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Austin Energy addresses nationwide transformer shortage, supply chain issues

Dec 19, 2023

To address the complex challenges that come from a nationwide raw materials shortage and supply chain issues, Austin Energy has changed the way it does business.

The public utility saw a significant impact last year when transformer deliveries dropped by 90% in the third quarter compared to the first quarter. Transformers are crucial electronic components that safely change the voltage level from one circuit to another, helping to power homes and businesses.

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

"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 public 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. 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.

"We will continue working on this issue," Reilly said. "We know that this is extremely frustrating for developers. It's frustrating for our crews and staff as well. It's very difficult. This is not a local problem. This is a global problem."

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