Builders Speak Out Against Proposed Transformer Rule

More than 65 builders and members of utility organizations took part in a March 14 energy roundtable teleconference hosted by the U.S. Small Business Administration Office of Advocacy to air their strong concerns about the Department of Energy’s (DOE) proposed rule to regulate energy conservation standards for distribution transformers.

At a time when the home building industry is facing a severe shortage of electrical transformers, the proposed rule would dictate that manufacturers increase the efficiency of distribution transformers by a mere tenth of a percentage point. In order to achieve this nominal increase in efficiency, the proposed rule would require manufacturers to transition to a different type of steel that would add months to a lengthy order cycle that already takes more than 16 months to produce and deploy new transformers.

“I am very concerned that these new rules will make the supply issues we have with transformers even worse,” said Rob Myers, immediate past president of the HBA of Greater Cleveland. “We can’t get the transformers we need now. I would love to come to Washington and talk to these people and say, ‘Wake up. You are tying our hands behind our back and we are the ones who house America.’”

Delaware builder Justin Olear told the SBA officials that “we don’t have enough transformers to keep us going and that there are thousands of units in [his] state where home sales cannot be closed due to the transformer shortages.

“The ripple effect of this is bad,” Olear continued. “People are backing out of contracts on homes that are under construction. The focus needs to turn to production of transformers. We do not need to worry about future efficiency at this point.”

“We have a terrible problem with sourcing and getting transformers,” added Bobby Cleveland, an apartment developer in Georgia. “There’s an acute shortage of affordable housing, and I would be against anything that will complicate the supply chain issues we’ve already got with transformers. The payback and benefit of this kind of change is minuscule compared to the expense and damage this will cause.”

“This is a great discussion, but let's not stop here,” said NAHB First Vice Chairman Carl Harris. “We must convene with DOE and the secretary of Commerce to show how this proposed rule will do damage to housing attainability.”

NAHB will be sending comments to the DOE stating how this proposed rule will not only exacerbate the current nationwide shortage of electrical transformers, but also fuel delays in home construction projects across the country as well as aggravating the nation’s housing affordability crisis.

Comments are due by March 27. Prianka Sharma, assistance chief counsel at the SBA, encouraged those who are interested in providing comments to stress the economic impact this proposed rule would have on their business and to provide actual data whenever possible.

Comments can be sent here.