The Biden administration is rushing to get funding for major clean energy projects out of the door before the Trump administration takes over — and big utilities are its latest focus.
On Tuesday, the Energy Department’s Loan Programs Office announced a conditional commitment for a loan guarantee of up to $15 billion to California utility Pacific Gas & Electric. It’s the single biggest commitment yet from an office that has offered $55 billion in funding to 32 different low-carbon energy-related manufacturing, transportation, and infrastructure projects over the past four years.
If finalized, the backing from LPO will “support a portfolio of projects to expand hydropower generation and battery storage, upgrade transmission capacity through reconductoring and grid enhancing technologies, and enable virtual power plants throughout PG&E’s service area,” according to a Tuesday statement. LPO aims to close the loan before President-elect Trump takes office in January, per reporting from The Wall Street Journal.
PG&E was forced into bankruptcy in 2019 after incurring tens of billions of dollars in liabilities when a failed power line sparked a deadly wildfire. It emerged from bankruptcy in 2020 under a challenging debt load and has been struggling to modernize and harden its power grid since then.
PG&E also has the most customers with rooftop solar systems, solar-charged batteries, and electric vehicles of any U.S. utility. Those resources could stand in for more expensive grid upgrades if aggregated into virtual power plants. PG&E has been working over the past few years to integrate those customer-owned energy technologies into how it operates its grid and find ways to control them to lower grid costs.
The $15 billion commitment, first sought by PG&E last year, is the second under LPO’s Energy Infrastructure Reinvestment program. The EIR program has $250 billion in lending authority to finance the restructuring or renovation of power plants, power lines, and other energy infrastructure into new or modernized clean assets. The first proposed EIR loan was announced last week, in the form of a $2.5 billion conditional loan guarantee to Wisconsin Electric Power to build up to 1,650 megawatts of utility-scale renewable power generation and energy storage projects.
Recipients of EIR loans will have to make sure that “the financial benefits received from the DOE loan guarantee will be passed on to the customers of, or communities served by, that utility,” LPO noted in its Tuesday statement.
That could be good news for PG&E customers who’ve seen rates nearly double over the past decade.
“We’re excited to see PG&E harness this unique opportunity to make already low cost clean energy even more affordable for ratepayers,” Julia Dowell, senior electric sector organizer with the Sierra Club, said in a Tuesday statement. “This innovative loan program will help ensure that Californians will see more stable rates, enjoy more good clean energy jobs, and live with fewer harmful emissions.”
