The U.S. Energy Dept has finalized what it said is the first Trump administration loan guarantee—$1.6 billion to utility American Electric Power to support reconductoring and rebuilding of 5,000 miles of high-voltage transmission line in Indiana, Michigan, Ohio, Oklahoma and West Virginia carrying mostly fossil-fuel-derived power.
The project received the funding conditionally from the Biden-era department’s Loan Programs Office in January, as part of $23 billion in assistance DOE offered to eight utilities for investments in transmission, energy storage grid modernization and gas pipelines.
The AEP funds gained final approval by the now renamed “Energy Dominance Financing Program,” Energy Secretary Chris Wright said during a media briefing on Oct. 15, noting he was “happy to move forward” to support the work, which is claimed to generate 1,000 construction jobs.
According to AEP, total project cost in the five states is $3.56 billion.
The company is “experiencing growth in energy demand that has not been seen in a generation,” company Chairman Bill Fehrman said.
About 2,000 miles of line work in Ohio and 1,400 miles in Oklahoma, costing $1.9 billion and $767.2 million, respectively, are the first and largest projects supported by the loan, according to the utility.
Contractors will be selected “on a project-by-project basis,” said an AEP spokesman.
“This is a good project,” Energy Secretary Chris Wright told media. “Not all of the [Biden-era] projects were nonsense.”
He defended the agency’s cancellation in July of a $4.9-billion Biden-era department loan guarantee to the planned first phase of the Grain Belt Express, a new high-voltage transmission line being developed by Invenergy to deliver solar and wind power from Missouri to Indiana.
Wright pointed to the project’s higher per mile cost as a new line, with unclear power buyers. “Ultimately that is a commercial enterprise that needs private capital,” he said, also questioning if the project could meet strict loan financial conditions required.
