Energy Department offers $1.6 billion loan guarantee to upgrade
transmission lines across Midwest
[October 17, 2025] By
MATTHEW DALY
WASHINGTON (AP) — The Department of Energy said Thursday it has
finalized a $1.6 billion loan guarantee to a subsidiary of one of the
nation's largest power companies to upgrade nearly 5,000 miles of
transmission lines across five states, mostly in the Midwest, for
largely fossil fuel-run energy.
AEP Transmission will upgrade power lines in Indiana, Michigan, Ohio,
Oklahoma and West Virginia to enhance enhance grid reliability and
capacity, the Energy Department said. The project, first offered under
the Biden administration, is meant to help meet surging electricity
demand from data centers and artificial intelligence.
Ohio-based American Electric Power, which owns AEP Transmission, is one
of the nation's largest utilities, serving 5.6 million customers in 11
states. It primarily produces electricity from coal, natural gas and
nuclear power, along with renewable resources such as wind and
hydroelectric power.
Thursday's announcement deepens the Trump administration’s commitment to
traditional, polluting energy sources even as it works to discourage the
U.S. from clean energy use.
Earlier this month, the administration cancelled $7.6 billion in grants
that supported hundreds of clean energy projects in 16 states, all of
which voted for Democrat Kamala Harris in last year’s presidential
election. A total of 223 projects were terminated after a review
determined they did not adequately advance the nation’s energy needs or
were not economically viable, the Energy Department said.
The cancellations include up to $1.2 billion for California’s hydrogen
hub aimed at developing clean-burning hydrogen fuels to power ships and
heavy-duty trucks. A hydrogen project costing up to $1 billion in the
Pacific Northwest also was cancelled.
The loan guarantee finalized Thursday is the first offered by the Trump
administration under the recently renamed Energy Dominance Financing
program created by the massive tax-and-spending law approved this summer
by congressional Republicans and signed by President Donald Trump.
Electric utilities that receive loans through the program must provide
assurances to the government that financial benefits from the financing
will be passed on to customers, the Energy Department said.
The project and others being considered will help ensure that Americans
"will have access to affordable, reliable and secure energy for decades
to come,” Energy Secretary Chris Wright said in a statement.
“The president has been clear: America must reverse course from the
energy subtraction agenda of past administrations and strengthen our
electrical grid,'' Wright said, adding that modernizing the grid and
expanding transmission capacity "will help position the United States to
win the AI race and grow our manufacturing base.”
[to top of second column] |
Energy Secretary Chris Wright listens as President Donald Trump
meets with Argentina's President Javier Milei in the Cabinet Room of
the White House, Tuesday, Oct. 14, 2025, in Washington. (AP
Photo/Alex Brandon)
 The upgrades supported by the
federal financing will replace existing transmission lines in
existing rights-of-way with new lines capable of carrying more
energy, the power company said.
More than 2,000 miles of transmission lines in Ohio serving 1.5
million people will be replaced, along with more than 1,400 miles in
Indiana and Michigan serving 600,000 customers, the company said. An
additional 1,400 miles in Oklahoma, serving about 1.2 million people
and 26 miles in West Virginia, serving 460,000 people, will be
replaced.
The projects will create about 1,100 construction jobs, the company
said.
The loan guarantee will save customers money and improve reliability
while supporting economic growth in the five states, said Bill
Fehrman, AEP's chairman, president and chief executive officer. “The
funds we will save through this program enable us to make additional
investments to enhance service for our customers," he added.
Wright, in a conference call with reporters, distinguished the AEP
loan guarantee from a $4.9 billion federal loan guarantee the
department cancelled in July. That money would have boosted the
planned Grain Belt Express, a new high-voltage transmission line set
to deliver solar and wind-generated electricity from the Midwest to
eastern states.
The Energy Department said at the time it was “not critical for the
federal government to have a role” in the first phase of the $11
billion project planned by Chicago-based Invenergy. The department
also questioned whether the project could meet strict financial
conditions required, a claim Wright repeated Thursday.
“Ultimately that is a commercial enterprise that needs private
developers,” Wright said. The company has indicated the Grain Belt
project will go forward.
Trump and Wright have repeatedly derided wind and solar energy as
unreliable and opposed efforts to combat climate change by moving
away from fossil fuels. Wright said the Grain Belt Express loan was
among billions of dollars worth of commitments “rushed out the door”
in the waning days of former President Joe Biden’s administration.
The loan guarantee to AEP was among those conditionally approved
under Biden, a fact Wright acknowledged to reporters.
“Not all of the (Biden-era) projects were nonsense," he said, adding
that he was “happy to move forward” with the transmission upgrade.
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