January 22, 2024

Young, Colleagues Introduce New Legislation to Bolster U.S. Transformer Supply Chains and Protect American Energy Independence

WASHINGTON – U.S. Senator Todd Young (R-Ind.) joined Senator Ted Cruz (R-Texas), Senator Sherrod Brown (D-Ohio), and a bipartisan group of senators in introducing the Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024. The legislation would bolster the U.S. transformer supply chain, an important part of energy grids, by setting new realistic energy efficiency standards that help stabilize domestic transformer manufacturing to meet increasing demand without exacerbating existing supply chains or undermining American steel production.

“Transformers are a critical part of our electric grid,” said Senator Young. “Our bipartisan bill would correct a misguided rule proposed by the Department of Energy to ensure we have a sufficient domestic supply of transformers and set appropriate federal standards to better promote American energy independence.”

In January 2023, the U.S. Department of Energy (DOE) published a proposed rule that risks exacerbating existing supply chain challenges for distribution transformers and shortage of related components. If finalized, the proposed rule would require all distribution transformers to shift from the industry standard grain oriented electrical steel (GOES) cores to amorphous cores, to the detriment of U.S. steel manufacturers. GOES currently accounts for more than 95 percent of the domestic distribution transformer market and manufacturers’ production lines are tooled for designs that use GOES.

Moving to amorphous cores, as proposed by DOE, would disadvantage U.S. manufacturers and risk adding significant vulnerability to the nation’s grid and threat to our national security.

The Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024 would prevent the new DOE rule from taking effect and instead create a new standard that provides increased energy efficiency of transformers at levels that preserve market opportunities for GOES as well as amorphous.

In addition to Senators Young, Cruz, and Brown, Senators Joe Manchin (D-W.Va.), Bill Hagerty (R-Tenn.), John Fetterman (D-Pa.), Pete Ricketts (R-Neb.), Bob Casey (D-Pa.), Marco Rubio (R-Fla.), Kyrsten Sinema (I-Ariz.), Jon Tester (D-Mont.), and Ted Budd (R-N.C.) also co-sponsored the bill.

This bill is supported by the National Rural Electric Cooperative Association, National Electrical Manufacturers Association, Edison Electric Institute, National Association of Home Builders, Leading Builders of America, United Automobile, and Cleveland Cliffs.

Background on the legislation is available here.