PG&E applies for federal loan to bolster California’s electricity grid
Pacific Gas & Electric (PG&E) has applied for a loan from the federal government to revamp its California electricity grid — part of a broader effort to recover from equipment mishaps linked to devastating wildfires in recent years.
The utility has requested approximately $7 billion from the Department of Energy as was first reported by The Wall Street Journal.
While The Hill could not verify the precise amount included in the utility’s loan application, PG&E spokesperson Lynsey Paulo confirmed that the Journal’s coverage “was in the right ballpark.”
The company this year proposed a series of safety and resiliency investments that aim to reduce wildfire risk and strengthen the grid, in a General Rate Case that the company submits to the California Public Utilities Commission every three years.
Critical to the proposal are plans to bury about 10,000 miles of electricity lines underground, as well as install stronger poles, trim trees, and conduct more inspections and repairs. The document also makes a case for introducing new technological solutions that could rapidly reduce or shut off power when a potential wildfire ignition threat is imminent.
To help expedite these efforts, PG&E applied for the loan from the Energy Department’s Loan Programs Office, which funds large-scale energy infrastructure projects.
The Loan Programs Office became “flush with new funds” after the Inflation Reduction Act expanded its lending capacity to nearly $412 billion last summer, according to a legal analysis of the program.
Of that $412 billion available is $250 billion in a new Energy Infrastructure Reinvestment Program — through which projects can replace or repurpose energy infrastructure to reduce greenhouse gas emissions.
“Ultimately, this type of creative financing is advancing the clean energy transition more quickly, and at a lower cost to our customers,” Lynsey said in an emailed statement.
The application, Lynsey explained, would help “fund eligible investments in electric infrastructure upgrades for state- and federal-approved projects.”
These investments could help improve resiliency, enable further vehicle electrification, and allow distributed energy resources to become a generation source for the electricity grid, the spokesperson stated.
“This program is a great way for the federal government to back our ability to make these infrastructure investments at the lowest cost for customers,” Lynsey added.
PG&E has been mired in lawsuits in recent years — with officials blaming the company’s equipment for sparking many of the state’s most destructive wildfires.
As of November, the PG&E Fire Victim Trust had paid out about $5.36 billion in settlement funds to compensate survivors of the 2015 Butte, 2017 North Bay, and 2018 Camp Fires, according to the office of Rep. Mike Thompson (D-Calif).
The Fire Victim Trust updated that figure to about $9.57 billion paid as of June 15.
Last month, a Shasta County judge dismissed criminal charges against PG&E associated with the 2020 Zogg Fire that was triggered by its equipment — killing four people. At the same time, the utility also reached a $50 million settlement with the Shasta County District Attorney’s office.
In Spring 2020, however, PG&E pleaded guilty to 84 felony counts of involuntary manslaughter as a result of the deadly 2018 Camp Fire blaze.
The company filed for bankruptcy in 2019 and emerged from Chapter 11 the following year, having completed a restructuring and reorganization plan.
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