AEP Secures DOE Loan Guarantee of $1.6 Billion to Upgrade 5,000 Miles of Transmission Lines
AEP Transmission, a subsidiary of American Electric Power, has closed on a $1.6 billion loan guarantee at a preferred interest rate from the U.S. Department of Energy’s Loan Programs Office (LPO) to upgrade nearly 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia.
Customers will save an estimated $275 million in financing costs over the life of the loan, realizing through lower costs in their bills. The upgrades supported by this financing will 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 the communities AEP serves. AEP predicts 1,100 construction jobs to be created through these projects.
Customers have committed to business expansions or additions that will require an additional 24 GW of electricity demand by the end of 2030.
The upgrades have been identified to support data center, artificial intelligence and manufacturing development and represent generational load growth on the electric system. By looking for federal funding opportunities and implementing rate structures ensuring new customers are supporting infrastructure investment, AEP is working to reduce rate impacts for customers.
“This loan saves our customers money and improves reliability while supporting economic growth in our states,” said Bill Fehrman, AEP 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.”
AEP will work with local communities and landowners in siting transmission lines that will power important technology advancements and facilitate economic development for the states and communities the utility serves. Approximately 100 miles of transmission lines across Ohio and Oklahoma are the projects to be supported by the loan guarantee.