The stability of the nation’s electrical grid depends in part on large power transformers. The size of small houses, these transformers are in short supply and they take a long time to build. The Government Accountability Office (GAO) has found that the Energy Department could help secure this important link in the electricity supply chain. For more, Federal Drive Host Tom Temin spoke with GAO’s Director of Natural Resources and Environment Issues, Frank Rusco.

GAO REPORT on ELECTRICITY GRIND: https://www.gao.gov/assets/gao-23-106180.pdf

Interview Transcript: 

Tom Temin And these large power transformers, most people have never laid eyes on one there, I guess big gray things that sit in those nests of fenced off areas you see sometimes by railroad tracks where the grid kind of comes together and goes back out again, best way I can describe it. What does the Energy Department have to do with these privately owned and operated pieces of equipment?

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Frank Rusco These large power transformers are critical for the safe and reliable functioning of the electrical grid. And [Department of Energy (DOE)] has a lot to do with both studying how reliable and resilient the grid is and taking steps to promote resilience. As you know, the grid was built over many, many years by literally hundreds of small utilities. And it’s all pieced together and there’s many moving parts. And so it’s essential that there be some central attention paid to how it’s functioning.

Tom Temin And these devices, really, they are the size of a cabin. If they were hollow you could live in one, big gray painted steel boxes. What do they do? They take the long distance transmission lines that are something like 15,000 volts and step them down for voltage for local distribution?

Frank Rusco That’s primarily what happens, yes. They can either step power up or down. So what typically happens is power is produced a long ways away from where it’s usually consumed, say someone’s house, and they’ll bring it in transmission lines, which, as you say, are very high voltage. But you can’t use that in your house. You have to get it down to 110 or 220. And so these large transformers step down the power from the transmission lines into a usable form, usable level.

Tom Temin And do they just sit there or do they deteriorate, require maintenance and replacement from time to time?

Frank Rusco Yeah, they last a long time, but they require some maintenance and care. Basically, if you’re taking high voltage power and stepping it down to a level that you can use it, you’re creating a lot of heat. So these machines are getting very hot, they have to have cooling systems. So they typically are filled with some kind of oil or something that circulates around. They sometimes have air cooling systems. And so these things can go wrong and need maintenance or what we’ve seen in recent times is people attack them, shoot a hole in them with a rifle, and you drain the coolant and all of a sudden you’ve got a big problem.

Tom Temin Right. And the House and Senate subcommittees on Energy and Water Development asked for this report. What was their concern about power transformers, of all things.

Frank Rusco These large power transformers are so large and there’s so many different designs, and each individual utility may have no spares on hand. So if one is damaged it can really cause problems with reliability in the power system. And so originally, Congress had cast DOE with identifying the problem and trying to determine whether it made sense to have a strategic reserve of these large power transformers in case something went wrong with multiple transformers could cause a major outage. So really, one of the things that DOE found is that these transformers are of so many different designs having been put in place by different utilities over a long period of time, that you can’t just have a reserve of a generic transformer. It has to be able to fit into a specific system. And so Congress asked DOE to study it and come up with some solutions.

Tom Temin We are speaking with Frank Rusco, director of natural resources and environment issues at the GAO. And what had they done? What did you find?

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Frank Rusco Yes, DOE has identified some issues, and among them are real limits in the supply chain. So if you go back to 2020, more than 80% of the transformers that were in operation had been purchased from foreign countries. The biggest countries that we import these large transformers from are Canada and Mexico, they’re allies. We also buy them from China. And there’s only a few producers of Transformers domestically. And both DOE and Commerce has recognized this as a potential vulnerability for security reasons. So they identified that there’s these problems with supply chain. It takes longer and longer to build these things in recent years. So one of the things that we’ve asked DOE is to come up with a plan to address some of these. There are things with labor needs to be trained to be able to do this work. There are issues of just specific components. Very few people produce special steel that goes into them, and DOE can take some steps to help alleviate some of these supply chain issues.

Tom Temin What steps could they take?

Frank Rusco Well, one thing is identifying where everything is and what condition all of these transformers are in, and then working with utilities to try to make orders and have parts that are on order come in at a reasonable amount of time. Another thing that DOE can do is coordinate with smaller utilities that have problems with maintaining another form of supply of parts. So if you take a small utility and one of these large transformers, it’s very expensive. So they’re basically not going to buy another one until the ones that they have are near the end of their life. And if you go to a big utility, they may have some spares sitting around and they have less of a problem. But DOE needs to work to try to coordinate among the smaller utilities and try to identify where are their spare transformers in the country. Are they’re close enough that one could be put into use at a small utility, if necessary. And that’s another thing they can do.

Tom Temin And just a question about these devices, which concerns me on the China question, if we have them from China. Is there a communication electronics control component to them such that they can be accessed by the Internet and then you can imagine what the possibilities there are?

Frank Rusco Yeah, absolutely. That is a concern that most of these large transformers will be connected to industrial control systems that are connected to the Internet. And so it’s definitely important to make sure that when these things are being built, there aren’t backdoors put into those systems or vulnerabilities that we don’t know about.

Tom Temin And what does DOE say to these recommendations to get started on this kind of inventory survey and then looking at some of the supply issues?

Frank Rusco DOE said that they’re doing a lot of this stuff, but they have not yet put their efforts into a plan to actually achieve a goal. So that’s what we’re asking. They’ve done a lot of work to identify the problem, but what they really need to do is implement a plan, work with the utilities, and come up with a solution that’ll help.

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Tom Temin And is there a sense that the grid infrastructure is old in this country? Sometimes you stand on a street corner and you look up at 77 wires that’s literally hanging from some pole crossing the street and going this way and that. It looks really old. And the grid, you don’t see as much. But are these things tending to be on the aging side, and that we may have some kind of a future transmission crisis if we don’t get to the bottom of these big transformers?

Frank Rusco There are a lot of very old transformers in operation, and there’s a wide range. So as the demand and supply of electricity is grown, obviously they put in new equipment and then when  the old equipment wears out, they replace it. So there is equipment of all different vintages on the system, but some of it is very old and some of it is more vulnerable than others. The real risk is that you have multiple, multiple transformers going out at once, and then you’d have a big potentially region wide issue.

Tom Temin And probably some of the really old ones might have been made in America. And there used to be a company called Westinghouse. I’m not sure they even exist anymore, but was in the power transmission power generation business. General Electric maybe made them, I don’t know, but most assuredly none of them do now. And so if those old domestic ones failed, there would be a compatibility problem and the utility would be hard pressed to somehow retrofit.

Frank Rusco At this point, there are so many different types of transformer that any transformer that is going to need to be replaced is going to be a special order with specifications for the particular use that it’s put to buy a utility.

Tom Temin Yeah, it’s not 17,000 volts in on these two terminals and 2,000 volts out on those two.

Frank Rusco No, it’s unique to almost every application, so that the lack of standardization is a problem. And you can’t really address that, it would be too expensive to sort of replace that. You can think about standards going forward, and that’s another thing that DOE may want to do.

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