The U.S. Department of Energy announced Feb. 25 it will provide a loan package totaling $26.5 billion to Southern Co. that it said will deliver savings for ratepayers while enhancing grid reliability in Georgia and Alabama.
According to a statement, DOE will provide the loans under the Office of Energy Dominance Financing, the new name for the Loan Programs Office, to Southern utilities Georgia Power and Alabama Power. The 30-year package is the largest loan in the department’s history, it said.
The loans will support the building or upgrading of projects representing over 16 GW, including 5.3 GW of new gas generation and nearly 500 MW of capacity upgrades at existing gas plants; upgrades and license renewals for nuclear facilities totaling 6.3 GW; and modernization and enhancement projects at hydropower facilities representing 1 GW.
Battery energy storage system projects are also part of the funding package, along with about 1,300 miles of transmission and grid enhancement projects. DOE said in a fact sheet that the loans will “provide $7.3 billion in estimated customer savings” and reduce Southern’s interest expenses by $300 million/year, while Southern CEO Chris Womack said in a separate statement that the financing “will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers.”
“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. “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 financing announcement came the week after Southern released its fourth-quarter earnings, reporting net income of $4.3 billion for the year 2025, down from $4.4 billion the previous year. (See Southern Forecasts Continued Large Loads Growth.) The company announced plans to invest $81 billion across its subsidiaries through 2030, an expansion of the previously planned $63 billion; the main driver is new generation facilities, including five combined cycle plants, three combustion turbines, two combined solar and battery plants and 17 BESS facilities.
Both Georgia Power and Alabama Power have received permission from their state regulators to freeze base rates for several years. Georgia’s Public Service Commission in July 2025 approved Georgia Power’s plan to freeze rates through the end of 2028, and the Alabama Public Service Commission in December accepted a two-year halt on increases to Alabama Power’s rates. The PSCs’ decisions did not apply to storm recovery costs.
The loans to Southern follow $4.1 billion in financing provided to Constellation Energy to restart the Three Mile Island nuclear plant; an American Electric Power subsidiary to strengthen its transmission system; and Wabash Valley Resources to use a coal plant to produce fertilizer. The Office of Energy Dominance Financing has more than $289 billion in available loan authority and plans to prioritize projects in 2026 that it says contribute to energy security, grid reliability and affordability.
