ARLINGTON, Va. — A coalition of manufacturers, utilities, and homebuilders led by the National Electrical Manufacturers Association (NEMA) called on Congress to appropriate funding to help expand domestic manufacturing capacity of critical grid components, including distribution transformers.
The request, sent in a letter by the coalition to House and Senate Appropriations Committee leadership, encourages continued bipartisan cooperation to resolve ongoing distribution transformer supply chain obstacles and provide much-needed business certainty. The American Public Power Association (APPA), Edison Electric Institute (EEI), The GridWise Alliance (GridWise), Leading Builders of America (LBA), National Association of Homebuilders (NAHB), National Rural Electric Cooperative Association (NRECA), and Transformer Manufacturing Association of America (TMAA) joined NEMA in outlining how additional work is needed beyond the Department of Energy’s (DOE) final distribution transformer efficiency rule, published April 4, to bolster the domestic production of distribution transformers and reduce lead times for new orders:
“Our coalition again requests assistance from Congress to expand domestic manufacturing capacity for distribution transformers to reduce these lead-time averages or, at the very least, to prevent them from growing. Without additional manufacturing capacity in the near-term, grid reliability and resilience remain highly vulnerable. Our coalition will continue to collaborate with DOE to explore constructive solutions to address supply chain issues around distribution transformers and other critical grid components. Further, we look forward to engaging with Congress during the FY2025 appropriations process to identify pathways to deploy resources to keep America’s grid robust and secure.”
Unprecedented demand for grid components is expected to continue for the foreseeable future. According to the National Renewable Energy Laboratory, demand is driven largely by replacement of aging infrastructure and investments in electrification, such as data centers, electric vehicles, and heat pumps. The efficiency standards detailed in DOE’s final rule provide a manageable production framework for manufacturers to address that demand growth. The coalition discourages Congress from further attempts to delay or postpone the rule and, instead, focus on making additional investments to expand domestic manufacturing capacity for distribution transformers to reduce lead-time averages or, at the very least, to prevent them from growing.
“Our nation is facing a distribution transformer shortage and order backlog of more than two years. A near-term boost in production capacity will enable manufacturers, utilities, and end-users to continue delivering grid reliability and resilience all Americans rely on,” said Debra Phillips, President and CEO, NEMA. “There is more to be done to ensure our nation’s grid remains secure and resilient. We need assistance from Congress to expand domestic manufacturing capacity for this critical grid component.”
The coalition emphasized continuing to work with Congress, the Administration, and other stakeholders to find solutions and provide certainty to manufacturers.
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