SBA Issues Strong Rebuke to Transformer Rule Following Builder Input

Regulations
Published
Contact: Alex Strong
[email protected]
Senior Director, Federal Legislative
(202) 266-8279

The Small Business Administration’s (SBA) Office of Advocacy has delivered a stinging rebuke to the Department of Energy’s (DOE) proposed rule to regulate energy conservation standards for distribution transformers after NAHB voiced its strong concerns at a recent SBA forum.

At a time when the home building industry is facing a severe shortage of electrical transformers, the proposed rule would dictate that manufacturers increase the efficiency of distribution transformers by a mere tenth of a percentage point. In order to achieve this nominal increase in efficiency, the proposed rule would require manufacturers to transition to a different type of steel that would add months to a lengthy order cycle that already takes more than 16 months to produce and deploy new transformers.

In a seven-page letter to DOE opposing the agency’s proposed transformer rule, the SBA’s Office of Advocacy cited concerns raised by builders during their March 14 teleconference call with the SBA.

“Several [stakeholders] raised concerns about indirect impacts from the proposed rule, including to home building,” the SBA letter stated.

SBA’s letter to DOE went into greater detail regarding home builder concerns regarding DOE’s proposed rule.

“Small home builders noted that delays in transformer installation have led to significant costs to their projects,” the letter noted. “Not having power connected in structures that are already built has led to the potential for mold in the home due to poor ventilation in warmer climates/months.

“Additionally, home builders stated that they cannot close on a home unless the transformer is installed and working, and power is being generated to the home. This creates a ‘winners and losers’ scenario by which utilities are having to pick and choose when and how to connect transformers to a particular development.

“These delays amount to consumers backing out of home closings, and as a result significant costs to the builders. These indirect, cumulative impacts were not adequately considered by DOE in the rulemaking.”

NAHB has also sent comments to the DOE stating how this proposed rule will not only exacerbate the current nationwide shortage of electrical transformers, but also fuel delays in home construction projects across the country as well as aggravating the nation’s housing affordability crisis.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Student Chapters | Workforce Development

Dec 18, 2025

NAHB Welcomes 24 New Student Chapters to Help Build the Future

NAHB is proud to welcome 24 new student chapters in 2025. These chapters were created to enhance students' educational experiences, increase their exposure to the home building industry and connect them with their local HBAs.

Advocacy

Dec 17, 2025

House Panel Approves Major Housing Package

In a move that provides momentum for Congress to enact major housing legislation in early 2026, the House Financial Services Committee this week approved the Housing for the 21st Century Act. This bipartisan housing package takes much-needed steps toward addressing our nation’s critical lack of housing.

View all

Latest Economic News

Economics

Dec 16, 2025

Job Market Shows Signs of Cooling in November

In November, job growth slowed, and the unemployment rate rose to 4.6%, its highest level in four years. At the same time, job gains for the previous two months (August and September) were revised downward. The November’s jobs report indicates a cooling labor market as the economy heads into the final month of the year.

Economics

Dec 15, 2025

Builder Sentiment Inches Higher but Ends the Year in Negative Territory

Builder confidence inched higher to end the year but still remains well into negative territory as builders continue to grapple with rising construction costs, tariff and economic uncertainty, and many potential buyers remaining on the sidelines due to affordability concerns.

Economics

Dec 11, 2025

Homeownership Rate Inches Up to 65.3%

The latest homeownership rate rose to 65.3% in the third quarter of 2025, according to the Census’s Housing Vacancy Survey (HVS).