The U.S. Department of Energy has issued a conditional $15 billion loan to Pacific Gas and Electric to support climate resilience projects and enhance the power grid in California.
This loan, part of President Joe Biden’s climate efforts, aims to expedite financing from the Loan Programs Office to bolster the grid’s clean and resilient infrastructure in northern and central California.
The big picture: Both the Department of Energy and PG&E must meet technical, legal, financial, and environmental conditions before finalizing the loan agreement.
- The loan is expected to support various energy projects, including the refurbishment of PG&E’s hydroelectric infrastructure, upgrades to substations and transmission networks, and expansion of energy storage capacity.
- PG&E currently manages 4.2 gigawatts of battery storage and aims to increase this capacity with the help of the loan. Additionally, funds may also contribute to the growth of virtual power plants within PG&E’s system.
What we’re watching: By utilizing low-cost federal loans for these projects, PG&E anticipates cost-saving benefits for consumers, potentially saving $1 billion in net present value over the loan’s duration.
- In addition to the loan, PG&E recently announced plans to raise $2.4 billion through a stock offering to further support its infrastructure investments.
What they’re saying: “Investments in a clean and resilient grid for northern and central California will have significant returns for our customers in safety, reliability and economic growth,” said PG&E CEO Patti Poppe in a statement. “The DOE loan program can help us accelerate the pace and impact of this work.”
