Chad Capps, CEO of Cooperative Electric Energy Utility Supply (CEEUS), the corporation that supplies tools and equipment to co-ops.
Photo by Josh P. Crotzer
If you’ve gone grocery shopping recently, you probably found that some of the items you needed were sparsely stocked and others were out of stock altogether. This is a symptom of a breakdown in the global supply chain—one or more of the steps required to produce and distribute those items went wrong, leaving them temporarily unavailable.
Supply chain issues have also put South Carolina’s electric cooperatives in a similar predicament. For example, co-ops used to be able to acquire transformers—you know them as the big green boxes in front of your house, or the gray cylinders at the top of utility poles—in as little as four to eight weeks. Now it often takes 10 times that, says Chad Capps, CEO of Cooperative Electric Energy Utility Supply (CEEUS), the corporation that supplies tools and equipment to co-ops.
“One major manufacturer in our industry … they’re telling us their lead times are 127 weeks,” says Capps. “They’ve already sold all their capacity for over two years.”
On top of that, prices frequently increase, even months after CEEUS places orders. “We are getting price changes literally every day,” he says.
Capps says the delays and price increases are largely due to a shortage of labor at every point in the supply chain, but especially in manufacturing. The pandemic triggered a wave of layoffs, resignations, and early retirements from which transformer manufacturers have yet to recover. Some facilities are short-staffed by as many as 400 employees and able to run at just 60–75% capacity. While many expected the labor situation to improve after the expiration of the Federal Pandemic Unemployment Compensation (FPUC) program on Sept. 5, 2021, that has not yet been the case.
Fortunately for South Carolina co-op members, CEEUS is attempting to insulate them and their cooperatives from the worst consequences of the supply chain breakdown by monitoring lead times and maintaining an emergency stock of electrical supplies.
“The reason we exist is, in general, so customers don’t see these ups and downs of the market,” says Capps, but “even CEEUS can’t mitigate everything.”