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Utility Business

Steel Company, Transformer Makers in Talks About West Virginia Plant

April 25, 2024

Cleveland-Cliffs’ CEO says his team wants to help solve the country’s electric equipment shortage.

A West Virginia tinplate plant recently idled by steel manufacturer Cleveland-Cliffs Inc. could be revived as a hub for electric transformer manufacturing, the company’s leader said April 23.

Chairman, President and CEO Lourenco Goncalves and his team this month indefinitely halted production at their Weirton plant after the International Trade Commission overruled a U.S. Department of Commerce recommendation that tinplate imports be slapped with a range of duties. The decision left more than 900 people without a job, although more than 100 of them have since relocated to other Cliffs plants.

But Cliffs isn’t prepared to walk away from its site on the Ohio River about 30 miles west of Pittsburgh. Goncalves said he has been talking to some of his customers that make transformers—ERMCO, a 2,000-employee subsidiary of Arkansas Electric Cooperatives Inc., is among them—about adding capacity to a market that’s been very tight for several years as electrification investments have soared. Among the options are building a new plant in Weirton plant to make transformers.

“We can co-invest [or] we can just support with the steel. We can do whatever it takes,” Goncalves said. “But we need to increase the throughput and the availability of transformers for the supply chain, made-in-USA transformers and hopefully with union workers. That’s what we are working on, and we believe we’re going to be successful.”

If the work around Weirton materializes in a new plant, it will be a welcome addition for utilities spending billions to upgrade and expand their power networks. In the wake of the COVID-19 pandemic and the supply-chain snarls it created, lead times for large transformers ballooned from a few months to more than three years in some cases. Those delays—which also have produced price increases—led at least one utility to issue a notice saying it could no longer accommodate projects needing a new distribution transformer. (See ‘No Easy Answers’ in the sidebar here.)

Researchers at the National Renewable Energy Laboratory early this year said growing demand for energy requires that the overall stock of transformers in the United States needs to grow (from 2021 levels) by between 160% and 260% by 2050. With U.S.-based manufacturing able to supply only about 20% of demand, there is a large growth opportunity. A handful of companies that includes Siemens, Eaton and Hitachi Energy have announced plans of late to beef up production.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.