DOE backs Southern with record $26.5 B loan
Funding supports new gas generation, grid upgrades and lower customer costs across Georgia and Alabama.
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USA, Georgia / Alabama: The US Department of Energy (DOE) has finalised a $26.5 B loan package for Southern Company to support major investments in power generation and grid infrastructure across the southeastern United States. The DOE described it as the largest loan in the agency’s history.
The financing will help Southern build or upgrade around 16.7 GW of grid resources, including more than 5 GW of new natural gas-fired generation. According to the DOE, the package is expected to deliver more than $7 B in cost savings for customers of Southern’s subsidiaries, Georgia Power and Alabama Power.
Southern serves around 9 million customers across the Southeast and recently increased its five-year, multi-state investment plan to $81 B to respond to rising electricity demand. The company said the DOE support will help fund reliability, resilience and capacity expansion across its system.
In addition to new gas capacity, the loans will back upgrades and licence renewals for around 6.3 GW of nuclear generation, modernisation of 1 GW of hydropower, battery energy storage projects and more than 2100 km (1,300 mi) of transmission and distribution system improvements.
The DOE confirmed that the gas investments include approximately 5.3 GW of new capacity and nearly 500 MW of upgrades. This includes three new natural gas turbines totalling 1.3 GW at the Yates Power Plant in Georgia, scheduled to enter service by the end of 2027. Further additions at other plants are planned by 2030.
The DOE estimates the loans will reduce Southern’s interest costs by more than $300 M per year, helping limit electricity price impacts for customers. Base rates at Georgia Power and Alabama Power are currently frozen through 2028 and 2027 respectively.
Source: Utility Dive
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#DOE loan#grid investment#Southern Company#transmission upgrades