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Bill Would Set New Limitations on Federal Efficiency Rules for Specific Distribution Transformers

Senators Sherrod Brown (D-OH) and Ted Cruz (R-TX) recently introduced legislation that amends the Energy Policy and Conservation Act and establishes new limitations on federal efficiency rules for specific distribution transformers.

The American Public Power Association on Jan. 18 issued a statement supportive of the efforts of Cruz and Brown.

The bill, the Distribution Transformer Efficiency and Supply Chain Reliability Act of 2024 is co-sponsored by Senators Joe Manchin (D-WV), Bob Casey (D-PA), John Fetterman (D-PA), Jon Tester (D-MT), Bill Hagerty (R-TN), Pete Ricketts (R-NE), Marco Rubio (R-FL), Todd Young (R-IN), Ted Budd (R-NC) and Kyrsten Sinema (I-AZ).

The bill would amend EPCA to restrict the Department of Energy from finalizing any energy efficiency standards rule for liquid-immersed type, low voltage dry type, or medium voltage dry type distribution transformers that are greater than a trial standard level 2 (TSL 2).

It also requires that those changes not take effect until ten years after the rule is finalized.

The legislative effort comes in response to a January 2023 notice of proposed rulemaking by DOE announcing it was seeking new energy efficiency standards for distribution transformers.

Those new standards would set a TSL 4 energy efficiency and require distribution transformers to feature amorphous steel cores shifting away from traditional, grain-oriented electrical steel (GOES).

Despite the electric sector informing DOE about the severity of the supply chain challenges impacting distribution transformer production and availability, DOE has not backed away from those efforts.

If finalized, the rule would severely exacerbate the transformer shortage, present a major threat to grid reliability and cripple the domestic production of GOES steel, APPA said.

Under the Distribution Transformer Efficiency and Supply Chain Reliability Act, requiring a change to TSL 2 allows for the main types of distribution transformers to continue using GOES steel in their cores.

While requiring some change, this prevents a complete shift in the materials acquisition and manufacturing process that would have been required to meet TSL 4 energy efficiency.

Currently, under EPCA, DOE is required to review and potentially revise energy efficiency standards every five years. Providing the ten-year delay before the rule takes effect allows steel producers and distribution transformer manufacturers adequate time to make the necessary changes and ramp up production to meet demand.

APPA, Other Groups Support Funding for Transformer, Grid Components

In recent related news, APPA and other energy impacted trade associations on Jan. 4 sent a letter to key congressional leaders voicing their strong support of the Senate Energy and Water Development Appropriations bill’s inclusion of $1.2 billion in repurposed supplemental funding to bolster domestic transformer manufacturing and other critical grid components.

The letter was sent to Senate Majority Leader Charles Schumer (D-N.Y.), Senate Minority Leader Mitch McConnell (R-Kentucky), Sen. Patty Murray (D-Wash.), Senate Committee on Appropriations Chair, and Sen. Susan Collins (R-Maine), Vice Chair of the Senate Committee on Appropriations.

House Committee Passes Transformer Legislation

In December 2023, the House Energy and Commerce Committee passed a bill that would prohibit the Department of Energy from increasing distribution transformer conservation standards for five years.

Passed on a party-line vote, H.R. 4167, the Protecting America’s Distribution Transformer Supply Act, sponsored by Rep. Richard Hudson (R-NC), would prohibit DOE from increasing distribution transformer conservation standards for five years.

The American Public Power Association on Sept. 13 voiced support for the bill.

“A delay is urgently needed to give manufacturers the certainty to increase production to meet demand,” wrote Desmarie Waterhouse, Senior Vice President, Advocacy and Communications & General Counsel at APPA, in a Statement for the Record.

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