OAKLAND — PG&E received a record-setting $15 billion federal loan guarantee in one in all the ultimate acts of Joe Biden's presidency, an approval that would help the utility and its customers get monetary savings on various key projects.
The U.S. Department of Energy's loan guarantee could allow PG&E to tap unique sources of financing that may allow it to have lower payment costs than would otherwise be the case in business financial markets.
Oakland-based PG&E said it could save customers as much as $1 billion.
“The loan guarantee is intended to align with the state’s policy goals of reducing electricity costs for customers,” PG&E said. “The savings from cheaper financing would be used to reduce customers’ bills.”
PG&E said the loan might be used to finance already approved work that may must be done anyway whatever the loan guarantee.
The federal funding would fund planned projects aimed toward improving California's energy infrastructure similar to hydroelectric facilities, helping ensure reliability and supporting distributed energy resources similar to battery storage and electric vehicles, while reducing costs for purchasers, the utility said.
“These projects are not new work,” said Lynsey Paulo, a spokeswoman for PG&E. “Partially funding these projects with lower-cost financing from the DOE Loan Program Office would allow us to complete already approved grid work at a lower cost to our customers than traditional borrowing.”
The energy credit guarantee program is one in all the provisions of the Inflation Reduction Act of 2022, which Biden signed earlier.
Among President Donald Trump's quite a few executive orders in recent days was a directive for federal agencies to suspend the distribution of funds – including the federal loan guarantee – made possible by two pieces of laws approved by Biden, the Inflation Reduction Act and the Bipartisan Infrastructure Law .
On January 17, PG&E filed a regulatory document with the Securities and Exchange Commission indicating that the corporate has not yet received funds from this system, but has only received approval from the Department of Energy.
Any savings can be a welcome change from recent increases in PG&E electricity and gas costs, which have risen faster than the Bay Area's overall inflation rate.
Recent reports on consumer prices within the Bay Area and across the country released by the U.S. Bureau of Labor Statistics showed dramatic differences between the region's inflation rate and the associated fee of operating services like those offered by PG&E.
In December 2024, electric utility services increased by 11.2% annually. Gas supply services increased by 6.3%, the Federal Employment Agency reported. In contrast, the Bay Area's inflation rate rose just 2.4% annually in December.
However, there are some hopeful signs for PG&E customers.
Starting with this month's billing cycles, a typical PG&E residential customer who receives each electric and natural gas service from the investor-owned utility began paying a mean of $295 monthly.
This is $1 greater than the $294 monthly that typical PG&E residential customers paid for combined electric and gas services in January 2024.
The average that customers paid for combined services in January 2024 was 22% higher than the $241 that customers paid in January 2023.
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