With electricity demand projected to increase 25% by 2030 and 78% by 2050 from 2023 levels, utilities face a perfect storm: aging infrastructure, climate-driven outages, and increasing expectations for reliability and resiliency. Getting to this point will require more than incremental improvement; It requires entirely new sources of capacity and a fundamental rethinking of how the industry delivers results. Procurement is no longer a support function: it is the utility industry’s most critical capability builder. Long before equipment hits the field, procurement decisions determine whether transmission and distribution (T&D) projects move forward or stall, determining access to critical materials, supplier reliability, and risk exposure.
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Procurement, once viewed primarily as a purchasing and cost containment function, is now recognized by forward-thinking utilities as a value-enabling strategic advantage. In an era defined by supply volatility, regulatory pressure and unprecedented capital expansion, acquisitions secure supply, manage risk and keep T&D programs on schedule, while unlocking capacity and value that have historically been on the table. When disruption occurs, acquisition is where the pressure falls first. That reality positions you to anticipate limitations, detect early warning signs, and intervene before problems become delays in the field. Utilities that scale up procurement accordingly are not just managing challenges – they are actively building the capacity needed to deliver reliable, timely T&D results.
Data centers alone are projected to triple their energy consumption by 2028 compared to 2023 levels. Operating 24 hours a day, a single campus can consume as much energy as a medium-sized city, straining regional networks during both peak and off-peak hours. Add to that the rapid adoption of electric vehicles and the electrification of heating systems, shifting the load from gas to electricity, and the magnitude of the challenge becomes unmistakable. Procurement is the lynchpin to meet this increase in demand. By securing capacity in advance, negotiating favorable prices for critical materials and equipment, and working closely with suppliers to avoid bottlenecks, procurement allows utilities to efficiently upgrade infrastructure and maintain reliable operations.
Modernizing America’s utility infrastructure is long overdue, making the challenge of meeting growing demand even more complex. Most U.S. distribution lines have exceeded their 50-year life expectancy and utilities are investing in these improvements at record rates, with capital expenditures topping $178 billion in 2024 and projected to reach $220.7 billion by 2026. Transmission improvements alone account for more than $34 billion of that spending. But these investments face obstacles in a volatile market. Tariffs on steel, aluminum, copper and other metals have raised production and construction costs, while prices for critical components such as transformers, switchgear and smart meters continue to rise. As a result, both conventional and renewable projects are under increasing financial pressure. Additionally, due to tariffs, trade disputes, and increases in demand, delivery times are lengthening dramatically. It can now take two to four years to order and obtain a transformer. A semiconductor shortage is slowing smart grid progress, and high copper and aluminum prices are crippling cable orders. Adding shipping bottlenecks results in lost opportunities, delays in fulfillment, and decreased customer satisfaction. The procurement department is uniquely positioned to manage the risk and turbulence that utilities currently face. Through disciplined contracting, dedicated monitoring teams, diversified supply bases, and the use of predictive analytics, procurement allows utility operations to anticipate disruptions rather than react to them. Leading organizations are going a step further: establishing rate command centers that combine real-time analytics with cross-functional decision making to identify, assess and mitigate supply chain risks before they impact T&D performance.
Another cost to utilities is weather-related damages. The United States faced more than $40 billion in climate disasters in recent years, with more than $115 billion in damages in 2025 alone. These damages not only disrupt transmission to customers, but also disrupt supply chains, increase costs, and delay critical projects. The ripple effects of these disasters last for years. Procurement can build resilience against climate-induced disasters by establishing regional stockpiles, negotiating surge capacity agreements and mutual aid contracts, and stress testing suppliers to determine their continuity and recovery readiness. As a gateway to supply chain sustainability, procurement can help utilities reduce their environmental footprint and avoid contributing to climate-driven disasters. Almost all emissions fall within Scope 3, generated by upstream suppliers or downstream partners. Procurement teams can collaborate directly with suppliers to track, manage and help reduce these emissions. You can also focus on responsible sourcing to minimize environmental impacts while generating economic value.
Despite their potential, acquisitions have historically been considered a weak point for many utilities. Compared to other industries, the sector has lagged behind in acquisition maturity, and the consequences are costly. Without a strategic approach, projects can go 20% to 40% over budget, forcing utilities to make difficult decisions: absorb cost overruns or delay critical upgrades. To meet growing industry challenges, utilities must elevate procurement from a transactional function to a strategic powerhouse. Here are the top actions that can close the gap: 1. Establish closer alignment with your business partners: Position procurement as an enabler of operational reliability and growth, not a cost driver. Integrate acquisitions early in planning cycles, align category strategies with long-term operating and capital plans, and co-own the performance results that matter to the business. 2. Diversify suppliers to build resilience: close contracts for items with long lead times and identify alternative sources for the most critical components and materials. Then expand these efforts to find alternative suppliers for as much of the procurement portfolio as possible. Alternative suppliers provide support during supply chain disruptions and can even offer financial savings. Additionally, expand regional manufacturing partnerships and explore the possibility of sharing critical components. 3. Develop procurement talent: Build a team with strategic procurement expertise through targeted hires, continuing professional development and specialist consulting partnerships. 4. Embrace procurement technology and analytics: Predictive insights enable smarter long-term budgeting, more accurate rate case planning, and stronger recovery strategies. 5. Create a procurement center of excellence: A centralized hub for spend data, supplier status, and project milestones streamlines decision making and accelerates execution. 6. Foster supplier relationships: Treat suppliers as strategic partners and customers, allowing the team to unlock better pricing, foster innovation, and strengthen resilience and sustainability practices.
Utilities are operating under unprecedented interconnected pressures, and procurement is now at the center of how those pressures are managed. When elevated as a core capacity generator, procurement becomes a force multiplier for T&D performance, enabling utilities to meet accelerating demand, secure critical supply, and reduce the risk of costly outages before reaching the field. To delve deeper into how procurement can transform utility performance in an era of disruption, explore recent insights from ProcureAbility in: “Charged for Change: Transforming Utilities Procurement in an Era of Disruption.” —Conrad Sover is CEO of ProcureAbility. Snover Conrad leads the company’s vision and growth with a focus on customer success, talent and culture, and continuous innovation of procurement and supply chain services. He is deeply committed and experienced in helping global organizations evolve procurement from a transactional function to a strategic driver of business value.
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