The cup’s half-full

Daryl Jones, Manager of Black Warrior EMC

It’s hard to believe that the first half of 2023 has passed. The older I get the faster the years, go by it seems. Most days, however, feel long, especially with this time of year and daylight savings time.

I am proud to report some relief in the supply chain shortages. We now have a full ramp of spare transformers for the first time since COVID began. We now have a new vendor that has access to the parts needed to rebuild and refurbish the failed transformers we take down. This progress gives me a lot of comfort now that hurricane season is upon us.

Equipment still has long lead times but we’ve had bucket and derrick trucks on order since 2021 that should arrive this year and in 2024. Needless to say, the prices reflect the high demand and long delivery times. A 30 percent increase in cost is what we see from that prior to 2020 for what we have ordered. Any new orders for large trucks would see increases near 60 percent and deliveries in 2028.

The availability and costs of other materials continue to be of concern for us. High inflation rates impact the cost here also. Crossarms have a cost of nearly $100 per arm now and transformers have tripled in price. A common transformer that serves a residence is over $1,500 each. Wire has also doubled in price over the last three years.

We have a very good inventory now of these items on hand in preparation for those summer storms and, Lord forbid, a hurricane. Our crews are prepared to respond to storms whether here or as mutual aid to other cooperatives both in and out of state.

Our biggest concern at this time is the volatility of the cost of wholesale power we purchase from our supplier. Last summer’s record cost due to natural gas prices are still being recovered with our billing. Fortunately, we had the reserves to apply so we can spread that recovery over many months. The concern lies within the demand and dependence on natural gas as other countries seek supplies from the United States. That, coupled with older coal generation plants being retired, will bring about more challenges as we try to meet increasing demand requirements from our members. We can control most of our operations budget but are helpless with the cost of our wholesale power costs.

I hope everyone is enjoying this summer. Stay safe and remember why we get to celebrate July 4th!