Feds Provide Record $27B Loans for Georgia and Alabama Utility Expansion

Loans will fund new natural gas plants, transmission lines, and power plant upgrades to meet growing demand from data centers.

Published on Feb. 26, 2026

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The U.S. Department of Energy announced a record $27 billion in loans to electric utilities in Georgia and Alabama, subsidiaries of Southern Company, to fund a major expansion of their power infrastructure. The loans will allow the companies to build new natural gas power plants, construct new transmission lines, and upgrade existing facilities to meet growing electricity demand, particularly from the proliferation of data centers in the region.

Why it matters

The federal loans are intended to help keep electricity rates affordable for customers in Georgia and Alabama as the utilities undertake significant infrastructure upgrades. However, some critics argue the loans amount to a 'bailout' that will lock in high utility profits and rates, rather than taking advantage of declining costs for renewable energy sources.

The details

The loans include $22.4 billion for Georgia Power and $4.1 billion for Alabama Power, both subsidiaries of Southern Company. The funds will be used to build new natural gas power plants, construct new transmission lines, and upgrade existing facilities. Federal officials say the lower, subsidized interest rates on the loans will save customers over $7 billion compared to commercial financing.

  • The loans were announced by federal energy officials on February 26, 2026.
  • Last July, Georgia regulators approved a 3-year rate freeze requested by Georgia Power.
  • In December, Alabama regulators approved a 2-year rate freeze for Alabama Power.

The players

Georgia Power

A subsidiary of Southern Company and one of the electric utilities receiving a major federal loan for infrastructure expansion.

Alabama Power

A subsidiary of Southern Company and one of the electric utilities receiving a major federal loan for infrastructure expansion.

Southern Company

One of the largest utility companies in the United States, owning the Georgia Power and Alabama Power subsidiaries that are receiving the federal loans.

Chris Wright

The U.S. Energy Secretary who announced the record $27 billion in federal loans for utility expansion in Georgia and Alabama.

Chris Womack

The chairman, president, and CEO of Southern Company.

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What they’re saying

“We're focused on driving down costs. These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers.”

— Chris Wright, U.S. Energy Secretary (wbal.com)

“As a taxpayer, it's hard to avoid the fact that this is a bailout paid for by every taxpaying citizen of the United States.”

— Jennifer Whitfield, Attorney, Southern Environmental Law Center (wbal.com)

What’s next

The loans will need to be approved by the elected Public Service Commissions in Alabama and Georgia, who will determine if the projected customer savings are realized.

The takeaway

This record federal loan for utility infrastructure expansion in the Southeast highlights the ongoing tensions between providing affordable, reliable electricity and transitioning to cleaner, renewable energy sources. While the loans aim to keep rates down, some critics argue they will lock in high utility profits and stifle the adoption of lower-cost renewable alternatives.