The Biden administration conditionally approved a loan of up to $1.8 billion to Arizona’s largest electric utility as the state works to tackle skyrocketing electricity demand and the closure of major coal plants.
The loan guarantee from the Department of Energy’s Loan Programs Office will help Arizona Public Service (APS) build a large battery energy storage system paired with an existing solar site. The loan could also be used to fund additional battery facilities, new wind energy or solar power and transmission infrastructure.
“We appreciate the opportunity for potential funding for new energy resources to meet growing energy demand,” said APS spokesperson Ann Porter. “The conditional commitment is an important milestone in an application process that involves continued engagement with the Department of Energy to achieve closing.”
The announcement comes as Arizona has become a hot spot for the challenges facing the electricity sector. A growing population, manufacturing growth, data center construction and extreme weather are all driving up demand in the state.
