Rural electric co-ops in the USA are asking the federal Department of Energy to use funding from the Inflation Reduction Act to address the shortage of distribution transformers.
In a letter to Energy Secretary Jennifer Granholm on 19 October, the National Rural Electric Association (NRECA) and American Public Power Association urged the DOE to prioritise Inflation Reduction Act (IRA) funding to immediately boost the domestic production of distribution transformers by using its authority under the Defense Production Act (DPA).
According to the letter, the shortage “poses an unacceptable risk to the electric reliability”.
“If we don’t act today, we risk being unable to recover from a storm tomorrow,” read the letter, co-signed by Nreca CEO Jim Matheson and American Public Power Association CEO Joy Ditto.
DOE said it intends to use the IRA funding to make more heat pumps available but the two apexes argue the funds should go toward distribution transformers in order to fast-track domestic production of critical grid components.
The letter highlights issues faced by rural electric co-ops and community-owned utilities, including procuring basic equipment for reliable service, especially in areas ravaged by disasters. It adds that labour is a key challenge for manufacturers, urging DOE to “establish a $220m wage subsidy programme that would assist manufacturers in attracting and retaining more workers, thus enabling them to move to 24/7 operations”. According to the letter, such a programme could result in increased output of approximately 30% of distribution transformers in 2023.
A July report by Tiger team, a group of co-ops, public power providers, investor-owned utilities and key federal agencies, found that the average wait for a distribution transformer is one year and that labour is the most immediate challenge to replenishing supply.
“While we support long-term investment in domestic manufacturing capacity for heat pumps, we believe the current shortage of distribution transformers available to electric utilities poses an unacceptable risk to the electric reliability of our nation and urge you to alleviate this unprecedented situation by prioritising available IRA funding for transformers,” the letter warned.
“If we don’t act today, we risk being unable to recover from a storm tomorrow. In the longer term, it could mean being unable to meet the electrification goals envisioned by the Biden administration. In the meantime, the backlog for distribution transformers continues to grow.”
The two apexes said they were open to discussing the issue further with DOE to address this transformer shortage.
