NAHB NOW NAHB, Other Trade Groups Urge Congress to Act on Transformer Shortages

NAHB, OTHER TRADE GROUPS

Urge Congress to Act on TransformerShortages

NAHB , along with five other building and utility trade groups, recently sent a joint letter to leaders of the House and Senate appropriations committees urging Congress to allocate $1 billion to address the growing supply-chain crisis for electric distribution transformers. The letter stated that "throughout 2022, the electric sector and representatives from residential and commercial building sectors have been calling attention to the unprecedented supply-chain challenges both industries have been facing in procuring equipment used to maintain and grow the electric grid."

Electric utilities continue to have significant problems in procuring distribution transformers needed to provide reliable electric service and restore power following severe storms and natural disasters. The trade groups noted that in housing construction, this is further exacerbating the ability of home builders to address the housing affordability crisis facing our nation.

NAHB has taken the lead in sounding the alarm since late last year that construction and electrification projects are being deferred or cancelled due to the inability to procure distribution transformer across all segments of the electric industry.

The trade groups informed lawmakers that orders for transformers that previously took two to four months to fill are now taking on average over a year. To address labor and material shortages focused specifically on the production of distribution transformers, Congress is being urged to use its authority under the Defense Production Act to expedite production of depleted stockpiles.

Other groups signing the letter along with NAHB were the American Public Power Association, Associated General Contractors of America, Edison Electric Institute, Leading Builders of America and the National Rural Electric Cooperative Association.

NAHB Members: Take Action Today

Reach out today to urge your members of Congress to support the implementation of the Defense Production Act to specifically address the supply chain crisis for electric distribution transformers. Follow this link to connect with NAHB's grassroots tool that will automatically send a letter to your members of Congress on your behalf.

CONTACT:

Alex Strong astrong@nahb.org (202) 266-8279

November 18, 2022 The Honorable Patrick Leahy Chair, Senate Committee on Appropriations Room S-128, The Capitol Washington, DC 20510 The Honorable Richard Shelby Vice Chair, Senate Committee on Appropriations Room S-128, The Capitol Washington, DC 20510 The Honorable Rosa DeLauro Chair, House Committee on Appropriations H-307, The Capitol Washington, DC 20515 The Honorable Kay Granger Ranking Member, House Committee on Appropriations 1036 Longworth HOB Washington, DC 20515 Dear Chairman Leahy, Vice Chair Shelby, Chairwoman DeLauro, and Ranking Member Granger: On behalf of the National Rural Electric Cooperative Association (NRECA), American Public Power Association (APPA), Edison Electric Institute (EEI), National Association of Home Builders (NAHB), Leading Builders of America (LBA), and Associated General Contractors of America (AGC), we urge you to appropriate $1 billion this year for implementation of the Defense Production Act (DPA) to specifically address the supply chain crisis for electric distribution transformers. Throughout 2022, the electric sector and representatives from residential and commercial building sectors have been calling attention to the unprecedented supply chain challenges both industries have been facing in procuring equipment used to maintain and grow the electric grid. Specifically, electric utilities continue to have significant problems in procuring basic equipment – particularly distribution transformers – needed to operate the grid, provide reliable electric service, and restore power following severe storms and natural disasters. In housing construction, this is further exacerbating their ability to address the housing affordability crisis facing our nation. Due to the threats to reliability, the Electricity Subsector Coordinating Council (ESCC), a partnership between the electric sector and the federal government aimed at combatting threats to critical infrastructure, established an industry “Tiger Team” to examine the supply chain crisis. Through this process, the electric industry has been able to report and confirm what individual utilities and the housing industry have been saying since late last year: that construction and electrification projects are now being deferred or canceled and that they are concerned about their ability to adequately respond to major storms due to depleted stockpiles. The Tiger Team ultimately found that current transformer production is not meeting demand and that demand is expected to continue to increase in the coming years. Between 2020 and 2022, average lead times to procure distribution transformers across all segments of the electric industry and voltage classes rose 443 percent. The same orders that previously took two to four months to fill are now taking on average over a year. This is a serious threat to reliability. Among the Tiger Team’s initial considerations for the federal government to address are labor shortages and material availability, which were identified as the most immediate short-term barrier to more manufacturing output. Additional long-term recommendations include building manufacturing capacity to support long-term demand and investing in domestic production of grain oriented electrical steel (GOES), a key transformer component. Usage of DPA authorities to address labor and material shortages, focused specifically on the production of distribution transformers, is the most immediate way we can address this growing crisis. The upcoming work period is a critical opportunity to appropriate funds needed to help address these problems before the end of this year. Thank you for your time and consideration of this issue. We welcome the opportunity to discuss this further with you and your team.

Sincerely, Jim Matheson National Rural Electric Cooperative Association Joy Ditto American Public Power Association Tom Kuhn Edison Electric Institute Ken Gear Leading Builders of America Gerald M. Howard National Association of Home Builders of the United States Stephen E. Sandherr Associated General Contractors of America

Ed Machovina, Alexis Concrete Enterprises, Inc. Joe Novosielski, Blades of Grass Scott Kubit, Bob Schmitt Homes, Inc. John Blakeslee, Blakeslee Excavating, Inc. Jerry Caruso, Caruso Cabinets Matt Herb, Fidelity National Title Tim Gossman, Fifth Third Bank Chris Bartish, First Federal Lakewood Dave Meadows, First Federal Lakewood Kevin Henceroth, Henceroth Construction, LLC David Ritchey, Hercules Fire Protection & Plumbing Sean Smith, MPW Construction Services Beth Fritz, Norwalk Concrete Industries James Sturgill, Sturgill’s Drywall, Inc. Theresa Riddell, The Nelson Agency D. Mark Clement, Weathertight Construction, Inc. Greg Zimmerman, Zimmerman Remodeling & Construction, LLC

Sorry to See You Go!

Keith Oberg, K. Hovnanian Homes Joe Work, Mr. Level

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