The conditional low-interest loan is supposed to help pay for a number of costly energy projects. Supporters say the loan could end up saving PG&E bill payers a lot of money in the long run.
With a record $15 billion loan from the federal government, PG&E expects to invest big money into energy projects.
PG&E says the loan could help the utility improve its hydroelectric infrastructure--which produces enough energy for 4 million homes
Money could go to improve battery storage and electric vehicles.
Money could also go to improve power lines and expand and upgrade substations and transmission networks.
PG&E submitted its application to the agency's Loan Programs Office in June 2023.
Mark Toney is Executive Director with TURN, The Utility Reform Network.
"This loan allows PG&E to make needed investments in wildfire safety in expanding the grid to serve more customers," said Toney.
The CEO of PG&E issued this statement in response to the conditional loan from the U.S. Department of Energy saying:
"Investments in a clean and resilient grid for northern and central California will have significant returns for our customers in safety, reliability and economic growth. The DOE loan program can help us accelerate the pace and impact of this work, which supports thousands of living wage jobs, at a lower cost to our customers."
PG&E says the money could also be invested into lowering costs for its customers.
Toney questions that.
"We believe that reducing ratepayer bills is a high priority," said Toney. "PG&E has had four rate increases that went into effect in 2024 and there are two more rate increases on this Thursday's Public Utility Commission agenda."
TURN says the loan overall is a win for California.
"There's some very good news in this. This is far less money that ratepayers are going to have pay than if PG&E went out to borrow the money thru its corporate structure which would have been over 10 percent interest. This way the interest would be far less, and it would be much better for ratepayers," said Toney.
TURN also says there needs to be oversight on how the money is spent because it is a loan. And PG&E customers will be the ones paying it back--not shareholders.
"This is a good thing. We just need to make sure the money is invested wisely in the projects that bring the most value," said Toney.
The Sierra Club, the environmental advocacy group, cheered PG&E's commitment to modernizing the power grid and expanding clean energy infrastructure.
"This innovative loan program will help ensure that Californians will see more stable rates, enjoy more good clean energy jobs and live with fewer harmful emissions. This unprecedented windfall also offers a unique opportunity for PG&E to update its outdated transmission infrastructure with more efficient, climate-friendly and fire-safe technology," Sierra Club organizer Julia Dowell said in a statement Tuesday.
PG&E faced billions of dollars in wildfire liabilities and filed for bankruptcy protection in 2020.
It's also facing big pressure to prevent its equipment from sparking devastating fires.
The conditional loan still has to be finalized.
The Department of Energy says the loan "will help PG&E meet its forecasted load growth and increase electric reliability..."
The loan office hopes to finalize the commitment before President Joe Biden leaves office next month.
The Associated Press contributed to this report