The Biden administration is set to provide a record $15 billion loan to California-based utility Pacific Gas & Electric Company in an effort to boost the grid and secure more financial support for climate projects before President-elect Donald Trump takes office again.
The Department of Energy’s Loan Programs Office announced the conditional commitment for a loan guarantee for PG&E on Tuesday, with the funds expected to go toward a variety of projects, including expanding hydropower generation, battery storage, upgrading transmission capacity, and more.
These projects are anticipated to go on to support developments for electric vehicle infrastructure, data centers, and the clean-energy industry.
“This loan is going to reduce greenhouse gases. This loan is going to increase the useful life of energy infrastructure in California,” Chris Creed, chief investment officer of the LPO, told Bloomberg. “This is going to replace needed pieces of equipment, and all the while, do so while saving ratepayers money.”
The final price tag of $15 billion is allegedly half of what the office had been planning to provide, people familiar with the matter told the Wall Street Journal. The LPO reportedly slashed the loan over concerns from PG&E on the projected size of upfront payments. Still, the massive loan is reportedly the largest in the office’s history.
Once the loan is finalized, PG&E will receive the funds in installments over several years through 2031.
The utility and loans office faces a tight deadline to close the loan before the presidential inauguration on Jan. 20, 2025, as Trump has vowed to walk back unspent funding for green projects and initiatives.
As the end of President Joe Biden’s term nears, the administration has been racing for weeks to finalize upward of $40.5 billion worth of loans. Earlier this month, the New York Times reported that the LPO had only finalized around $13.5 billion worth of deals — out of the roughly $54 billion in loans and loan guarantees announced. As of Tuesday, that amount had risen to around $24.1 billion, according to the Wall Street Journal.
The LPO was first established in 2005 and has a long history of supporting green technologies and projects such as solar power and EV companies, such as Tesla. The office saw its authority increase under the Biden administration thanks to the 2022 Inflation Reduction Act.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
While the office was previously only permitted to hand out around $40 billion in loans, the Democratic-passed legislation expanded that to over $400 billion.
As Republicans have repeatedly criticized the loan’s office, often dubbed Biden’s “green bank,” many have feared the incoming administration could slash the LPO’s lending authority to previous levels.