APS has taken several measures to respond to the issue, including:
- Actively working with key manufacturers to maintain the supply levels we need to serve current customers and their construction projects
- Seeking alternative suppliers to help fulfill equipment needs
- Procuring inventory from other electric utilities, when available
- Refurbishing and redeploying existing equipment, when possible
- Evaluating and purchasing alternative product and design options that meet our high safety and quality standards
- Partnering with construction partners and customers to prioritize schedules based on the customer’s move-in readiness levels (i.e., permits in hand, inspections cleared)
- Frequent planning meetings to assess the ongoing market to ensure continuity of supply and deploy solutions necessary to meet our customers needs
In short, there’s more demand than there is supply due to increased market demand in the Utility sector. On the supply side, we are seeing raw material and labor shortages impacting manufacturers, as well as transportation and logistics challenges caused by congested ports and truck driver shortages. On the demand side, strong growth and expansion throughout Arizona is driving increased demand for materials.
The steel shortage has particularly impacted our supply of distribution transformers and other equipment used to adjust system voltages to the appropriate levels for businesses and neighborhoods.
We will continue to monitor and manage our supplies with help from our partnering manufacturers should we run into other equipment-sourcing challenges.
There’s no clear answer here, as this is an evolving, fluid situation. We expect some material to be in scarce supply for the foreseeable future. However, we are not stopping any new construction work; instead, we are re-prioritizing our schedules and making every effort to minimize delays.
We’ve created two categories for new construction projects: Critical and Pending. Move-in ready projects will be prioritized as Critical, and must present the following:
- 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)
Providing our customers with safe, reliable power is our No. 1 priority. Although global supply chain challenges have affected our suppliers, we do not anticipate any impact on existing services and are doing all we can to keep replacement parts and equipment in stock.