Since the start of the COVID-19 pandemic, the U.S. has faced a major supply chain crisis, and the electric utility sector has been hard-hit. Supply chain constraints affect both the availability and cost of critical components required to provide reliable electric service to American consumers and business.
The public power community is responding. Many of those responsible for keeping the lights on in 72 North Carolina public power communities met in Raleigh Sept. 8 to discuss the ongoing supply chain constraints affecting the electric sector. The discussion among members of the ElectriCities Utility Director Advisory Committee followed a briefing held the week prior by public power’s national trade association, the American Public Power Association (APPA). At that briefing, APPA staff and members of the Electricity Subsector Coordinating Council’s (ESCC) Supply Chain Tiger Team, a nationwide team staffed by utility experts convened by the Department of Energy and Department of Homeland Security, discussed crucial sections of the supply chain shortage and how to navigate workable solutions.
Some of the primary areas of concern include distribution transformers, conductors, utility poles, and large transformers. Utilities seeking to acquire all of these components are seeing significant delays and steep price increases: a pad-mount distribution transformer, for example, now costs close to three times more than it did pre-pandemic and lead times for delivery have increased by 12 months. Large transformer manufacturing will also have major long-term issues, with demand expected to double by 2027 and the steel industry already hitting maximum capacity.
This backlog can be credited in part to a shortage in labor and parts, but it is being exacerbated by a growing need for equipment driven by population growth, abundance of infrastructure funding, broadband deployment, and pole attachment shot clocks increasing demand at a level that production cannot maintain.
The ESCC Tiger Team is conducting a survey that includes public power organizations and manufacturers, to identify long-term and short-term remedies. Mitigating actions suggested by the team include temporarily changing standards to ease the burden of some of these constraints, sharing and encouraging folks in the industry to participate in the survey, and utilities sharing information and equipment, when possible, to help ease the burdens.
Following the APPA briefing, we spoke with John Maclaga, member of the ESCC’s Supply Chain Tiger Team and assistant director of Wilson Energy in Wilson, North Carolina, and asked some questions. His answers are paraphrased below, with the caveat that the briefing only allowed time for speakers to scratch the surface of the issues.
What supply chain issue do you believe is most concerning for public power in North Carolina?
Shortages of distribution transformers are a threat to both growth and ability to respond to outages. Meter bases, wire, connectors, meters, regulators, relays, substation transformers, and even humble wooden poles have been impacted by supply shocks.
Do you think public power communities in N.C. have worked well together to aid each other during these constraints?
Through ElectriCities, we have jointly purchased over 1,000 transformers. We got a relatively decent price, but only one quote from one company. We should continue to look for opportunities to do joint purchases.
What else can you tell us?
Conserving supply, recovering “lost” equipment on the system, getting used equipment refurbished, and seeking traditional and non-traditional suppliers and alternative parts or construction methods are best bets for getting through this situation individually.
Maclaga spoke about the concerns voiced during the APPA briefing to members who attended ElectriCities’ recent Utility Director Advisory Committee meeting. There was consensus among attendees that public power agencies will need to continue to work together to manage supply chain constraints in the near and distant future.
Utility directors and others continue to meet on these issues, and more information on supply chain constraints can be found on APPA’s website, here.