Trump DOE decides to keep at least one Biden-era energy program

The Energy Department said Thursday it has finalized a $1.6 billion loan guarantee to upgrade nearly 5,000 miles of transmission lines.

Grid upgrades will ease the flow of electricity in Indiana, Michigan, Ohio, Oklahoma and West Virginia. The project, which will address lines owned by American Electric Power, won’t add any new routes, but it will help existing ones carry more power.

AEP is one of the largest utility and transmission line owners in the United States, with operations spanning 11 states. The 5,000 miles that will be upgraded represent one round 13% of the company’s total network.

The loan guarantee began under the Biden administration days before President Trump’s inauguration. Previously, the Trump administration cited approvals that occurred between Election Day and Inauguration Day as justification for canceling projects.

It’s unclear what sets this grid modernization project apart from others from the Trump administration is under consideration or in the process of cancellation.

In Minnesota, the Energy Department is set to cancel a $467 million grant that would have helped unlock 28 gigawatts of new generation capacity, most of it solar and wind. Another in Oregon will issue $250 million in grants to connect half a dozen renewable projects.

But the biggest transmission project is the Trump administration’s $630 million grant to modernize California’s grid. In many ways, this is similar to the AEP project, seeking to tap more off the existing grid to reduce congestion. As planned, the California project will test improved conductors and dynamic line rating devices, both of which would allow older rights-of-way to carry more electricity. This is often a cheaper option than building new power lines.

The AP project will reconnect the lines with new conductors. The loan guarantee will allow the utility giant to secure lower interest rates, saving the company at least $275 million, which it says will benefit its customers.

Energy Secretary Chris Wright said the loan “will ensure lower electricity costs across the US Midwest.” Among the states already included in the scheme Minimum electricity rate in the nation

The loans will be issued from the Loan Program Office, which the GOP has named the Energy Dominance Financing Program. The office was established in 2005 under the Energy Policy Act. Historically, the office focused on clean energy and manufacturing projects. Its loan loss rate about 3%Much lower than private sector lenders.