The U.S. Department of Energy has canceled a pending $1.8 billion loan guarantee to Arizona Public Service that was intended to help finance transmission, renewable energy and storage projects.
DOE announced Jan. 22 that its Office of Energy Dominance Financing was revising or eliminating more than $83 billion in “green new scam” loans and conditional commitments. The action followed a yearlong review of the loan obligations from the Biden administration, “including approximately $85 billion rushed out the door in the final months after election day,” DOE said. The Office of Energy Dominance Financing is the new name for DOE’s Loan Programs Office.
Following its announcement, DOE sent RTO Insider a list of projects that had been fully or partly de-obligated and made public. Other de-obligations are underway but haven’t been publicly revealed yet, a spokesperson said, and other projects have been de-obligated but not made public.
A project called APS ReCoVR is on the list of projects as a de-obligated conditional commitment. Although the list did not include project details, DOE’s Loan Programs Office announced in January 2025 a conditional commitment for an up-to $1.81 billion loan guarantee to APS to help finance new or upgraded transmission, renewable power generation, and grid-integrated energy storage systems.
The first project targeted for financing assistance was Phase 1 of the Agave battery energy storage system, a four-hour, 150-MW project to be built next to an existing solar power plant.
One requirement of the program was that savings from the financing assistance would be passed on to customers. The APS loan guarantee was expected to save customers $250 million by reducing the cost of debt.
APS representatives didn’t respond to a request for comment.
APS applied for the loan guarantee in November 2023. The approval was conditional, and APS and DOE still needed to work out technical, legal, environmental and financial conditions before it was finalized.
The application came around the same time the company filed its 2023 integrated resource plan with the Arizona Corporation Commission. The plan projected that APS would need to increase its resources from 9,400 MW to 11,350 MW in 2027, 13,000 MW in 2031 and 14,820 MW in 2038. (See APS IRP Envisions Increased Renewables, Natural Gas.)
Other projects for which the DOE de-obligated a conditional loan guarantee include the Grain Belt Express transmission line. DOE announced the termination of the $4.9 billion commitment in July 2025, saying federal support for the project was “not critical.” The Biden administration issued the conditional approval in November 2024. (See DOE Pulls $4.9B in Funding for Grain Belt Express.)
Grain Belt Express, an 800-mile HVDC line, would move a diverse mix of energy from Kansas to Indiana. The Invenergy project could power 50 data centers, the project website said.
