The U.S. Department of Energy (DOE) has confirmed a $15 billion loan guarantee to Pacific Gas and Electric (PG&E) to fund extensive grid modernisation projects across California. The financing, provided through the DOE’s Loan Programs Office (LPO), is part of the Biden-Harris Administration’s “Investing in America” agenda aimed at strengthening the nation’s energy infrastructure.

Funding for Hydropower, Energy Storage, and Smart Grids

The loan will support PG&E’s efforts to enhance its energy infrastructure, improve reliability, and reduce electricity costs for its 16 million customers. Projects include refurbishing PG&E’s hydroelectric power fleet, which generates over 3.8GW of clean energy, and expanding battery energy storage capacity, with 4.2GW already contracted.

Additionally, the funding will help upgrade PG&E’s transmission systems, including reconductoring power lines, expanding substations, and deploying advanced sensors. These upgrades are designed to improve grid resilience during extreme weather events and integrate virtual power plants (VPPs) into the grid. PG&E currently operates 400MW of VPP capacity through various customer programs.

The loan is also expected to create around 3,900 jobs over its lifespan, including construction and operational positions. PG&E is required to implement a Community Benefits Plan (CBP) as part of the loan terms, which will expand job training opportunities, particularly for underserved communities.