February 7, 2012 – Upon initial review, NEMA (National Electrical Manufacturers Association) says it supports the U.S. Department of Energy’s (DoE) proposed rule to increase the energy conservation standards for distribution transformers.

“We’re pleased that DoE has proposed amended standards that take into account manufacturers’ recommendations for higher efficiency levels which are technologically feasible and economically justified,” said NEMA president and CEO Evan R. Gaddis. “Saving energy and preserving well-paying manufacturing jobs are two ways to boost our economy.”

Throughout the fall of 2011, DoE hosted a negotiated rulemaking, where stakeholders gathered to discuss the justification for higher energy efficiency standards for all three classes of regulated distribution transformers: low voltage dry-type; medium voltage dry-type; and medium-voltage liquid-immersed. Under current energy conservation standards, NEMA insists distribution transformers are already the most energy-efficient product that DoE regulates at 97% to 99% efficiency, but NEMA members believed there was an opportunity to increase energy conservation without unduly burdening the sectors that supply materials for transformers, the manufacturers, and consumers of transformers.

NEMA and its member companies are united behind a recommendation made to DoE that would spur “significant, long-term energy savings” in distribution transformers. The proposed rule would lower electrical losses more.

NEMA says its manufacturers agree that moving to standards higher than what DoE has proposed would likely have the following the negative consequences:

• It would limit the availability of supply of certain materials necessary to meet the standards.
• In effect, it would require the use of a single technology, amorphous material, which is much more expensive than its alternatives and currently available in the U.S. only through a single supplier. This raises real questions about both the availability of this material and how quickly its price could be raised.
• If required to utilize amorphous material, small manufacturers would be forced to make major capital investments or risk much higher input costs, either of which could put some of these companies in jeopardy of closing their doors permanently.
• Since transformer customers give great weight to the first cost of the products they buy, more expensive transformers would have the perverse consequence of further encouraging the refurbishment of older, less efficient transformers instead of the purchase of new, higher-efficiency units. This situation would hinder, not promote, energy savings.

DoE is holding a public meeting on the notice of proposed rulemaking (NOPR) February 23. There will also be a public comment period on NOPR before the rule is finalized by October 2012.