Biden administration finalizes record $15 bil energy reinvestment loan to PG&E

The Biden administration on Jan. 17 finalized a $15 billion loan to Pacific Gas and Electric Co. to boost hydropower generation and battery storage, upgrade electric transmission lines, and deploy virtual power plants throughout the utility's service territory in northern and central California.

The loan, finalized one month after a conditional commitment for the PG&E Corp. subsidiary was announced, is the largest ever closed by the US Energy Department's Loan Programs Office (LPO). Under the Inflation Reduction Act's Energy Infrastructure Reinvestment program, borrowers receive lower interest rates than traditional capital market financing in exchange for passing savings on to customers.

The LPO separately announced $23 billion in conditional utility loan commitments through the program, part of a flurry of funding awards for clean energy projects in the closing days of the Biden administration.

Liberty Energy Inc. CEO Chris Wright, nominated by President Donald Trump for US energy secretary, has promised to consider pausing all new DOE loans in response to an inspector general report that found conflicts of interest at the LPO. Congressional Republicans are also eyeing repeal of the Inflation Reduction Act's clean energy subsidies as part of a broad tax reform package expected to move through the Senate's budget reconciliation process later this year.

The Biden DOE said Jan. 17 that it expects the slate of PG&E investments, called Project Polaris, to support thousands of ongoing construction and operations jobs. In November 2024, PG&E increased its five-year capital spending plan to $63 billion to help meet electricity demand from datacenters, electric vehicle charging and other large loads.

A PG&E spokesperson did not immediately respond to a request for comment.