Just One More Week
 
Industry Pulse Check Closes June 15. Learn more
 

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

IBS

Jun 08, 2026

IBS Scholarships Offer Members More Opportunities to Network and Learn

More members are able to experience the numerous benefits of attending the International Builders' Show thanks to the IBS Scholarship Program. Applications are now open for IBS 2027 scholarships, which will provide recipients with a show pass, travel stipend, hotel accommodations and more.

Spring Leadership Meeting

Jun 05, 2026

Watch Livestreams of Key Spring Leadership Meetings

NAHB leadership will gather June 9-13 for the 2026 Spring Leadership Meeting in Washington, D.C. Members and HBA staff not in attendance can view livestreams of key meetings.

View all

Latest Economic News

Economics

Jun 08, 2026

Mortgage Applications Retreat in May, with ARMs Gaining Share

Mortgage application activity declined again in May as higher mortgage rates continued to suppress the market, although adjustable-rate mortgages (ARM) gained some traction. According to the Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, applications fell 5.5% month-over-month in May on a seasonally adjusted basis.

Economics

Jun 05, 2026

U.S. Labor Market Remains Resilient in May

Despite rising inflation and ongoing economic uncertainty, the U.S. labor market remained resilient in May. Nonfarm payrolls increased for the third consecutive month, and the unemployment rate held steady at 4.3%.

Economics

Jun 04, 2026

Mortgage Rates Increase Further as Inflation Remains Elevated

Mortgage rates continued to increase in May as inflation accelerated. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.41% in May, up 7 basis points (bps) over April.