The U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) has announced a conditional commitment for a loan guarantee of up to $15 billion to Pacific Gas & Electric Company (PG&E). The loan guarantee, if finalized, will support PG&E’s Project Polaris, which includes a series of infrastructure investments aimed at expanding hydropower generation, increasing battery energy storage, upgrading transmission systems, and enabling virtual power plants across PG&E’s service area.
These efforts are intended to address projected load growth, enhance grid reliability, and reduce costs for PG&E customers. The announcement is part of the Energy Infrastructure Reinvestment (EIR) program, which was established under the Title 17 Clean Energy Financing Program through the Inflation Reduction Act.
The $15 billion loan guarantee represents the second EIR project under LPO’s tailored loan facility for regulated, investment-grade utilities. EIR projects require that utilities pass financial benefits received from the DOE loan guarantee directly to customers or communities served. The loan’s lower interest rate compared to traditional financing is expected to help mitigate upward pressure on electricity costs for PG&E’s 16 million customers.
As part of this initiative, PG&E will partner with the International Brotherhood of Electrical Workers (IBEW) Local 1245 to provide training and employment opportunities for underrepresented groups through its PowerPathway program. PG&E estimates that full implementation of these projects will support thousands of ongoing construction and operations jobs. Currently, two-thirds of PG&E’s workforce are represented by union agreements.
LPO’s due diligence process ensures that at least one anchor project meets program eligibility and environmental review standards before it is included in the loan facility. PG&E will implement a comprehensive Community Benefits Plan (CBP) to ensure meaningful engagement with local communities and stakeholders. PG&E will collaborate with local governments, Native American Tribes, community organizations, and low-to-middle income customers as part of these efforts.
The EIR program supports projects that repurpose, retool, replace, or enhance energy infrastructure to reduce, avoid, or mitigate greenhouse gas emissions and other pollutants. While the conditional commitment marks a significant milestone, finalization of the loan guarantee is contingent on meeting technical, legal, environmental, and financial requirements.
