good-faith compliance posture.
5. Studies Are Not a One-Time Event
One of the most common mistakes facilities make is treating a power system study as a box to check rather than a living part of their electrical safety program. The study reflects your system at a point in time. When the system changes, the study becomes less accurate.
Triggers for updating power system studies include:
- Addition of significant new load, such as EV charging infrastructure, new production equipment, or facility expansions
- Changes to utility service, including transformer upgrades or service entrance modifications
- Replacement of major switchgear or protective devices
- Changes in facility use or occupancy that affect electrical load profiles
- Any time the arc flash study is more than five years old
A study that was accurate in 2018 may significantly understate fault current levels or incident energy values if the facility has grown. Operating under outdated study results creates liability exposure even if you believe you are in compliance.
How Shaw Consulting Approaches Power System Studies
Shaw Consulting Services provides comprehensive power system studies for commercial, industrial, and institutional facilities across the Atlanta area and throughout the Southeast. Their work goes beyond generating a report. The goal is to give facility managers and safety professionals a clear picture of where their electrical system stands, what risks exist, and what corrective actions make the most sense given operational priorities and budget constraints.
Shaw’s study work integrates directly with their arc flash assessment, NFPA 70E compliance, and electrical design services, so findings from a power study translate into actionable program improvements rather than sitting in a binder.
If your facility has not had a current set of power system studies completed, or if it has been more than five years since the last review, reach out to Shaw Consulting to schedule an initial assessment.
Do not wait for an outage to find out what your electrical system is hiding. Contact Shaw Consulting today to schedule a power system study and get a clear picture of your facility’s risk profile before it costs you.
Frequently Asked Questions
How often should power system studies be updated?
At a minimum, any time there is a significant change to your electrical system, such as an added load, new equipment, or service modifications. As a general rule, arc flash studies older than five years should be reviewed and updated. For facilities with active growth or frequent infrastructure changes, more frequent reviews are warranted.
Are power system studies required by OSHA or NFPA?
OSHA 29 CFR 1910.333 and NFPA 70E both require employers to assess electrical hazards and implement appropriate controls. An arc flash hazard analysis is the accepted engineering method for meeting that obligation. Short circuit and coordination studies are required to ensure protective devices are properly rated and configured.
What is the difference between a short circuit study and a load flow study?
A load flow study examines normal operating conditions: how current flows through the system, where voltage drops occur, and which equipment is operating near capacity. A short circuit study calculates the maximum fault current at various points in the system to verify that protective devices are rated to handle it. Both are typically performed together as part of a comprehensive power system analysis.
How long does a power system study take?
Scope and facility complexity determine the timeline. A study for a mid-size commercial or industrial facility typically takes several weeks from data collection through report delivery. Larger or more complex facilities may take longer. The process begins with a site survey and collection of as-built electrical documentation.
Can a power system study help reduce insurance costs?
Some insurers recognize current arc flash studies and documented electrical safety programs when assessing commercial property risk. More broadly, the documented due diligence a study provides limits liability exposure in the event of an incident, which carries its own financial value independent of premium adjustments.