General Manager’s Message – March 2025
Marching Toward Change
March is only the end of the first quarter of the year, but what a year we have experienced already. In the first season of Alabama football without coach Nick Saban, the team didn’t even make the 12-team playoff. For the first time in 132 years, the United States has a nonconsecutive-term president. Can you name the only other 1?
Due to global warming, the state of Alabama also had over a foot of snow in some parts of South Alabama Electric Cooperative’s (SAEC) service area. Compound that with almost a week of hard freezing temperatures, and it all adds up to a third consecutive year when our co-op has set a demand peak record for our electrical system.
That kind of peak demand might be normal for places like Minnesota or Wisconsin, but this is Alabama. We relate more to the words of the great songwriter Hank Williams Jr. in his song, “Country State of Mind.” “That hot, old summer sun makes you beg for your next breath. So, you best be on the creek bank, laying in the shade, so the mosquitoes can eat you alive.” I added in that last part for old Bocephus.
Things are so off-kilter in Alabama that it appears our most successful sport is basketball. What the heck? I guess that’s due to global warming, too. On the topic of global warming, the January snowstorm answered a lot of prayers. No, I did not pray for snow. That prayer was from individuals not related to the electric industry. My answered prayer was our members experienced few outages, which meant your employees were not subject to hazardous road and work conditions. Another 1 of mine was that schools and large businesses were not open, so their demand was not fully reflected in our system peak. If schools and businesses had stayed open, that demand would have been even higher.
I’ve written about demand for the last several months now, which reminds me of my pastor, Lanny Shepard. Each Sunday he reviews what he has taught us over the past few weeks, drilling the word of God into our heads because so many of us forget the message by the time we get home and eat lunch.
I feel the same way when it comes to electrical demand shortages. So, to review, electric demand is the amount of electricity people on our system are using at any given moment. We have to build our generation plants to meet that demand requirement.
Our baseload generation is what meets those needs most of the time. Intermediate generation fills the void when our system exceeds its baseload but is usually more expensive to run. Then, there are generation plants for peak demand. These can be started up quickly and then shut down until the next demand event but are typically very costly to operate.
Currently, SAEC and its generation partner, PowerSouth, are in good shape to meet baseload demand. Our problem is that, according to demand forecasting models, we are short on resources for peak demand in the coming years. This demand problem isn’t limited to SAEC and PowerSouth but is 1 shared by the entire country. Maybe not in California. I’m not sure they care if people have power or not, but we do.
Across America, we are retiring baseload-generating plants 3 times faster than we are building and replacing them. The same goes for peaking plants. If you remember basic economics, you know that when demand outpaces supply, prices tend to increase.
On the utility side, the concern is that when electric demand outpaces generation, there could be rolling brownouts and blackouts as producers struggle to meet peak demand. That would be like the University of Alabama, Auburn University, and Troy University football teams all going 0-14 each year. It just can’t happen.
Our decision-making process for building generation plants has become riskier. But we don’t want our power plants to run out of generation capacity, the same way we don’t want our teams to stop winning games. Then all we can do is hope for global warming to keep us warm.
In closing, have you figured out the other president with nonconsecutive terms? It was Grover Cleveland in 1893. Until next month.