Across the country, the cost of providing electricity continues to rise and not just here at Meeker Energy. From generation to delivery, electric cooperatives like ours are experiencing cost increases from every angle, particularly from our wholesale power providers.
These providers are responsible for generating the electricity we deliver to your homes, farms, and businesses. And right now, they’re facing an environment where everything from building materials to regulatory requirements is more expensive than it was just a few years ago.
One key factor is the need for new infrastructure. To meet growing demand and replace aging systems, our wholesale providers are investing in new power plants, high-voltage transmission lines, and system upgrades. These aren’t small, short-term projects; they’re large-scale, multi-year efforts that require significant capital and planning. As a result, the cost of building and maintaining the grid is increasing dramatically.
The price of essential materials has also spiked. Since 2020, the cost of transformers, critical for distributing electricity, has risen by 70 to 100 percent. Wire and conductor materials are up 30 to 50 percent, and components like relays, breakers, and smart meters have all seen double-digit increases. These are the core building blocks of our electric system, and they’re more difficult and expensive to source than ever before.
At the same time, regulatory standards around grid reliability have tightened. Utilities must now carry larger reserves of generation capacity to ensure power is available during extreme weather or high-demand events. That means additional investments, whether purchasing capacity on the market or building it directly.
One of the largest contributors to these rising generation costs is the growing demand for natural gas. While renewables like wind and solar are an important part of the mix, natural gas remains essential for backup and peak-time generation. As overall electricity usage grows, especially with the rise of electric vehicles, data centers, and large manufacturing loads, natural gas demand is increasing, and prices are projected to follow. This directly impacts the cost to produce wholesale electricity, especially during high-demand seasons.
These cost drivers are beyond any one utility’s control, but they have very real effects on how we plan for the future. At Meeker Energy, we’re continuing to monitor these trends, advocate for a stair step approach to wholesale rate increases and find local efficiencies to help reduce long-term impacts on our members. We appreciate your continued trust as we work to balance affordability, reliability, and responsible planning, today and for the years ahead.