US Closes Record $26.5 Billion Loan to Back Southern Co. Grid Projects

The Energy Department stated on Feb. 25 that it had closed a record $26.5 billion loan package to support power generation and grid projects in Georgia and Alabama, in what officials described as the largest loan in the department’s history.

The financing is expected to deliver more than $7 billion in electricity cost savings to millions of customers served by subsidiaries of Southern Co., according to a statement from the department.

The loans are funded under President Donald Trump’s Working Families Tax Cut and align with Trump’s executive order “Unleashing American Energy,” which is aimed at expanding domestic energy production and grid reliability.

“Thanks to President Trump and the Working Families Tax Cut, the Energy Department is lowering energy costs and ensuring the American people have access to affordable, reliable, and secure energy for decades to come,” Energy Secretary Chris Wright said.

He noted that the administration intends to “reverse the energy subtraction agenda of past administrations.”

“These loans will not only lower energy costs but also create thousands of jobs and increase grid reliability for the people of Georgia and Alabama,” Wright said.

Power, Grid Expansion

According to the department, the loans will support construction or upgrades totaling more than 16 gigawatts of firm, reliable power capacity.

That includes 5 gigawatts of new natural gas generation and about 6 gigawatts of nuclear capacity through plant upgrades and license renewals.

The financing will also cover hydropower modernization, battery energy storage systems, and more than 1,300 miles of transmission and grid enhancement projects.

Once fully drawn, the Energy Department estimates that the financing will reduce Southern Co.’s interest expenses by more than $300 million per year, helping speed the delivery of lower electricity costs to customers.

Grid Resilience

Southern Co. CEO Chris Womack said in a Feb. 25 statement that the financing would help the company manage projected growth while maintaining rate stability.

“These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers,” Womack said.

Southern Co. stated that the projects funded by the loans will support power generation from natural gas, nuclear uprates and license extensions, hydropower and battery storage, and transmission system improvements.

The investments are intended to serve Alabama Power and Georgia Power customers, which together total about 4.3 million.

The company stated that its regulated utility structure provides “an orderly and transparent framework” for working with regulators on large-scale infrastructure investments.