Author: Power Peak Digest Team Pub Date: January 17, 2025
The US Department of Energy’s Loan Programs Office (LPO) has conditionally approved $22.92bn in financing for eight utilities across 12 states under the Energy Infrastructure Reinvestment (EIR) programme.
Created by the Inflation Reduction Act, the programme aims to modernize energy infrastructure and reduce emissions.
The loans will fund clean generation, transmission upgrades, energy storage, gas pipeline investments, and grid modernization projects. Utilities will benefit from lower financing costs compared to borrowing through commercial capital markets.
Key recipients include:
- DTE Energy subsidiaries (Detroit, Michigan): Potential $8.8bn for gas pipeline replacements and renewable energy installations.
- Consumers Energy Company (Michigan): Up to $5.23bn for renewable energy investments and pipeline replacements.
- PacificCorp (six western states): Up to $3.52bn for transmission line upgrades to improve wind power delivery.
LPO, which manages $385bn in low-interest loans for green energy initiatives, anticipates that these loans, under the current administration, will enhance energy system resilience. However, with the upcoming administration change on 20 January 2025, the future of LPO programmes remains uncertain.
An Energy Department official emphasized the minimal taxpayer risk, stating that in the rare event of a loan default, the department could recover the loaned amount through the financed assets’ sale or acquisition.
Source: Power Technology