The Department of Energy should use most of its $250 million share from the Inflation Reduction Act to rev up production of distribution transformers before the lights go out, power industry CEOs said.
NRECA CEO Jim Matheson and American Public Power Association CEO Joy Ditto sent an urgent request to DOE noting that drastically low inventory of distribution transformers “poses an unacceptable risk to the electric reliability of our nation.”
“If we don’t act today, we risk being unable to recover from a storm tomorrow,” the CEOs told Energy Secretary Jennifer Granholm in an Oct. 19 letter.
DOE has said it plans to apply all its IRA money toward making more heat pumps available, but NRECA and APPA said these funds should go toward distribution transformers in accordance with the department’s new authority to fast-track domestic production of critical grid components.
Electric co-ops and community-owned utilities face “unprecedented challenges” in procuring even basic equipment for reliable service, especially in areas ravaged by disasters, Matheson and Ditto said.
“Projects are now being deferred or canceled, and utilities are concerned about their ability to respond to more than one major storm in a season due to their depleted stockpiles,” their letter said.
An Electricity Subsector Coordinating Council Tiger Team formed in July to study supply chain issues found that the average wait for a distribution transformer is one year and that labor is the most immediate challenge to replenishing supply.
If DOE used $220 million of its IRA funds to subsidize wages, domestic manufacturers of transformers could attract and retain workers for 24/7 operations, the CEOs said. That could boost production by about 30% in 2023 and “support the workforce keeping the lights on in our country.”