The Biden administration has finalized a $15 billion loan guarantee to California utility Pacific Gas & Electric (PG&E), in the biggest outlay to a single group in the history of the Dept. of Energy’s (DOE) Loan Programs Office (LPO). The Jan. 17 announcement comes one day after the outgoing administration said it would provide nearly $23 billion in loans to support work being done by eight U.S. electric utilities. Those projects include an expansion of clean energy generation, along with upgrades to energy infrastructure and the power grid. The LPO on Friday said that during the Biden-Harris administration, the agency announced 53 deals totaling some $107.57 billion in project investment. The group said it provided about $47 billion for 28 conditional commitments across sectors including battery production, the critical minerals supply chain, sustainable aviation fuels, and virtual power plants. More than $60 billion in funding was spread among 25 closed loans and loan guarantees across sectors including nuclear, hydrogen, critical minerals, virtual power plants, and advanced vehicle components. The LPO published a 2024 Year in Review—which includes deals made this month—that is available here. The DOE initially announced its plan to award funding to PG&E on Dec. 17 of last year, meaning the loan was finalized in only a month, far less time than normal for such financing. The agency at that time said, “These infrastructure investments will help PG&E meet forecasted load growth, increase electric reliability and reduce costs for its consumers across California.” Patti Poppe, PG&E’s chief executive, in a statement in December said, “The DOE loan program can help us accelerate the pace and impact of this work, which supports thousands of living wage jobs, at a lower cost to our customers.”
PG&E, which filed for bankruptcy in 2019 as it faced billions of dollars in liability claims related to its role in a series of devastating and deadly wildfires in California, expects to use the money to help finance several projects. That work includes upgrades to its transmission grid, including resilience and reliability projects, along with refurbishing the utility’s hydropower facilities. PG&E also is adding battery energy storage to its power generation fleet. The utility emerged from bankruptcy in 2020 PG&E said the funding will save its customers about $1 billion over the life of the loan. The utility, like many other U.S. electricity suppliers, has raised rates over the past few years to cover increased costs of building new generation resources, along with higher insurance premiums due to liability claims. California regulators have pressured PG&E to limit rate increases for its customers, though state officials approved multiple rate increases for the utility in 2024. A report published last month from the Public Advocates Office, which represents consumers in utility rate cases before the state’s Public Utilities Commission, said PG&E’s rate increases were the highest among the state’s investor-owned utilities. The group’s report said PG&E’s rates increased 56% over a three-year period through October of last year, and 118% across the past decade. The DOE Loan Programs Office was created in 2005. It has been a pivotal part of the Biden administration’s efforts to support renewable energy. The 2022-passed Inflation Reduction Act expanded the LPO’s authority to provide loans to groups working on new energy technologies, increasing the lending capacity to more than $400 billion from $40 billion. —Darrell Proctor is a senior editor for POWER.
