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Stock Markets February 25, 2026

U.S. Energy Department Extends $26.54 Billion Loan to Southern Co Subsidiaries - Biggest Financing to Date

Two roughly 30-year loans aim to expand generation, storage and over 1,300 miles of transmission in Georgia and Alabama

By Sofia Navarro SO
U.S. Energy Department Extends $26.54 Billion Loan to Southern Co Subsidiaries - Biggest Financing to Date
SO

The U.S. Department of Energy has offered $26.54 billion in financing to subsidiaries of Southern Co to strengthen grid reliability and expand generation capacity across Georgia and Alabama. The funding - the largest ever issued by the department's loan office - covers upgrades and additions across generation, nuclear, hydro, battery storage and transmission, and is projected to produce more than $7 billion in savings for local customers, according to the department.

Key Points

  • The Department of Energy offered $26.54 billion in loans to subsidiaries of Southern Co, the largest financing to date from its loan office.
  • Two roughly 30-year loans to Georgia Power and Alabama Power will support more than 16 GW of grid capacity additions and upgrades, including 5 GW of new natural gas generation, nuclear plant enlargements, hydropower modernization, battery storage and over 1,300 miles of transmission improvements.
  • The department says the financing will save power customers in Georgia and Alabama more than $7 billion and create thousands of jobs, according to statements from officials.

The U.S. Department of Energy announced on Wednesday an offer of $26.54 billion in loans to subsidiaries of Southern Co, aimed at shoring up grid reliability in Georgia and Alabama. The department said this package represents the largest single financing extended by its loan office.

According to the department, the financing will go to two roughly 30-year loans provided to Georgia Power and Alabama Power. The loans are intended to support the construction or upgrade of more than 16 gigawatts of capacity to the electrical grid, including 5 gigawatts of new natural gas generation.

Beyond the new gas capacity, the department said the funds will be used to expand existing nuclear plants, modernize hydropower facilities, deploy battery energy storage systems and complete more than 1,300 miles (2,092 km) of transmission and grid enhancement projects.

The Energy Department also said the loans will deliver more than $7 billion in savings to power customers in Georgia and Alabama, though it did not provide details on the calculation or mechanisms for those savings.

Official comments

U.S. Energy Secretary Chris Wright described the financing as delivering both cost reductions and broader economic benefits, saying, "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."

Southern Company's chairman, president and CEO Chris Womack 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."

Timing and conditions

Southern noted that draws from the loans are subject to the satisfaction of conditions and that any draws may be made through September 15, 2033. The department did not provide a detailed timeline for project milestones or disbursement schedules.

The package targets multiple elements of the power system - generation, nuclear uprates, hydro modernization, storage and extensive transmission work - reflecting a multi-faceted approach to strengthening regional grid performance.

Risks

  • Loan draws are conditional - Southern said draws are subject to the satisfaction of conditions, which introduces uncertainty in the timing and certainty of funding.
  • The department reported expected savings of more than $7 billion for customers but did not detail how those savings will be calculated or achieved.
  • Disbursements may be made through September 15, 2033, which implies a long timeframe for full deployment of funds and project completion.

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