LPO empties the chamber: Nearly $23B committed to 8 utilities

Courtesy: Eyestetix Studios on Unsplash

As the Department of Energy’s Loan Program Office (LPO) braces to potentially fade into the ether like some sort of Star Wars ghost that’s assumedly always around but not necessarily visible, it’s unloading its coffers to the benefit of nearly 15 million Americans.

Today the LPO announced eight conditional commitments through its Title 17 Energy Infrastructure Reinvestment (EIR) program, offering $22.92 billion to utilities serving more than 14.78 million customers across 12 states. The low-interest loans will support transmission, clean generation, energy storage, grid modernization, and gas pipeline investments. The projects will ultimately save ratepayers money- the selected utilities will incur lower costs through these loans than if they had taken a more traditional capital markets route.

Utility undertakings include adding much-needed transmission capacity by building new transmission lines, reconductoring existing lines, and implementing grid-enhancing technologies (GETs). Also among the grid modernization investments are substation upgrades, virtual power plants, and strategically placed energy storage; plus gigawatt-scale new solar, wind, and hydropower generation projects.

PROJECTLOAN AMOUNTSTATESCUSTOMERS BENEFITTING
PacificCorp Western Interconnected Renewable Energy $3.52 billion California, Idaho, Oregon, and Utah 2.1 million 
DTE Gas Clean Energy $1.64 billionMichigan 1.3 million 
DTE Electric Clean Energy $7.17 billionMichigan 2.3 million 
Interstate Power and Light Clean Energy Blueprint Projects $1.43 billionIowa 500,000 
Wisconsin Power and Light Clean Energy Blueprint Projects $1.62 billionWisconsin500,000 
Consumers Energy Clean Energy $5.23 billionMichigan 3.1 million 
Jersey Central Power & Light Transmission Projects $0.71 billionNew Jersey 1.2 million 
AEP Transmission Projects $1.60 billionIndiana, Michigan, Ohio, Oklahoma, and West Virginia  3.78 million
TOTAL$ 22.92 billion12 states14.78 million

Is the LPO DOA when Trump shows up?

The Biden Administration has been rapidly allocating leftover money made available by the Inflation Reduction Act (IRA) to clean energy and transmission projects, particularly over the last few weeks. According to recent Atlas Public Policy data, more than $74 billion of IRA funding had been dispatched before today’s announcement. The LPO alone has promised about $55 billion via 32 deals, investing in everything from electric vehicle component manufacturing to virtual power plants.

It’s unclear what will become of the LPO starting January 20 when Trump retakes the highest office in the United States, but it was quiet under his last administration, and some Republicans deem its spending frivolous. More than 75% of the $160 billion in privately-led clean energy and manufacturing projects supported by the IRA are in Republican-held districts, yet Trump has said it would be “a great honor” to roll back any unspent funds. It’s unlikely he will be able to recall money that has already been allocated.

This could be the last billion-dollar golden parachute that we see drop into clean energy infrastructure for a while. If it is, the LPO picked a hell of a way to go out.

Originally published in POWERGRID International.

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