California utility giant Pacific Gas & Electric has in recent days secured a conditional loan guarantee of up to $15 billion from the U.S. Department of Energy to upgrade hydroelectric facilities and expand and modernize infrastructure state clean energy transmission, a record total for the federal agency seen as a last-minute push to disperse funding before the end of President Joe Biden’s term.
The loan guarantees, which the DOE aims to complete by Jan. 20, could potentially be used to refurbish 61 hydroelectric plants, which generate more than 3.8 GW of power, or to expand its 4.2 GW of solar systems. contracted battery energy storage, including the Elkhorn Battery in Monterey County, one of the largest energy storage systems in the world, PG&E said. The largest public utility in the state, it serves 16 million customers in an area of 70,000 square miles.
If finalized, the guarantees will support “a portfolio of projects to expand hydroelectric power generation and battery storage, improve transmission capacity and enable new virtual power plants throughout PG&E’s service area,” the DOE says in a Dec. 17 announcement of the agreement. A PG&E spokeswoman said in an email that specific projects funded through the deal will be announced after they receive federal approval.
The transmission system improvements would coincide with projected growth in clean power generation and PG&E’s plans to upgrade lines and substations, and would also implement advanced telemetry and controls to improve grid reliability during extreme times. These investments would allow greater integration of renewable energy sources and a more resilient bidirectional energy flow, according to the company.
PG&E also said it aims to deploy and interconnect 400 MW of virtual power plants to support demand management and grid balancing, which could be up and running next year. The company said taxpayers could save up to $1 billion over the life of the program through lower interest rates that the federal loan guarantee would provide. “It’s a direct transmission to all of our customers,” PG&E CEO Patti Poppe said in a television interview. “There is no role for the government in the projects themselves. We do the work.”
Poppe said he is confident the terms of the deal will be finalized at the end of the current administration, but also that the new Trump administration “shares our value of the importance of the network and [that] more onshoring in America, new data centers, [and] To remain the world leader in AI, it will take power.”
