New buildings coming to Austin might have to push back their opening date as Austin Energy’s transformer shortage is not meeting the demands of booming development.

What happened

Labor shortages and increased demand are causing a global shortage of transformers, said Stuart Reilly, interim general manager for Austin Energy, at a May 16 meeting.

Transformers—electronic components that transfer energy from one circuit to another—are needed for powering homes and businesses, day-to-day maintenance and power restoration.

Reilly said there is only one domestic supplier for silicon steel core—a material used to make transformers—and there are limited foreign suppliers. The city is also low on other raw materials, including sheet metals, wiring, switches and fuses.

“Unfortunately, the supply and demand of this situation has resulted in some very steep price increases for electric equipment,” Reilly said. “We do not see this supply chain crisis ending anytime soon."

Austin Energy’s ‘unconventional’ solutions

Reilly said Austin Energy is looking at “unconventional” solutions to ease frustrations from developers.

Austin Energy is relaxing its standards for transformers and allowing private developers to acquire their own transformers—if they can get their hands on one—as long as they meet the city’s minimum standards.

Austin Energy is also looking outside the U.S. for transformers—something it’s never had to do before—and is working with a vendor to receive refurbished transformers rather than purchasing new ones.

Quote of note:

“When we’re talking about the shortage of supply in this area, typically we see that it materializes for many of us when we’re talking about new development needs and getting critical housing stock online in the Austin area, especially reasonably priced housing or affordable housing,” Reilly said at the meeting. “The last thing we want is for that housing supply to be ready and for us not to be able to energize because we’re still waiting on transformers.”

Going forward

Austin Energy is communicating with customers on where they are in the queue so they can plan how to move forward with development, Reilly said; however, transformers don’t always arrive from the manufacturer when they’re supposed to, and the shortage has so sign of stopping.

“We [will] continue working on this issue. We know that this is an extremely frustrating issue for developers; it’s frustrating for our crews and staff as well,” Reilly said. “It’s very difficult. This is not a local problem; this is a global problem.”