06.02.23

Hoeven, Colleagues Push Back on Biden Administration Rule that Threatens Reliability of Electric Grid

Proposed Rule Would Exacerbate Transformer Shortages, Jeopardize National Security & Weaken Supply Chains

WASHINGTON – Senator John Hoeven this week joined 46 of his colleagues, led by Senator Bill Hagerty (R-Tenn.), in pressing Department of Energy (DOE) Secretary Jennifer Granholm to rescind a proposed rule that increases efficiency standards on distribution transformers at a time when the availability of essential grid components remains a significant challenge for the electric power industry. Specifically, the proposed rule requires a shift from the industry standard grain oriented electrical steel (GOES) cores to amorphous steel cores. This would exacerbate supply chain shortages as manufacturers would need to adjust their production lines with access to only a limited domestic supply of amorphous steel.

 

“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,” the senators wrote.

 

“Between 2020 and 2022, average lead times to procure distribution transformers went from eight to 12 weeks to up to three years. This multi-fold increase is directly impacting the electric power industry’s grid modernization and reliability efforts, as well as its ability to respond and recover from natural disasters, posing challenges for communities that need to rebuild as well as new development… We urge the Department to refrain from promulgating a final rule that will exacerbate transformer shortages at this strategically inopportune time. Such a standard could come at meaningful cost to grid reliability.”

 

In addition, the senators requested a briefing with DOE on the advancement of the proposal and how DOE can address the supply chain challenges facing distribution transformers with its existing authority. A copy of the letter, including the full list of co-signers, can be found here.

  

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