Learn Spanish (Latin America): Las provisiones escasean; encima, la electricidad falló. - The provisions are running low; on top of that, the electricity failed.

Yes! Escasear is the verb form of escasez (shortage or scarcity). It means to be scarce or to run low. At the B2 level, using verbs like escasear or abundar (to be abundant) sounds much more natural than relying on basic phrases like hay pocas provisiones.

I usually think of encima as a location (on top). How does it work here?

In this sentence, encima is used as a conversational connector meaning on top of that, besides, or to make matters worse. It is incredibly common in spoken Spanish to introduce an additional, often negative, piece of information.

Why use the preterite falló instead of the imperfect fallaba?

We use the preterite falló because the power failure is treated as a single, completed event (the moment the power went out). If you used the imperfect fallaba, it would mean the power was flickering or continuously failing in the background.

Would a native speaker say la electricidad falló in everyday conversation?

While perfectly correct, it sounds a bit formal or technical. In everyday Latin American Spanish, it is much more common to hear se fue la luz (the power went out) or se cortó la luz.