Groups Urge DOE to Move Quickly to Alleviate Supply Chain Challenges With Transformers

by Paul Ciampoli
APPA News Director
December 6, 2022

The Department of Energy (DOE) should use Defense Production Act (DPA) authorities to prioritize distribution transformers, large power transformers, and other critical grid components ahead of other technologies, and it should act quickly to alleviate the most acute supply chain challenge with distribution transformers, the American Public Power Association (APPA), the Edison Electric Institute (EEI), and the National Rural Electric Cooperative Association (NRECA), said in joint comments submitted to DOE on Nov. 30.

The comments responded to a DOE request for information (RFI) that sought input from stakeholders on how DOE should use its authority under Title III of the DPA to address supply chain issues for clean energy technologies and distribution transformers.

“Recent surveys show our members are waiting longer than ever for transformers of all sizes, conductors, meters, circuit breakers, and other products,” the trade groups noted. “Industry cannot solve this challenge alone and thus we are pleased to see the government may use its authority under the DPA to address challenges created by shortages of transformers and other key components of the energy grid.”

“We respectfully urge DOE to prioritize distribution transformers, large power transformers, and other critical grid components ahead of the other technologies considered in the RFI,” APPA, NRECA and EEI said.

“Until we can address the shortages and supply chain challenges that are directly impacting reliability, we may not be able to accomplish many of the goals this administration has laid out for advancing clean technologies or expanding electrification,” they said.

“Most urgently, in the near-term, we urge DOE to act quickly to alleviate distribution transformer shortages, as this is the most acute supply chain challenge the electric industry is facing,” the groups said.

“We also ask DOE to establish longer-term efforts dedicated to supporting expanded domestic manufacturing capacity for large power transformers and other grid components that may take longer to address but are nonetheless critical to grid operations and therefore national security.”

The RFI comments also note that DPA authorities could be used for financial assistance, loan guarantees, and purchase commitments for transformer manufacturers that would help address labor shortages and the availability of materials that are hampering manufacturers’ ability to increase production.

Groups Urge Congressional Appropriators to Fund DPA Authorities to Address Supply Chain Shortages

APPA and the electric trades augmented their comments on DPA with a letter for action on Capitol Hill. The electric trades, along with building trade organizations, recently sent a joint letter to Congressional Appropriations leadership requesting funding for DPA.   

The groups request that Congress appropriate $1 billion this year for the implementation of DPA authorities to specifically address the supply chain crisis for electric distribution transformers.

“Throughout 2022, the electric sector and representatives from residential and commercial building sectors have been calling attention to the unprecedented supply chain challenges both industries have been facing in procuring equipment used to maintain and grow the electric grid,” wrote APPA President and CEO Joy Ditto and leaders of the other groups. DPA authorities should be prioritized to immediately address increased production of distribution transformers.