First Toilet Paper, Now Transformers
Until toilet paper was suddenly void from grocery store shelves, the term “supply chain” was not a part of our daily vernacular. Now, it’s the topic of conversations at the local diner and the family dinner table. “When will things return to normal?” we rhetorically ask each other. Experts predict the supply chain bottleneck and resulting shortages to last well into 2023.
Electric cooperatives are not immune to the supply chain challenges facing nearly every industry and household. Fewer freight trucks, less warehousing space, labor shortages, major weather events — all have contributed to the disruptions in manufacturing and delivery of basic machinery and components essential to providing power to electric co-op consumer-members.
Three-phase transformers are one of many components used by electric cooperatives stranded in the supply chain bottleneck. Transformers are used to step up or step down the high voltages in different stages of the energy transmission system. According to the National Rural Electric Cooperative Association (NRECA), the typical lead time for three-phase transformers of 10-12 weeks has ballooned to eight months.
Co-ops report that some manufacturers of pole mounted transformers are no longer accepting new orders due to backlogs. Additionally, the lead time for substation transformers has been extended by a full year. Meanwhile, the wait time for pad-mounted transformers, which are necessary to provide underground electric service, is six months. Co-ops also report orders for electrical conduit have been delayed five-fold to 20 weeks, while digital meters, bare wire and primary underground distribution cable are all taking longer to procure, which is impacting project schedules for new service and infrastructure build out.
Not only are electric cooperatives waiting longer for equipment orders, but, like everything else these challenging times, they are also paying more — sometimes up to 200% more than typical.
Some relief may be ahead, but it won’t be immediate. On June 6, President Biden invoked the Department of Energy to use the Defense Production Act (DPA) to accelerate domestic manufacturing of transformers and electric grid components. This declaration should help shorten lead time for acquisition of items essential to providing reliable electricity.
In true cooperative fashion, electric co-ops are meeting supply challenges by working together to find materials, helping each other where possible, along with changing how they approach inventory and project scheduling. Key for the co-ops is prioritizing inventory for outages, ongoing maintenance and storm restoration while balancing new construction requests.
“The biggest challenge we face is securing inventory,” says Travis Griffin, member services manager for Flint Hills Electric headquartered in Council Grove. “We are in constant contact with our suppliers and have made the commitment to carry more inventory to allow for the delay in delivery. We also try to communicate the added delay with our members in regards to new builds.”
NRECA’s advocacy efforts on behalf of the 900-plus electric co-ops nationwide, has raised the profile of these issues among federal policymakers and urges the government to continue pursuing policies that will support sustainable supply chains for the electric sector.
Kansas electric co-ops will continue to communicate ongoing supply chain challenges with their consumer-members through this magazine and the local pages beginning on Page 12A.