COVINGTON, Ga. — Costs and lead time amounts on electric supplies nationwide are skyrocketing, and the city’s electric department is experiencing this firsthand.
In his recent request for purchasing transformers, Covington Electric Director Joel Smith told the city council that the market has been “tricky.” Typically, Smith said during the April 4 meeting, his department sends out a request for proposals to purchase transformers, but in today’s market, few will give out pricing. And those that will can commit to given prices for only a few hours.
“So, no one will give us the pricing because mainly due to the lead time on transformers, which is anywhere from one year to — I had some come back at 135 weeks, or two-and-a-half-years,” Smith said. “So trying to figure out this one has been tricky.”
After sending out a request to four vendors for only “projected” pricing and “potential” lead times, Smith said vendor Stuart Irby gave the best price and lead time at about $722,695 for 90 transformers, which were expected to be delivered no later than the first quarter of 2023. But Smith said he was told to expect up to a 30% increase on the cost, rising upwards of $1 million.
“We’re growing, and we’re growing fast,” Smith said. “A lot of these have already been allotted to different projects going on right now … And this is not giving us the cushion that I really would like to have. This is just getting us by. We do have a cushion, but it’s not as much as I would like, but I’m not comfortable paying these prices when I feel like the market will probably drop back down in the next two years.”
Smith said the transformers would be mostly for upcoming and ongoing projects including Wildwood Phases 1 and 2; the Lakeview Landing development; the Ashford Park project off Washington Street; the Martin’s Crossing development at U.S. Hwy. 278 and Covington Bypass Road; the Quinn Residence — homes in Covington Town Center; the Cottages at Studio Village; and the recently announced Cinelease Studios-Three Ring expansion. Smith said the Neely Farms development was not part of the projects included for this order.
Smith said there used to be a market for reconditioned transformers, but considering the market as a whole, “most people are hanging onto them and having them reconditioned for themselves.”
Councilwoman Fleeta Baggett suggested the council consider that lead times may only get worse in the short term considering hurricane season was approaching. She also talked about her family’s experience in the electric supply business and how pricing and lead times were affecting them, too.
“Anything that Joel needs that we can get our hands on, get it,” Baggett said. “Because they are literally holding [my family’s] purchasing agent to the price while she’s on the phone with them. If she hangs up, goes to talk with my brother, and then goes to call them back, the price might be different … So if there’s anything we can get, please get it.”
“It’s a nationwide thing,” Smith said. “It’s not just Georgia or the Southeast. It’s nationwide.”
Smith said the cost of the purchase would be figured into next year’s budget.
After further discussion, the council voted unanimously to approve the purchase of the transformers from Stuart Irby, as requested.
In addition to the transformers, the council also approved the purchase of 618 Itron meters through Tantalus from Anixter in the amount of $2,134,310.15, and the purchase of infrastructure from Anixter in the amount of $68,565 for reading meters.