The US Department of Energy (DoE) has announced that the Loan Programs Office (LPO) has revoked its conditional commitment offering a taxpayer-funded loan guarantee of up to $4.9bn to the Grain Belt Express Phase 1 project. Privately held by Invenergy Transmission, the 1290km high-voltage direct current (HVDC) transmission line is intended to facilitate the supply of wind and solar derived power across Kansas and Missouri. Following a comprehensive examination of the project’s financials, the DoE concluded that the conditions required to issue the guarantee are unlikely to be fulfilled, and it is not essential for the federal government to support the project.
The DoE stated: “DoE is conducting a review of every applicant and borrower – including the nearly $100 billion in closed loans and conditional commitments LPO made between Election Day 2024 to Inauguration Day 2025 – to ensure every single taxpayer dollar is being used to advance the best interest of the American people. This ongoing review positions LPO to move forward with a lower risk tolerance in lending practices and an uncompromising focus on expanding access to affordable, reliable and secure energy … DoE remains focused on advancing projects that expand American energy dominance and deliver on president Trump’s commitment to lower energy prices for the American people.”
The Grain Belt Express project is the country’s second-longest transmission line, connecting four grid regions, including the PJM [Pennsylvania-New Jersey-Maryland) Interconnection from Illinois to New Jersey as a ‘national energy security backbone’. Grain Belt Expresss commented: “While we are disappointed about the LPO loan guarantee, a privately financed Grain Belt Express transmission superhighway will advance president Trump’s agenda of American energy and technology dominance while delivering billions of dollars in energy cost savings, strengthening grid reliability and resiliency, and creating thousands of American jobs.”
Issued in November 2024 by the Biden administration, the conditional commitment was opposed by American farmers owing to the numerous petitions filed for eminent domain, or compulsory acquisition, against state landowners, as reported by Reuters. Jigar Shah, who oversaw the loan guarantee approval under the Biden administration, considers that the cancellation was illegal. He stated, in a social media post: “When the LPO applicant meets all of the requirements that are set for the conditional commitment, then the Department of Energy is obligated to close the loan.” And the Sierra Club, an environmental group, has warned that this decision could raise electricity costs in coal-dependent states.
