The Department of Energy on Friday made $237 million available to strengthen U.S. supply chains for power grid components, including distribution transformers that are critical for electric cooperatives.
The Grid Supply Chain Alternatives to Lead Energy Dominance (SCALED) notice of funding opportunity will provide $50 million to promote refurbishment and reuse of existing grid equipment and materials and $187 million to increase use of domestically sourced alternative materials and subcomponents.
NRECA has long advocated for increased supply chain funding, successfully encouraging Congress to include $375 million for a program to enhance domestic supply chains in the DOE’s fiscal year 2026 appropriations.
The money could ease bottlenecks for crucial equipment that co-ops need to meet rising electricity demand while supporting the domestic manufacturing sector.
“Electric cooperatives have seen firsthand how transformer shortages and other supply chain challenges can drive up costs and make it harder to meet growing electricity demand,” NRECA CEO Jim Matheson said. “That’s why NRECA fought hard for Congress to provide funding to address this problem.”
“We appreciate the Department of Energy taking action and investing in domestic manufacturing of these critical grid components. Strengthening America’s supply chain will help co-ops continue to deliver the reliable, affordable power their communities depend on.”
NRECA has worked for years to ensure workable efficiency standards for distribution transformers and seek federal funding to boost domestic transformer manufacturing.
Those efforts led to DOE releasing a final distribution transformer efficiency rule in April 2024 that reflected NRECA’s advocacy priorities, including maintaining use of grain-oriented electric steel to make transformers.
At the same time, NRECA and co-ops have sought federal funding to address transformer shortages as co-ops face unprecedented demand for grid components.
In April 2024, NRECA joined a coalition of power industry groups, including the Edison Electric Institute, American Public Power Association and the National Electrical Manufacturers Association, in asking Congress to help expand domestic manufacturing capacity for distribution transformers. At the time, co-ops faced wait lists of up to 30 months for new distribution transformers.
That advocacy drove enactment of the $375 million in grid component funding.
“We’re proud that the years of dedicated advocacy by NRECA and in partnership with our members led to Congress providing this money to DOE that will lead to dedicated investments in the supply chain serving our members,” NRECA Legislative Affairs Director Will Mitchell said.
Applicants for SCALED awards must submit a concept paper by Nov. 26 to qualify to submit a full application, which would be due by Feb. 8, 2027.
Molly Christian is a staff writer for NRECA.