Sen. Casey reacts to Department of Energy mandate
U.S. Sen. Bob Casey said in a virtual conference that he supports legislation that would keep a U.S. Department of Energy rule change from potentially shutting down a company like Cleveland-Cliffs because of a shift in standards.
Casey led a conference Wednesday morning, April 10, that included remarks from himself, Jamie Sychak, president of United Auto Workers Local 3303; and Lourenco C. Goncalves, chief executive officer of Cleveland-Cliffs, regarding the Department of Energy’s recent energy efficiency rule, which put new efficiency standards for the electrical transformers Cleveland-Cliffs produces the steel to make.
While the department extended the time Cleveland-Cliffs has to adapt its grain-oriented electrical steel to the new energy standards from three to five years, Casey said the passage of the Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024, also known as Senate Bill 3627, would help balance the implementation of energy standards.
“The next step we have to take, however, is to pass a statute, so we’re not having to depend upon the back and forth of a rule change or how the rule comes out, or what changes we can make in the process of promulgating a rule,” Casey said. “We have more work to do for the future to protect all those … jobs at Butler Works, but also to protect our own national security and economic security.”
The department’s final energy standards, released April 4, indicate Cleveland-Cliffs Butler Works will have five years to comply with new efficiency standards. The Butler Works plant is the only domestic producer of grain-oriented electrical steel, which is used in distribution transformers nationwide.
The announcement to increase the minimum efficiency by 2029 came after Cleveland-Cliffs management, union leaders and elected officials opposed the proposed mandate, raising concerns that the jump in energy efficiency requirements was too wide for the company to bridge in just under three years and would potentially risk 1,300 jobs at the Butler Township plant.
Senate Bill 3627 is in its introduction stage, but if passed, would keep the secretary of energy from finalizing any rule putting too high standards on distribution transformer efficiency; and new rules would have to be implemented 10 years after a rule’s finalization.
The new standards for manufacturers of distribution transformers outpace the efficiency of grain-oriented electrical steel, manufactured domestically only at Cleveland-Cliffs Butler Works. However, Jennifer Granholm, U.S. secretary of energy, said the new compliance period gives the company additional time to improve its product’s efficiency.
In Wednesday’s conference, Goncalves said the grain-oriented electrical steel is vital to power grids that take on large loads. The initial draft of the Department of Energy’s rule would have put efficiency standards at levels currently attainable only by amorphous metal transformers, but Goncalves said the material would not be able to handle power levels in the U.S.
“Everywhere in the world that will have high demand … of the electrical grid, you have grain-oriented electrical steel,” Goncalves said. “This rule that was being proposed to change it to amorphous metal would basically kill the electrical grid in the United States.
“There is no technological disadvantage on our grain-oriented electrical steel against anyone in the world, let alone with amorphous metal.”
Casey also responded to a question about Nippon Steel Corporation’s purchase of U.S. Steel, saying that he has concerns about the company being owned by the Japanese steel company. He said he will take action to keep union jobs not only in the U.S., but in Pennsylvania.
“This is a national security question as much it is an economic security and a jobs issue,” Casey said. “I don’t want those jobs going to a nonunion state. I want those jobs to stay in Pennsylvania; I want to preserve every single union job, and not allow them to go to another state.”
Goncalves said the extended deadline for Cleveland-Cliffs to update its grain-oriented electrical steel — coupled with the $75 million Department of Energy grant Butler Works is up for — will allow Cleveland-Cliffs to expand.
“We are going to be able to invest, we’re going to be able to increase our production, take care of our needs in our country and possibly start exporting to other markets,” Goncalves said.
