Bipartisan legislators urge DOE to nullify transformer rule

Forty-seven senators are urging the U.S. Department of Energy (DOE) to nullify a rule increasing the efficiency standards for distribution transformers.

In a letter to Energy Secretary Jennifer Granholm, the senators said the rule would increase challenges for the electric power industry already struggling due to increases in demand, supply chain issues and a skilled workforce shortage.

At issue in the “Energy Conservation Program: Energy Conservation Standards for Distribution Transformers” proposed rule is a move from the industry standard grain-oriented electrical steel (GOES) to amorphous steel cores. Congress members said the shift could exasperate the supply chain shortage as transformer manufacturers would need to adjust production lines. Currently, domestic supply of amorphous steel is limited, the lawmakers said, and scaling up production to accommodate the proposed rule would cause further delays in manufacturing timelines.

“Currently, the United States only has one domestic producer of amorphous steel. Moving to amorphous steel cores, as proposed by DOE, would require this sole domestic supplier to rapidly scale operations from its current market share of less than five percent to accommodate the entire distribution transformer market. Such a recalibration of the supply chain will further delay manufacturing production timelines – currently estimated to be a minimum of 18 months to two years,” the senators wrote in their June 1 letter.

Moving to amorphous steel cores, the Senators said, would wipe out advancements made by the current and previous administrations to address the challenges associated with transformer supply chains.

“By phasing out the primary market for U.S.-produced GOES, the Proposed Rule could jeopardize this progress, putting everyday American families at risk,” the senators wrote. “Further, we are concerned that requiring the use of amorphous steel for new distribution transformers could put the administration’s electrification goals at risk by exacerbating an existing grid vulnerability… We believe the most prudent course of action is to let both GOES and amorphous steel cores coexist in the market, as they do today without government mandates, for new installations as we ramp up domestic production and reorient supply chains.”

The senators asked the DOE to refrain from enacting the final rule and to brief the Senate on the advancement of the proposal and how the DOE will address supply chain challenges facing distribution transformers.

“We are committed to working with you to identify short and long-term solutions to the supply chain shortage of these critical grid components with a goal of building a robust domestic market and a more efficient and reliable grid for decades to come,” the senators wrote.