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

Safety Toolkits

Jan 27, 2026

NAHB Updates 3 Key Safety Programs

Having a written safety plan in place is essential to protecting workers and others on a home building jobsite. NAHB recently updated three key safety and health programs specifically designed for home builders, remodelers and siding contractors.

Advocacy

Jan 26, 2026

Key Changes in the One Big Beautiful Bill to Lower Your Taxes

The 2026 tax season officially opens Monday, Jan. 26, as the IRS begins to accept and process 2025 tax returns. These important housing and business provisions in the One Big Beautiful Bill Act will apply to the 2025 tax year.

View all

Latest Economic News

Economics

Jan 27, 2026

State-Level Employment Situation: December 2025

With few exceptions, year-over-year nonfarm employment levels were relatively stable across states at the end of 2025, ranging from a decline of 4.2 percent to a gain of 1.8 percent. Construction employment, however, showed considerably greater dispersion, with declines of up to 9.3 percent in some states and gains approaching 9.0 percent in others.

Economics

Jan 26, 2026

Pool Permitting Falls Lower in 2025

After a rapid expansion of residential swimming pool and spa construction following the pandemic, permit levels in the latest monthly index for December fell to their lowest level since 2020.

Economics

Jan 23, 2026

2025 Third Quarter State-Level GDP Data

In the third quarter of 2025, the Bureau of Economic Analysis (BEA) reported that real gross domestic product (GDP) expanded nationally, with growth recorded across all states and the District of Columbia.