City experiences impact of supply chain delays to receive electrical transformers

Posted on 4 February 2022 by Matthew Liebenberg

The City of Swift Current will be paying more and waiting longer to receive electrical transformers due to the pandemic related supply chain problems plaguing the global economy.

Council members approved the purchase of several electrical transformers during the regular City council meeting, Jan. 24.

City General Manager of Infrastructure and Operations Mitch Minken told the meeting the purchase of these transformers for the Light & Power utility became necessary due to the long time it will take to receive it.

“The requirement to place this order at this time is based on the lead time to receive the transformers,” he said. “The single-phase transformers have a lead time of 60-62 weeks and the three-phase transformers are 48-50 weeks.”

Council members reacted with surprise to these details about how long it will take to receive the transformers.

“This is crazy to think that you wait this long for things that you need to literally keep the lights on,” Councillor Ryan Plewis said. “So I’m glad that our admin team and Light & Power got a good plan in place and that you guys figure this is going to last us for some time, because I would hate to get stuck in a situation where all of sudden we need something that’s up to 60 months away.”

Minken assured the meeting that the inventory of electrical transformers will be sufficient for future needs in the city.

“I don’t anticipate any inventory shortage,” he said. “Depending on the type of transformer and the size, we try to keep between two and six of those transformers available, which will carry us through. So we don’t anticipate any shortages at this point, but we feel we need to make the move to get this stock coming.”

He indicated the lead time to receive electrical transformers has increased since the previous time the City purchase these items.

“This is abnormal,” he said. “If you recall, we ordered some transformers earlier in 2021. They were at that time around a six-month lead time. So the lead time is getting longer on these items. As you saw in the quotation sheet, the pricing has also increased. The vendor that actually supplied the transformers earlier in 2021 was unable to even provide a quote for us. Their production is filled until the end of 2024 at this point. So it’s really a factor of the environment right now and the supply chain issues that are going on.”

The price increase is related to the availability of certain materials used to manufacture these electrical transformers.

“The factor here is the winding material,” he explained. “So aluminum and copper primarily along with some steel, but it ranges from an increase of 24 per cent per unit to a maximum of 76 per cent per unit. So they’re up substantially.”

Light & Power keeps an inventory of electrical transformers for use when there are new installations or for replacement of existing transformers after failures.

“These transformers remain in inventory until required in the system, at which time they are charged to the appropriate financial account,” he said. “Light & Power inventory is funded by the Light & Power utility and included in the rate charges.”

The City received quotes from three suppliers for the purchase of 12 single-phase pad-mounted transformers. Quotations ranged from $73,979.52 to $319,208.40.

Four suppliers provided quotes for supplying 12 three-phase pad-mounted transformers. These quotations ranged from $272,224.96 to $381,494.

In both cases, the lowest quotation was provided by Anixter Power Solutions Canada Inc. from Winnipeg. Council therefore approved the purchase of all the transformers from this company at a total cost of $346,204.48 (PST included, GST excluded).

City Chief Administrative Officer Tim Marcus said during a media briefing after the meeting that supply chain issues are impacting the City with regard to a variety of purchases.

“We’re seeing price increases on all the materials that we use, it doesn’t matter what they are,” he mentioned. “We’ve seen fuel surcharges. If you remember back earlier when we bought the water treatment plant chemicals, there was some pretty exorbitant increases on them.”

He added that factory shutdowns earlier during the pandemic contributed to the current situation of long lead times when things are ordered.

“We’re seeing that on lots of stuff,” he said. “Sometimes when a vehicle is down, it’s down for more than the day or two that it used to be, because they can’t get the parts to fix it. So it sits for a longer period of time. It’s all over the place, although I can’t say it’s just one particular area. We seem to be getting hit almost daily from a different angle from somebody else. It’s just the kind of the sign of the times.”

Council approved proposed bar and lounge development:

Council approved a discretionary use application for the proposed development of a bar and lounge in an area zoned for commercial use.

The property is located at the corner of Chaplin Street East and 19th Avenue NE, across the street from the Innovation Credit Union iPlex. It was previously used by a catering business.

The applicant wants to use the property for a service station and restaurant, which will include a bar and lounge.

The City’s zoning bylaw requires that any discretionary use must be approved by Council resolution after consideration of its potential impact on surrounding property. City departments and external agencies reviewed the application and no issues were identified. The final step was the public consultation, which was completed in January.

The City advertised the application and also provided written notice to all property owners within a 75-metre radius of the site. A public hearing took place at the regular council meeting on Jan. 10.

City General Manager of Planning and Development Marty Salberg said no presentations were made at the public hearing and one verbal submission in support of the proposal was received by the City Clerk.

The proposed development will comply with three key discretionary use criteria in the zoning bylaw. It will meet the City’s zoning bylaw regulations, there are no concerns that it will create a nuisance and danger to the public, and it will not impede orderly development of surrounding properties.

Councillor Ryan Switzer welcomed this new development in the city and the fact that it will be done by a local investor.

“It’s great to see they’re going forward with a very ambitious project,” he said. “Many have often thought how great it would be to have a lounge within proximity of the Innovation Credit Union iPlex, and it’s great that’s happening.”