((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
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Loan supports climate resilience and PG&E grid modernization
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Funds to renovate hydroelectric plants and develop battery storage
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DOE and PG&E must meet conditions before finalizing the loan
(Added PG&E comments and details from paragraph 3) by Timothy Gardner and Laila Kearney
The U.S. Department of Energy said Tuesday it has offered a conditional loan of up to $15 billion to California power company PG&E PCG.N to support climate resilience projects and strengthen the grid electric.
President Joe Biden’s administration is rushing to release billions of dollars in funding for the Loan Programs Office, or LPO, which is facing uncertainty under President-elect Donald Trump, who takes office on January 20.
“Investments in a clean, resilient grid for Northern and Central California will have significant benefits for our customers in terms of safety, reliability and economic growth,” said Patti Poppe, chief executive officer of PG&E, in a statement. press release.
“The Department of Energy’s loan program can help us accelerate the pace and impact of this work,” Ms. Poppe added of projects by PG&E, which provides electricity and natural gas to about 16 million people as the major power company in America’s most populous state.
DOE and PG&E must meet technical, legal, financial and environmental conditions before the United States signs final financing documents.
If finalized by the LPO, the record loan will support multiple energy projects.
These include rehabilitating PG&E’s hydroelectric infrastructure, which produces enough power for 4 million homes, as well as expanding and modernizing substations and transmission networks.
The loan would also be used to increase energy storage deployment, with PG&E currently having 4.2 gigawatts of battery storage under contract. The funds could also be used to supplement 400 megawatts of virtual power plants in PG&E’s system.
Partially financing the projects using low-cost federal loans could save PG&E up to $1 billion in net present value over the life of the financing, the power company said.
PG&E said earlier this month that it plans to raise $2.4 billion from investors through a stock offering.
U.S. utility companies have held stock offerings and filed rate requests to fund infrastructure upgrades, as the country’s power grids face growing demand from industrial customers, such as data centers, and the electrification of industries such as the transport sector.
Along with increasing electricity consumption, increasingly extreme weather conditions, with intense storms and wildfires, threaten to destabilize the grid.
PG&E, which emerged in 2020 from bankruptcy sparked by deadly fires in California linked to the company’s equipment, remains facing the risk of wildfire-related liabilities.
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