I hope that all our members had a great holiday season and a happy New Year. However, I am typing this article in the aftermath of the severe weather and tornadoes that hit northeast Arkansas on Dec. 10. Immediately after the tornadoes struck, Arkansas had about 12,000 cooperative members without power, and crews worked diligently through the weekend to restore it. By nightfall Dec. 12, there were still 3,000 members without power, and the work continued. The storm, spawning tornadoes over six states and over 250 miles, took the lives of nearly 100 people and devastated communities, homes and businesses. So, I know that for many this holiday season, it has been difficult — a time of loss, and a tragic end to 2021. All of those impacted were immediately in our thoughts and prayers and will continue to be as they put their lives back together.
As I was leaving church the following Sunday morning, a fellow church member noticed me and asked if I was the “electric guy” who writes the articles in Arkansas Living magazine. I said I was, and that I was actually headed home to finish up my article for the January edition. She had one request: “Please write something that gives us hope.” I went home and thought about that request for quite some time.
Let’s face it, 2021 was a tough year. It started with a historic winter storm, Uri, in February, which caused rolling blackouts and cost members $100 million in power and fuel costs for that week. 2021 also saw the lingering of COVID-19 and its impact on our daily lives, including the deaths of over 5,000 Arkansans. The impacts of COVID-19 on the global economy and the challenges associated with getting back to work gave rise to terms like “supply chain crisis.” It became commonplace for things that used to be in ready supply to be on backorder for months. Pent-up demand outpaced supply and, with lots of stimulus money in the economy, 2021 gave rise to the highest inflation we have seen in over 30 years.
Likewise, the cost of energy soared in 2021. In 2020, at the beginning of the pandemic, energy prices cratered. Oil and natural gas prices bottomed out, and producers cut back supply. Electric generators shifted away from coal to cheap natural gas, causing coal plants’ coal piles to swell to the point that they had to stop taking coal deliveries. This led to coal mine and railroad cutbacks in response to decreased demand. However, in 2021, demand for energy increased faster than supplies could come online, which caused significant price increases. Natural gas that was $1.50 per mmBtu in 2020 was $6 per mmBtu in 2021. This price swing caused a shift back to coal generation, and power plants began using coal faster than the mines and railroads could deliver it to the plants, since that infrastructure doesn’t just come back online overnight. Shrinking coal piles forced utilities like AECC to use higher-priced natural gas to conserve coal for the peak winter season, when natural gas prices are generally predicted to go even higher. All these actions and reactions caused increased power prices in 2021. So far, I haven’t written anything that would provide hope, and that is what I was asked to do. So, here it goes.
Hope is the feeling that what is wanted can be had or that events will turn out for the best. Here are some things that give me hope in 2022.
The support that our cooperatives and our nation provided to the victims of those devastated by Hurricane Ida and December’s tornadoes gives me hope. Although the nation has been gripped in political division, we all come together when there are times of great need, and we prove that we can rise above it all to help our neighbors.
Vaccines and ever-improving treatments to battle COVID-19 can turn the tide on this pandemic, which gives me hope. As more people are either vaccinated or recover from COVID-19, the percentage of the population that is resistant to the most serious impacts is increasing. This combined with modern medicine continuing to find innovative and new ways to treat this virus will save lives in the future, and this gives me hope.
Technically, our transmission system and power plants held up well during storm Uri; what failed was the natural gas fuel supply. However, we always strive for continuous improvement, and we applied lessons learned from Uri to be even more prepared for this winter season. I believe that gas producers and power generators across the board have better prepared for this winter season. Should we see more severe weather, I am convinced that we will fare better than last year, and this gives me hope.
And finally, the Arkansas Razorbacks will play their first bowl game since 2016, and this gives me hope for the 2022 season.
While there are still some lingering supply chain issues, I think we will see the light at the end of the tunnel, and there is good reason to hope that things will be better in 2022.
My New Year’s resolution is to be more Affordable, Reliable and Responsible in 2022.
Vernon “Buddy” Hasten is President and CEO of Arkansas Electric Cooperatives, Inc., and Arkansas Electric Cooperative Corporation.