Duke Energy (NYSE: DUK) submitted an application to the U.S. Department of Energy for loans aimed at reducing customer costs while strengthening the electric grid and adding capacity. The company stated the loans could potentially save customers billions of dollars through lower financing costs.

The application represents the first step in a process to negotiate the final loan amount and terms. Duke Energy said the federal financing would reduce interest costs for planned investments in grid infrastructure and capacity expansion to meet rising energy demand.

"Delivering reliable power at the lowest possible cost is central to every decision we make," said Harry Sideris, president and CEO of Duke Energy. "That means pursuing every opportunity like federal loans when they can help reduce costs for customers."

The Charlotte-based utility company serves 8.7 million electric customers across North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, with 55,700 megawatts of energy capacity. Its natural gas utilities serve 1.6 million customers in North Carolina, South Carolina, Ohio and Kentucky.

Duke Energy announced earlier this month that it was delivering more than $5 billion in cost-saving benefits to customers through the combination of its Carolinas utilities and tax-credit savings, including nuclear and solar production tax credits and investment tax credits expected between 2025 and 2028 in Florida and the Carolinas.

The company noted that rates in all of its vertically integrated states are below the national average due to its state-regulated utility model that enables reduced financing costs to flow directly to customers.