When One Third of San Francisco Goes Dark, Your Supply Chain Stops Too

A fire at a PG&E substation knocked out power to 130,000 San Francisco customers on Saturday, December 20, roughly one third of the city. Traffic lights went dark. BART skipped downtown stations. Waymo suspended driverless taxi service. Restaurants served by candlelight before closing early. Gas stations and grocery stores shut down. By Sunday afternoon, 17,000 customers remained without power, with full restoration not expected until Monday at 2 PM.

The timing was brutal. Saturday before Christmas is historically one of the busiest shopping days of the year. Mayor Daniel Lurie said weekend closures could cost businesses hundreds of thousands of dollars. At 25th and Clement Produce Market, owner Spiros Johnson dumped everything: chicken, meat, fish. Thousands of dollars in inventory gone. Ice cream shops threw out bags of melted product. Families discarded refrigerators full of holiday groceries.

This matters beyond San Francisco. The failure mode is what supply chains cannot tolerate. Modern distribution depends on refrigerated storage and just-in-time delivery. When power fails for extended periods, there is no backup. Produce markets cannot keep meat cold. Ice cream shops cannot save melting inventory. Restaurants lose perishable stock during peak revenue days.

For food and beverage companies, the calculation is straightforward. A 24-hour power outage in a major distribution hub means total loss of temperature-sensitive inventory. No amount of planning compensates when refrigeration stops. Products spoil. Companies either absorb losses or pass costs to customers through higher prices.

The infrastructure vulnerability extends beyond food. Manufacturing facilities depend on continuous power for production lines, climate control, and safety systems. A substation fire that affects one third of a major city reveals how concentrated infrastructure creates single points of failure. When 130,000 businesses lose power simultaneously, backup generators cannot cover the gap.

San Francisco sits at the center of tech and biotech supply chains. Server farms, pharmaceutical cold storage, semiconductor fabrication facilities, research labs. All require uninterrupted power. A 24-hour outage in the wrong location could destroy months of production or irreplaceable research samples.

The broader pattern is clear. Aging electrical infrastructure cannot reliably support modern supply chain requirements. PG&E described the substation damage as significant and extensive, requiring complex repairs. But one substation fire should not darken one third of a major city for 24 hours. The grid lacks redundancy.

For supply chain managers, the lesson is uncomfortable. Geographic diversification provides no protection when infrastructure fails affect entire metropolitan regions. Backup power covers hours, not days. Insurance reimburses financial losses but cannot replace spoiled inventory during peak shopping periods or restore production schedules after multi-day shutdowns.

Companies optimized supply chains for efficiency by consolidating warehousing and distribution in major urban centers with reliable infrastructure. That assumption is breaking. When substations catch fire, traffic lights go dark, and 130,000 businesses dump food, the cost of concentrated infrastructure risk becomes visible.

In a world of black swans and cascading disruptions, this is what resilience in action looks like.