Inflation’s toll on electricity transmission and distribution costs for not-for-profit cooperatives
Recent inflationary pressures have had unprecedented impacts on every single person, business, and entity in the country, including your local not-for-profit electric distribution cooperative. Over these past three years, we have witnessed a massive surge in costs and delays on delivery of materials, creating new challenges for your co-op.
Electric distribution cooperatives are not-for-profit entities dedicated to providing their members with electricity at cost. These costs include expenses linked to maintaining infrastructure, employees and benefits, and operational overhead. Despite our best efforts over the last three years, both inflation and supply chain delays have significantly increased costs, especially in the area of transmission and distribution.
We did see some of this coming. We’ve purchased a larger-than-normal supply of materials to keep on hand, and continue to take steps to ensure reliable service to our members, but the bottom line is that right now, we face
historically difficult challenges.
Even as a not-for-profit cooperative, we cannot avoid the inflationary pressures of the cost of materials or even the delays in manufacturing and shipping. For example, a 65-foot bucket truck required to inspect, repair, and maintain vital infrastructure has been on order for more than two years (ordered on Sept. 29, 2021). These types of delays in delivery not only affect our ability to repair but also to maintain.
We are no longer measuring delivery delays in days. Now, it is in months and years. In addition to delays, we are also seeing an exponential increase in costs. One of the most recent orders (placed in January of 2023) for a 55-foot bucket truck has increased by more than 42%, and we are seeing more than a 68% increase for a new digger truck.
Basic supplies, like transformers, poles, and meters, are also seeing massive delays and increases. Over the past three years, the average cost has increased by 79% on transformers, 22% on poles, and 50% on meters. In the end, inflation directly affects the costs related to maintaining and upgrading infrastructure like power lines, substations, and equipment. Despite all of the increased costs of the materials and tools we use everyday, your not-for-profit electric cooperative will continue to work to provide safe, reliable, and at-cost electricity as best as we are able.
For those of you struggling to pay your bills, don’t forget that the co-op has an energy advisor program free to all members. Energy advisors can often help you identify issues that may be affecting your bill. They can also work with you to identify ways to become more energy efficient. Call your co-op today to learn more.