How East Kentucky Power Cooperative turns early decisions into long-term reliability
From its headquarters in Winchester, Kentucky, East Kentucky Power Cooperative (EKPC) keeps the lights on for about 1.2 million people. Its electricity reaches 16 member cooperatives across 89 counties, serving homes, farms and small towns throughout some of the most rural parts of the state.
Reliability here is a long game. A new generating unit takes roughly seven years to bring online, and once it runs, it runs for decades. The people who plan and approve a plant are making decisions that will outlast their own careers, on behalf of the cooperatives that own it and the people who depend on it every day.
Like much of the power generation industry, EKPC faces pressures that seem to intensify by the month. Regulatory requirements keep evolving, fuel markets swing quickly and demand climbs as the region grows.
So how does a cooperative keep the lights on through all of it? Long-horizon planning, deep engineering and a clear-eyed view of what it's up against. "Uncertainty is the only thing constant in the power industry," said Narmada Nanjundan, EKPC's director of risk. "I've worked in this industry for almost 30 years and have never seen anything stay the same."
Close to home
EKPC is a not-for-profit, owned by the cooperatives it supplies. There are no shareholders and no returns to pay out, so every decision ties back to the people at the end of the line.
"We're stewards of their assets," said Craig Johnson, chief operating officer at EKPC. "Our focus is on reliability and making sure that when you go and turn the light switch, you have power."
Cliff Scott, the cooperative's chief financial officer, came from an investor-owned utility. What stood out when he arrived was how directly EKPC's work serves the people who rely on it, many of them in rural communities where affordable, reliable power is not a given.
Waiting is its own risk
The pressure to wait for certainty runs into a hard limit. The equipment that goes into a power plant now sits in manufacturing queues that stretch for years, and the utilities racing to build are all drawing from the same limited supply chain. A few months of hesitation can mean losing a place in line and waiting far longer for the next one.
"A six-month delay could add easily one or two years to your project timeline," Scott said. So EKPC commits early, ordering major equipment before every variable is settled and accepting some risk to hold its place.
Bringing risk forward
The answer to the lead-time problem is to bring engineering and risk into every decision early, while the design can still be changed without heavy cost. EKPC turns to a partner it has worked with for 56 years. FM is the cooperative's property insurer and provides a second set of engineering eyes on every major project.
"EKPC has engineers who understand how to operate their plant, and then our engineers understand how to reduce risks," said Cullan Reid, an account engineer at FM. "When you put those two together, we can understand any hazards and mitigate potential losses."
Catching a problem early helps keep it in check. Brad Young, EKPC's vice president of engineering and construction, pointed to overspeed protection on a turbine as an example. When you account for it from the start, it becomes part of the design. If you wait until the end, "the cost is three to four times what it should be, but also the delay and the impact of our schedule is even more significant," he said.
Fifteen years ago, EKPC started an annual meeting that puts FM's engineers and EKPC's plant managers around one table to go through every recommendation together. FM's engineers are also on-site through the year, and the meeting is when all plants compare notes and align on recommendations.
"We created the annual meeting because we didn't want the power plant to not know what the insurers think, and the insurers not to know what the power plant thinks," Nanjundan said.
Where it pays off
The reward for early engineering discipline comes at the end of a project, when a new plant reaches commissioning with few open recommendations and few last-minute issues to resolve.
A 56-year partnership is its own kind of proof. FM is a mutual insurer, owned by its policyholders the way EKPC is owned by its members, so neither answers to outside shareholders. Across decades of changing regulations, technologies and markets, that shared footing has held.
"At EKPC, we think long term," Johnson said. "Those long-term relationships mean a lot when you're trying to make decisions that affect this company for 60 or 70 years."
The purpose of all the planning is to keep the power on and the rates within reach, while the hard part stays out of sight. A ratepayer never sees the seven-year decision behind the switch. The light just comes on.