Environment and Energy

DOE transformer rule to benefit Cliffs' electrical steel

Written by Ethan Bernard

The US Department of Energy has finalized Congressionally mandated energy-efficiency standards for transformers.

In a statement on Thursday, DOE said the new standards “will save American utilities and commercial and industrial entities $824 million per year in electricity costs, and result in more demand for core materials like grain-oriented electrical steel (GOES).”

DOE noted these updated standards include a longer compliance timeline of five years. The department added that the standards will increase the resiliency and energy efficiency of the US power grid, support domestic manufacturing jobs, and will accelerate the supply of “affordable, reliable, and clean electricity around the nation.”

“While the initial proposal would likely have represented about a 95% market shift to amorphous alloy, under today’s final rule about 75% of the market will be able to achieve the standards with GOES,” DOE said.

Both Cleveland-Cliffs and the United Auto Workers (UAW) union had urged DOE to make the revised rule.

Cleveland-Cliffs voices support

The Cleveland-based steelmaker said the DOE final transformer efficiency standard rule will provide for the continued use of GOES in virtually all of Cliffs’ current distribution transformer end markets.

“We are grateful that the US Department of Energy was open to the feedback provided by Cleveland-Cliffs and our clientele of transformer manufacturers, and adopted major changes to the originally proposed transformer efficiency rule,” Lourenco Goncalves, chairman, president, and CEO, said in a statement on Thursday.

Cliffs noted that with the revised rule, DOE acknowledged the importance of GOES and the essential role played by Cliffs’ steel plants in Butler, Pa., and Zanesville, Ohio. These help sustain the functionality of the US electric grid, Cliffs said.

“Cleveland-Cliffs and the United Auto Workers (UAW) worked collaboratively to educate the DOE on the shortcomings of the originally proposed distribution transformer rule and the danger of relying on amorphous metal, which is produced in very limited volumes and exclusively from imported materials,” the company said.

Goncalves said that, “Once this rule is enacted, we expect to actually see an increase in demand for our GOES, opening the possibility of future investments and expansion of our plants in Butler and Zanesville.”

Cliffs said it currently employs 1,500 workers at the two locations.

UAW adds endorsement

“Today’s announcement from the Department of Energy is a victory for the 1,100 members of UAW Local 3303 in Butler, Pa.,” Jamie Sychak, president of UAW Local 3303, said in a statement on Thursday. 

“The DOE’s final rule ensures a viable pathway for UAW-made steel to supply the transformer market long into the future. Throughout this process, we worked closely with Cliffs, our UAW leadership, local, state, federal officials, and the DOE to provide feedback on the proposed rule,” Sychak added. 

Politicians applaud the news

“Pennsylvania is a national energy leader, and the skilled workers at Cleveland-Cliffs in Butler County (Pa.) know how to build the transformers that power our nation’s critical infrastructure,” Pennsylvania Gov. Josh Shapiro said in the DOE statement.

Likewise, US Sen. Bob Casey (D-Pa.) praised the DOE actions. “With this final rule, the Department of Energy listened to the concerns of Pennsylvania workers and made adjustments so Butler workers can continue to produce Pennsylvania-made steel for electricity transformers,” he said.

“I’ll continue to work with Cleveland-Cliffs and the United Auto Workers to ensure that Pennsylvania workers remain integral to our energy supply chain,” Casey added.

Ethan Bernard

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