2022 is now a year in history, and 2023 has arrived. It’s hard to believe that so much has changed in such a short amount of time. But it’s true — we’re now living in a new era, and things will never be the same. The past year was one of volatility and uncertainty. We expected improvement in supply chains, material availability, easing of prices, and of labor issues. However, things seemed to worsen in many areas. The war between Russia and Ukraine contributed to the significant increase in natural gas prices. Lead times for common materials such as transformers and poles have increased from weeks to months. New bucket trucks and digger derricks are two to three years out.
These factors have changed our way of operating. Members are experiencing longer wait times for new services, and system improvement projects are put on hold until we get poles and materials. Some of our contract help has been released for the same reasons.
Members have seen their cost of power increase due to several factors — a sweltering summer, a lack of renewable (wind) energy, and costs of everyday materials. All of this, added to the high cost of natural gas for power generation, has led to the highest price of power in our history.
There is some positive news to report, however. In the fall, temperatures and load dropped. This eased the market, reducing the cost of generation. Natural gas prices were down, and renewable energy increased reducing the market price of electricity.
Alfalfa Electric is committed to providing our members with the best possible service as we power you. This includes maintaining some of the lowest rates in the country. Who knows what will happen this winter? That’s something only Mother Nature can tell us. A milder climate would undoubtedly help the situation; however, a cold winter will likely drive natural gas prices up and further increase costs. Another polar vortex or ice storm could be devastating.
Our board of trustees and staff members work hard to maintain your co-op and our HVAC subsidiary, AEC Services. We are in good shape financially, and our system is also in excellent condition. Each year, we inspect and replace many poles. We rebuild areas that have been damaged by storms or have degraded over time.
Our industry has seen significant changes in technology, different types of generation resources, and our members’ expectations. We are continually preparing to face the challenges 2023 will bring. Although we are not perfect and cannot keep the lights on 100% of the time, your co-op will strive to serve you, our members, in the best ways possible. Alfalfa Electric Cooperative, “We Power You.”