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By Scott Dunlop
President and Co-Founder
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Your power bill may be rising because of a piece of equipment most people will never see.
Transformers and other critical grid components sit deep inside the infrastructure behind every electricity bill, yet shortages and long delivery times are increasingly affecting how quickly new power capacity can come online.
Those delays may feel distant from everyday life, but their costs do not stay there.
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The grid cannot expand as quickly as demand is growing. The reason is not a lack of ambition or investment. It is that the equipment required to move power from where it is generated to where it is needed cannot be built and delivered fast enough.
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According to analysts from PwC, as reported by pv magazine, lead times for high-capacity transformers have stretched to as long as four years. That is not a delay in a project schedule. It is a hard constraint on how quickly the grid can modernize.
The specialized steel used in transformer cores has faced its own global supply hurdles, and the mills that produce it are at capacity.
The demand surge is not subtle. The same article from pv magazine shows data from Wood Mackenzie that the demand for generator step-up transformers increased 274 percent between 2019 and 2025.
Substation transformer demand rose 116 percent over the same period. Prices increased roughly 80 percent in five years.
Households feel this in their bills. The U.S. Energy Information Administration reported an average residential electricity price of 18.19 cents per kilowatt-hour for January through August 2026, compared with 17.03 cents over the same period in 2025.
That increase is not isolated. It reflects a system where the equipment to supply power cannot keep pace with the demand for it.
A Procurement Problem
I have seen what that looks like in practice. Transmission lines are completed. Substations are waiting. And the transformers that would make the whole system operational sit on a backlog with no clear delivery date.
The money has been spent. The infrastructure is not working. The delay is paid for by the consumer.
I think the industry has been slow to treat this as an infrastructure problem rather than a procurement one. A procurement problem is solved by finding a supplier.
An infrastructure problem requires coordination across manufacturing, logistics, construction, and the regulatory environment that governs all of it.
The steel towers, the substations, the transformers, and the cables have to arrive in sequence. If one piece is missing, the rest of the system sits idle.
The solution is not simple, and I am not going to pretend it is. Data centers are not going to disappear. The demand for power is not going to fall.
What I believe is that we need to treat supply chain integration as a strategic priority rather than an operational detail.
The specialized steel capacity has to expand. The permitting and interconnection processes have to move faster. The manufacturing base has to be treated as a critical national asset rather than a cost center.
A Predictable Consequence
If we do this, the outcome is realistic, not utopian. Households pay less than they would have otherwise. Projects move closer to their original schedules. Communities that depend on reliable power get it. The gap between generation and consumption closes rather than widens.
If we do not, the outcome is also clear. Bills continue to rise. Delays compound. The infrastructure that is already built sits idle while the equipment it needs sits on a waiting list. The communities that can least afford the increase absorb the largest share of it.
What I would ask of policymakers is straightforward. Treat transformers and specialized steel capacity as critical infrastructure. Coordinate procurement across regions rather than treating each project in isolation. Support the manufacturing base that produces these components and give the industry the predictability it needs to invest in capacity.
What I would ask of industry leaders is to stop treating supply chain shortages as bad luck. They are a predictable consequence of a system that has been underinvested in for years. The companies that plan for the shortage rather than react to it will be the ones that deliver.
None of this is abstract. Every kilowatt-hour that reaches a home has been through a supply chain that starts in a mill and ends at a meter. If we want the meter to stay affordable, we have to start paying attention to the mill.
Scott Dunlop is the president and co-founder of ER Steel, a Canadian structural-steel fabricator serving transmission, energy and industrial projects.
All opinions are the author’s own.
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