Cosponsors Bipartisan Legislation to Ensure DOE Policy Doesn’t Hurt Domestic Transformer Production

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) is cosponsoring bipartisan legislation to set realistic energy efficiency standards that help stabilize domestic transformer manufacturing in order to meet increasing demand without undermining American steel production, electricity distributors, and customers.

Hyde-Smith cosponsored the Distribution Transformer Efficiency and Supply Chain Reliability Act (S.3627), which would set new standards to increase the energy efficiency of distribution transformers in place of a proposed U.S. Department of Energy (DOE) rule that would harm U.S. transformer manufacturing, exacerbate supply chain shortages, and have a harmful impact on Mississippi electricity suppliers.

“The current cost and short supply of transformers are already serious challenges to everyone trying to get electricity to homes, businesses, and industrial facilities.  This situation was already critical even before DOE issued its transformer efficiency standards plan, which set off alarm bells in Mississippi and across the country,” Hyde-Smith said.  “The Distribution Transformer Efficiency and Supply Chain Reliability Act is a true bipartisan solution to set efficiency standards that won’t wreck U.S. industry and put us in the dark.”

In addition to setting new standards, S.3627 would prevent DOE from implementing a proposed rule it published in January 2023 to require all distribution transformers to shift from grain oriented electrical steel (GOES) cores to amorphous cores.  GOES, the industry standard, currently accounts for more than 95 percent of the domestic distribution transformer market.  Manufacturers’ production lines are tooled for GOES designs and recalibration of the supply chain to meet the new standard will further delay manufacturing timelines, currently estimated to be a minimum of 18 months to two years.

As a member of the Senate Energy and Natural Resources (ENR) Committee, Hyde-Smith warned the Biden administration of the harmful effects of the proposed rule to Mississippi and signed bipartisan letters asking for the rule to be withdrawn or rewritten.

The Distribution Transformer Efficiency and Supply Chain Reliability Act was introduced by U.S. Senators Sherrod Brown (D-Ohio) and Ted Cruz (R-Texas).  In addition to Hyde-Smith, current cosponsors include ENR Chairman Joe Manchin (D-W.Va.), and U.S. Senators Bill Hagerty (R-Tenn.), Pete Ricketts (R-Neb.), John Fetterman (D-Pa.), Marco Rubio (R-Fla.), Bob Casey (D-Pa.), Todd Young (R-Ind.), Krysten Sinema (I-Ariz.), Ted Budd (R-N.C.), Jon Tester (D-Mont.), and Mark Kelly (D-Ariz.).

The legislation is supported by electricity providers in Mississippi and nationwide.

“Entergy Mississippi thanks Senators Hyde-Smith, Cruz, Brown and others for introducing this important piece of legislation to address a critical supply chain issue for the grid,” said Haley Fisackerly, President and CEO, Entergy Mississippi.  “We experienced a number of catastrophic weather events last year, which impacted our electric system.  The shortage of electric distribution transformers only compounded challenges to respond to natural disasters and meet growing business needs.  We appreciate this thoughtful legislation that sends the right market signals to support our nation’s steel producers and transformer manufacturers, like our great partner Howard Industries, who also calls Mississippi home.”

“The Electric Cooperatives of Mississippi are grateful to Senator Cindy Hyde-Smith for her sponsorship of the Distribution Transformer Efficiency and Supply Chain Reliability Act.  Mississippi’s electric cooperatives have been concerned that the Department of Energy’s proposed transformer rule would further strain our supply chain, causing disruptions to our disaster recovery work as well as economic development efforts,” said Electric Cooperatives of Mississippi Executive Vice President and CEO Michael Callahan.  “We have continued to work to educate and inform Senator Hyde-Smith, and other members of Mississippi’ congressional delegation, to the potential impacts of the DOE’s proposal.  This legislation allows for the adoption of efficiency standards over a more realistic time frame and helps electric cooperatives continue to serve their members with reliable and affordable electricity.”

Additional supporters include the National Rural Electric Cooperative Association, National Electrical Manufacturers Association, Edison Electric Institute, National Association of Home Builders, Leading Builders of America, American Public Power Association, United Automobile Aerospace and Agricultural Implement Workers of America (UAW), and Cleveland-Cliffs.