Basin Electric plans ahead for active hurricane season

Hurricanes might seem like a distant concern for Basin Electric, whose member cooperatives span nine landlocked states. But when it comes to energy and supply chains, geography doesn’t tell the whole story.

While hurricanes may not make landfall anywhere near Basin Electric’s service territory, their impact can still be felt across the region. “Hurricanes can cause port closures, barge delays, and evacuation-driven fuel demand spikes, disrupting logistics and distribution,” Gallagher said.

Forecasts for the 2025 hurricane season predict increased activity. “Forecasts from Colorado State University and the University of Arizona predict 17 named storms, which exceeds the historical average of 14,” Dan Gallagher, Basin Electric vice president of Commercial Operations, said.

With nearly half of U.S. refining capacity located on the Gulf Coast, Gallagher said that “a major storm hitting refining hubs could temporarily remove over 1 million barrels a day of refining capacity,” with even moderate storms triggering regional price spikes and delivery challenges.

In addition to oil and fuel, the fertilizer market also faces risks from hurricane disruptions. Gallagher said that “hurricanes can disrupt port operations and transport routes, affecting the import and export of fertilizer and oil, which in turn can impact regional markets, such as the upper Midwest fertilizer market.”

To manage these challenges, Basin Electric is proactively adjusting its approach. “Price fluctuations may lead Basin Electric to hedge commodity exposure and adjust sales strategies,” Gallagher said. The cooperative is also reinforcing its logistics by building redundancy into logistics systems to maintain sales continuity, such as having multiple delivery and destination points and diversifying transport routes.

By proactively addressing these challenges, Basin Electric aims to minimize the impact of hurricane-related disruptions on its operations and members. The cooperative’s focus on flexibility and resilience will help ensure continued reliability, even as the 2025 hurricane season brings increased uncertainty.