Supply Chain – Looking Ahead to 2023

The year 2022 brought a significant increase in inflation and substantial supply chain hurdles for electric cooperatives and the world alike. Increases in supplies we purchased, such as coal, natural gas, fuel among others resulted in an energy increase of 5%. For electric cooperative consumer-owners, however, that increase was half of what other utility consumers experienced (15% and up). 

In the past year, electric cooperatives had significant delays in purchasing equipment and delivery times for supplies needed to operate their systems. The cooperative system is working with supply cooperatives to forecast materials needs including substation and vehicle investments to play for those long delivery waiting periods. Substation investments have experienced delivery time increases from 1 to 3 years. Vehicle replacements like bucket trucks can take up to 3 years for delivery. Even with these realities, the cooperative cost-based business model helps to keep our costs as low as possible for our consumers.  

Additionally, we are partnering with our national coalition of electric utility and home building trade associations advocating for an additional $1 billion to help alleviate the distribution transformer supply chain shortage.

On the horizon, we expect cost pressures to continue into 2023 on natural gas, coal, and diesel fuel, but we do expect to provide a high quality of service that is less expensive than other utilities. We will likely see another 5% increase in prices from generation and pressure on materials. 

There will be continued importance of the cooperative-owned power plant operating reliably into the next year during periods of high demands. Electric cooperatives continue to produce baseload power electricity to meet its consumer needs especially during periods of extreme weather, such as winter snow and ice storms. 

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