Powering Strong Communities

APPA, Other Groups Urge President Biden to Convene Electrical Steel Summit

The American Public Power Association and several other trade groups are urging President Biden to convene an Electrical Steel Summit that would bring together stakeholders for a strategic discussion on the current challenges to sustaining and growing domestic production of electric steel.

The summit would bring together users and manufacturers of electrical steel such as electric utilities, electrical manufacturers, automobile manufacturers, steel manufacturers, labor unions, home builders and others “to help solve the current supply chain crisis that threatens both the national security and economic outlook for the United States and to deliver on this Administration’s goals for electrification and decarbonization,” the May 22 letter said. Steel, specifically grain-oriented electrical steel (GOES) is a critical component in distribution transformers that are in short supply.

“As organizations representing the electrical steel value chain, we are increasingly concerned about the skyrocketing demand and limited availability of domestically produced electrical steel, which is a core component to the industries and products that we represent and vital to expanding electrification in the United States,” the groups said.

“We write to urge your administration to make it clear that electrical steel is critical to the national and economic security of the United States and to prioritize actions that will create a sustainable supply.”

In order to deliver on the “ambitious goals and visions of the Infrastructure Investment and Jobs Act (IIJA), and Inflation Reduction Act, it is vital that the federal government recognize and support the domestic production of electrical steel to meet the unprecedented demand for electrification and grid modernization and resilience initiatives,” APPA and the other groups said.

Electrical steel, including grain oriented electrical steel and non-grain oriented electrical steel, “is a vital component in the manufacturing of a range of critical electrical products. Electric motors, transformers, electric vehicle chargers, generators, and other critical electrical equipment all require electrical steel due to its unique properties that reduce power loss. Shortages of domestic electrical steel are contributing to significant and persistent supply chain challenges across our industries.”

The groups said that the limited availability of domestically manufactured electrical steel “poses challenges to the widespread adoption of electric vehicles, delays timelines for utilities to restore power following natural disasters, and is a contributing factor to an insufficient inventory of distribution transformers to meet the demand for new home and commercial construction.”

They noted that the Department of Energy in 2022 reported that the United States is dependent on a single manufacturer for GOES, which severely limits electrical manufacturers’ ability to source domestically and meet certain domestic content thresholds.

While two domestic manufacturers have committed recently to increase GOES production, even with this expanded output, domestic supply levels will still fall far short to meet electrification goals and satisfy demand created by the IIJA and IRA, the groups went on to say.

“Further, plans to expand domestic steel capacity and manufacturing of critical electrical equipment, such as transformers, are now in flux as DOE contemplates new efficiency standards that would upend the market and manufacturing process,” the letter said.

The groups said that “Now is the time to demonstrate leadership by prioritizing the critical importance of electrical steel and growing domestic manufacturing jobs by working with Congress to put requisite financial resources toward shoring up domestic supply. The federal government can guarantee purchase of GOES and NOES up to a defined amount, as needed by critical electrical industries, to serve a more electrified economy as well as incentivize expanded manufacturing capacity.”

Along with APPA, the following groups signed on to the letter:

  • Alliance for Automotive Innovation
  • Edison Electric Institute
  • GridWise Alliance
  • International Brotherhood of Electrical Workers
  • Leading Builders of America
  • National Association of Home Builders
  • National Electrical Manufacturers Association
  • National Rural Electric Cooperative Association