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2024-011 Distribution Transformers March 29,2024 Report No. 2024-011 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Department of Energy's (DOE) Energy Efficiency Rule Proposal for Distribution Transformers. EXECUTIVE SUMMARY: Over the last couple of years,DME staff have been working with partner entities(American Public Power Association, Texas Public Power Association, and various other electric utilities) to bring awareness to supply chain challenges impacting the availability of distribution transformers. Since the beginning of the COVID pandemic, the entire electric industry has experienced longer lead times and increasing prices as a result of workforce shortages, transportation delays, and the availability of raw materials (core steel, primarily). In addition, proposed standards by the DOE, requiring the use of new materials (amorphous steel vs core steel, for example) are anticipated to delay the manufacturing and delivery of distribution transformers and further increase lead times. While DME staff have not previously informed the City Council about the DOE's proposed standards, nor disputed their efficiency or environmental impacts, the focus of DME's federal legislative activity has been to advocate for a slowdown in the implementation of these standards so that lead times do not increase further. As of today, DME estimates that lead times are at 3-5 years from the date of order. If the DOE's proposed standards take effect, DME anticipates lead time may grow to 5-7 years. DISCUSSION: The availability of distribution transformers post Covid 19 pandemic has been severely reduced causing the supply chain constraints that increased lead times and prices.' These distribution transformers are essential to meet the customer growth being experienced in Denton and all of Texas. Equally important to DME is to maintain an inventory of distribution transformers to replace equipment that fail or is damaged and to ensure that there is sufficient spare equipment to restore electric service in the event of a catastrophic weather event impacting DME customers. Since January 2022, the American Public Power Association (APPA) has issued three briefs (Attachments A, B, & C) addressing supply chain challenges and the DOE's proposed standards. In October 2022, APPA announced the results of its August 2022 members' survey that shows "the production of distribution transformers is not meeting current demand, `as evident in the significantly growing lead times, lack of stock in yards and the high number of project deferrals' ... "Ninety-five (95) public power utilities serving a total of 6,719,596 meters responded to the survey." See the APPA website for more information here: APPA Survey of Members Shows Distribution Transformer Production Not Meeting Demand I American Public Power Association . 1 Price increases of up to 300% have been seen on certain types of distribution transformers. March 29,2024 Report No. 2024-011 In May 2023, the Department of Energy announced the proposed Energy Efficiency Rule which did not appear to consider the documented distribution transformer shortages and lack of manufacturing capacity to produce the new transformer efficiency standards. Beginning in July 2023, DME staff engaged on the issue by advocating for support of legislation that would provide federal funding to enhance domestic production of distribution transformers. Unfortunately, the effort failed to gain support and the funding was not included in the 2024 Energy and Water Appropriations Bill. In conjunction with this effort, DME staff also engaged with Federal Legislators regarding the DOE's proposed standards and advocated for a delay in their implementation. To date, DME staff s engagement on these matters have included: letters of support signed by Mayor Hudspeth; meeting with Federal Legislators and/or their staff; and gathering and sharing DME specific inventory and procurement data on distribution transformers to APPA and others. DME's efforts have mirrored those by APPA, TPPA, and other electric utilities across the Country. Due to a staff oversight, letters signed by the Mayor in February 2024 were not provided to the City Council and have been attached to this report (Attachment D). In January 2024, Senator Brown (D-OH) introduced S. 3627, The Distribution Transformer Efficiency and Supply Chain Reliability Act of 2024, and co-sponsored by Senator Cruz (R-TX) and others. A companion bill in the House (H.R. 7171) has also been introduced and is identical to the Senate bill. Both bills delay the DOE's proposed standards for 10 years after they are finalized. To be clear, other bills have also been introduced that would delay the implementation of DOE's proposed standards for 5 years. DME staff continue to monitor these bills,but no formal action has been taken other than their introduction. CONCLUSION: DME staff remain concerned that the proposed DOE standards will further exacerbate distribution transformer lead times. However, in recent testimony by the Secretary of Energy, Jennifer Granholm, before the House Subcommittee on Energy and Water Development and Related Agencies, she indicated that DOE "has been listening to criticism of its proposed rule to tighten energy efficiency requirements for distribution transformers and `adjustments have been made'. The DOE's draft rule proposed the new energy efficiency standard for distribution transformers to take effect in 2027, estimating it would save consumers approximately $15 billion over 30 years. The agency has indicated it intends to issue a final rule in April."Below is a link to the referenced article: Granholm tells Congress'adiustments have been made'to distribution transformer proposal I Utility Dive While the possibility of a resolution to this matter may be forthcoming, DME staff recommends that legislative efforts to date continue in partnership with other entities across the Country. If a City Council member would like to discuss this matter further or provide other direction to DME staff,please submit a two-minute pitch request to the City Manager's Office for an upcoming City Council meeting. March 29,2024 Report No. 2024-011 ATTACHMENTS: A—APPA's Issue Brief(January 2022) Energy Efficiency. B—APPA's Issue Brief(May 2022) Critical Infrastructure and Supply Chain Constraints. C—APPA's Issue Brief(January 2024) Energy Efficiency. D—Mayor Hudspeth's February 2024 Letters. STAFF CONTACT: Tony Puente DME General Manager Antonio.Puentekcityofdenton.com 940-349-8487 REQUESTOR: Staff Initiated STAFF TIME TO COMPLETE REPORT: 2 hours Attachment A AMERICAN P U B.,L I CO- •. `K W ASSOCIATION Powering Strong Communities ISSUE BRIEF January2022 Energy Efficiency Summary While many of the efficiency standards set by DOE regulate Energy efficiency is the ability to maximize energy use via more consumer products,including ceiling fans,light bulbs,furnaces, efficient technologies throughout the electric utility system,as and refrigerators,others may directly impact public power utili- well as for electric customers to minimize their energy use via ties,notably the efficiency standards for distribution transform- a variety of tools,technologies,and behaviors.It is one of the ers.Public power utilities,especially smaller municipally owned most important,cost-saving tools available to utilities to meet electric utilities,are often distribution-only asset owners and energy demand,defer generation investment,and reduce green- operators.A significant portion of their capital costs are for the house gas and other emissions.The federal government creates transformers and wires that bring electricity to end-use custom- incentives for energy efficiency through legislation,regulations, ers.Thus,APPA believes that any energy efficiency regulations the tax code,and executive orders.The American Public Power on distribution transformers must be economically justified to Association(APPA)provides tools and supports research and ensure that end-use customers recoup the costs for any increases development projects for its members to deploy energy effi- in capital investments required through such regulations. Com- ciency measures at their utilities.APPA is generally supportive of plex electric system equipment,like a distribution transformer, federal efforts to encourage and support such activities so long also requires an especially flexible and thoughtful approach as they are cost-effective for consumers and have a reasonable when it comes to energy efficiency regulations as there are often payback period. situations where efficiency gains can come at the cost of broader optimal system operability. In August 2021,DOE proposed new energy efficiency Regulatory Action regulations for distribution transformers in Docket#EERE- Beginning with the Energy Policy and Conservation Act 2019-BT-STD-0018.APPA filed comments with DOE in the (EPCA) of 1975,Congress has passed several laws to promote proceeding.The comments recommended that DOE delay energy efficiency standards for consumer products and equip- implementation of any new energy efficiency regulation until ment.Today,the Department of Energy's(DOE) Building the market for transformer materials has returned to the projec- Technologies Office implements minimum energy conserva- tions used in the economic justification for the proposed regula- tion standards for more than sixty categories of products.The tion.The comments noted the need for flexible and economi- standard setting process,which includes the publication of cally justified regulations,as well as cited current supply chain a proposed rule in the Federal Register, allows for public and constraints for distribution transformers.The proposed rule is stakeholder feedback.DOE is required to set standards that are still pending before DOE. "technically feasible and economically justified."In 2007,Con- gress passed the Energy Independence and Security Act(EISA), which required DOE to create a schedule for the regular review Congressional Action and updating of efficiency standards.DOE,along with the Congress has long had,and continues to have,a strong interest Environmental Protection Agency,also administers the volun- in promoting energy efficiency.Several energy efficiency provi- tary ENERGY STAR program to identify products and building sions were included in the Energy Act of 2020,which passed as materials that go beyond federal efficiency standards. part of the Consolidated Appropriations Act of 2021 and was signed into law on December 27,2020. Specifically,the law PubLicPower.org Energy Efficiency reauthorized the Weatherization Assistance Program,a DOE APPA Position program which funds energy efficiency upgrades for low-income APPA strongly supports legislation to improve energy efficiency households.The Energy Act of 2020 also directed DOE to in multiple sectors.Many public power utilities have already establish rebate programs to encourage the replacement of inef- taken steps on their own or through federal incentives,state ficient electric motors and transformers,which APPA supports. funds,or local initiatives to improve their own energy efficiency The Infrastructure Investment and Jobs Act(H.R. 3684), and incentivize their customers to do the same.APPA will con- signed into law on November 15,2021,appropriated an ad- tinue to work with Congress to promote strong energy efficiency ditional$2.5 billion for the Weatherization Assistance Program policies,as well as ensure that DOE efficiency standards issued and$550 million for the DOE Energy Efficiency Conservation under EPCA are technically feasible and economically justified. Block Grant program,which provides block grants to cities, states,and Indian tribes for energy efficiency and conservation projects.Additionally,the law will create a grant program for APPA Contact energy efficiency improvements and renewable energy deploy- Sarah Mathias,Government Relations Director, ment at public schools. 202-467-2959/smathias@publicpower.org Both Congress and the Biden administration have looked to federal energy efficiency standards to spur energy efficiency, with President Biden including an"Energy Efficiency and Clean Electricity Standard"as part of the American Jobs Plan,an infrastructure proposal released in March 2021 prior to the de- The American Public Power Association is the voice of velopment of the bipartisan Infrastructure Investment and Jobs not-for-profit,community-owned utilities that power Act. Similarly,Representatives Peter Welch(D-VT) and Yvette 2,000 towns and cities nationwide.We represent Clarke(D-NY) introduced legislation,H.R. 5889,the Ameri- public power before the federal government to protect can Energy Efficiency Act,which would create a national energy the interests of the more than 49 million people that efficiency standard and require utilities to achieve a 27 percent public power utilities serve,and the 96,000 people cumulative reduction in electricity use by 2035. Congress needs they employ. Our association advocates and advises to be cognizant that many energy efficiency improvements on electricity policy,technology,trends,training,and require customers to purchase new appliances,make upgrades to operations. Our members strengthen their communi- their homes or businesses,and/or change their personal behav- ties by providing superior service,engaging citizens, ior,all actions that utilities cannot control.Though several states and instilling pride in community-owned power. have implemented energy efficiency goals or standards,APPA believes that incentives,grants,rebates,and federal support for efficiency-related research and development are a more effective means to achieve greater energy efficiency nationally. PubUcPower.org Attachment B AMERICAN PUBL O _. `R ASSOCIATION Powering Strong Communities ISSUE BRIEF May2022 Critical Infrastructure And Supply Chain Constraints he U.S.economy has been deeply impacted by Distribution transformers and other supply chain constraints.These constraints are due to materials are in critically short supply. shortages of labor and multiple classes of materials, causing disruptions on a global level. For public pow- Distribution transformers are essential for electric utilities to er utilities,the ability to provide reliable and affordable power to expand capacity,provide electricity to new communities,and homes,businesses,and critical facilities is foundational to both restore service when existing infrastructure is damaged during their business model and the recovery and expansion of the U.S. a hurricane,winter storm,or other natural disaster.In a recent economy. Prioritization of critical electric infrastructure and the survey of public power utilities, 80 percent reported having electric industry's critical functions during this period of material either pad-mounted or pole-mounted distribution transformer shortages and delays is necessary to prevent further economic inventories that are lower today than they were in 2018.The slowdown and ensure electric reliability. median percent of distribution transformers companies have this year compared to 2018 is down by 25 percent. Some companies have only 10 to 15 percent of the number of transformers they had four years ago. Supply of critical equipment and materials is Lead times to purchase new distribution transformers have decreasing While demand continues to grout, risen from three months in 2018 to an extraordinary 12 months or more today.Utilities have relied on their existing inventory widening the gap between what is available of transformers and other measures to bridge the gap between and What is needed. equipment purchase and arrival but have begun to report that Electric utilities are experiencing shortages of distribution their buffer inventories are decreasing to unacceptable levels. transformers,smart meters,conductor materials,skilled labor, Assuming no changes to the current situation,21 percent of and other necessities due to the economic impacts from the surveyed public power utilities could run out of new transform- COVID-19 pandemic. Delayed investments and expanding lead ers within the quoted 12-month lead time needed for newly times for new equipment caused by a lack of materials and labor purchased equipment to arrive. will continue to compound the problem—possibly for years to come. As the economy rebounds from the impacts of the pandemic, additional electric capacity is needed to power new residential Prolonged supply chain constraints on and commercial development,new manufacturing facilities,and critical electric infrastructure could be to support a rapidly expanding electric vehicle fleet. Public pow- detrimentaL to the U.S. er utilities are investing heavily in clean energy technologies to meet environmental goals. Simultaneously,the industry is facing As hurricane and wildfire season approaches,maintaining a suffi- extreme weather events,which have become more frequent and cient inventory of critical equipment for emergency response and severe,requiring more resource-intensive response and resto- restoration is especially important.The historically severe grid ration. impacts of Hurricane Laura in 2020 and Hurricane Ida in 2021 combined with increasingly urgent supply chain constraints have PublicPower.org Critical Infrastructure and Supply Chain Constraints left electric utilities with depleted and decreasing transformer APPA Contact inventories,raising concerns about the feasibility of responding to and recovering from another severe storm season,even with a Alex Hofmann,Vice President,Technical&Operations Services, robust mutual aid program in place. 202-467-2956/ahofmann@publicpower.org Supply chain constraints,particularly shortages of distri- Corry Marshall,Senior Government Relations Director, bution transformers,have caused electric utilities to delay or 202-467-2939/cmarshall@publicpower.org cancel infrastructure projects that would require more resources than are available.Many of the industry's planned projects are designed intentionally to transition to cleaner energy resources, and significant construction delays have the potential to put the nation's clean energy objectives at risk.Already the transformer The American Public Power Association is the voice shortage is impacting the housing market,with construction of not-for-profit,community-owned utilities that companies being required to use generators long-term to keep power 2,000 towns and cities nationwide.We represent their job sites powered while utilities look for transformers to public power before the federal government to protect feed new electrical load. the interests of the more than 49 million people that To ensure that supply chain constraints do not impact reli- public power utilities serve,and the 93,000 people ability,utilities are taking extraordinary measures to meet current they employ. Our association advocates and advises on demand with the limited supply of equipment that is available, electricity policy,technology,trends,training,and op- including refurbishing older equipment and identifying swap- erations. Our members strengthen their communities ping equipment in the field to generate spares from underuti- by providing superior service,engaging citizens,and lized equipment.These are last-ditch efforts to protect the safety instilling pride in community-owned power. of electric customers and sustain other sectors that depend on electricity,but these efforts move the industry further away from clean energy,efficiency,and affordability goals. Utilities are discussing the issue with the federal government, working with manufacturers,and with the entire sector to en- courage additional production and sharing of transformers. PublicPower.org Attachment C AMERICAN P V BL Ir Pam,. W. `K ASSOCIATION Powering Strong Communities ISSUE BRIEF January2024 Energy Efficiency • Energy efficiency is one of the most important,cost-saving tools available to utilities to meet energy demand,defer generation investment,and reduce greenhouse gas and other emissions. • The federal government creates incentives for energy efficiency through legislation,regulations,the tax code,and executive orders.The American Public Power Association(APPA) is generally supportive of federal efforts to encourage and support efficiency if they are cost-effective for consumers and have a reasonable payback period. • Given that many energy efficiency improvements require changes in customer behavior that are beyond a utility's control, APPA believes Congress should continue to provide incentives,grants,rebates,and federal support for energy efficiency research and development to encourage,but not mandate,achieving greater energy efficiency. • APPA urges the Department of Energy(DOE)to maintain current conservation standards for distribution transformers. Background Energy efficiency is the ability to maximize energy use via more efficient technologies throughout the electric utility system,as well as for electric customers to minimize their energy use via a variety of tools,technologies,and behaviors.Beginning with the Energy Policy and Conservation Act of 1975 (EPCA),Congress has passed several laws to promote energy efficiency standards for consumer products and equipment.Today,DOE's Building Technologies Office implements minimum energy conservation standards for more than 60 categories of products.The standard setting process,which includes the publication of a proposed rule in the Federal Register, allows for public and stakeholder feedback. DOE is required to set standards that are"technically feasible and economically justified." In 2007,Congress passed the Energy Independence and Security Act,which required DOE to create a schedule for the regular review and updating of efficiency standards.DOE,along with the Environmental Protection Agency(EPA),administers the voluntary ENERGY STAR program to identify products and building materials that go beyond federal efficiency standards. While many of the efficiency standards set by DOE regulate consumer products,including ceiling fans,light bulbs,furnaces, and refrigerators,some may directly impact public power utilities,notably the efficiency standards for distribution transformers. Public power utilities,especially smaller ones,are often distribution-only asset owners and operators.A significant portion of their capital costs are for the transformers and wires that bring electricity to end-use customers.APPA believes that any energy efficiency regulations on distribution transformers must not constrain market production and be economically justified to ensure that end-use customers recoup the costs for any increases in capital investments required through such regulations. Complex electric system equipment,like a distribution transformer,also requires an especially flexible and thoughtful approach to energy efficiency regulations,as there are often situations where efficiency gains can come at the cost of broader optimal system operability.For more information on distribution transformers,please see APPAs issue brief,"Critical Infrastructure and Supply Chain Constraints." In response to increasingly severe distribution transformer supply chain constraints,in May 2022,APPA and the National Rural Electric Cooperative Association sent a letter to DOE Secretary Jennifer Granholm urging her to temporarily waive the existing energy conservation standard for distribution transformers.Manufacturers could use the waiver at their discretion to increase output as much as possible until the immediate supply crisis has abated,thereby increasing the stock of transformers available to public power and other utilities. DOE subsequently denied the request. PubLicPower.org Energy Efficiency APPA filed public comments in response to DOE proposals to increase energy efficiency standards for distribution transformers and EPA ENERGY STAR proposals for distribution transformers.The comments supported the need for flexible and economically justified regulations. In December 2021,APPA responded to a DOE pre-filing for distribution transformers standards recommending that DOE delay implementation of a new energy efficiency regulation until the market for transformer materials returned to the projections used in the economic justification for the proposed regulation,citing current supply chain constraints for distribution transformers.In December 2022,DOE released its Notice of Proposed Rulemaking(NOPR)for new efficiency standards for all categories of distribution transformers that would require a conversion to the use of amorphous steel cores.In March 2023,APPA filed comments in response to the NOPR stating that the standard and analyses used in it do not comport with EPCA requirements and that the proposed standards would"worsen already critical distribution transformer supply shortages."The final rulemaking has not yet been released. Congressional Action Several energy efficiency provisions were included in the Energy Act of 2020,which was enacted into law as part of the Consolidated Appropriations Act of 2021 (PL. 116-260). Specifically,the law reauthorized the Weatherization Assistance Program(WAP),a DOE program that funds energy efficiency upgrades for low-income households.The Energy Act of 2020 also directed DOE to establish rebate programs to encourage the replacement of inefficient electric motors and transformers,which APPA supports. The Infrastructure Investment and Jobs Act(IIJA/P.L. 117-58) appropriated an additional$2.5 billion for the WAP.It also appropriated$550 million for the DOE Energy Efficiency and Conservation Block Grant program,which provides block grants to cities,states,and Indian tribes for energy efficiency and conservation projects.Additionally,the law will create a grant program for energy efficiency improvements and renewable energy deployment at public schools. The Inflation Reduction Act(P.L. 117-169) extended or created several new tax incentives for residential energy efficiency improvements,including increasing the credit for residential energy efficiency home improvements,energy efficient home appliances, creating a rebate program for residential energy saving retrofits,and new grants for states to support energy efficiency training for contractors. In response to increasing concerns about how the distribution transformer supply chain issue is impacting communities across the country,including delaying when electric utilities can connect new housing and businesses to the electric grid,as well as potentially slowing down electrification efforts,senators and representatives from both parties in the spring of 2023 sent letters to Secretary Granholm requesting that DOE withdraw its proposed rule regarding new efficiency standards for distribution transformers.The House letter was led by Representative Diana Harshbarger(R-TN) and signed by 64 House members. Senator Bill Hagerty(R-TN) led a similar letter that was signed by 45 senators. In June 2023,Representative Richard Hudson (R-NC) and Senator John Barrasso (R-WM introduced the Protecting America's Distribution Transformer Supply Chain Act of 2023 (H.R.4167/S.2036).The legislation would prohibit DOE from moving forward on its proposed energy efficiency standards to increase conservation standards for distribution transformers over the next five years. H.R.4167 was approved by House Energy&Commerce Committee in December 2023.APPA strongly supports these bills; at minimum,a delay of five years is needed to allow market production to catch up to demand. Similar language to prevent DOE from using funding to move forward on the NOPR was included in the House Fiscal Year (FY) 2024 Energy and Water Development and Related Agencies Appropriations Bill.The FY 2024 Senate Energy and Water Appropriation Bill includes$1.2 billion through 2026 to"enhance the domestic supply chain for the manufacture of electric grid components."The funding is provided through several programs authorized under the IIJA.This funding could help address identified labor and materials shortages.The committee report accompanying the bill also includes language raising concerns over the distribution transformer crisis and the impact it could have on reliability,resilience,and affordability. APPA Contact Steve Medved, Government Relations Manager,202-467-2928/smedved@publicpower.org The American Public Power Association is the voice of not-for-profit,community-owned utilities that power 2,000 towns and cities nationwide.We represent public power before the federal government and protect the interests of the more than 49 million people that public power utilities serve and the 96,000 people they employ. PubUcPowenorg Attachment D 0 �oF Office of the Mayor DENTON 215 E. McKinney St., Denton, TX 76201 • (940) 349-7717 Friday, February 2, 2024 The Honorable Ted Cruz United States Senate Washington DC 20510 Via email: timothy_kocher@cruz.senate.gov Dear Senator Cruz: Thank you for introducing bipartisan legislation (S. 3627) that will set reasonable and attainable energy efficiency standards for electric distribution transformers without exacerbating supply chain issues or harming domestic production of this piece of critical equipment. Denton Municipal Electric (DME) supports the goal of increasing the efficiency of all our electric distribution system. As a citizen-owned public utility, our priority is providing our customers with the most affordable and reliable service possible, and improved energy efficiency plays a key role in meeting our core mission. However, given the supply chain crisis for electric distribution transformers, we fear that implementation of the Department of Energy's proposed efficiency standards will exacerbate the transformer supply chain crisis, increasing our costs and threatening the reliability of our service. The standard outlined in your bipartisan bill will meet the goals of increasing energy efficiency and ensuring a strong domestic supply of transformers. I am pleased that your bill enjoys broad stakeholder support, and I hope the Senate will act on it soon. Please let me know how we can be of assistance as you move this bill forward. Thank you for your work on this Denton priority. Sincerely, G Gerard Hudspeth Mayor OUR CORE VALUES Inclusion• Collaboration• Quality Service • Strategic Focus *Fiscal Responsibility ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989 0" CIT Office of the Mayor OF DENTON 215 E. McKinney St., Denton, TX 76201 • (940) 349-7717 Friday, February 2, 2024 The Honorable John Cornyn United States Senate Washington DC 20510 Via email: laura_atcheson@cornyn.senate.gov Dear Senator Cornyn: I am pleased that Senators Cruz and Brown have introduced bipartisan legislation (S. 3627) that will set reasonable and attainable energy efficiency standards for electric distribution transformers without exacerbating supply chain issues or harming domestic production of this piece of critical equipment, and I respectfully urge you to cosponsor this bill. S. 3627 enjoys broad stakeholder support, and I hope the Senate will act on it soon. As we wrote last year, the supply chain crisis for electric distribution transformers seriously impacted Denton Municipal Electric(DME). We have nearly$22 million in outstanding purchase orders for electric distribution transformers, with a waiting time of 1.5 to 3 years for delivery of new orders. As a result, our inventory of transformers is at levels reserved for normal, daily operational responsibilities and emergency response but falls short of meeting the extraordinary growth we are experiencing. DME has 71 construction-ready projects and another 131 projects currently in the design phase. Due to the low inventory of transformers and current supply chain issues, we have notified customers and developers DME may not be able to provide immediate service to these projects. DME supports the goal of increasing the efficiency of all portions of our electric distribution system. As a citizen-owned public utility, our priority is providing our customers with the most affordable and reliable service possible, and improved energy efficiency plays a key role in meeting our core mission. However, given the supply chain crisis for electric distribution transformers, we fear that implementation of the Department of Energy's proposed efficiency standards will exacerbate the transformer supply chain crisis, increasing our costs and threatening the reliability of our service. The standard outlined in S. 3627 will meet the goals of increasing energy efficiency and ensuring a strong domestic supply of transformers. Thank you for your attention to this Denton priority. Sincerely, G Gerard Hudspeth Mayor OUR CORE VALUES Inclusion• Collaboration• Quality Service • Strategic Focus *Fiscal Responsibility ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989