Lassen Municipal Utility District (LMUD) is facing potential financial strain due to a proposed 50 percent tariff on Brazilian imports, specifically affecting a $6.7 million transformer manufactured by Siemens. This transformer is critical for the Skedaddle Substation and is scheduled to arrive in October. If the tariff is enforced, it would add approximately $3.35 million to the cost, significantly impacting ratepayers.
The tariff comes as part of the Trump administration’s broader trade policies, which include conditions related to Brazilian domestic politics. LMUD General Manager Nick Dominguez has expressed concerns and is seeking assistance from Congressman LaMalfa’s office to explore possible exemptions or solutions to mitigate the anticipated tariff impact.
Dominguez highlighted that the transformer was ordered over two years ago, before the tariff situation escalated, and noted that such transformers are not available domestically. There is a possibility of storing the transformer in a tariff-exempt warehouse, but space limitations pose challenges.
General Counsel Eugene Chittock mentioned that discussions around tariff exemptions for smaller utilities have occurred previously, suggesting that there may still be avenues to pursue relief from the imposed tariffs. The potential tariff represents about 11 percent of LMUD’s annual budget, further emphasizing the financial implications for ratepayers.
