New York Yankees catcher and legendary aphorist Yogi Berra famously once said, “The future ain’t what it used to be.”
United Utility Supply Cooperative Executive Vice President Gary W. Burnett and Rappahannock Electric Cooperative CEO John Hewa reaffirmed Berra’s sentiment July 25 at the Virginia, Maryland & Delaware Association of Electric Cooperatives’ annual meeting at the Omni Homestead Resort in Hot Springs, Va.
They gave a realistic and somewhat bleak report on supply-related logistics, inflation and distribution issues, with an emphasis on the way preparedness and planning can help co-ops ensure reliable service.
“You are essentially paying 40% more for a transformer now than you were a year ago,” Burnett told an audience of about 100 attendees. “And there’s no immediate relief in sight.”
Burnett went on to say that in addition to continuing inflationary prices, delays in production and limited distribution pathways, it will continue to take longer to receive ordered equipment for the foreseeable future.
“We’re looking at 60-plus weeks lead time for transformers,” he said, “and if you’re building a substation, you’re looking at a 2-year wait for supplies. I don’t see either of these issues going away this or even next year. Current projections show that perhaps by the 2nd quarter of 2024, we might see a return to some normalcy, but likely not any time before.”
“I see the future as a moving target,” said Hewa, who emphasized that supply chain issues and the double-whammy of growth and aging infrastructure are currently having the most impact on REC.
“In addition, we keep getting hit with storms,” he added. “There’s also a huge EV wave coming and wholesale power costs continue to rise.”
The VMD Association and member co-ops also are bringing attention to logistics issues through creation of the Coalition for the Advancement of Reliable Electric Systems. The group includes cooperatives, municipal utilities, investor-owned utilities and equipment distributors who are advocating for policies that ensure power supplies remain reliable in the face of constant pressures. Hewa noted the association’s work in developing the coalition and supporting materials.
Hewa said REC has been strategic in maintaining a stockpile of materials that might be needed in case of a major storm and is working proactively with developers, local governments and elected officials.
“Company-wide we have less than 3,000 transformers,” said Burnett. “We’re committed to buy 80,000 next year, but the scary truth is that right now homes adversely affected by hurricanes on the east coast and in the gulf may not be able to be re-electrified for weeks, maybe months due to supply shortages.”