Washington– WASHINGTON (AP) — The Energy Department said Thursday it has finalized a $1.6 billion loan guarantee for a subsidiary of one of the nation’s largest energy companies to upgrade nearly 5,000 miles of transmission lines across five states, mostly in the Midwest, for largely fossil-fueled power.
AEP will be transferred Upgrade power lines The Department of Energy said in Indiana, Michigan, Ohio, Oklahoma and West Virginia, primarily to enhance grid reliability and capacity. The project, implemented by AEP Transmission, a subsidiary of Ohio-based American Electric Power, aims to help meet the growing demand for electricity from data centers and artificial intelligence.
AEP 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 polluting traditional energy sources even as it works to discourage the United States from using clean energy.
The move comes as the Trump administration moved to cancel $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. The Energy Ministry said a total of 223 projects were terminated after a review found they did not adequately meet the country’s energy needs or were not economically viable.
The cancellations include up to $1.2 billion Hydrogen Center in California It aims to produce clean hydrogen fuel to power ships and heavy trucks. A $1 billion hydrogen project in the Pacific Northwest has also been 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 corporation. Tax and spending law It was approved by Republicans in Congress this summer and signed by President Donald Trump. The Energy Department said electric utilities that obtain loans through the program must provide assurances to the government that the financial benefits from the financing will be passed on to customers.
Energy Secretary Chris Wright said in a statement that the project and others being considered will help ensure Americans have access to affordable, reliable and safe energy for decades to come.
“The president has been clear: America must reverse course from the energy reduction agenda of previous administrations and strengthen our electric 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 industrial base.”
The power company said the improvements supported by federal funding will replace existing transmission lines in existing rights-of-way with new lines capable of carrying more power.
The company said that 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. An additional 1,400 miles will be replaced in Oklahoma, serving about 1.2 million people, and 26 miles in West Virginia, serving 460,000 people.
The company said that the projects will create about 1,100 job opportunities in the construction field.
The loan guarantee will save customers money and improve reliability while supporting economic growth in the five states, said Bill Fairman, AEP Chairman, President and CEO. He added: “The funds that we will save through this program enable us to make additional investments to enhance service to our customers.”
Wright, in a conference call with reporters, distinguished AEP’s loan guarantee from a $4.9 billion federal loan guarantee. The department was abolished in July. This money would have strengthened the scheme Rapid grain belta new high-voltage transmission line slated to carry electricity generated by solar and wind energy from the Midwest to the eastern states.
The Energy Department said at the time that “the federal government does not necessarily 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 the stringent financial conditions required, something Wright reiterated Thursday.
“At the end of the day, this is a commercial enterprise that needs private developers,” Wright said. The company indicated that the Grain Belt project will go ahead.
Trump and Wright have repeatedly derided wind and solar power as unreliable and have opposed efforts to combat climate change Stay away from fossil fuels. The Grain Belt Express loan was among multi-billion-dollar commitments “paid offshore by former President Joe Biden’s administration” after the 2024 election, Wright said.