U.S. DOE Gives Out Its Largest Ever Loan, $26.5 Billion to Southern Company for Natural Gas, Nuclear, Hydro, Batteries, and Power Transmission in Georgia and Alabama

   The U.S. Department of Energy just issued its largest-ever loan to subsidiaries of Southern Company for electricity projects in Georgia and Alabama. The loan is for new gas power plants, improvements to existing nuclear and hydroelectric plants, battery storage, and transmission lines. Energy Sec Chris Wright noted that the loan will enable data center buildout and the reshoring of American manufacturing. Southern Company also announced that it will freeze power prices for customers for two years. The loan totals $26.5 billion. Subsidiary Georgia Power would get $22.5 billion, and Alabama Power would get $4.1 billion. Greg Beard, director of the department’s loans office, noted:

“This is the largest investment by the U.S. government ever in a non-crisis time.”

     The loan involves the development and improvement of up to 16 GW of power generation. According to the DOE, the loan aims to lower consumer electricity costs and increase grid reliability. Over the 30-year term of the loan, getting the loan from DOE instead of private sources offers the company about $7 billion in savings. The DOE stipulated that the $7 billion in savings would be delivered to millions of customers in Georgia and Alabama.

     Wright noted:

"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.”

     The Southern Company is planning for about 5 GW of new gas-fired generation, along with 6 GW of nuclear power through upgrades and license renewals for eight existing reactors. The loan will also modernize hydroelectric facilities, develop battery storage systems, and pay for transmission and associated upgrades.

     The state of Georgia has pending legislation to protect ratepayers from power cost increases associated with data centers. The state is also moving to end incentives to attract more data centers. Apparently, they think they are full enough with ongoing projects.

     DOE also noted that the loan will cover over 1,300 miles of transmission and grid enhancement projects.

“Once all funds are received through the program, the loans are estimated to reduce Southern Company’s interest expenses by over $300 million per year, helping expedite lower electricity costs for customers.”

   

References:

 

Energy Department doles out its largest-ever loan: $26.5B for power in Georgia, Alabama. Rachel Frazin. The Hill. February 25, 2026. Energy Department doles out its largest-ever loan: $26.5B for power in Georgia, Alabama

Southern Company awarded $26.5B loan by Energy Department. Alton Wallace. The Center Square. February 26, 2026. Southern Company awarded $26.5B loan by Energy Department

Energy Department Announces Largest Loan in Department History, Delivering Over $7 Billion in Electricity Cost Savings for Georgia and Alabama Customers. U.S. Department of Energy. February 25, 2026. Energy Department Announces Largest Loan in Department History, Delivering Over $7 Billion in Electricity Cost Savings for Georgia and Alabama Customers | Department of Energy