US announces nearly $23 billion in loans to energy utilities across 12 states

Published 01/16/2025, 06:10 AM
Updated 01/16/2025, 12:07 PM
© Reuters. FILE PHOTO: Wind turbines and an electrical power line are shown in Palm Springs, California, U.S., October 12, 2024. REUTERS/Mike Blake/File Photo
DTE
-
CMS
-
PCG
-

WASHINGTON (Reuters) - The U.S. Energy Department's loan office on Thursday announced $22.92 billion in conditional financing for several energy utilities across a dozen states.

The financing, if finalized, will come through the energy infrastructure reinvestment program at the department's Loan Programs Office (LPO) created under President Joe Biden's signature climate legislation, the Inflation Reduction Act.

The program guarantees loans to projects that retool or replace energy infrastructure that has stopped operating or that enables reductions in emissions blamed for global warming.

WHY IT'S IMPORTANT

The LPO administers more than $385 billion in low-interest loans to companies with green energy projects such as batteries, nuclear power and advanced vehicles, and this will be among the last rounds of financing under Biden before Donald Trump takes office on Jan. 20.

Last month LPO announced a conditional loan of up to $15 billion to California-based utility PG&E (NYSE:PCG).

The LPO faces an uncertain future under Trump.

BY THE NUMBERS

The recipients of the financing include two utility subsidiaries of Detroit, Michigan-based DTE Energy Company (NYSE:DTE), which got as much as $8.8 billion. The money will fund pipeline replacements to reduce gas leaks as well as the installation of renewable energy.

Consumers Energy Company, a subsidiary of CMS Energy (NYSE:CMS), which is also based in Michigan, got a conditional commitment of up to $5.23 billion for investments in renewable energy and the replacement of old gas pipelines.

PacificCorp, a utility serving six western states, secured a conditional commitment for up to $3.52 billion for transmission lines that will boost the system's ability to send wind power to consumers.

© Reuters. FILE PHOTO: Wind turbines and an electrical power line are shown in Palm Springs, California, U.S., October 12, 2024. REUTERS/Mike Blake/File Photo

KEY QUOTE

"Loans to utility borrowers pose minimal risk to the taxpayer," an Energy Department official told reporters, adding that unlike the LPO's loans for individual projects, the financing to investment-grade utilities was supported by all the assets of the company. "In the unlikely event of default, LPO could recover what it is owed, up to the loan amount, beyond the sale or acquisition of assets financed through the loan."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.