The U.S. Department of Energy (DOE) has finalized a $1.6 billion loan guarantee to a subsidiary of American Electric Power (AEP) to rebuild and reconductor approximately 5,000 miles of transmission lines across Indiana, Michigan, Ohio, Oklahoma, and West Virginia.

The financing, part of the DOE's Energy Dominance Financing Program, is the first loan closed under the initiative established by the One Big Beautiful Bill Act, signed earlier this year. The program aims to support large-scale infrastructure improvements that enhance grid reliability and reduce customer costs.

Energy Secretary Chris Wright said the investment will "bolster reliability and ensure lower electricity costs across the Midwestern region." The DOE emphasized that utilities receiving loans must pass financial benefits to customers.

AEP said the project will save customers about $275 million in financing costs over the life of the loan and create approximately 1,100 construction jobs. The company cited surging electricity demand from data centers, artificial intelligence, and manufacturing as drivers for the upgrades, with 24 GW of new customer commitments expected by 2030.

Initial projects supported by the loan include around 100 miles of transmission line improvements in Ohio and Oklahoma, with additional work planned in the coming years.

Source: energy.gov