Locally made transformers for a new Ameren substation will reportedly help reduce costs for customers statewide.
Two 45-ton transformers built by WEG Transformers USA, which currently has two plants in Washington, are part of a $6.5 million substation construction project by Ameren Missouri located near Sixth Street and Washington Avenue.
Ameren Supervising Engineer Gary Marquart said the substation will upgrade the capacity for Ameren customers on the east side of the town.
The project will directly affect an estimated 3,600 customers and increase the facility’s kilowatt capacity by an estimated 20 percent to 25 percent.
“This is a great project for Ameren and WEG,” said Sal Maniaci, the Washington’s community and economic development director. “It will create a smart and reliable energy grid for not only our residents, but our businesses as well. This will connect not only out to the industrial park, but more to the regional energy grid as a whole and it creates redundant and reliable power for all of our community.”
Work to install the first of the two transformers began Tuesday morning.
“Certainly, it’s very exciting to see one of our local industries provide the transformer for this,” Washington Mayor Sandy Lucy said. “I have been fully aware of the work that WEG has done. We take for granted that they ship these all over the country, but then it’s very exciting to see it put to use here.”
The substation project construction began May 15 and is expected to reach completion by the end of 2020.
With the transformers coming from a local manufacturer, the project fits Ameren’s initiative of “Built in Missouri, by Missourians, for Missourians.”
“WEG has been a very good partner for us in manufacturing these in the state of Missouri,” Marquart said.
Marquart said the expected savings for customers as a result of the project is unknown at this time.
“The school district is building a new project out to St. Johns Road,” Marquart said. “Some of our circuitry will help them as well. We’re going to be doing faster restoration. The return on the system is going to come back faster and easier than the current structure.”
Construction of one of the transformers by WEG takes an estimated four to six weeks. Construction of the second transformer for the Ameren substation is currently underway at WEG and anticipated to be delivered in October.
Coinciding with the first transformer installation Tuesday, WEG announced plans to expand to a new facility in Washington located approximately one-tenth of a mile from one of the current facilities on Pauwels Drive.
“Any time one of our existing industries chooses to expand right here in Washington is a win for all of us,” Lucy said in a WEG press release. “WEG’s expansion and job creation is a boost for our community, the surrounding area and the state of Missouri. The city of Washington is looking forward to working with WEG throughout this process of expansion.”
WEG said the new facility, located in the former Melton building, will be state-of-the art, including the latest technology and automation available in the industry for the manufacturing of distribution transformers.
The move will take WEG from two production facilities in Washington to three and increase the number of local jobs. WEG currently employs 450 workers between its two facilities.
WEG General Manager Phillip James said the exact number of new jobs could not be determined at this time, but would push the number of Washington employees to easily more than 500.
WEG is targeting early 2021 to have the new factory online.
“We are currently in the process of acquiring all of the tooling and equipment and everything we need,” James said. “What it’s going to do is allow us to expand what we call our distribution transformer production that’s currently at 1 Pauwels Drive right now, and then it’s going to allow us to further expand production at 1 Pauwels Drive into different markets that we need to expand within.”
A current investigation by the U.S. Department of Commerce, expected to be completed in February, could impact WEG’s plans for more expansion as it could result in additional tariffs on hydrate electrical steel that would increase WEG’s production costs. A 25 percent tariff was enacted in 2018, James said.
“There is a very specific hydrate electrical steel that goes in every transformer, not only that we build, but every transformer that’s built in the world,” James said. “It’s just like putting an engine in a car. This particular grade hydrate of electrical steel is only manufactured in one place (AK Steel) in the United States.”
James said AK Steel is asking for the additional tariffs under a national security clause.
“WEG has partnered with a group called the Core Coalition and we have brought a united industry front to the Department of Commerce to make sure that the DOC understands not only our position, but the industry position on this. It really has nothing to do with the national security or the security of the electrical grid of the United States, the way we see it.”