Transformer shortage impacting local utility companies

On a gray gravel lot on the north outskirts of Starkville, more than a dozen old, out-of-service electrical transformers sit idle, at least for now.

In normal times, Starkville Utilities Department would phase out the antiquated equipment for new as funds allow. A nationwide transformer shortage has made new equipment hard to come by, SUD General Manager Edward Kemp said, so the old transformers will soon be picking up the slack.

"The new strategy is taking (transformers) that have failed and sending them off to get repurposed because some steel components of them are good," Kemp said. "You can use them and put them back in service. They’re not as efficient as a brand new transformer, but it's better than not having one at all. … We’re taking and rehabbing every one that we can that's failed and trying to find new ones."

On Tuesday, the board of aldermen declared transformers and electric power grid components as emergency purchases. This is in accordance with a presidential determination from June, which allows electric grid components to be declared as emergency purchases. That will allow Kemp to purchase those components when he finds them without the need for pre-approval or a bidding process, and aldermen will ratify the purchases on its claims docket.

Both the aldermen's declaration and the presidential determination are possible due to the Defense Production Act of 1950, which allows presidential power to declare certain domestic production of goods during wartime or national emergency.

Still, Kemp told The Dispatch right now getting brand new transformers can take between six months to a year, if they can be found at all. While repurposing will work in a pinch, new transformers are more energy efficient and reliable.

The shortage in transformers comes from a shortage of supplies used to make them, including a specific grade of steel used to make the core of the unit. Kemp also said he believes there is a ripple effect from the winter storms in Texas last year.

"Transformers are in very short supply right now," Kemp said. "… They’re necessary. We have a very real, very worrisome problem that a lot of people in the electric industry are worried about right now."

Transformers are used to provide electricity to houses and businesses by "stepping down" the voltage from power lines. There are two main types of transformers SUD uses: pole-mounted and pad-mounted.

Pad-mounted transformers are used for underground services for a good portion of new subdivisions and developments. Pole-mounted transformers are used for above ground power lines to distribute power in often older residential and commercial developments.

SUD provides electricity to roughly 14,000 residential customers and 1,000 commercial customers, Kemp said.

The amount of power distributed and number of houses or businesses served depends on the size and type of transformer, Kemp said. A standard pole-mount transformer is typically about three feet tall and two feet in diameter, and just one can supply between four to 10 houses depending on the load of electricity needed.

Kemp said SUD is mostly looking for six pad-mounted transformers, which are used for underground services for a good portion of new subdivisions and developments.

"We have some developments coming online in the near future that are going to need pad-mounted transformers, and we’re really hoping that we can find some before they need that service," Kemp said. "We could use half a dozen right now, but really, critically we need two to three. … There are other ways that we can provide service that are not ideal, that we would not usually do, but we would do before we say, ‘You can't think about (starting a business or development). We would use pole-mounted transformers in a way that we would use a pad-mounted transformer, then eventually we would have to come in and replace that with an actual pad-mounted transformer."

SUD will look at vendors it has used in the past for transformers, but it also intends to look beyond those vendors to find other sources of supply.

"There's a few different manufacturers of transformers," Kemp said. "The problem is everybody is lined up to purchase whatever they can find. It's based on first-come first-served, how long you’ve been a customer, if you’ve bought in bulk from (the manufacturer) in the past. You just do the best you can. I don't think we’re at a critical state right now, but I appreciate the mayor and board giving us that flexibility if we do find some."

Columbus Light and Water

The Columbus Light and Water board has not yet declared transformers as an emergency purchase, but the department is feeling the strain from the material shortage.

Marc Rushing, CLW electric division manager, said he is one major storm away from needing to find transformers.

"At this point, we are not in dire need of any one transformer type," Rushing said. "We started increasing our inventories after the 2014 tornado in order to have enough materials to get by in a major storm event. However, we are always only one storm away from calling on any and all sources to find transformers and other power line hardware to keep our customers’ lights on."

Rushing said pricing and delivery lead time has changed over the past four years. He said a standard pole-mounted transformer now costs about $2,800 with a 60-week delivery time. In 2018, it cost about $900 with a six-to-eight-week delivery time.

CLW General Manager Angela Verdell said she is always looking for ways to purchase new transformers despite the maintenance cost of old transformers impacting business.

"We continue to work closely with our transformer vendors to find them when available," Verdell said. "We also participate in a mutual aid network in the TVA region as well as nationally to help find any needed units. We are experiencing higher maintenance costs because of the need to reuse older transformers that are not available for purchase. Many of which have reached their recommended lifespan. … These are just a few of the challenges we work to balance to ensure reliable and accessible power for the community."

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