The City Council of College Station, Texas, in December voted unanimously to approve the purchase of single and three-phase transformers.
The council voted to approve the purchase of single and three-phase padmount transformers from Texas Electric Cooperatives ($338,867), KBS Electrical Distributors ($61,550), and Alamo Transformer Supply ($109,372). A total of 12 vendors submitted bids to supply transformers.
The transformers are scheduled for delivery in 2025.
Prior to the City Council’s vote at its Dec. 11 meeting, Timothy Crabb, College Station’s Director of Electric Utilities, provided an overview of the transformer purchases.
Crabb said that because of market volatility and supply chain issues, “most of our vendor agreements have escalation/de-escalation clauses in their contracts and that’s been since July of 2021.”
He noted that “we evaluated the bids a little bit differently than we have in the past.”
Crabb said that some of the bids were submitted as firm bids and one of those bids came in as a bid with the price quoted at time of delivery.
“Delivery times have been 12 to 18 months on transformers, so that price could change,” he said. “So if you look at it, it’s like, OK, I have a firm bid and I have a non-firm bid – which one do you go with?”
The decision was made to go with a non-firm bid from Texas Electric Cooperatives “and essentially they’re sixty percent less than” a firm bid submitted by another entity for a single-phase transformer.
With respect to the three-phase transformers, “again, the non-firm bid came out less than the firm bid,” Crabb said, “and we’re proposing on some of the transformers based on the total ownership costs that was calculated, going with a non-firm bid on some, the firm bid on the others.”
The caveat? Because of an escalation charge, firm bids are not truly firm bids, he pointed out.
“We did a transformer order back in February of 2022 and it was bid as a firm bid, with a 12-month delivery time. Those transformers just came in, had an 18-month delivery time and there was an escalation on them of 30.13 percent,” he said.
Therefore, the evaluation of the more recent transformer bids was done differently. “In the past, we would only” award on firm bids. “This time, we’re awarding on some firm bids and some bids that aren’t firm.”
The American Public Power Association has made addressing the strained supply of distribution transformers one of its top policy issues.
In December, the House Energy and Commerce Committee passed a bill that would prohibit the Department of Energy from increasing distribution transformer conservation standards for five years.
Passed on a party-line vote, H.R. 4167, the Protecting America’s Distribution Transformer Supply Act, sponsored by Rep. Richard Hudson (R-NC), would prohibit DOE from increasing distribution transformer conservation standards for five years.
APPA on Sept. 13 voiced support for the bill. “A delay is urgently needed to give manufacturers the certainty to increase production to meet demand,” wrote Desmarie Waterhouse, Senior Vice President, Advocacy and Communications & General Counsel at APPA, in a Statement for the Record.