Dive Brief:
- The U.S. Department of Energy said Wednesday it has closed a $26.5 billion loan package to Southern Co. to build or upgrade 16.7 GW of grid resources, including 5 GW of new gas generation.
- It is the largest loan in DOE’s history, and officials say it will deliver over $7 billion in cost savings for customers of Southern subsidiaries Georgia Power and Alabama Power.
- Southern serves 9 million customers across the Southeast. Last week it announced that its five-year multistate spending plan now sits at $81 billion as it works to meet growing electricity demand. The DOE loan "will support the extraordinary and transformative projected growth we're seeing across our company,” said Chris Womack, Southern’s chairman, president and CEO.
Dive Insight:
DOE said the loans will support new gas generation as well as 6.3 GW of nuclear through upgrades and license renewals, 1 GW of hydropower modernization, battery energy storage systems and over 1,300 miles of transmission distribution system projects.
A fact sheet DOE provided specifies the loans will result in 5.3 GW of new gas generation and nearly 500 MW in gas capacity upgrades. The additions include three new natural gas turbines totaling 1.3 GW at the Yates Power Plant in Georgia, set to be online by the end of 2027. Southern will add additional generation at three other plants by the end of 2030, DOE said.
The 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.
According to a DOE statement, the loans represent “the largest government investment aimed at directly lowering consumer energy costs and increasing grid reliability.” The agency said the loans are estimated to reduce Southern’s interest expenses by over $300 million annually, “helping expedite lower electricity costs for customers.”
Georgia Power’s base rates are currently frozen through at least the end of 2028 under an agreement the state’s Public Service Commission approved in 2025. Alabama Power’s rates are also frozen through 2027 under a voluntary moratorium the utility requested.
