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Officials flag transformer lead times and inventory strategy ahead of voltage conversion
Summary
Staff said transformers and meters are added to plant value as soon as they arrive and warned of long lead times; council discussed budgeting and possible borrowing to support large transformer purchases tied to a planned voltage conversion.
Staff told the board that when transformers and meters are purchased they are added to plant value even if not immediately in service, and that lead times and tariffs have created procurement challenges. "So if you transformers and meters are the exception when it comes to fixed assets...regardless of whether they're in service, it will automatically be added to your plant and service values," staff said.
Members discussed ordering larger lots of transformers to raise plant value and the tradeoffs with customer rates, and staff said they had budgeted modest amounts this year but would likely pursue borrowing to make impactful bulk purchases. Board members also raised the difficulty of long lead times and the recent impact of storms, which have accelerated replacement needs in some areas.
