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Austin Energy Addresses Transformer Shortage, Supply Chain Issues

Texas public power utility Austin Energy on May 17 said it is addressing supply chain issues by focusing on key areas including adjusting equipment specification standards and expanding sourcing.

The public utility said it experienced a significant impact last year when transformer deliveries dropped by 90% in the third quarter compared to the first quarter.

Austin Energy is addressing the supply chain issues by focusing on four key areas:

Pinpointing Critical Supplies

Action: create a Material Resource Plan to forecast future demand, identify incoming supplies and seek alternative sources to fill future gaps.

Adjusting Equipment Specification Standards

Action: increase the flexibility of materials standards to improve the likelihood of finding supplies and accommodating customer needs.

Expanding Sourcing

Action: look outside the United States for equipment and adjust supplier contracts to seek more supply channels.

Improving Processes

Action: enhance customer communication about lead times and allow customers to source their own equipment, as long as it can safely operate on Austin Energy’s system.

“We expect these global supply shortages to persist for some time, and we’re pursuing every path we can to meet our customers’ needs,” said Stuart Reilly, Austin Energy interim general manager. “I speak with developers almost daily about these issues, and we are doing our best to obtain the equipment needed for new development, ongoing system maintenance, and storm response and restoration. In short, we’ve had to evolve how we do business.”

In the first quarter of 2023, transformer deliveries increased to the largest level in a single quarter when compared to the last five years. Scheduled deliveries for the next two quarters are even higher. There are more than 2,500 transformers ordered, with additional manufacturing allocations in Austin Energy’s name.

Austin Energy is asking existing suppliers to look for refurbished equipment as well as additional sources of new transformers. The utility is also performing additional repair-in-place activities with pad-mounted equipment to extend its lifespan.

“Nationwide supply chain issues are likely to continue as labor shortages — along with demand for electrical steel, sheet aluminum, magnet wire, switches, fuses and other components — contribute to very long lead times for transformers,” it said.

Austin Energy also noted that according to the American Public Power Association, public power utilities like Austin Energy have seen a jump in distribution transformer procurement times from 2-3 months to more than a year.

Reilly presented an update on the utility’s actions to City Council Tuesday during the Austin Energy Utility Oversight Committee Meeting.