Federal loan could fund Wisconsin natural gas and battery storage projects

Wisconsin ratepayers could see $400 million in savings over the life of a massive federal loan package finalized for Alliant Energy, a deal that links national grid reliability efforts with local investments in natural gas and energy storage.

The U.S. Department of Energy announced a $5.1 billion loan to Alliant Energy, including $1.6 billion earmarked for Wisconsin Power and Light, the state’s third-largest electrical utility. Wisconsin Watch reported that the funding could support a new natural gas storage facility in Rock County alongside two battery storage projects in southwestern Wisconsin and near Sheboygan.

Projects Awaiting State Oversight

While the federal financing is secured, the journey from Washington to local construction sites is far from complete. All three proposed Wisconsin projects still require formal approval from the Wisconsin Public Service Commission.

Alliant spokesperson Cindy Tomlinson noted that the federal dollars could support several paths, including restarting shuttered power plants, building new natural gas facilities, or expanding storage infrastructure. Across the border, KCRG reported that the overarching $5.1 billion package includes $800 million in projected lifetime interest savings for Iowa customers, where Alliant also operates.

The financing stems from the U.S. Department of Energy’s Loan Programs Office. That office initially focused on supporting clean energy projects under the Biden administration before navigating discussions around restructuring or cancelling existing loans following President Trump’s return to the White House in January 2025.

Grid Reliability and Changing Energy Demands

The revised loan agreement avoids explicitly barring renewable energy infrastructure. Instead, the terms direct funding toward projects that increase energy supply or enhance grid reliability, encompassing nuclear, coal, oil, natural gas, geothermal, and hydropower generation facilities.

U.S. Secretary of Energy Chris Wright stated that the financing delivers on a federal commitment to lower electricity costs and expand domestic energy capabilities through the Office of Energy Dominance Financing. Alliant also applied for a federal grant in June to extend the operational life of coal-fired generators at the Columbia Energy Center near Portage, reversing earlier plans to retire those units before the end of the decade.

Company earnings reports highlight an anticipated 60% load growth by 2031, driven heavily by contracted demand from data centers. This surge in electricity consumption has sparked local debates. In Iowa, clean energy advocates and local groups have contested whether utilities are using data center growth to justify constructing new fossil fuel generation, such as the proposed Morgan Valley Energy Center in Linn County.

The Long-Term Economic Outlook

For Wisconsin ratepayers, the primary question revolves around how long-term debt servicing translates into monthly utility bills. Alliant estimates the financing structure will shave hundreds of millions off operational and interest expenses over the next few decades.

Federal loan could fund Wisconsin natural gas and battery storage projects — Photo: kcrg.com

“To the extent that tax dollars are used to help pay for projects that are approved, that should lower the overall cost over 20-40 years.”

As state regulators begin reviewing the specific facility proposals in Rock County, Sheboygan, and the state’s southwest region, the intersection of federal financing and state utility oversight will determine how these projects reshape the local grid.