The Energy Department published final energy efficiency requirements Thursday for distribution transformers, standards meant to pursue the administration’s goal of making power grids more efficient and resilient, while also taking into account concerns raised by industry and labor groups over its stringent emissions requirements and time frame.

According to the final rule, transformer cores will now be required to be made with 75% amorphous steel — down from its originally proposed 95% requirement. Manufacturers will also have five years, rather than three, to comply.

The final rule marks a compromise between the Biden administration and industry groups, which had argued DOE’s earlier amorphous steel target would be all but impossible to meet in the three-year time frame, given the lack of current domestic production and the need for anticipated workforce reskilling.

Amorphous steel, which relies on an ultra-thin metal, is considered to be much more efficient than traditional, grain-oriented steel used in U.S. transformer cores. It also carries more capacity than traditional U.S. distribution cores — a significance officials say cannot be overlooked at a time when power demand has soared to record highs across the country, threatening capacity shortages and blackouts for millions.

But its near-term availability is highly limited. Though the United States is expanding investment in new amorphous alloy and electrical steel manufacturing facilities, just three U.S. suppliers currently produce these materials, and the overwhelming majority of U.S. distribution transformer cores are still made using GOES, or grain-oriented electrical steel. 

Speaking to reporters on a call previewing the rule, Energy Department officials said the updates were made in close consultation with industry groups — noting that the 75% threshold ensures that transformer cores can still primarily be met with GOES, while also increasing efficiency. 

DOE said the rule will save U.S. residents more than $14 billion in energy costs and slash nearly 85 million metric tons of carbon dioxide pollution — the equivalent of the combined annual emissions of 11 million homes.

“These standards are going to make America’s power grid more resilient,” Energy Secretary Jennifer Granholm told reporters on the call, adding that they will support “good-paying, high-quality manufacturing jobs,” and help deploy “more affordable and reliable clean electricity more quickly across the country.”

Industry groups gave qualified praise to the final standards, which they said allow for a more gradual shift toward energy efficiency while also keeping markets stable. 

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“As the nation depends on electricity to power more of the economy, a stable distribution transformer supply chain is essential to maintaining reliability and meeting growing demand,” Louis Finkel, the vice president of government relations at the National Rural Electric Cooperative Association, told the Washington Examiner. 

“DOE’s final rule is much improved over its proposal, which would have upended the entire market for distribution transformers at a time when manufacturers could not keep up with demand for this critical equipment,” Finkel said.