The U.S. Department of Energy (DOE) has conditionally offered a $15 billion loan to California-based electric utility PG&E to support climate resilience projects and power grid upgrades.
The funding aims to modernize PG&E’s hydroelectric infrastructure, which can power 4 million homes, and expand and upgrade substations and transmission networks. It will also enhance energy storage deployment, with 4.2 gigawatts of battery storage already under contract, and add to the company’s 400 megawatts of virtual power plants.
PG&E estimates that the low-cost federal loan could save customers up to $1 billion in net present value over the financing’s lifespan. However, the DOE and PG&E must meet technical, legal, financial, and environmental conditions before finalizing the agreement.
PG&E CEO Patti Poppe emphasized the investment’s significance, stating it would improve safety, reliability, and economic growth for northern and central California. The loan reflects broader trends as U.S. utilities increasingly seek federal support to meet rising power demand from industrial sectors and electrification efforts, while also addressing challenges posed by extreme weather events like wildfires and storms.
PG&E, which emerged from bankruptcy in 2020 due to wildfire liabilities linked to its equipment, recently announced plans to raise $2.4 billion through a stock offering. If finalized, this loan could help the utility accelerate its clean energy initiatives and bolster California’s power grid against future threats, Reuters news report said.