AEP will reconductor or rebuild almost 5,000 miles of transmission lines across multiple states, increasing transmission capacity.
January 16, 2025
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Jigar Shah
Former Director, Loan Programs Office
Jigar Shah served as Director of the Loan Programs Office (LPO) at the U.S. Department of Energy (DOE) from March 2021 to January 2025. He led and directed LPO’s loan authority to support deployment of innovative clean energy, advanced transportation, and Tribal energy projects in the United States. Prior, Shah was co-founder and President at Generate Capital, where he focused on helping entrepreneurs accelerate decarbonization solutions through the use of low-cost infrastructure-as-a service financing. Prior to Generate Capital, Shah founded SunEdison, a company that pioneered “pay as you save” solar financing. After SunEdison, Shah served as the founding CEO of the Carbon War Room, a global non-profit founded by Sir Richard Branson and Virgin Unite to help entrepreneurs address climate change.
Shah was also featured in TIME's list of the "100 Most Influential People" in 2024.
Originally from Illinois, Shah holds a B.S. from the University of Illinois-UC and an MBA from the University of Maryland College Park.
The U.S. Department of Energy’s Loan Programs Office (LPO) announced today a conditional commitment for a loan guarantee of up to $1.6 billion to AEP Transmission Company, LLC (AEP). The loan guarantee would help the transmission utility finance reconductoring or rebuilding of almost 5,000 miles of transmission lines in Indiana, Michigan, Ohio, Oklahoma, and West Virginia. The transmission upgrades would increase overall transmission capacity by approximately 70%. Upgrading transmission lines would provide cost savings to utility customers and improve service reliability.
As part of President Biden’s Investing in America agenda to create good-paying, high-quality job opportunities in communities across the country, these projects would create around 1,100 construction jobs.
If finalized, AEP’s projects would enhance transmission capacity, leading to a more efficient and reliable energy delivery system. The improved infrastructure would help meet growing energy demands.
All electric utilities receiving an Energy Infrastructure Reinvestment (EIR) loan must provide assurance to DOE that financial benefits received from the financing will be passed on to the customers of that utility. AEP’s proposed loan is expected to reduce upward pressure on electricity rates for ratepayers due to the reduced cost of debt associated with LPO financing.
The initial projects funded by the proposed loan guarantee involve upgrading approximately 100 miles of transmission across Ohio and Oklahoma. LPO estimates these initial projects, as well as future projects to be funded by the loan guarantee, would avoid greenhouse gas emissions by reducing line losses associated with electricity transmission. Additionally, AEP’s projects would contribute to emissions reductions by supporting existing and new clean generation by expanding transmission capacity in the regions in which they operate.
LPO borrowers are required to develop and ultimately implement a comprehensive Community Benefits Plan (CBP). CBPs ensure borrowers meaningfully engage with community and labor stakeholders to create good-paying jobs and improve the well-being of the local community and workers.
AEP has a long track record of working collaboratively with unions, and approximately two-thirds of AEP craft employees are covered by collective bargaining agreements with five unions: the International Brotherhood of Electrical Workers, Utility Workers Union of America, United Mine Workers of America, International Union of Operating Engineers, and United Steelworkers.
AEP has partnerships and apprenticeship programs with a range of organizations aimed at building a diverse workforce. AEP has an articulation agreement with local universities to provide employees up to 34 credit hours towards degree programs for completing a registered apprenticeship training. In addition, AEP also provides opportunities for line worker apprenticeships through a registered apprenticeship program.
Today’s announcement is the latest EIR project under LPO’s flexible loan facility and disbursement approach tailored for regulated, investment-grade utilities. President Biden’s Inflation Reduction Act created the EIR category under the of Title 17 Clean Energy Financing Program (Section 1706). EIR supports projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or that enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions. The qualifying operating energy infrastructure for AEP’s transmission projects is the existing electricity transmission circuits identified for reinvestment.
While this conditional commitment indicates DOE’s intent to provide a loan guarantee to finance the project, DOE and the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan guarantee.