U.S. Energy Department Announces $26.5 Billion Loan for Southern Company to Support Generation and Grid Upgrades

The U.S. Energy Department’s Office of Energy Dominance Financing on Feb. 25 announced a $26.5 billion financing package to support major electricity infrastructure investments by Southern Company subsidiaries serving Georgia and Alabama. The initiative is designed to lower electricity costs, strengthen grid reliability, and expand firm generation resources across the Southeast.

The loans will fund projects delivering more than 16 gigawatts of firm generating capacity and grid improvements. Planned investments include 5 gigawatts of new natural gas generation, about 6 gigawatts of nuclear capacity enhancements through uprates and license renewals, hydropower modernization, battery storage deployment, and more than 1,300 miles of transmission upgrades. The financing aims to strengthen grid resilience while supporting growing electricity demand.

The department estimates the package will result in more than $7 billion in electricity cost savings for customers and reduce Southern Company’s annual interest expenses by over $300 million once funds are fully deployed. Lower financing costs are expected to accelerate consumer rate relief and support multiyear rate freezes previously outlined by the utility.

The department noted that the initiative marks the largest federal financing effort focused directly on lowering consumer electricity costs while improving grid reliability. The effort aligns with broader federal priorities to expand domestic energy infrastructure, support job creation, and ensure reliable power supply amid rising demand and weather-related system stresses.

Southern Company is among the first utilities participating in the administration’s energy financing initiatives designed to promote affordable and secure electricity service.