Austin Energy Addressing Nationwide Shortage of Raw Materials, Supply Chain Issues

Austin Energy is proactively addressing the complex issues arising from a nationwide shortage of raw materials and supply chain disruptions.

In 2022, the company experienced a significant impact when transformer deliveries dropped by 90% in the third quarter compared to the first quarter. Transformers are crucial components that convert voltage levels to power homes and businesses.

Austin Energy is focusing on four key areas to address the supply chain issues:

1. Pinpointing Critical Supplies: Creating a Material Resource Plan to forecast demand, identify incoming supplies, and find alternative sources to fill future gaps.

2. Adjusting Equipment Standards: Increasing flexibility in materials standards to improve the likelihood of finding supplies and meeting customer needs.

3. Expanding Sourcing: Exploring international equipment options and adjusting supplier contracts to increase supply channels.

4. Improving Processes: Enhancing customer communication about lead times and allowing customers to source their own equipment, if it meets safety requirements.

During the first quarter of 2023, transformer deliveries increased to the highest level in five years. Scheduled deliveries for the next two quarters are even higher, with over 2,500 transformers ordered and additional manufacturing allocations in Austin Energy's name. The public utility is asking existing suppliers to seek refurbished equipment and additional transformer sources. They are also extending the lifespan of pad-mounted equipment through repair-in-place activities.

Nationwide supply chain challenges, including labor shortages and high demand for electrical components, have led to significant delays. Distribution transformer procurement times for public power utilities like Austin Energy have increased from 2-3 months to over a year, according to the American Public Power Association.