NRECA Joins Coalition Urging Senators to Fund Distribution Transformers

NRECA is urging Congress to approve funding to speed-up production of transformers and other crucial electric grid equipment. This photo shows completed pole-top transformers at ERMCO’s transformer production plant. (Photo By: Alexis Matsui)

NRECA has joined a coalition of energy, manufacturing and homebuilder groups urging Senate leaders to include $1.2 billion in funding for distribution transformers and other critical electric grid components in an energy and water spending bill that lawmakers are negotiating.

“Ongoing supply chain challenges and unprecedented demand for grid components require additional investment to assist manufacturers in expanding capacity in order to counteract a distribution transformer shortage and ensure nationwide grid reliability and resilience,” NRECA and other coalition groups wrote in a Jan. 4 letter to Senate Majority Leader Chuck Schumer, D-N.Y., Minority Leader Mitch McConnell, R-Ky., Appropriations Committee Chairman Patty Murray, D-Wash., and Appropriations Committee Vice Chairman Susan Collins, R-Maine.

The coalition is led by the National Electrical Manufacturers Association and includes the American Public Power Association, Edison Electric Institute, GridWise Alliance, Leading Builders of America and National Association of Home Builders.

In July, the Senate Appropriations Committee unanimously approved language that included $1.2 billion in repurposed supplemental funding for the Department of Energy’s Office of Electricity and the Grid Deployment Office to strengthen the transformer and critical grid component supply chain with additional financial assistance, procurement, technical assistance and workforce support. Coalition leaders are urging the Senate to include that provision in any final spending bill it negotiates with the House.

“Using this supplemental funding to accelerate the manufacturing of distribution transformers and other grid components will help electric co-ops keep the lights on and meet future energy needs of 42 million Americans,” NRECA CEO Jim Matheson said.

“The funding would significantly shorten transformer lead times while strengthening domestic supply chains. We urge the House and Senate to include this funding in a final FY24 appropriations bill.”

Before the COVID-19 pandemic, it took an average of one year to order and receive a new distribution transformer, the coalition leaders said.

“Today, due to complexities and inefficiencies in the supply chain, that schedule has grown to more than two years,” the letter states. “Record demand for these products, the lack of available skilled labor to produce them, and challenges acquiring various components and materials which go in them are causing real world problems: new building and housing construction projects have been stalled and utilities are unable to modernize the grid and help communities recover quickly from disasters.”

The letter added that “robust domestic production of distribution transformers is essential to ensuring a reliable U.S. grid while reducing dependence on foreign products.”

The legislative language approved by the Senate Appropriations Committee would “help domestic manufacturers increase capacity and catch up to existing orders, all while providing greater certainty to end-users of critical grid components,” the coalition wrote.

Erin Kelly is a staff writer for NRECA.