I'm going to go back to basics and try to be a little more systematic:
1) Remove both drives from Time Machine
2) Unplug the USB to the APC
3) Reboot
4) Re-attach the local USB drive only to Time Machine
5) monitor backups
6) if the backups go as scheduled - re-attach the USB to the APC
7) monitor backups
8) if the backups go as scheduled - re-add the network drive
9) monitor backups
If it breaks at step 8 I'm OK with that - I'll just use the WDMyCloud network drive to backup using CrashPlan rather than Time Machine.
Well, it broke at step 6/7 - when only the local USB drive was connected Time Machine was backing up like clockwork once an hour for the the last +12hrs. So I plugged back in the APC UPS and watched as the 08:30 backup time came and went with no backup performed (Latest backup: Today, 7:33 AM), and no backupd messages appearing in console and the next backup time jumped to 09:30 AM.
So, to me that points explicitly to the APC as the culprit
EDIT - how about that, literally as I hit send on this message the backup fired off - a few minutes late at 08:34, but it went anyway, and the Next backup time is now 09:33 AM.
So, now it's NOT a failure at step 6/7 and I'm going to continue step 7 and watch the backups throughout the day.