PG&E Customers Could Save Up to $1 Billion Through Federal Loan Program

Today, PG&E received a conditional commitment from the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) for a loan guarantee of up to $15 billion. When finalized, the loan guarantee should provide lower-cost financing for projects to help meet state and federal energy affordability, reliability and resiliency goals.

The proposed financing would pay for planned projects that are intended to enhance California’s energy infrastructure, help ensure reliability, and support distributed energy resources including battery storage and electric vehicles, while lowering costs for PG&E customers. These are existing investment areas approved by the California Public Utilities Commission and California Independent System Operator, as applicable.

PG&E applied for the loan guarantee to pursue access to this non-traditional funding source to help save customers money, which aligns with California policy goals on lowering electricity costs. Partially funding these projects with the lower-cost federal financing could save customers up to $1 billion net present value over the life of the financing, while paying for critical investments in safety and reliability to serve customers. The actual savings would depend on the ability to finalize loan documents, and the timing and amount borrowed.

“Investments in a clean and resilient grid for northern and central California will have significant returns for our customers in safety, reliability and economic growth. The DOE loan program can help us accelerate the pace and impact of this work, which supports thousands of living wage jobs, at a lower cost to our customers,” said Patti Poppe, CEO, PG&E Corporation.

“The work our members perform every day is essential for PG&E to modernize its grid. IBEW 1245 is encouraged by PG&E’s commitment to rebuild, retool and reinvest in energy infrastructure that is critical to California to achieve our electric reliability and climate resilience goals, and provide these benefits to PG&E customers at a lower cost,” said Bob Dean, IBEW 1245 business manager.

LPO provided the conditional commitment for this loan guarantee under its Energy Infrastructure Reinvestment (1706) Program. PG&E’s application is for a Federal Financing Bank loan guaranteed by the DOE, under the 1706 program.

Investments in power generation, transmission and virtual power plants

PG&E’s loan application included projects that support federal and state climate goals, and customers including projects that could:

Extend and expand clean power generation:

• Retooling and refurbishment to support the continued operations of PG&E’s hydroelectric power fleet which includes 61 powerhouses and produces more than 3.8 gigawatts (GW) of clean power or enough to power about four million homes.
• Increasing renewable energy integration through Battery Energy Storage Systems (BESS). PG&E currently has 4.2 GW of battery storage under contract, enough to power three to four million homes. This includes its Elkhorn Battery in Monterey County, one of the largest energy storage systems in the world.

Enhance the transmission system:

• Reconductoring and enhancing the transmission system to interconnect forecasted growth in clean energy generation.
• Expanding and upgrading substation and transmission line capacity to help reduce congestion and help ensure reliability.
• Deploying advanced sensors, telemetry and controls to support two-way power flow and resilient grid operations during heat waves, high winds, and other extreme weather events.

Enable virtual power plants (VPP) and ensure two-way power delivery:

• Integrating more renewable energy and demand management by deploying and interconnecting VPPs. These networks of small energy-producing, storage or energy management devices, like batteries and electric vehicles, are pooled together to serve the grid.
• In 2024, PG&E has approximately 400 MWs of VPPs including several customer programs designed and operated to support various grid needs.

While this conditional commitment indicates DOE’s intent to finance the project, DOE and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the Department can enter into definitive financing documents and authorize the funding of the loan. 

For more information, review the DOE's announcement.

Forward-looking statements

This news release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans, and strategies of PG&E Corporation and PG&E, including regarding PG&E’s capital investment plans, the financial and operational benefits of the DOE loan guarantee, the conditional commitment, estimated cost savings from the loan guarantee and projects to be funded by the loan guarantee. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include whether the parties can negotiate and mutually agree to terms of definitive documentation, including the loan guarantee, whether the loan guarantee is signed, whether PG&E satisfies conditions precedent under the loan guarantee to draw funds, whether DOE determines PG&E is in satisfaction of conditions precedent under the loan guarantee to draw funds, whether funds are available to draw under the loan guarantee, the impact of any changes to laws or regulations regarding the DOE’s ability to guarantee loans, and the factors disclosed in PG&E Corporation’s and PG&E’s joint Annual Report on Form 10-K for the year ended December 31, 2023, their most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and other reports filed with the SEC, which are available on PG&E Corporation's website at www.pgecorp.com and on the SEC's website at www.sec.gov. PG&E Corporation and PG&E undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.