CEEUS Expands into Mid-Atlantic with CFC Support

Supply chain disruption—leading to long waits for key parts, along with price inflation—has caused challenges for the electric utility industry since the COVID-19 pandemic. But that hasn’t stopped the growth of South Carolina-based Cooperative Electric Energy Utility Supply (CEEUS). 

CEEUS is the member-owned wholesale electrical distributor and parts supplier for the Electric Cooperatives of South Carolina. Due to its rapid growth in supplying members with critical materials and equipment, CEEUS recently purchased new warehouses in South Carolina and Virginia, and also announced plans to expand its service territory into Virginia, Maryland and Delaware. As its sole financing partner, CFC is helping CEEUS finance this expansion.

CEEUS has been able to manage through the supply chain disruption by focusing on what it does best—serving members.

“CEEUS was challenged just like all distributors to perform under unforeseen circumstances,” CEEUS President and CEO Chad Capps said. “First, we immediately started working with our suppliers to partner in outside-the-box ways in order to get the materials our members needed, while addressing the challenges our suppliers faced. Second, we worked on our resiliency through our people—training existing employees and developing a process to hire new people who were team players. These two focus areas were successful, as we have been able to meet many of our members’ needs, while other utilities were struggling to get the same material from their sources.”

Today, the supply chain situation has improved, but is not yet back to pre-pandemic levels.

The supply cooperative has seen a few products return to pre-pandemic lead times. However, most products continue to experience longer-than-normal lead times. For example, many underground-related products still have lead times double, triple or even quadruple what would have been a normal lead time.

There is some good news in terms of pricing as the rate of inflation has slowed. As the cost of raw materials declined, CEEUS has seen some prices decline from their peak. Capps explained, “In general, we are still expecting an overall increase in product pricing over the next year—albeit a much smaller increase than we have seen over the past few years.”

Business Growth Requires New Facilities

CEEUS has experienced tremendous growth since the pandemic—41% in 2021, 53% in 2022, and another 9% so far this year. To keep up with member demand for parts and services, CEEUS recently announced the purchase of a new warehouse in West Columbia, South Carolina, and the construction of new office space at that facility.

“With the growth rates we have experienced the past few years, we simply outgrew our current warehouse and office space,” Capps said. “This resulted in our purchasing a new 247,000-square-foot warehouse that will provide two to three times the amount of pallet spaces as our existing warehouse, as well as building all new office space that is three times our current space with additional room for expansion in the future. We are also building a state-of-the-art test lab and tool repair facility that is double the current size. This new campus will be our corporate headquarters going forward, and will support our South Carolina electric utility business and our Line Equipment Sales business to contractors throughout the United States.”

In April, the company announced plans to expand its service territory into Virginia, Maryland and Delaware, and also announced plans to purchase a new warehouse in Glen Allen, Virginia, north of Richmond.

“Our Glen Allen warehouse is a brand-new, 187,000-square-foot warehouse that should allow us to serve electric utilities in the Virginia-Maryland-Delaware area for years to come,” Capps said. “We had been working on a plan to expand in this area for two years, and our market research showed a definite need for another distributor.” 

CEEUS will be the first cooperative-owned distributor to own a physical warehouse in the Virginia-Maryland-Delaware area. Capps believes the cooperative business model will allow electric cooperatives in the area to have a distributor that they ultimately own and puts their needs first, over profits, like it has for decades for its member-owners in South Carolina. 

While this will be the first time CEEUS has expanded with a physical warehouse outside of South Carolina, the company’s wholly owned subsidiary, Line Equipment Sales, has been doing business in 42 other states and Canada for many years. 

CFC Provides Financing

As the sole financing provider for CEEUS, CFC worked closely with the company to put together a funding package to support its growth. 

“CFC has been great to work with on both our new South Carolina and Virginia warehouse facilities,” Capps said. “CFC has provided CEEUS with a line of credit for many years, but with our rapid growth in South Carolina and our expansion into the Virginia-Maryland-Delaware market, additional financing was needed to acquire warehouse space to properly service this market, both for today and for many years to come.”

He added, “CFC has been such a great partner and easy to work with each step of the way on our financing journey. I couldn’t have asked for a more seamless path to acquiring the funds our business has needed.”