AEP Texas Secures $3.26 Billion DOE Grid Modernization Loan

The U.S. Department of Energy finalized a $3.26 billion loan to AEP Texas, a subsidiary of American Electric Power, to modernize the state's electric grid. Provided through the Office of Energy Dominance Financing, the funding supports between 89 and 100 projects to deploy approximately 2,800 miles of high-capacity transmission lines across south central and west Texas.

This infrastructure is designed to meet surging power demands from AI data centers, advanced manufacturing, and oil and gas operations in the Permian Basin, supporting up to 41 gigawatts of new load additions through 2030. The investment focuses on grid reliability and heavy industrial upgrades over emissions-reduction mandates, marking the third utility financing completed under the Trump administration's Energy Dominance Financing Program.

By utilizing federal financing at a lower interest rate than traditional markets, the utility expects to deliver an estimated $685 million in total savings to customers over the next 30 years. This follows a broader strategy by American Electric Power to secure federal funding across its 11-state territory, including a separate $1.6 billion loan guarantee received in 2025.