AEP Transmission, a subsidiary of American Electric Power, has closed on a $1.6 billion loan guarantee at a preferred interest rate from the US Department of Energy’s Loan Programmes Office. The loan is for the upgrade nearly 5000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia. It will save customers an estimated $275 million in financing costs, benefits that AEP says will be passed on to customers.
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 object is to enhance reliability and facilitate new economic growth opportunities.
Energy demand is increasing across AEP’s footprint. Customers have committed to business expansions or additions that will create an additional 24 GW of demand by the end of the decade. They have been identified as primarily data centre, artificial intelligence and manufacturing development needs.
“AEP is experiencing growth in energy demand that has not been seen in a generation. As the first company to close a new loan with the Trump administration under this programme, we are excited to get to work on these projects,” said Bill Fehrman, AEP chairman, president and CEO.
Approximately 100 miles of transmission lines across Ohio and Oklahoma are the first projects to be supported by the loan guarantee. Additional funding and projects are expected to follow.
