Biden backs $23bn in utility loans before Trump takes office
The commitments are among the largest made by the agency's Loan Programmes Office as it races to get money out the door before Trump assumes power on Monday
The Department of Energy (DoE) on Thursday announced conditional loan commitments totaling $22.9bn to six utilities that would support clean generation, energy storage, grid modernisation, natural gas pipeline, and transmission projects across 12 states.
“By accessing LPO’s lowest-cost debt, these utilities will incur lower financing costs for their qualifying infrastructure projects than if they had used commercial capital markets, and they will pass along the savings to customers,” said DoE, referring to its Loan Programmes Office (LPO).
With President-elect Donald Trump set to take office on Monday, the administration of outgoing Joe Biden has been working overtime to utilise as much remaining climate-related money as possible in the landmark 2022 climate law.
This reportedly includes tens of billions of dollars in appropriations for federal loans and loan guarantees, as well as for awards, grants, and other direct spending by federal agencies.
Trump has threatened to utilise any unspent Inflation Reduction Act (IRA) clean energy and climate funds for unrelated purposes and potentially claw back unspecified funds already committed under the law.
DoE notes that while today’s conditional commitments indicate its intent to provide a loan guarantee to finance selected projects, DoE and the companies must satisfy certain technical, legal, environmental, and financial conditions. Only then, will the Department enter a definitive financing document and fund the loan guarantees.
DTE Electric received the biggest conditional loan commitment, up to $7.17bn, to help finance generation and battery storage in Michigan. Sister utility DTE Gas would receive up to $1.64bn in loan guarantees to update large gas pipes and service distribution lines and to move metering infrastructure outdoors.
AEP Transmission would receive up to $1.6bn in loan guarantees to finance reconductoring or rebuilding of almost 5,000 miles (8,046 km) of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia. The upgrades would increase overall transmission capacity by 70%, according to DoE.
Consumers Energy, a unit of CMS Energy, another Michigan utility, received a $5.23bn conditional loan commitment for a project called CE Clean Energy. It consists of battery storage, solar, virtual power plant, and wind projects through 2031, and replacement of legacy pipelines.
Two utility subsidiaries of energy holding company Alliant won conditional DoE commitments. Interstate Power and Light’s is $1.43bn and Wisconsin Power and Light’s is $1.62bn. The loan guarantees would finance 2GW of multiple battery energy storage and clean energy projects.
DoE also announced a loan guarantee of up to $3.52bn for Warren Buffett’s PacifiCorp for several transmission projects in various states, including Idaho, Oregon, and Utah. The portfolio of projects would enable more transmission of existing and future power generation without direct greenhouse gas emissions.
The final DoE conditional commitment is for a loan guarantee up to $716m to Jersey Central Power & Light for transmission upgrades and expansion.
(Copyright)