Nor is it clear how Trump’s DOE might prevent as-yet-unfinalized conditional loans from being processed under the agreements made by the Biden administration. “As a binding agreement, funds are obligated at the time of conditional commitment,” the DOE official said at Wednesday’s briefing. The majority of the projects backed by LPO loans are in Republican districts, according to a Politico analysis, which could also lead some GOP lawmakers to oppose any efforts to restrict them from receiving the loans they’ve been promised.
Lending to utilities is also less risky than LPO’s usual clientele, the DOE official noted. The utilities in question are all ranked as investment grade, the projects have been approved by state regulators as financially prudent, and the loans are backed by all of a utility’s assets, the official said.
For those same reasons, utilities aren’t the typical target for LPO, which was created with the primary purpose of helping bring new technologies to commercial viability. That mission was expanded with the EIR, which authorized LPO to lend up to $250 billion to finance the repurposing or rebuilding of power plants, power lines, and other energy infrastructure to lower consumers costs and reduce carbon emissions.
But the program has been slow to process and finalize deals. The first conditional loans were announced in December, including $2.5 billion for Wisconsin Electric Power to build renewables and energy storage projects and $15 billion for California utility Pacific Gas & Electric to expand hydropower generation and battery storage, upgrade transmission grids with new power lines and grid enhancing technologies, and expand “virtual power plant” programs that equip customers with solar panels, batteries, and controllable thermostats, EV chargers and other devices to relieve grid stress.
Thursday’s $22.4 billion in loans are set to bolster the financing of a host of similar projects.
In Michigan, more than $14 billion in loans will help utilities DTE Energy and Consumers Energy build clean power and batteries and upgrade fossil gas pipelines. Alliant Energy is set to receive more than $3 billion to build about 2 gigawatts of clean power and storage over the next decade in Iowa and Wisconsin.
And nearly $6 billion in loans are aimed at lowering the cost of large-scale transmission projects being built by Jersey Central Power & Light in New Jersey; PacifiCorp across Idaho, Oregon, and Utah; and American Electric Power subsidiary AEP Transmission in Indiana, Michigan, Ohio, Oklahoma, and West Virginia.
