Kenergy, a Touchstone Energy Cooperative, is a member-owned, not-for-profit electric company that purchases electric power at wholesale and distributes it to its customers, which include nearly 58,000 households, commercial enterprises and industries in 14 rural western Kentucky counties.
In mid-2005, Doug Hoyt, director of procurement and contracts for Kenergy, was asked by the company's CEO to address a variety of issues that were plaguing its 136 vehicle fleet. The fleet was comprised of different manufacturers, such as Ford, Freightliner and Chevy, and Kenergy didn't have the internal knowledge or expertise to consistently train new fleet employees.
With no significant experience managing fleets, Hoyt took the initiative and the decision was made to outsource Kenergy's fleet maintenance to Penske. At the outset, Kenergy relied on Penske's strong knowledge base to guide their fleet needs. "There was a learning curve, both with Kenergy and Penske," said Hoyt. "But Penske really took their time to get to know our business."
While the relationship has evolved over time, there is one critical focus that has not changed – ensure workforce safety and productivity for Kenergy associates. "Our employees rely on our vehicles to operate perfectly," remarked Hoyt. "From aerial booms to the vehicle chassis, everything must function as designed to keep our workforce safe." A fact not lost on Hoyt. "We require a reliable fleet to do our job each and every day."
During 2006, the first full year of the partnership, Kenergy reduced their fleet from 136 to 96 vehicles. This resulted in greater efficiency through fleet right-sizing, a reduction in overall fuel and maintenance costs and a reduced total cost of ownership. While this jumpstarted the ongoing partnership, it wasn't until 2008 when Kenergy fully understood Penske's overarching breadth of services and the impact they have on day-to-day operations.
Between September 2008 and January 2009, Kenergy was impacted by two weather-related events. First, Hurricane Ike affected many members and squeezed Kenergy's resources and employees to full capacity. Weeks later, a winter storm left more than an inch of ice in the area, knocking out 95% of their electrical lines.
"When [weather] conditions deteriorated, Penske's value really shined through."
— Doug Hoyt, director of procurement and contracts for Kenergy
Kenergy initially deployed nearly 100 linemen and 100 trucks to repair the lines. Unfortunately, they required in excess of 1,000 linemen and more than 300 trucks to make the necessary repairs. This monumental effort took 23 days to restore power and it put tremendous pressure on the technicians responsible for maintaining the fleet.
In a typical year, Kenergy changes between 450-500 poles. During the 23 days following the ice storm, they changed in excess of 3,300 poles. Penske supported this unprecedented event with additional technicians, bucket and pickup trucks, a full moving van of tires, as well as additional tools to ensure the vehicles were fully operational and ready to go. "We knew at that point our relationship was on solid ground because when [weather] conditions deteriorated, Penske's value really shined through."
In addition to reducing the number of vehicles within their fleet, Penske's fleet maintenance program also produced a notable increase in reliability that is key to ensuring the overall success of Kenergy's operations. Kenergy is now keeping vehicles longer and extending their useful miles.
During the summer of 2017, several hurricanes hit the United States, making landfall in both Texas and Florida. Kenergy aided in the recovery, working diligently to restore electricity in the areas affected by the hurricanes. "I have total confidence in the fact that our trucks are serviced by Penske before they depart for jobs. Penske takes ownership of this task and I know Kenergy's vehicles are ready to roll," said Hoyt.
"We are in the energy business. We are not in the business of buying, selling or maintaining vehicles. Penske is in the transportation business," said Hoyt. "I didn't fully understand the importance of fleet management in 2005, but Penske did and they have proven to be a great partner ever since."
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