PG&E receives record-breaking $15 billion federal loan in waning days of Biden’s term

The U.S. Department of Energy’s Loan Program Office (LPO) announced on Dec. 17 the largest loan since the office’s inception in 2005 of $15 billion to California utility PG&E. The $15 billion conditional commitment covers a portfolio of projects ranging from increasing and enhancing transmission line capacity to refurbishing PG&E hydroelectric power fleet.

The Energy Department has been working to speed up applications for financing clean energy projects before President-elect Trump takes office in January.

Specifically, the PG&E loan will support:

• The integration of renewable energy and demand management with and expanded network of virtual power plants.
• Replacing and enhancing the existing transmission system to meet forecasted energy growth with clean energy sources.
• the increase of renewable energy integration via Battery Energy Storage Systems (BESS), of which PG&E currently has 4.2 GW of battery storage under contract, or the equivalent of powering three to four million homes.
• Retooling the hydroelectric power fleet.

“The work our members perform every day is essential for PG&E to modernize its grid,” said Bob Dean, business manager of utility union IBEW 1245 in a press release, “IBEW 1245 is encouraged by PG&Es commitment to rebuilt, retool, and reinvest in energy infrastructure that is critical to California to achieve our electric reliability and climate resilience goals, and prove these benefits to PG&E customers at a lower cost.

While permitting reform once again failed to get through Congress with the Manchin-Barrasso bill, that won’t stall any of the LPO-supported projects PG&E have planned, according to a DOE senior representative.

“For our projects, all permits need to be acquired,” said the DOE representative, “NEPA (National Environmental Policy Act) [requirements] need to be complete, and all of those things need to occur in order to reach financial goals.”

And while PG&E and DOE reached a conditional commitment, as opposed to officially closing the loan, the DOE official wasn’t concerned about the next administration potentially axing the deal before it has time to get off of the ground.

“Conditional commitments are binding legal agreements,” said the official. While the creation of the Department of Governmental Efficiency (DOGE) could potentially add unprecedented conflicts to the process, they continued, it will require teams of lawyers to even begin the dissolution of the binding, legal agreement.

Moving forward, LPO still has many applicants hoping to receive their own conditional commitments.

“Currently, as of the last time we updated our numbers, which was November 30, we had $139.2 billion in applications in our pipeline for financing under this program, which is 47 applicants,” said the DOE senior official.