California’s utility PG&E has applied for a federal loan of around $7 billion to finance the burying of power lines and thus reduce the risk of wildfires, chief executive Patti Poppe told The Wall Street Journal in an interview published on Thursday.  

The utility, which has been held liable for wildfires that have killed people in recent years, has applied for a loan with the Loan Programs Office of the Department of Energy. The office funds key energy projects supporting clean energy infrastructure.

To date, LPO has issued more than $35 billion of loans and loan guarantees for more than 30 projects, it says on its website. Loans have been granted for transforming existing energy infrastructure, reviving nuclear construction, accelerating the growth of utility-scale solar and wind, and expanding domestic manufacturing of electric vehicles (EVs).

If PG&E’s application for a federal loan is approved, it would be one of the biggest-ever the office has extended.

Last week, the Department of Energy announced a record $9.2 billion loan to a Ford Motor joint venture to finance EV battery plants. The loan comes courtesy of the Inflation Reduction Act, the massive spending bill designed to earmark monies in part that will be used to help spur clean energy projects.

If PG&E gets the $7-billion loan, it plans to use it to partially fund the burial of 10,000 miles of power lines in areas at high risk of fire, upgrade substations, and replace overloaded transmission conductors, CEO Poppe told the Journal.

If it approves the loan, DOE would be backing PG&E’s ability to pay for making the grid EV- and electrification-ready, Poppe added.

PG&E, which emerged from bankruptcy restructuring in 2021, has struggled to reduce the risk of wildfires and has pleaded guilty to 84 counts of involuntary manslaughter in federal court for the 2018 Camp Fire which killed 84 people.    

By Charles Kennedy for Oilprice.com

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