Public Power Officials Discuss Supply Chain Challenges At MMUA Event

by Paul Ciampoli
APPA News Director
June 21, 2022

Officials from Minnesota public power utilities, the American Public Power Association (APPA) and a power industry manufacturer recently discussed the power sector’s response to ongoing supply chain challenges facing the sector during a virtual roundtable held by the Minnesota Municipal Utilities Association (MMUA).

“What we’re facing right now truly is a perfect storm,” said Alex Hofmann, Vice President, Technical and Operations Services, at APPA.

He noted that when it comes to supply chain priorities, transformers are the highest-ranking priority for APPA’s members, “but there are many other concerns.”

APPA has been meeting with federal agencies to discuss supply chain issues, as well as with manufacturers.

“We’ve developed a simple voltage matching and sharing tool” through APPA’s eReliability Tracker. APPA is offering free access to the tracker for all public power utilities, he noted, because “to us, this is an emergency.”

Hofmann said that public power utilities, cooperatives and investor-owned utilities (IOUs) are all working together at the federal level.

“We plan to share, so if you reach out to your fellow public power utilities using this tool, you find that you’re not getting the response you need and we don’t have anything, we’re going to give that to the cooperatives and the IOUs and us their networks as well,” he said.

“Be creative. Pursue every measure you can. Your fellow utilities are in the same situation,” he said.

“I’m not here trying to bring you a doom and gloom story. I think that as infrastructure providers, we’re naturally very conservative, so we’re alarmed now that our stocks are getting low, but we still have stock and there are still people with units, it’s just those lead times are making our warehouses order larger amounts.”

Chad Backes, District Manager for Irby Utilities, a manufacturer for the electric utility sector, addressed the question of lead times in the context of supply chain issues.

“It depends upon the product line. It depends upon how much technology is involved and, of course,” how much copper and aluminum is involved, among other things.

“No manufacturer really has an ample supply of finished goods. They’re really struggling to get all their components,” Backes said.

He pointed out that “when one manufacturer goes down or isn’t taking any orders, that puts extra pressure on the other manufacturers that are still taking orders and they have to go out on the open market and buy the raw materials. Well, a lot of those purchases aren’t under contract and they’re having to pay spot prices.”

Backes also noted in core steel there is only one domestic manufacturer, AK Steel. “Everything else has to be imported and we’ve all seen pictures of the big container ships sitting in ports and nobody there to unload them or nobody there to load them.” All of the extra material “that’s being requested is driving that price up – just simply supply and demand.”

Backes also said that most of the core steel that needs to be used for transformers is also being used for batteries in electric vehicles and manufacturers are “making more money selling into the EV market than they are the transformers.”

Other participants in the roundtable included Mike Willetts, Director of Training & Safety at MMUA.