Powering Through Uncertainty:
How Tariffs Impact Utility Workers Nationwide
Written by: Ken Lulow
The electrical utility industry, the very backbone of our modern lives, is facing a period of significant change due to recently implemented tariffs on crucial materials and equipment. These tariffs, essentially taxes on imported goods, target steel, aluminum, electrical equipment like transformers, and components for renewable energy projects. As utility professionals and line workers, these changes have the potential to affect your daily work and your household finances. Let's take a closer look at what these tariffs mean for you across the United States.
Tariffs on Key Materials and Equipment
To understand the impact, let’s first recap the key tariffs affecting electric utilities:
Steel Imports (25% Tariff): Steel is fundamental for utility infrastructure, transmission towers, and substation structures. This tariff means utilities pay 25% more for imported steel products, often leading to higher domestic prices too.
Aluminum Imports (10% Tariff): Aluminum is widely used in power lines and cables. A 10% hike in aluminum cost makes wires, conductors, and other components more expensive.
Transformers and Electrical Components: Many transformers and the specialty steel they require are subject to trade tariffs. Imported transformers may face additional duties, which increases prices and reduces availability.
Renewable Energy Components: Substantial tariffs on solar panels and components from countries like China, Vietnam, Thailand, Malaysia, and Cambodia, with rates ranging from 24% to as high as 49% or even more when combined with other duties. Tariffs also affect lithium-ion batteries imported from China, crucial for energy storage.
Broader Tariffs: A baseline tariff of 10% applies to most other imported goods, with even higher "reciprocal" tariffs on specific countries based on trade imbalances.
These tariffs were meant to protect U.S. industries, but in practice, utilities are paying more across the board. Higher equipment costs are straining budgets and affecting how quickly utilities can complete critical infrastructure projects.
Economic Impacts
Tariffs have caused material and equipment costs to climb sharply, putting pressure on utility budgets. The chart below illustrates the estimated cost increases for key inputs since the tariffs were put in place:
Summary of Key US Tariff Rates
(April 2025)
For electrical utilities, higher material costs strain project budgets. A new transmission line or substation now comes with a much bigger price tag. Utilities often operate within regulated budgets or contracts, so these overruns can force them to postpone or cancel some projects. In some cases, utilities seek to pass on the costs to customers through rate increases. While many factors go into electricity pricing, tariffs add a new layer of upward pressure on rates.
Operational Impacts
Beyond higher costs, tariffs contribute to operational challenges, most notably project delays and equipment shortages. A major issue is the shortage of transformers, which are critical to maintaining and expanding the grid.
Project Delays and Increased Costs: The higher cost of steel, aluminum, and specialized equipment like transformers can lead to increased project budgets and potential delays in infrastructure upgrades, maintenance, and new construction. This can affect project timelines and your daily work schedule.
Supply Chain Issues: Getting the necessary materials and equipment might take longer due to disruptions in global supply chains caused by tariffs. This is particularly true for transformers, where shortages already existed and are now being exacerbated.
Shifting Priorities: Utilities might have to make tough decisions about which projects to prioritize due to budget constraints. This could mean a greater focus on essential maintenance rather than new development in some areas.
Impact on Renewable Energy Work: If you work in the renewable energy sector, the increased cost of solar panels, batteries, and other components could lead to a slowdown in the deployment of new solar and wind projects, potentially affecting job growth in this area.
Many U.S. utilities imported transformers from global suppliers. Tariffs have made some imports more expensive or unavailable, pushing more orders to domestic manufacturers who are already facing backlogs. This means delayed projects, longer outages, and maintenance crews stretched thin. Utilities might now look to repair and reuse old equipment rather than install new systems, increasing strain on field teams and resources.
Workforce Impacts
Tariff-related cost increases and supply delays also impact utility employees. When project budgets are tight, hiring slows, and some planned projects get shelved. While widespread job loss hasn’t occurred yet, some workers may see reduced opportunities or increased workloads.
Job Security: High equipment costs mean fewer new builds or upgrades, which can reduce demand for construction crews and field installers.
Unpredictable Workloads: Delayed projects might result in downtime, followed by periods of intense activity when materials finally arrive. Crews also face more maintenance work, often dealing with older, overworked equipment.
Rising Costs for Workers: As electricity rates increase due to tariff-related costs, workers across the country will feel the pinch in their household budgets—especially in areas with already high living expenses. Even a modest rise in monthly utility bills can affect take-home pay and savings.
Impacts at Home
The tariffs can also have a direct and indirect impact on your household finances.
Potential for Higher Electricity Bills: The increased operational costs faced by utility companies due to tariffs on their supplies could eventually translate to higher electricity prices for consumers across the country. The exact amount of increase can vary by region depending on the local energy mix and regulations.
Increased Cost of Goods: As tariffs increase the cost of imported goods, you might see a general rise in prices for various consumer products, impacting your overall cost of living.
Regional Impacts Across the U.S.
Tariffs impact utilities in all regions, but the severity can vary based on local factors like cost of living, infrastructure age, and growth rate. Here are a few examples:
Fast-Growing States: In areas with booming populations and energy demand, such as many Southern and Western states, the transformer shortage and rising equipment costs can delay new housing developments, industrial expansions, and grid upgrades.
Storm-Prone Regions: In hurricane or wildfire-prone areas, replacing damaged poles and transformers is critical. Delays in receiving equipment due to tariffs can lengthen restoration times and increase recovery costs.
High-Cost-of-Living Areas: In cities and regions where housing and utility costs are already high, any increase in electricity bills due to infrastructure costs hits workers and consumers harder.
Regional Variations in Electricity Costs: Electricity prices already vary significantly across the US. States with a higher reliance on imported energy or those undergoing significant grid modernization might see more pronounced increases due to tariffs. For instance, regions in the Northeast that rely on Canadian hydropower could face higher prices if tariffs affect those imports.
Every region is going to feel some degree of impact, from rural cooperatives to major urban utilities.
Long-Term Implications
Looking ahead, tariffs could continue to slow down modernization and clean energy deployment:
Economic Uncertainty: Tariffs can create broader economic uncertainty, potentially affecting overall economic growth and consumer spending nationwide.
Grid Upgrades: Delays in sourcing transformers, equipment, and switchgear hinder efforts to modernize aging infrastructure and improve reliability.
Clean Energy Goals: Experts are concerned that the higher costs of renewable energy technologies due to tariffs could slow down the nation's progress towards clean energy goals.
Domestic Manufacturing: The hope is that tariffs will encourage more domestic manufacturing of essential utility equipment and components, potentially creating jobs in the US. However, the extent and speed of this growth remain uncertain. If domestic suppliers can scale up successfully, utilities may benefit from more stable prices and better availability long-term.
How Utilities and Workers Can Adapt
Despite the hurdles, the industry is capable of finding ways to move forward. Here’s how utilities and workers might adapt:
For Utilities:
Diversify Suppliers: Looking beyond traditional vendors and building relationships with alternative manufacturers.
Plan Proactively: Ordering materials well in advance and stockpiling critical items when possible.
Advocate for Relief: Working with regulators and lawmakers to seek tariff exemptions or production incentives for grid-critical equipment.
Innovate: Exploring new technologies and designs that reduce reliance on specific components.
For the Workforce:
Upskill: Learning how to maintain aging systems, adapt to alternative materials, and work with evolving technologies.
Stay Informed: Understanding how broader economic trends like tariffs affect their roles.
Collaborate: Sharing ideas from the field with management to find practical workarounds and safe, effective solutions under constrained conditions.
Staying Resilient in a Tariff-Driven Landscape
The utility industry is known for its resilience and ability to adapt. As these tariffs continue to shape the economic environment, it's important for utility professionals and line workers to stay informed about these changes and how they might affect their work and personal lives. Higher material prices, slower equipment deliveries, and shifting priorities will affect how utilities operate and how their workers maintain the grid. While the long-term outlook will include more domestic manufacturing and resilient supply chains, the near-term reality requires adaptation, collaboration, and smart planning.
Utility professionals, whether in the field or the office, prepare by staying informed, flexible, and focused on the mission of powering our communities safely and reliably, even in challenging times. By understanding the ripple effects of tariffs and working together to overcome them, the industry can continue to move forward while supporting its essential workforce across the country.
