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Global supply chain challenges are creating issues for a wide variety of industries, from home construction to new cars. Raw materials, such as steel, are in short supply.

APS has been working with suppliers for the last two years to manage these challenges with a focus on minimizing impacts to our customers. Recently, supply constraints around the globe have intensified, resulting in low inventory on some key equipment and delayed orders from some of our suppliers.

Our first priority is maintaining safe, reliable service to existing customers. We’re also partnering with builders and customers with new projects under construction to prioritize and allocate limited-inventory equipment based on project readiness.

Importantly, we are not stopping our work on new construction. While we expect some materials to be in scarce supply for the foreseeable future, we will work hard to mitigate any delays for new construction.

FAQs

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Here are some of the ways we are tackling this challenge today:

  • Actively working with our key manufacturers to maintain the supply levels we need to serve current customers and construction/expansion projects
  • Seeking alternative suppliers to help fulfill our equipment needs
  • Procuring inventory from other electric utilities, as available
  • Refurbishing and redeploying existing equipment, when possible
  • Evaluating alternative product and design options that meet safety and quality standards
  • Partnering with construction partners and customers to prioritize the schedule based on “move-in” readiness levels on the customer side (e.g. permits in hand, inspection clearances received)
  • Frequent coordination meetings to assess the situation continuously and take quick decisions and actions

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In simplest terms, there’s more demand than there is supply. On the supply side, we are seeing raw material shortages (including steel), labor shortages impacting manufacturers, and transportation and logistics challenges (such as congested ports). On the demand side, strong growth in different parts of the world, including here in Arizona, is driving increased demand for materials. 

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The steel shortage has particularly impacted our supply of distribution transformers – equipment used overhead or underground to adjust voltages to the appropriate levels for serving different types of customers, including businesses and neighborhoods. In addition, the supply of concrete is constrained in the state and across the Southwest. These are not the only materials or equipment experiencing challenges, so we continue to monitor and manage our supply of the many components required to deliver safe and reliable service to customers.

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No; this is an evolving, fluid situation. We expect some material will be in scarce supply for the foreseeable future. Importantly, we are not stopping our work on new construction; rather, we are prioritizing the schedule and making every effort to minimize delays for customers. 

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Our first priority is maintaining safe, reliable service to existing customers. For new construction projects, we have created two categories: Critical and Pending. Projects deemed “move-in” ready will be prioritized as Critical. "Move-in" ready status is determined by validating completion of key project milestones:

  •  An executed line extension agreement (prior to construction in accordance with Schedule 3)
  • Inspection clearance from appropriate jurisdiction (city, town, county)
  • Necessary trench and conduit (excavation and installation of conduit by customer for APS cable)
  • Easements
  • Permits

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Again, maintaining safe, reliable service to existing customers is our first priority. While global supply chain challenges are affecting our suppliers, we are proactively engaged on this issue and do not anticipate impacts to existing service. With our summer season on the horizon – when we will see our typical extreme summer temperatures, potential monsoons and wildfires, and seasonal peak demand for energy across our system – we are prioritizing keeping inventory levels of replacement parts and equipment in stock. 

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Your local customer project representative can provide more details specific to your project. Find your local representative on our construction contacts map.
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