Tester’s Bipartisan Letter Urges Administration to Reject Rule That Would Weaken American Supply Chains

Senators tell Biden Administration not to implement overly burdensome rule for manufacturers and utilities

As part of his continued efforts to defend America’s national security and lower costs by easing pressures on our supply chains, U.S. Senator Jon Tester joined 46 of his colleagues on a bipartisan letter urging the Biden Administration to nullify a Department of Energy (DOE) rule that would make it harder for manufacturers to meet current demand for distribution transformers.

Tester’s bipartisan letter to DOE Secretary Jennifer Granholm emphasizes that the Administration’s proposed rule for distribution transformers would be detrimental to our national security and supply chain resiliency.

“The availability of critical grid components remains a significant challenge for the electric power industry that could impact national security, grid reliability and resilience, as well as the ability to continue the important work of electrification and grid modernization,” the Senators wrote.

The Senators’ bipartisan letter stresses that the proposed rule would make it harder for manufacturers to meet current demand for distribution transformers which would have a detrimental impact on grid reliability. It also emphasizes the challenges that the proposed rule would create for utilities working to create long-term plans to provide affordable, reliable power to their members or customers:

“The Proposed Rule increases efficiency standards on distribution transformers, critical grid products, which currently are no less than 97.7% energy efficient, at a time when the industry is struggling due to a significant increase in demand, supply chain issues, and skilled workforce shortage. These factors have made it hard for manufacturers to meet current demand for distribution transformers, creating challenging lead time conditions and concerns regarding grid reliability and resiliency. Further, the proposed rule has introduced uncertainty that prevents utilities from signing long-term contracts and manufacturers from making investment decisions,” the Senators continued. 

The Senators concluded their letter by urging the DOE to reverse course on implementing the proposed rule and instead finalize a rule that won’t exacerbate supply chain issues. 

The DOE’s proposed rule, Energy Conservation Program: Energy Conservation Standards for Distribution Transformers, would exacerbate supply chain issues by requiring manufacturers to shift from grain oriented electrical steel (GOES) cores to amorphous steel cores. This shift would force manufacturers to adjust their production lines which would exacerbate the supply chain shortage. The current domestic supply of amorphous steel is limited, and scaling up production to accommodate the entire distribution transformer market would cause further delays in manufacturing timelines.

A copy of Tester’s bipartisan letter can be found HERE.