Brown Pushes Department of Energy to Preserve U.S. Transformer Supply Chains in Finalized Transformer Rule

WASHINGTON, D.C. - Following U.S. Senator Sherrod Brown's (D-OH) push, the Department of Energy today announced finalized electrical distribution transformer energy standards that will preserve Ohio jobs and support grid resilience.

Brown took on the Biden administration and pushed the Department of Energy to make changes to the proposed rule that would have required all electrical distribution transformers to shift from the industry standard grain oriented electrical steel (GOES) cores to amorphous cores. This would have devastated U.S. electrical steel manufacturers - including Ohio-based Cleveland-Cliffs - and would have risked adding significant vulnerability to the nation's grid, and threatened our national security. The final standards correct the major deficiencies of the proposed rule.

"Building transformers made with Ohio steel is crucial to our electric grid and our energy independence," said Brown. "I am glad to see that the Department of Energy finally listened to Ohio's rural communities and energy producers and made significant changes to its misguided initial standards. The final standards are a step toward keeping our critical supply chains in the United States and ensuring that our energy grids will not become dependent on foreign steel. I will keep pushing the Administration to ensure that any standards support Ohio manufacturers and Ohio workers."

"The Department of Energy's (DOE) final transformer efficiency standard rule will provide for the continued utilization of Grain-Oriented Electrical Steel (GOES) in virtually all of Cleveland-Cliffs' current distribution transformer end markets, thereby preserving good-paying United Auto Worker jobs in Ohio and Pennsylvania. Senator Brown led a bipartisan Congressional coalition that insisted the DOE recognize the critical role of domestically-produced GOES in sustaining the functionality of the U.S. electric grid. Thanks to the efforts of Senator Brown, as well as his fellow Congressional champions on this matter, including Senators Casey, Manchin, and Cruz and Representatives Kelly, Balderson, Deluzio, and Kaptur, 1,500 workers at Cleveland-Cliffs' Zanesville Works and Butler Works steel mills can be confident in their futures. With this policy in place, Cleveland-Cliffs can resume investments that support the continued production of highly-efficient electrical steels in the United States," said Lourenco Goncalves, Chairman, President & Chief Executive Officer, Cleveland-Cliffs Inc.

"We want to thank Sen. Brown for leading this bipartisan effort to address this problematic rulemaking. Our municipal electric community members have seen significant delays in obtaining transformers in recent years and we want to also thank the DOE for recognizing the concerns raised by industry and modifying the final rule to eliminate further delays in the delivery of distribution transformers," said Michael Beirne, Vice President of External Affairs at American Municipal Power, and Executive Director of the Ohio Municipal Electric Association.

"Ohio's Electric Cooperatives appreciates the leadership of Sen. Sherrod Brown, and bipartisan support from Congress, in urging the U.S. Department of Energy to reconsider and greatly improve this rule. The final rule is a significant improvement from the proposed rule, which would have only further exacerbated supply chain issues and threatened electric reliability. We are pleased to see a final rule that promotes continued access to electric distribution transformers as Ohio's electric cooperatives strive to meet the rapidly growing demand for electricity in our economy," said Pat O'Loughlin, President and CEO of Ohio's Electric Cooperatives.

In January, Brown and Senator Ted Cruz (R-TX) introduced theDistribution Transformer Efficiency & Supply Chain Reliability Act of 2024, bipartisan legislation that would bolster the U.S. transformer supply chain, an important part of energy grids, by setting new realistic energy efficiency standards that help stabilize domestic transformer manufacturing to meet increasing demand without exacerbating existing supply chains or undermining American steel production. This bill was built upon another bipartisan Senate effort from last June when Brown, Cruz, and Senator Bill Hagerty (R-TN) sent a bipartisan letter to Department of Energy Secretary Jennifer Granholm signed by an additional 13 Democrats and 32 Republicans calling on the Department to fix the proposed standards.

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