Pinehurst Today

WASHINGTON, D.C. – U.S. Representative Richard Hudson (R-NC) introduced the Protecting America’s Distribution Transformer Supply Chain Act, legislation to repeal the Department of Energy’s authority to propose, finalize, implement, administer, or enforce any energy efficiency standard for distribution transformers for the next five years. This legislation builds on Rep. Hudson's work to strengthen our nation's energy security. On June 16, Rep. Hudson discussed this legislation and those efforts at a field hearing in Moore County.

“The Department of Energy should be focusing on strengthening the U.S. supply chain for distribution transformers for the next five years, not further disrupting it,” said Rep. Hudson. “My constituents can not afford further energy disruptions that jeopardize their safety. I am proud to introduce the Protecting America’s Distribution Transformer Supply Chain Act in order to ensure our electrical manufacturers can continue to do what they do best, without Washington getting in their way.”

The Protecting America’s Distribution Transformer Supply Chain Act is led by Rep. Hudson and cosponsored by fellow Energy and Commerce Committee members Reps. Balderson, Griffith, Bilirakis, Allen, Walberg, Balderson, Harshbarger, and Miller-Meeks. A companion version of this legislation was introduced by Senator Barrasso and Senator Tillis.

“The Biden Administration’s new standards for distribution transformers threatens national security, grid reliability and resilience, and the continued domestic production of grain-oriented electrical steel (GOES),” said Rep. Balderson. “As one of the two Members of Congress with a GOES facility in my district, I am proud to join Congressman Hudson in introducing the Protecting America's Distribution Transformer Supply Chain Act to protect the grid and hundreds of good-paying steel jobs in Ohio.”

In December, the Department of Energy proposed new energy efficiency standards for low-voltage dry-type distribution transformers, liquid-immersed distribution transformers, and medium-voltage, dry-type distribution transformers. If finalized as proposed, the standards will yield minor energy savings and further disrupt the nation’s supply chain by causing lead times to procure transformers to increase from months to years.

This proposed rule would require all distribution transformers to shift from the industry standard grain oriented electrical steel (GOES) cores to amorphous steel cores—which accounts for 95% of the domestic distribution transformer market. 

To read the Protecting America’s Distribution Transformer Supply Chain Act, click here.

Several coalitions have sounded the alarm on this proposed rule, including Edison Electric Institute, American Public Power Association, National Electrical Manufacturers Association, National Rural Electric Cooperative Association, and National Association of Homebuilders.

“ElectriCities supports efforts to relieve supply chain constraints for electric transformers,” said Roy Jones, CEO of ElectriCities of North Carolina, a membership organization for public power utilities. “Additional changes to current efficiency standards will only further disrupt the supply chain, increasing lead times and cost. We applaud Congressman Hudson’s efforts to prevent the implementation of unnecessary and problematic rulemakings that would further disrupt our ability to deliver electricity reliably and affordably to public power customers in North Carolina.”

"We appreciate Congressman Hudson’s leadership to advance solutions that accelerate the production, procurement, and deployment of transformers," said Dwight Jacobs, Duke Energy's chief procurement officer. "Distribution transformers are essential for both ensuring grid reliability, including restoring power following natural disasters and storms, and supporting the clean energy transition and economic growth in our communities."

"The National Rural Electric Cooperative Association (NRECA) supports the Protecting America’s Distribution Transformer Supply Chain Act and applauds this effort to delay DOE’s ill-timed distribution transformer rule. The bill would allow electric co-ops to replenish depleted transformer stockpiles, upgrade the grid, and maintain reliability using proven transformer technology.” said Jim Matheson, Chief Executive Officer, National Rural Electric Cooperative Association.

“Manufacturers are working tirelessly to meet sustained record demand for distribution transformers during a time of significant infrastructure investment and strained supply chains,” said Debra Phillips, NEMA President and CEO. “It’s simply the wrong time for DOE to upend the manufacturing process and further complicate supply chain bottlenecks with new regulations that result in marginal efficiency gains. We look forward to working with Rep. Hudson on advancing this legislation that is critical to grid reliability and security.”

“At a time when the home building industry is facing a severe shortage of distribution transformers, NAHB commends Rep. Hudson for introducing this important legislation,” said Alicia Huey, Chairman, National Association of Home Builders. “This vital measure to delay for five years any rulemaking on energy efficiency standards for distribution transformers will provide needed time to boost output at existing facilities to address the growing supply chain crisis for transformers that has delayed home construction projects across the country and aggravated the nation’s housing affordability crisis.”

"EEI and America's electric companies commend Representative Hudson and Senator Barrasso for their leadership in addressing the severe supply chain challenges facing high-efficiency distribution transformers. The shortage of these essential grid components poses significant risks to national security, grid reliability, and resilience, and it impacts our industry’s important electrification and grid modernization plans. The Protecting America's Distribution Transformer Supply Chain Act provides additional time for the electric power industry to work with our government partners to assess the costs and benefits that would result from a significant shift away from the electrical steel that currently is being used for transformer cores. Moreover, the bill sends a strong market signal to manufacturers that there is demand for their existing products, which enables manufacturers to determine that investments to expand production capacity to address the shortages are prudent. Establishing a stronger and sustainable domestic market for high-efficiency distribution transformers, while ensuring the reliability, resilience, and efficiency of the energy grid, are goals that we all share. EEI's member companies are eager to continue collaborating with Congress and with all stakeholders to identify short-term and long-term solutions to overcome this crisis." said Tom Kuhn, Edison Electric Institute President and CEO.

Original source can be found here.