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Loan supports PG&E ( PCG ) climate resilience, grid upgrades

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Funds to refurbish hydroelectrics, expand battery storage

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DOE, PG&E ( PCG ) must meet conditions before finalizing loan

(Adds PG&E comments, details from paragraph 3)

By Timothy Gardner and Laila Kearney

WASHINGTON/NEW YORK, Dec 17 (Reuters) - The U.S.

Department of Energy said on Tuesday it had offered a

conditional loan of up to $15 billion to California-based

electric utility PG&E ( PCG ) to support climate resilience

projects and strengthen the power grid.

President Joe Biden's administration is rushing to push out

billions of dollars in financing from the Loan Programs Office,

or LPO, which faces uncertainty under President-elect Donald

Trump, who takes office on Jan. 20.

"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," PG&E ( PCG ) CEO

Patti Poppe said in a statement.

"The DOE loan program can help us accelerate the pace and

impact of this work," Poppe added of plans for PG&E ( PCG ), which

provides power and natural gas to about 16 million people as the

biggest electric utility in the most populous U.S. state.

The DOE and PG&E ( PCG ) must satisfy technical, legal, financial

and environmental conditions before the U.S. signs definitive

financing documents.

If finalized by the LPO, the record loan will support

multiple energy projects.

These include refurbishing PG&E's ( PCG ) hydroelectric

infrastructure, which produces enough energy for 4 million

homes, as well as expanding and upgrading substations and

transmission networks.

The loan would also be used toward increasing the deployment

of energy storage, with PG&E ( PCG ) currently logging 4.2 gigawatts of

battery storage under contract. Funds may also be used to add to

the 400 megawatts of virtual power plants in PG&E's ( PCG ) system.

Partially funding the projects with the low-cost federal

loans could save PG&E ( PCG ) bill payers as much as $1 billion in net

present value over the life of the financing, the utility said.

PG&E ( PCG ) said earlier this month that it planned to raise $2.4

billion from investors via a stock offering.

U.S. utilities have been making stock offerings and filing

rate case requests to fund their infrastructure upgrades as the

country's power grids face surging demand from industrial

customers like data centers and the electrification of

industries like transportation.

At the same time as power consumption grows, increasingly

extreme weather that brings intense storms and wildfires

threatens to destabilize the grid.

PG&E ( PCG ), which in 2020 emerged from a bankruptcy that was

prompted by deadly California blazes linked to the utility's

equipment, continues to face the risk of wildfire liabilities.