The Department of Energy has finalized a $26.5 billion loan package to build and upgrade several gigawatts’ worth of power to be added to the electrical grids in Georgia and Alabama, marking the largest loan in the agency’s history.
The Energy Department announced the record loan package on Wednesday morning, just hours after President Donald Trump delivered his State of the Union address to Congress.
The loan package will support two wholly owned subsidiaries of gas and electric utility Southern Company, and is expected to deliver over $7 billion in electricity cost savings across Georgia and Alabama, the Energy Department said.
“The President has been clear: America must reverse the energy subtraction agenda of past administrations and add more reliable power generation to our electrical grid,” 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 funds from the loans will go toward building or upgrading over 16 gigawatts of what the agency described as “firm reliable power,” including 5 gigawatts’ worth of new gas generation, 6 gigawatts’ worth of nuclear energy license renewables and capacity upgrades, one gigawatt in hydropower modernization, and 3.5 gigawatts worth of battery energy storage systems.
The loans will also support over 1,300 miles of transmission and grid enhancement projects.
The Energy Department estimates that, once the funds are received by the Southern Company subsidiaries, they will reduce the utility’s interest expenses by over $300 million per year.
Of the total $26.5 billion, just over $4 billion will go to the Alabama Power Company, while the remaining $22.4 billion is allocated for the Georgia Power Company, according to the Energy Department’s Loan Programs Office, which has been rebranded as the Office of Energy Dominance Financing.
EDF director Greg Beard told reporters following the announcement that the funds will support hundreds of separate projects over the next eight years, supporting thousands of jobs.
“Each project will be individually reviewed by the EDF team at DOE to assure that the project dollars are going to result in lower cost for ratepayers, including projects related to hyper-scaler data centers,” Beard said.
These two loans bring the total number of active projects receiving loans from the Energy Department to five.
In January, the Trump administration canceled nearly $30 billion in loans for clean energy projects finalized under former President Joe Biden and said it would be revising an additional $53 billion to support the president’s energy dominance agenda.
TRUMP ADMINISTRATION CANCELS $30 BILLION IN GREEN ENERGY LOANS FINALIZED UNDER BIDEN
The administration plans to leverage the agency’s lending authority to support the development of grid infrastructure, natural gas infrastructure, and, more prominently, new nuclear energy technology.
As of January, the agency’s loan office had more than $289 billion available in its loan authority.
