President Donald Trump’s recently released proposed budget for fiscal year (FY) 2027 includes $375 million to establish a targeted, performance-based program within the Department of Energy’s Grid Deployment Office/Office of Electricity to rapidly expand U.S. manufacturing capacity for transformers and other critical electric grid components.
The proposed budget is intended to address documented supply chain constraints, improve grid reliability, and reduce reliance on foreign sourced equipment by incentivizing measurable, near-term increases in domestic production capacity by 2028 fully utilizing domestic manufacturing, the proposed budget said.
“APPA continues to work closely with the Trump Administration to unleash funds to help incentivize domestic manufacturing for key grid components that remain constrained in the U.S.,” said Adrienne Lotto, Senior Vice President for Grid Security, Technical & Operations Services at APPA.
A recently completed APPA survey of member utilities revealed that public power utilities continue to face constraints in grid components.
The survey was conducted to ascertain the types of electric utility equipment currently facing supply chain constraints. Additionally, the research sought to identify equipment types at risk should manufacturers’ export capabilities increase.
The survey, which was conducted from March 23 through April 10, 2026, found that large power transformers, switchgears, cables/conductors, and distribution transformers are the most common types of equipment currently facing supply chain constraints.
Nearly all of the reported equipment examples currently facing supply chain constraints are manufactured domestically.
Even when utilities are not facing an immediate supply chain constraint, there are notable concerns if manufacturers were to increase their export capabilities.
The most common equipment types with immediate supply chain concern (within 12 months) given this hypothetical increase in exports include switchgears, distribution poles, cable/conductors, and distribution transformers among utilities not already facing constraints.
President Trump recently invoked section 303 of the Defense Production Act (DPA) to bolster the development and manufacturing of grid infrastructure and its associated upstream supply chains.
