September 09, 2024

Arlington, Va.— NEMA welcomes last week’s recommendations from the National Infrastructure Advisory Council (NIAC) to address U.S. transformer supply. Transformers are one of many critical grid components produced by NEMA members, and transformer lead times have been steadily increasing for the last two years to a current average of 120 weeks. Amid rapid electrification and grid resilience projects, skyrocketing energy demand, and ongoing workforce shortages, there is little end in sight to these record backlogs.

NIAC’s report, “Addressing the Critical Shortage of Power Transformers to Ensure Reliability of the U.S. Grid” presents seven recommendations to increase production and output capacity while providing reliability to critical grid infrastructure supply chains. Key among NIAC’s recommendations are the creation of a virtual transformer reserve, with the government as the buyer of last resort; the need to hastily grow the transformer production workforce through partnerships with educational institutions; increased market forecasting and certainty through long-term contracting; and expanded, proven policy incentives which foster investment into greater domestic capacity output, such as with tax credits and direct grants.

NEMA’s President and CEO Debra Phillips was a member of the NIAC Subcommittee on Transformer Availability, which convened experts from electric utilities, manufacturers, federal agencies, and academia to develop the comprehensive set of recommendations.

“It was a pleasure to serve on this Subcommittee, which heard important insights from NEMA members Hitachi and Prolec GE as well as other organizations and companies that are committed to solving this critical challenge,” said NEMA President and CEO Debra Phillips. “NEMA has worked constructively with coalition partners, including utilities, homebuilders, electrical steel suppliers, and others, for more than two years to engage Congress, agencies, and the White House on the pivotal role distribution transformers play in delivering electricity to all Americans. We’re pleased that NIAC reflects manufacturing perspectives and further amplifies the importance of this issue.”

NEMA looks forward to working with the Subcommittee and key stakeholders on executing NIAC’s recommendations so that manufacturers, utilities, and end users can continue to deliver the electricity communities across the United States rely on. A link to the final report can be found here.