These days the word “unprecedented” gets thrown around, often in a negative light. The latest use of the word is tied to supply chain slowdowns in the electric utility industry. It is not just cooperatives that have been experiencing these challenges. The issues are industry-wide.
Delays along the supply chain contribute to delivery delays of the components essential to new construction projects or other infrastructure upgrades or projects. The typical lead time for larger transformers for a three-phase line was 10 to 12 weeks, but more recently, the quote has been eight months or longer. Substations’ procurement and delivery of transformers have been quoted for a year or more. Manufacturers see historic backlogs, and the industry is seeing significant cost increases of up to 200%. 
“We are seeing the supply chain hiccups here,” said Ryan Coates, FreeState’s procurement and inventory manager. “While some of our inventory is slightly delayed, the larger items like transformers are what we are seeing delayed the most.”
“We don’t anticipate at this time that it will impact our day-to-day operations,” Coates said. “However, we may see a slight delay in new construction projects.”
Coates explained that the cooperative is well stocked and prepared for storm season when it comes to basic overhead infrastructure, but larger project items and new construction items are being impacted the most. FreeState prioritizes projects and the operations department is aware of lead time on materials and is working on planning ahead.
“This is not doom and gloom, but we also have to be realistic,” Coates said. “We have to be aware, and we are working even harder to plan further out to make sure we have what we need when we need it.”
“The hardest part is that we just don’t have any control over the situation,” added Coates.
Before March 2020, the industry saw seasonal supply chain slowdowns. Demand would increase in the spring and summer months and during large spread natural disasters. Those were manageable and planned for.
So why the historic backlog?
Facilities shut down when the country did. The manufacturing of materials took a hit, just like other industries. Plant slowdowns and transportation delays caused significant lag times in getting products out. That would not have been as big a problem if the demand had stayed the same, but demand exploded, and manufacturers have yet to catch up.
“Demand is high,” Coates said. “At an all-time high, and supply is low. That doesn’t pencil out. We have to just power through and do what we can to manage this challenge.”
“One thing we don’t want to do is panic or create a frenzy,” added Coates. “FreeState is managing this challenge and will continue to do so to provide our members with the reliable service they expect.”
What is being done?
While FreeState is constantly monitoring and communicating with suppliers, it is also being monitored at the national level. The National Rural Electric Cooperative Association (NRECA) monitors the situation across the country for all cooperatives. The NRECA has actively raised attention among federal policymakers throughout the executive and legislative branches to ensure they fully grasp the scope of how these supply chain challenges are impacting the electric sector.
The Department of Energy has also made addressing supply chain constraints a focus.
For now, for FreeState, it’s all about planning, prioritization, and taking care of existing infrastructure.
“Those green boxes in your yards, take care of those,” said David Gechter, Topeka line superintendent. “Be aware of your surroundings when working in your yards and be mindful when utilizing equipment like skid loaders and tractors.”
“Everyone should be mindful of electrical infrastructure in their immediate area when it comes to general safety, but especially when stock to replace those items is so delayed,” Gechter added. “Just be careful out there.”
FreeState will continue to monitor the supply chain and communicate with members as updates become available.