March 06, 2024

Arlington, Va.— The National Electrical Manufacturers Association (NEMA), along with a broad coalition of trade associations, labor organizations, and companies, sent a letter to the Senate yesterday seeking additional bipartisan support for S. 3627, the Distribution Transformer Efficiency and Supply Chain Reliability Act of 2024, sponsored by Senators Sherrod Brown (D-OH) and Ted Cruz (R-TX). The 12-member coalition, launched by NEMA in 2023, is working to ensure a secure and reliable domestic supply chain for critical grid components including distribution transformers.

The American Public Power Association, Cleveland-Cliffs, Inc., Edison Electric Institute, The GridWise Alliance, International Brotherhood of Electrical Workers, Leading Builders of America, National Association of Home Builders, National Rural Electric Cooperative Association, Transformer Manufacturing Association of America, United Auto Workers Union Local 3303, and Zero Emission Transportation Association joined NEMA in requesting Senators’ co-sponsorships.

“We thank Senators Brown and Cruz for sponsoring S.3627 and taking action to provide long-term supply chain certainty for transformer component suppliers, manufacturers, utilities and customers while maintaining practical efficiency gains,” said Debra Phillips, President and CEO, NEMA. “Our partners who’ve joined us on this letter understand the urgency of bolstering our transformer supply chain. Every aspect of American life that requires electricity depends on this critical grid infrastructure.”

“The ability to manufacture high-quality transformers domestically is critical from both a national security and national economic perspective. S. 3627 strikes the appropriate balance between implementing reasonable efficiency standards for distribution transformers while providing long-term supply chain certainty for domestic manufacturers at a critical time in the industry,” said Joe Donovan, Executive Director of the TMAA. “The diverse nature of this coalition with organizations from manufacturing, utilities and labor affirms that balance.  The TMAA encourages passage of S. 3627 and thanks those offices that have joined onto the bill.” 

The Department of Energy’s (DOE) 2023 proposed rule, Energy Conservation Program: Energy Conservation Standards for Distribution Transformers, effectively requires distribution transformers to shift from using industry standard grain oriented electrical steel (GOES) cores to amorphous steel cores to achieve marginal efficiency gains. DOE already requires distribution transformers to be highly efficient; currently, these products are made to be no less than 97.7% efficient. The shift in core steel would significantly upend the distribution transformer supply chain at a time when customers are already forced to wait more than two years for new orders due to supply chain complications. DOE is required to finalize its rule by June 1 and the rule is currently pending review at the Office of Management and Budget.

Since DOE published the proposed rule, NEMA has worked with lawmakers and supply chain partners to advocate for compromise legislation. The coalition letter follows a June 2023 bipartisan letter from Senator Bill Hagerty (R-TN), signed by 48 Senators, urging DOE to change course on the rule. In the House of Representatives, Congressmen Chris Deluzio (D-PA-17) and Mike Kelly (R-PA-16) have introduced a companion bill to the Brown and Cruz Senate version.

The Distribution Transformer Efficiency and Supply Chain Reliability Act of 2024 would set reasonable efficiency standards for distribution transformers and allow sufficient time for manufacturers and suppliers to implement the new manufacturing process. The legislation would also limit the ability of DOE to increase efficiency standards on distribution transformers in the future, removing this critical grid infrastructure from a constant cycle of supply chain disruptions. Finally, the legislation would preserve the ability for manufacturers to use industry standard GOES, while providing U.S. steel manufacturers sufficient time to meet new efficiency levels.  

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About APPA

The American Public Power Association is the voice of not-for-profit, community-owned utilities that power 2,000 towns and cities nationwide. We represent public power before the federal government to protect the interests of the more than 49 million people that public power utilities serve, and the 96,000 people they employ. Our association advocates and advises on electricity policy, technology, trends, training, and operations. Our members strengthen their communities by providing superior service, engaging citizens, and instilling pride in community-owned power.

About EEI

The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric companies. Our members provide electricity for nearly 250 million Americans, and operate in all 50 states and the District of Columbia. As a whole, the electric power industry supports more than 7 million jobs in communities across the United States. In addition to our U.S. members, EEI has more than 70 international electric companies as International Members, and hundreds of industry suppliers and related organizations as Associate Members.

About The GridWise Alliance

The GridWise Alliance leads a diverse membership of electricity industry stakeholders focused on accelerating innovation that delivers a more secure, reliable, resilient, and affordable grid to support decarbonization of the U.S. economy. For more information about The GridWise Alliance, visit: www.gridwise.org.

About LBA

Leading Builders of America (LBA) represents 21 of the largest production homebuilders in the United States, our members build approximately 45% of all new homes in the nation. While its members build for many different market segments, the majority of the homes we build are for entry-level and middle-class, working families. 

About NAHB

The National Association of Home Builders of the United States strives to protect the American Dream of housing opportunities for all, while working to achieve professional success for its members who build communities, create jobs and strengthen our economy.

About NRECA

The National Rural Electric Cooperative Association (NRECA) is the national trade association representing nearly 900 not-for-profit electric cooperatives and other rural electric utilities. America’s electric cooperatives are owned by the people that they serve and comprise a unique sector of the electric industry. From growing exurban regions to remote farming communities, electric cooperatives power one in eight Americans and serve as engines of economic development for 42 million people across 56 percent of the nation’s landscape. Electric cooperatives are focused on providing affordable, reliable, and safe electric power in an environmentally responsible manner and support common sense solutions to environmental impacts.

About TMAA

The Transformer Manufacturing Association of America (TMAA) is the voice of the domestic transformer manufacturing sector and its customers. Our members manufacture power and distribution transformers in the United States or are service suppliers, vendors, utilities, contractors and others who support the domestic transformer industry.  TMAA advocates for policies aimed to expand the market for domestically produced power and distribution transformers and secure the U.S. economic supply chain.  Learn more at www.TMAA.org

About ZETA

The Zero Emission Transportation Association (ZETA) is a federal coalition focused on advocating for 100% EV sales. ZETA is committed to enacting policies that drive EV adoption, create hundreds of thousands of jobs, secure American global EV manufacturing leadership, drastically improve public health, and significantly reduce carbon pollution.