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Global Supply Chain Impacts to New Construction (July 2023 Update)

New Braunfels Utilities is committed to navigating the short and long-term challenges of the global supply chain situation.

Supply chain issues continue to pose a challenge; however, some larger deliveries of transformers in September and early October have helped improve the issue. Materials continue to be an issue for manufacturers. While the destruction caused by hurricane Ian in Florida has not created an immediately noticeable impact, this is still considered a threat as key components may be diverted to aid in reconstruction. A summary of monitored inventory items is listed below, with more information provided for each item on the following pages.

Transformers:  75 kVA Transformers continue to be the primary focal point. The American Public Power Association (APPA) recently stated that according to a recent survey, transformer delivery lead times are averaging 12-18 months on a national level. NBU’s main supplier, TEC, still has not changed their estimated delivery of approximately six 75 kVA transformers a month; however, NBU received 29 units from them in September. Additionally, an order of 59 transformers placed in July from Anixter was delivered in October. New Braunfels Utilities’ Purchasing Department is conservatively estimating that delivery will not occur until July 2023. These were delivered ahead of schedule on October 5, which has helped improve the immediate outlook. 

An expected shipment of 100 transformers, currently estimated to be delivered in January, will help reduce the backlog of work; however, if regular deliveries do not improve after that, the subdivision backlog is likely to start to grow again in March of 2023.

Poles: NBU is also watching a potential threat to the stock of wood poles. Lead times have increased to 30+ weeks. NBU has received alternative poles treated with a different chemical compound (CCA) which will be used in controlled areas while Electric Operations evaluates their performance. NBU typically purchases creosote-treated poles. There is no way to do a long-term evaluation at this time, but early tests indicate that they are more difficult to climb than creosote poles.

Wire: NBU currently only has enough 1000MCM wire to meet the reserve levels causing some concern, and has increased the level of monitoring.  Orders have been placed with multiple vendors; however, the shortage is causing a delay in the completion of three projects.  The warehouse expects deliveries in November that can be released to Operations for them to work on completing these projects. Any delays in anticipated deliveries could delay these further. 

Impact of Supply Issues and Solutions

Delays in receiving critical materials like the 75 kVA transformers will continue to delay projects waiting to be scheduled for a construction start date. Our goal is to continue to help move your project forward. We have evaluated where we may be able to assist with that effort by making a temporary change in our service application process.

  • Until the supply chain issue is resolved, development projects will no longer have to wait for NBU electric service to be in place before final acceptance can be issued for water and wastewater infrastructure. Final acceptance of water and wastewater infrastructure will allow for application for water meters, release of construction bonds, commencement of the warranty period, and allow builders the opportunity to apply for a building permit. (If you choose to proceed in this manner, the NBU New Construction team will work with you to make the needed notations to your account(s). New Construction can be reached at 830.608.8992 or newconstruction@nbutexas.com.)
  • Please note that this constitutes building at your own risk, as supply chain conditions may not improve in the near future and could even worsen. Any delay in receiving electric service should be shared upfront with potential home buyers to help manage expectations regarding when a house will be ready for occupancy. The account will remain in a builder’s/developer’s name and cannot be transferred to a homeowner until electric, water, and/or sewer service/meters are in place.

At this time, we cannot give a firm estimate as to when individual projects will have the needed materials on hand to proceed. We are simply not receiving that level of information from our vendor. New Braunfels Utilities has relaxed all possible engineering specifications and is seeking any and all additional supplier resources in the market. Even so, the estimated delivery of transformers remains at approximately 20-34 weeks, and there is no assurance that the quantity ordered will be delivered. Vendors continue to cite delays for other material as well; in some instances, this can be up to 100 weeks.

Mitigating Supply Issues

Your continued assistance in ensuring that all easements, fees, and civil work are completed before a project is released to our Purchasing team for material confirmation will be the best way to help NBU mitigate the impact of supply chain issues. Once Purchasing has confirmed that material is available, an Electric Engineering Tech will notify you via email that the job is being released to Electric Operations to be placed on their construction schedule, along with an estimated start date.

If NBU receives any significant information regarding changes in delivery or project schedules, our team will share those updates with you. New Braunfels Utilities’ teams are currently evaluating several tactics to mitigate this issue, and we will share updated information about our approach to this matter regularly. We appreciate your patience as we continue to navigate through this situation. Our sincere hope remains that we will start seeing a recovery in the global supply chain in the near future.