Trump’s Energy Department decides to keep at least one Biden-era energy plan in place

The Department of Energy announced Thursday that it has finalized a $1.6 billion loan guarantee to replace nearly 5,000 miles of power lines.

Power grid upgrades will ease the flow of power in Indiana, Michigan, Ohio, Oklahoma and West Virginia. The project would address transmission lines owned by American Electric Power (AEP) and would not add any new routes, but would help transport more power on existing routes.

AEP is one of the largest electric utilities and transmission line owners in the United States, with operations across 11 states. The 5,000 miles being upgraded represents about 13% of the company’s entire network.

The loan guarantees began under the Biden administration just days before President Trump took office. Previously, the Trump administration cited approvals made between Election Day and Inauguration Day as justification for canceling the project.

It’s unclear what makes this grid modernization project different from other projects the Trump administration has canceled or is considering canceling.

In Minnesota, the Department of Energy is moving to cancel $467 million in subsidies that would have helped unlock 28 gigawatts of new power generation capacity, much of it from solar and wind. Another company in Oregon was scheduled to issue a $250 million grant to connect six renewable projects.

But the biggest transmission project the Trump administration wants to eliminate is a $630 million grant to modernize California’s power grid. In many ways, this is similar to the AEP project, which aims to squeeze more out of the existing power grid to alleviate congestion. As planned, the California project will test advanced conductors and dynamic line rating equipment, both of which could bring more power to older sites. This is often a cheaper option than building new power lines.

The AEP project will reroute the tracks with new conductors. The loan guarantee will allow the power giant to secure lower interest rates, saving it at least $275 million and benefiting its customers.

Energy Secretary Chris Wright said the loan “will ensure lower electricity prices across the Midwest region of the United States.” The states included in this project already have some of the lowest electricity rates in the nation.

The loans would be issued by the Office of Loan Programs, which Republicans renamed the Energy Control Loan Program. This office was established in 2005 under the Energy Policy Act. Historically, the firm has focused on clean energy and manufacturing projects. The company’s loan loss rate is about 3%, far below the loss rate of private sector financial institutions.