The U.S. Energy Department has offered a $26.54 billion loan to subsidiaries of Southern Co to increase grid reliability, the largest ever such financing by its loan office, the department said on Wednesday.
The loans will save power customers in Georgia and Alabama more than $7 billion, the department said, without detailing how. Southern said last year it would freeze increases in power bills for several years.
The two roughly 30-year loans to Georgia Power and Alabama Power will help build or upgrade more than 16 gigawatts of power to the electrical grid, including 5 GW of new natural gas generation.
It will also help enlarge current nuclear plants, modernize hydropower plants, and develop battery energy storage systems and over 1,300 miles (2,092 km) of transmission and grid enhancement projects, the department 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,” U.S. Energy Secretary Chris Wright said in a release.
Chris Womack, the chairman, president and CEO of Southern Company, 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”.
Southern said draws from the loans are subject to the satisfaction of conditions, and may be made through September 15, 2033.
(Reporting by Timothy Gardner and Pranav Mathur in Bengaluru; Editing by Shilpi Majumdar and Jan Harvey)