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By Amanda Greenwood
Associate News Editor
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The U.S. Department of Energy (DOE) has closed a $26.5 billion loan package to support two subsidiaries (Alabama Power and Georgia Power) of Southern Company—an Atlanta‑based energy company that owns and operates regulated electric and natural gas utilities across the southeast.
The "unprecedented" move is expected to deliver more than $7 billion in electricity cost savings to millions of customers over the loan term, according to the agency’s press release, and "create thousands of jobs, and increase grid reliability in Georgia and Alabama".
Why It Matters
Federal officials said the loan is designed to lower energy costs, increase grid reliability, and support a portfolio that includes natural gas generation, hydropower modernization, battery energy storage systems, and transmission upgrades, with the DOE estimating more than $7 billion in customer savings over roughly 30 years.
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This comes after an Inside Climate News investigation found that Alabama Power customers are paying the highest average residential electricity bills in the nation, even as the utility posts strong profits in one of the country’s poorest states.
What To Know
The DOE said its Office of Energy Dominance Financing closed two loans, together forming the largest loan package in the department’s history.
The agency said the investments are intended to add or upgrade more than 16 gigawatts of firm, reliable power—generation that can be counted on during peak demand—and more than 1,300 miles of high‑voltage transmission lines and supporting grid infrastructure in Georgia and Alabama.
According to PR Newswire, Southern Company said the financing is expected to lower borrowing costs and help maintain rate stability as demand grows, particularly across Alabama Power and Georgia Power’s roughly 4.3 million customers.
The department said lower-cost federal financing is expected to reduce Southern Company’s annual interest expenses by more than $300 million once all funds are received through the program, helping deliver lower electricity costs to customers.
What People Are Saying
U.S. Energy Secretary Chris Wright said the "Energy Department is lowering energy costs and ensuring the American people have access to affordable, reliable, and secure energy for decades to come."
Southern Company Chairman, president and CEO, Chris Womack said “these investments will support the extraordinary and transformative projected growth we’re seeing across our company. These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers.”
What Happens Next
PR Newswire reported that Southern Company said loan draws might occur through September 15, 2033, subject to certain conditions, and that actual customer savings will depend on the amount and timing of the borrowings and the interest rate savings realized as projects progress.
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