Clean Energy
California Utility PG&E Set to Gain $15B US Mega-Loan in Final Biden Push
Cresta Dam on the Feather River in northern California is among PG&E hydroelectric facilities set to be upgraded, if giant utility and DOE can finalize terms of record $15-billion federal loan guarantee.
Photo courtesy PG&E
California utility giant Pacific Gas & Electric has gained a conditional loan guarantee in recent days of up to $15 billion from the U.S. Energy Dept. to upgrade hydroelectric facilities and expand and modernize state clean energy transmission infrastructure—a record total for the federal agency viewed as a last-minute push to disperse funding before the end of President Joe Biden's term.
The funding, earmarked under the 2022 Inflation Reduction Act, follows a previous record $9.6 billion conditional loan DOE closed on Dec. 16 to Ford Motor Co.'s Blue Oval battery joint venture with South Korea based SK On. The funding, to finance two new battery plants in Kentucky and one in Tennessee, would generate 5,000 construction jobs, said DOE.
The PG&E loan guarantees, which DOE aims to finalize before Jan. 20, could be used to refurbish 61 hydroelectric plants, which generate more than 3.8 GW of energy or expanding its contracted 4.2 GW of battery energy storage systems, which include the Elkhorn Battery in Monterey County, one of the world's largest energy storage systems, said PG&E. The state's largest utility, it serves 16 million customers in a 70,000-sq-mile area
If finalized, the guarantees' will support "a portfolio of projects to expand hydropower generation and battery storage, upgrade transmission capacity, and enable new virtual power plants throughout PG&E’s service area,” DOE said in announcing the agreement Dec. 17. A PG&E spokeswoman said in an email that specific projects funded through the arrangement would be announced after they receive federal approval.
DOE officials told media that because the loan is a legal contract, a future administration could not claw back money, but there is concern over how Trump agency appointees will allot future project funding. .
Transmission system improvements would coincide with forecasted growth in clean energy generation and PG&E's planning to upgrade lines and substations, and would also implement advanced telemetry and controls to improve grid reliability during extreme weather. These investments would allow for more integration of renewable energy sources and a more resilient two-way power flow, according to the utility.
PG&E also said it aims to deploy and interconnect 400 MW of virtual power plants to support demand management and grid balancing, which could be operating by next year. The company said ratepayers could save up to $1 billion over the life of the program through lower interest rates the federal loan guarantee would provide.
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The utility also said it will partner with the International Brotherhood of Electrical Workers (IBEW) Local 1245 to train and employ members of underserved groups interested in operational roles through its existing PowerPathway program.
“It’s a straight pass-through to all of our customers,” said PG&E CEO Patti Poppe in a TV interview. “There is no role for the government in the projects themselves. We do the work.”
Poppe said she is confident agreement terms will finalize by the end of the current administration, but also that the incoming Trump regime “shares our value of the importance of the grid, and [that] more onshoring in America, new data centers, [and] remaining the global leader in AI will require power.”
