The US Energy Department has announced a record $15 billion loan guarantee for Pacific Gas & Electric (PG&E), California’s largest utility, to improve its electrical grid and fund climate resiliency projects. The conditional commitment will help PG&E invest in hydroelectric power generation, batteries, and power lines.
The move comes as PG&E faces pressure to address rising electricity demand, driven by the shift to electric vehicles, data center expansion, and efforts to phase out fossil fuels. The company is also under scrutiny over equipment-related wildfires that have devastated California.
State regulators have approved multiple rate increases for PG&E this year, with rates increasing 56% over three years and 118% over ten years. PG&E has filed for bankruptcy protection in the past but emerged in 2020 after pleading guilty to involuntary manslaughter over its role in the 2018 Camp Fire that killed 84 people.
The loan guarantee is expected to save ratepayers around $1 billion by lowering borrowing costs, allowing PG&E to advance planned improvements such as hydroelectric power plant upgrades and increased battery storage. The company aims to expand home solar panel use, batteries, and electric vehicles to support thousands of living-wage jobs at a lower cost to customers.
The loan guarantee is part of the Energy Department’s Loan Programs Office, which has issued tens of billions of dollars in loans and guarantees under the Biden administration to fund energy and electric vehicle projects. The office was created in 2005 and has seen its lending capacity expanded significantly since 2022.
Source: https://www.nytimes.com/2024/12/17/business/energy-environment/pge-loan-energy-department.html