Keeping the Lights On:
An Action Plan for America's Aging Utility Transformers

The failure rate of transformers in the United States is expected to rise sharply in the coming years — even as America continues to demand more power. It's a serious problem that will affect power producers, insurers, industry, public institutions and the entire U.S. economy. How will utilities meet this growing need for energy and maintain system reliability? Utilities may have to make significant changes in the way they operate and care for their transformers.

Future Reliability

The most difficult task for the utility engineer is to predict the future reliability of the transformer fleet, and to replace each one just before it fails. The forecast presented in the full-text article that follows is simply a statistical model and does not take into consideration individual design differences or loading history. But our statistical model, based only on the calendar age and the population explosion, illustrates the magnitude of the problem facing the utility engineer.

We have plotted the predicted failure rate for all U.S. utility transformers built between 1964 and 1992. According to our model, the number of failures for 1964 vintage transformers continues to rise, reaching a peak in 2006. Due to the population increase, the failure rate of the 1972 vintage transformers will overtake the failures of the 1964 vintage in 2005; and the failure rate of the 1974 vintage will equal the failures of the 1964 vintage in 2006.

An Action Plan

What can utilities do about the problem? One conservative strategy suggests that the industry start a massive capital replacement program that duplicates the construction profile of the 1960s and 1970s. But this would cause many transformers to be replaced needlessly and cost the utility industry billions of dollars.

Another strategy suggests that we operate all the transformers until they fail, and let the insurance companies pay for it. But your insurance program may have high deductibles, and probably does not cover all the costs. An unexpected failure can cost several times the amount of the original transformer installation. And the time required to rewind or rebuild a large power transformer can take 6 to 12 months, or more!

Life Management Program

Managing these assets will require considerable effort by utility engineers in the coming years. The optimum strategy is a life assessment or life management program. That should include: