MESSAGE FROM OPERATIONS: Navigating rising infrastructure costs

The past five years have been a period of rising costs for everyone – including the electric utility industry. Increased costs are a result of soaring demand for electricity, supply chain challenges, material shortages and increased labor costs. The impact beyond increased infrastructure costs includes more unpredictable timelines.

KEM Electric Cooperative works off a multi-year work plan which allows for ample time to order and secure materials from upcoming projects. Along with cooperatives across the country, KEM Electric has not been excluded from the supply chain and material challenges. For instance, the cost of transformers and regulators has doubled in the last five years and lead time to secure them continues to change, at one point lead times were more than a year out. Uncertainty in the supply chain causes the operations team to step back and reevaluate projects to ensure time and money are efficiently utilized. 

Impacts can be seen all the way down to equipment and materials used by crews every day. Bucket trucks and digger derrick trucks have seen price increases, and a lead time of one and a half to three years is not unusual. The price tag on utility poles have increase 40-50% over the last five years. Underground cable and wire prices have fluctuated over the years, and lead times are expected to be six to seven months. 

Due to the increase in price and lead times, we know it is important to plan and adapt to changes, thankfully we have an effective team of operations personnel and engineers who work efficiently to ensure co-op projects continue so we can deliver reliable electric services to our members. We understand that cost for essentially everything is rising, and that puts a strain on everyone. As KEM Electric navigates rising industry costs, we work closely with our CEOs and board of directors to explore ways to manage costs for you, our members, while ensuring the reliability of your electric service.