The U.S. Department of Energy on Wednesday said it has closed a loan for up to $3.26 billion to a subsidiary of American Electric Power to finance about 100 transmission projects and upgrades across Texas.
The AEP Texas projects are expected to save homes and businesses approximately $685 million in electricity costs over the next 30 years. They include rebuilding or reconductoring existing transmission lines and constructing new transmission infrastructure spanning roughly 2,800 miles, DOE said.
Upgrades will double the power-carrying capacity of existing transmission infrastructure to “help meet rapidly growing electricity demand from data centers, advanced manufacturing, and oil and natural gas development in the Permian Basin,” the agency said.
AEP Texas says it has signed letters of agreement supporting up to 41 GW of potential new load through 2030.
Texas is poised for “incredible growth” over the next five years, AEP Texas President and Chief Operating Officer Adrian Rodriguez said in a statement. “This loan supports critical updates to our transmission infrastructure to strengthen reliability, connect new load and generation resources and manage affordability.”
The loan is part of AEP’s “broader strategy” across its 11-state service territory “to secure federal funding to reduce customer costs while supporting growth and investing in reliability and resiliency,” according to a company announcement.
Another American Electric Power subsidiary, AEP Transmission, was awarded a $1.6 billion loan guarantee in October to reconductor and rebuild around 5,000 miles of transmission lines across Indiana, Michigan, Ohio, Oklahoma and West Virginia.
AEP Texas is the fourth utility to secure financing through the Trump administration’s Energy Dominance Financing program. In February, DOE announced $26.5 billion in loans to Southern Co. subsidiaries Alabama Power and Georgia Power to build or upgrade 16.7 GW of grid resources, including 5 GW of new gas generation.
And in June, the program closed a $1.6 billion loan to Michigan’s DTE Gas to update approximately 800 miles of distribution mains and service lines, as well as rebuilding an existing compressor station.
