GAO Report Highlights Transformer Supply Chain Issues Raised by Public Power Utilities

by Paul Ciampoli
APPA News Director
August 7, 2023

A new report issued by the Government Accountability Office highlights many issues that have been consistently raised by public power utilities related to the ongoing transformer supply chain crisis. 

Those include long manufacturing lead times, increasing manufacturing capacity will take time, material and component shortages that limit capacity expansion, labor shortages, and competition from foreign producers.

The report also details efforts undertaken by utilities to address these issues on their own including maintaining spare equipment on site, strategically managing, and modifying inventory in stock, and other efforts to harden infrastructure (such as security enhancements) to avoid having to replace components.

The report, “DOE Could Better Support Industry Efforts to “Ensure Adequate Transformer Reserves,” was issued to the House and Senate Appropriations Committees.

The American Public Power Association was contacted by GAO staff last year to provide information regarding APPA efforts to address supply chain issues related to transformers.

While the subject of the GAO report focuses on large power transformers (LPTs), public power was able to provide information to GAO that shows the similarities between LPTs and distribution transformer lead times and supply issues, as well as other grid components being constrained.

The report concludes that utilities and DOE have taken steps to address challenges, but that DOE has not done enough to support industry efforts. 

The agency “has yet to develop a plan that sets actionable objectives to operationalize these options and strategies. Without such a plan to guide DOE’s efforts, those efforts could stall or remain incomplete, further delaying potential solutions and support that utilities and other stakeholders need to address supply chain challenges,” GAO said.

GAO makes two recommendations for action by DOE.

First, the report states that the Secretary of Energy should establish a plan, including time frames as appropriate, to guide the agency’s efforts to develop solutions and support for addressing transformer supply chain challenges.

Second, the Secretary of Energy should establish a plan, including time frames as appropriate, to guide the agency’s support for utilities and facilitate greater participation in industry-sharing efforts.