American Electric Power received conditional commitment from the U.S. Department of Energy’s Loan Program Office (LPO) to support the company’s upgrade of nearly 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma and West Virginia.
These upgrades replace existing transmission lines in existing rights-of-way with new lines capable of carrying more energy. The upgrades will provide enhanced reliability for customers and facilitate new economic growth opportunities by bringing additional power capacity to these regions. The LPO is making up to $1.6 billion available to AEP at a preferred interest rate. This program will save AEP customers an estimated $278 million in financing costs over the life of the loan.
“AEP is investing $54 billion in transmission, distribution and generation projects over the next 5 years. Funds from this program will support these investments and save our customers money while we work to improve reliability and bring economic growth to our states,” said Bill Fehrman, AEP president and chief executive officer. “The funds we are able to save through this program enable us to make additional investments to enhance service for our customers.”
AEP submitted loan applications for 126 projects, representing almost 5,000 miles of transmission lines and $3.6 billion in investments, that would generate $278 million in financing savings. AEP estimates that 1,100 construction jobs will be created through these projects.
These projects will use existing easements and rights-of-way as much as possible. Some existing easements may need to be widened or updated to accommodate the higher capacity lines. Impacted landowners will be contacted before any work takes place.
Approximately 100 miles of transmission lines across Ohio and Oklahoma are the first projects to be supported by the proposed loan guarantee. Additional funding and projects will follow.
Before the funds are available, AEP and the LPO must agree to certain conditions. It is anticipated that loan will close by the end of the first quarter in 2025 with initial funding to occur in 2026.