U.S. Energy Department Announces $15 Billion Conditional Commitment to PG&E’s Energy Projects

The U.S. Energy Department announced on Dec. 17 a conditional loan guarantee of $15 billion to Pacific Gas & Electric Company to diversify California’s energy sources and improve grid resilience. The announcement marks the department’s largest conditional commitment to a loan guarantee through its Energy Infrastructure Reinvestment, EIR, program to date.

The loan guarantee will support a portfolio of projects, known as Project Polaris, aimed to increase renewable power generation and battery storage capacity, deploy virtual power plants, and improve transmission capacity through grid-improvement projects. This diverse portfolio of energy projects will help to improve California’s grid resilience and reduce utility bills for PG&E’s 16 million customers in Northern and Central California. The company first submitted the loan application to the department in June 2023.

PG&E’s loan guarantee is also the second EIR project under the department’s flexible loan facility and disbursement approach designed specifically for regulated, investment-grade utilities. Earlier this week, the department announced $2.5 billion through the EIR initiative for Wisconsin Electric Power Company to build a diverse portfolio of clean energy projects in Wisconsin.

The 2022 Inflation Reduction Act established the EIR program, also known as the Title 17 Clean Energy Financing Program (Section 1706), to fund energy infrastructure projects that reduce, avoid, sequester, or utilize greenhouse gas emissions. The program allows the department to offer loans at lower rates than traditional capital financing, which will financially benefit customers through reduced infrastructure costs and energy bill savings. To qualify for these loans, the utility company must demonstrate how customers and communities will benefit from the financial incentive.