Wide-ranging investments will add over 1800 MW of new electric generation and support an efficient gas distribution system, improving reliability and affordability for Consumer Energy's customers.
January 16, 2025
minute read time
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 Department of Energy Loan Programs Office announced a conditional commitment for a loan guarantee of up to $5.23 billion to Consumers Energy, a subsidiary of CMS Energy. Consumers Energy submitted its loan application to LPO in December 2023.The project, called CE Clean Energy, consists of proposed investments through 2031 in solar generation, wind generation, battery storage, virtual power plant projects, and the replacement of legacy natural gas pipelines. If finalized, the loan guarantee will enable Consumers Energy to invest in reliability and energy security while significantly lowering costs for its customers.
The loan guarantee will be made under LPO’s flexible loan facility and disbursement approach tailored for regulated, investment-grade utilities. Utility borrowers for EIR projects demonstrate that the financial benefits received from the DOE loan guarantee will be passed on to the customers of, or communities served by, that utility. LPO’s financing of the individual projects within the loan facility is expected to come at a lower interest rate than traditional capital market financing, helping reduce the debt costs passed through to Consumers Energy’s 1.9 million electric customers and 1.8 million natural gas customers.
At full deployment, Consumers Energy is expected to support thousands of ongoing construction and operations jobs. Approximately 45% of Consumer Energy’s current employees are covered by collective bargaining agreements with various unions.
LPO performed an eligibility assessment and is conducting an environmental review on one anchor project: the Enhanced Infrastructure Replacement Program, a Consumers Energy program to replace legacy natural gas pipelines. Through its due diligence approach to regulated utility lending, LPO confirmed that this individual project met all program eligibility requirements for inclusion in the guaranteed loan facility, illustrating Consumers Energy’s ability to identify and execute eligible projects.
The guarantee will help Consumers Energy meet its ambitious goal of net-zero greenhouse gas emissions for the entire business by 2050. By supporting Consumers Energy’s ongoing legacy pipeline replacement program, LPO will help the utility reduce methane leaks from its existing operations and support Consumers Energy’s efforts to attain net zero methane emissions from its natural gas operations by 2030.
LPO borrowers are required to develop and ultimately implement a comprehensive Community Benefits Plan that 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. Consumers Energy’s planned retirement of coal facilities will reduce particulate matter, improving air quality for local communities. The gas line replacements will reduce safety risk inherent in the operation of legacy infrastructure. The distributed nature of Consumers Energy’s projects will not only provide increased resiliency to severe weather events but will also extend the benefits of Consumers Energy’s investments across the communities it serves.
The Inflation Reduction Act of 2022 created the EIR category under the Title 17 Clean Energy Financing Program. 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.
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 DOE and Consumers Energy enter into definitive financing documents.