Last week, U.S. Senator Katie Britt last week joined U.S. Senator Bill Hagerty (R-Tenn.) and a bipartisan group of 45 other colleagues in sending a letter to Department of Energy (DOE) Secretary Jennifer Granholm expressing their concerns about a proposed rule by the DOE that increases efficiency standards on distribution transformers.
The Senators said that the transformers are a critical piece of infrastructure for the nation’s power grid. The new rule, they contend, comes at a time when the availability of essential grid components remains a significant challenge for the electric power industry and while the industry is struggling due to a substantial increase in demand, supply chain issues, and a skilled workforce shortage.
“Instead of meeting the challenges of today – grid reliability, national security, and supply chain efficiency – President Biden chooses to regulate to a different reality, one that only serves his reckless Green New Deal priorities,” said Senator Katie Britt. “I urge this Administration to rescind this rule and commit to a solution that supports current steel industry capabilities.”
The Sens. wrote, “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. Such a recalibration of the supply chain will further delay manufacturing production timelines – currently estimated to be a minimum of 18 months to two years.”
The Senators acknowledged the actions that this and previous administrations have already taken in recognition of the challenges associated with distribution transformer supply chains but warned that this proposed rule would negate these advancements.
“By phasing out the primary market for U.S.-produced GOES, the Proposed Rule could jeopardize this progress, putting everyday American families at risk,” the Sens. explained. “Further, we are concerned that requiring the use of amorphous steel for new distribution transformers could put the administration’s electrification goals at risk by exacerbating an existing grid vulnerability. At the same time, we recognize the numerous and often underappreciated benefits of energy efficiency and support the overall goal of reducing wasteful electrical losses in our distribution grid. We believe the most prudent course of action is to let both GOES and amorphous steel cores coexist in the market, as they do today without government mandates, for new installations as we ramp up domestic production and reorient supply chains.”
The Sens. urged the DOE to refrain from promulgating the final rule.
“We are committed to working with you to identify short and long-term solutions to the supply chain shortage of these critical grid components with a goal of building a robust domestic market and a more efficient and reliable grid for decades to come,” the Senators concluded.
The Proposed Rule would require that the power industry stop installing the industry standard grain-oriented electrical steel (GOES) for all distribution transformers and shift to new transformers with amorphous steel cores.
“The Biden-Harris Administration continues to use every means available to reduce America’s carbon footprint while strengthening our security posture and lowering energy costs,” said Sec. Granholm. “Efficient distribution transformers enhance the resilience of our nation’s energy grid and make it possible to deliver affordable electrical power to consumers in every corner of America. By modernizing their energy-conservation standards, we’re ensuring that this critical component of our electricity system operates as efficiently and inexpensively as possible.”
The Biden DOE estimates that the proposed standards would reduce U.S. CO2 emissions by 340 million metric tons over the next 30 years—an amount roughly equal to the annual emissions of 90 coal-fired power plants. DOE also expects the proposed rule to generate over ten quads of energy savings and approximately $15 billion in savings to the nation from 30 years of shipments.
There is only one domestic producer of amorphous steel core transformers.
Katie Britt was elected to the U.S. Senate in 2022. She is an attorney, a native of Enterprise, a former Chief of Staff for Sen. Richard Shelby, former President and CEO of the Business Council of Alabama, and a graduate of the University of Alabama and the University of Alabama School of Law.
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