In last-minute splurge, DOE announces $23 billion in utility loan commitments

As the Biden administration pushes to finalize as much funding for its energy agenda as possible before the end of its term, the US Department of Energy announced conditional loan guarantees totaling $22.92 billion for eight projects to help pay for various power and gas investments.

The funding, which the DOE's Loan Program Office (LPO) announced Jan. 16, comes out of the agency's Title 17 Energy Infrastructure Reinvestment (EIR) facility. That program was created by the 2022 Inflation Reduction Act and makes money available for a wide range of projects aimed at reducing greenhouse gas emissions.

The largest loan guarantee, $7.17 billion, would go to Michigan utility DTE Electric, a subsidiary of DTE Energy, for the construction of what the LPO termed "significant" new power generation and battery storage projects. The LPO also announced a $1.64 billion loan guarantee to DTE Energy's gas distribution subsidiary DTE Gas for a project to update gas pipelines and place metering infrastructure outdoors.

Another Michigan utility, CMS Energy subsidiary Consumers Energy, would receive a $5.23 billion commitment to help pay for construction of more than 1,800 MW of new solar, wind, battery storage and virtual power plant capacity, and to replace old gas pipelines.

Portland, Oregon-based PacifiCorp would get $3.52 billion for about 700 miles of new high-voltage transmission across several western states.

Alliant Energy's two utility subsidiaries, Interstate Power and Light and Wisconsin Power and Light, would receive about $3 billion for the company's "clean energy blueprint" projects, to add about 2,000 MW of renewables and storage resources.

American Electric Power subsidiary AEP Transmission received a conditional commitment of up to $1.6 billion to reconductor or rebuild transmission infrastructure in multiple states, and FirstEnergy subsidiary Jersey Central Power & Light was given a conditional commitment of $710 million for new transmission capacity to support renewables in New Jersey.

"Projects planned by the utilities announced today will add much-needed transmission capacity by building new transmission lines, reconductoring existing lines, and implementing grid-enhancing technologies that will get more out of [the] existing grid," the LPO said in its announcement.

In addition, the LPO said the funding would enable utilities to replace more than 3,000 miles of "leaky" gas lines, preventing methane emissions into the atmosphere.

Before the eight funding deals announced on Jan. 16, the LPO had made three other conditional loan guarantees to utilities under the EIR program. The largest, a $15 billion commitment to Pacific Gas & Electric for new hydropower, battery storage, virtual power plants and transmission resources, was announced in December 2024. However, none of the utility deals have yet closed.

In addition, the LPO has closed two loan guarantees under the EIR to independent power producers for new firm capacity. The largest of those commitments, a $1.52 billion deal closed in September 2024 with Holtec Palisades, will help the company restart the Palisades nuclear plant in Michigan, which ceased generating power in 2022.

In October 2024, the LPO closed an $861.3 million EIR loan guarantee to AES Marahu, a joint venture of AES and TotalEnergies, for the construction of 285 MW of solar generation and battery storage capacity in Puerto Rico.

The LPO also made conditional a $584.5 million commitment to subsidiaries of Convergent Energy and Power to build 225 MW of solar and battery storage at other locations in Puerto Rico. Also, the loan office in September 2024 made a conditional $1.6 billion loan guarantee to Wabash Valley Resources to finance an Indiana waste-to-ammonia plant using carbon capture and storage technology.