The U.S. Department of Energy (DOE) has finalized a $1.6 billion loan guarantee to a subsidiary of American Electric Power (AEP) to improve grid reliability and reduce electricity costs in the Midwest. The announcement was made by Secretary of Energy Chris Wright.
The funding will be used to reconductor and rebuild approximately 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia. The project is expected to create more than 1,000 construction jobs and improve grid reliability and capacity in areas experiencing rapid growth.
“Thanks to President Trump and the Working Families Tax Cut, the Energy Department is ensuring the American people will have access to affordable, reliable and secure energy for decades to come,” said Secretary Wright. “The President has been clear: America must reverse course from the energy subtraction agenda of past administrations and strengthen our electrical grid. This loan guarantee will not only help modernize the grid and expand transmission capacity but will help position the United States to win the AI race and grow our manufacturing base.”
The loan guarantee is part of the Energy Dominance Financing (EDF) Program, established by the Working Families Tax Cut, also known as the One Big Beautiful Bill Act, which was signed into law earlier this year. This is the first closed loan guarantee under the EDF Program. Utilities that receive an EDF loan are required to ensure that financial benefits from the financing are passed on to their customers.
DOE officials stated that the loan guarantee was evaluated under new guidance from Secretary Wright and fulfills a commitment to manage taxpayer funds responsibly while supporting American energy initiatives.
DOE reiterated its commitment to using all available tools, including the Loan Programs Office, to provide affordable, reliable, and secure energy.
