The Department of Energy on Thursday confirmed the cancellation of a $1.8-billion clean energy loan commitment to Arizona Public Service, the largest investor-owned utility in that state.
The loan would have helped finance the utility’s “new or upgraded transmission projects, renewable power generation, and grid-integrated energy storage systems,” according to a DOE press release from last January. APS has a goal of ending all coal-fired generation by 2031 and delivering completely carbon-free electricity to customers by 2050, it said.
APS did not immediately respond to a request for comment.
According to the press release announcing the loan commitment, the first investment to receive support would have been the Agave Battery Energy Storage System Phase 1 project, a 4-hour duration 150-MW (600-MWh) BESS located next to an existing solar site. It was intended to support renewable integration and system peak shaving.
The project was among $83 billion in Biden-era loan commitments that have been “restructured, revised or eliminated,” according to the DOE.
DOE announced the total sum in a “year in review” letter from leadership last week, but it was not immediately clear what projects were impacted and whether the changes were new or previously reported.
The elimination of funding for the Arizona project was first reported by Bloomberg News. Most of the other affected projects on a list provided to Utility Dive by DOE have already been reported.
Olivia Tinari, deputy press secretary for DOE’s Office of Public Affairs, wrote in an email that more cancellation announcements are on the way.
“Additional de-obligations are in process but cannot be publicly disclosed until finalized,” she said. “There are other projects de-obligated that were not made public.”
This decision “follows an exhaustive first-year review” of the previous administration's loan obligations, including billions the DOE said were rushed out the door after Joe Biden lost the presidential election to Donald Trump.
Other canceled loans that were previously reported include a $716-million loan to Jersey Central Power & Light to help upgrade and expand transmission infrastructure.
DOE has “eliminated around $9.5 billion in government-subsidized, intermittent wind and solar projects, and is replacing them with investments in natural gas and nuclear uprates that provide more affordable and reliable energy for the American people,” the department said. “Of the $104 billion in Biden-era principal loan obligations, EDF has completed or is in the process of de-obligating almost $30 billion, with another $53 billion in revision.”
The three projects currently listed on the project portfolio webpage of DOE’s loan program office are a $1.6-billion loan to AEP to help “reconductor and rebuild almost 5,000 miles of transmission lines across Indiana, Michigan, Ohio, Oklahoma, and West Virginia”; a $1.5-billion loan to Wabash Valley Resources to restart a coal gasification plant; and a $1 billion loan to Constellation to help finance the Crane Clean Energy Center nuclear restart.
Wabash Valley Resources is one of five borrowers EDF worked with to modify loan terms, DOE said. Other modified loans include Lithium Americas’ $2.23-billion loan for its Thacker Pass lithium project and LongPath Technologies’ $162.4-million loan for its nationwide methane emissions monitoring network.
