April 23, 2024

Arlington, Va.— A coalition of manufacturers, utilities, and homebuilders led by the National Electrical Manufacturers Association (NEMA) today 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.

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.