The U.S. Department of Energy (DOE) has announced a $15 billion loan guarantee to Pacific Gas & Electric Company (PG&E). This initiative is part of the Biden-Harris Administration's Investing in America agenda. The funding aims to support PG&E’s Project Polaris, which focuses on expanding hydropower generation, battery storage, and transmission capacity through reconductoring and grid-enhancing technologies. Additionally, the project will enable virtual power plants across PG&E’s service area in Northern and Central California.
According to the DOE's Loan Programs Office (LPO), this marks the first Energy Infrastructure Reinvestment (EIR) project to achieve financial closure under LPO’s flexible loan facility. The program is tailored for regulated, investment-grade utilities like PG&E. "Electric utility borrowers for EIR projects must demonstrate that the financial benefits received from the DOE loan guarantee will be passed on to the customers of, or communities served by, that utility," stated LPO officials.
The LPO ensures that its due diligence approach verifies PG&E’s ability to identify and execute eligible projects within the guaranteed loan facility. These projects meet program eligibility and environmental review requirements.
In collaboration with the International Brotherhood of Electrical Workers (IBEW) Local 1245, PG&E plans to train and employ members from underserved groups interested in operational roles through its PowerPathway program. Approximately two-thirds of PG&E employees are currently covered by collective bargaining agreements with unions.
PG&E is also required to develop a comprehensive Community Benefits Plan (CBP). This plan involves engaging community and labor stakeholders to create quality jobs and improve local well-being. "In its CBP, PG&E plans to expand its outreach programs to boost engagement and deliver community benefits in partnership with key stakeholders," explained company representatives.
The investment aligns with the Biden-Harris Administration’s Justice40 Initiative, aiming for 40% of federal investment benefits in climate and clean energy to reach disadvantaged communities. Many projects under Project Polaris are expected to be located in these areas.
The Inflation Reduction Act established the EIR category under Title 17 Clean Energy Financing Program, supporting projects that modify or replace energy infrastructure while reducing emissions. As of December 2024, DOE's LPO has received 182 applications requesting over $278.9 billion in loans and guarantees nationwide.
For further details about PG&E’s Project Polaris, interested parties can access additional resources on LPO's portfolio projects page.
