Georgia Power gets largest federal energy loan to aid data center expansion

Georgia Power will receive the bulk of the money, about $22.5 billion, and Alabama Power will get roughly $4.1 billion, a DOE official confirmed with The Atlanta Journal-Constitution.

The loans are financed with taxpayer money and come with a lower interest rate than if the electric companies went to the private markets. The utilities must pass the savings to customers as a condition of the loan, the DOE officials said.

“I think we all recognize that the importance of what I call rate stability and importance of what I call downward pressure on rates,” Chris Womack, Southern’s president and CEO, said in an interview with the AJC.

The deal was borne from an already existing relationship between Southern and what was previously known as the DOE’s Loan Programs Office, according to the department’s new director, Greg Beard. He considers the loans a tool to implement policy directives from President Donald Trump and Energy Secretary Chris Wright that answers the question of how to power data centers to support artificial intelligence without raising the price of electricity for other customers.

“I couldn’t be happier that we’re starting with Southern in Georgia and Alabama,” Beard told the AJC.

While President Joe Biden was in office, Georgia was also the recipient of significant DOE loan support.

Rivian received a $6 billion loan to support construction of the new electric vehicle factory the company is building about 50 miles east of Atlanta. Cox Enterprises, which owns The Atlanta Journal-Constitution, also owns about a 3% stake in Rivian.

Solar company Qcells was awarded a $1.45 billion loan to aid the expansion of its manufacturing footprint in northwest Georgia.

Under Trump, the DOE has taken a different tack. Trump, who has been openly hostile to electric vehicles, solar and other clean energy, has steered the country’s energy policy to boost the fossil fuel industry. The burning of fossil fuels is the biggest contributor to the worsening impacts of global warming.

“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,” Wright said in a statement. “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 money will aid construction of 5 gigawatts of new gas-burning units, the DOE said.

Some of those projects are part of the almost 10 gigawatts of new gas-burning power plants, battery storage systems and some solar Georgia Power received regulators’ approval to add last year. The expansion — the largest in Georgia Power’s history — is set to unfold over the next five years and cost as much as $60 billion, according to some estimates.

Almost all the new capacity is to serve data centers cropping up across Georgia. But critics have warned that not all of those power resources are necessary, and that residential customers could face higher bills if the data center projects Georgia Power is planning don’t pan out.

The DOE loans will also support upgrades to existing gas and nuclear units across Georgia, including at Plant Vogtle outside Augusta and Plant McIntosh near Savannah, along with grid expansion projects.

Southern says customers will save

Critics of federal spending argue those dollars wind up going to salaries and other overhead costs instead of their intended destination. Beard said his department will review each of Georgia Power’s projects to ensure the money will help lower what customers would be paying if Southern went to the private market for capital.

“We are going to be the last gatekeeper to make sure any projects related to this financing will go to lower ratepayer costs,” Beard said.

Last October, the DOE issued $1.6 billion in loan guarantees to a unit of Ohio-based American Electric Power to upgrade roughly 5,000 miles of transmission lines in five states.

To receive the loans, electric companies must provide reasonable assurance they can be repaid; the projects must help the power grid become more affordable, reliable and secure; and the technology must be commercially operating, according to the DOE. In other words, no first-of-a-kind technology like advanced nuclear reactors that are still in the design and development phases are eligible.

Beard said Southern “understands the administration’s mandate” when it comes to building out the power grid and not raising electricity prices.

Trump has repeatedly claimed renewable energy is more expensive and less reliable than fossil fuels, but evidence shows that’s often not the case.

For Southern’s part, Womack said the loans will go toward making the power grid more reliable and resilient. That was what started Southern’s conversation with the DOE in the first place.

“We began to explain and talk about the value of these loans and their support of a whole wide range of projects and the benefits that these loans can provide to customers because of lower financing costs,” he said.

Nuclear ‘uprates’

This is not the first time Georgia Power has leaned on federal assistance for major energy infrastructure projects.

Southern, Georgia Power and a group of public power utilities were awarded a total of $11.8 billion during President Barack Obama’s administration and Trump’s first term to support the construction of two nuclear units at Plant Vogtle. The Vogtle expansion was completed in 2024 but was plagued by delays and cost overruns. The project ultimately cost around $35 billion, more than $20 billion over its initial estimated price tag.

A portion of the loan package will aid Georgia Power’s plans to improve the efficiency of its older nuclear reactors and ask the federal government for permission to run them for 80 years instead of 60.

Among those set to receive upgrades are Plant Vogtle Units 1 and 2, which have been in service since the late 1980s. At full tilt, each reactor generates about 1,200 megawatts of electricity, enough to power roughly 500,000 homes.

Last year, the Public Service Commission approved Georgia Power’s plans to increase the units’ power output, known as an “uprate,” when it signed off on the utility’s “Integrated Resource Plan,” its road map for generating electricity over the next two decades.

The uprates would boost the total capacity of Vogtle Units 1 and 2 by 3.4%, or about 41 megawatts, according to documents Southern Nuclear has submitted to federal regulators.

The PSC last year also gave Georgia Power permission to “proceed with preliminary planning, licensing and engineering” for similar upgrades to two nuclear units at Plant Hatch. About 90 miles west of Savannah, Hatch’s units have been generating electricity since the 1970s.

For both projects, the PSC has required that Georgia Power submit semiannual status reports.

A note of disclosure

This coverage is supported by a partnership with Green South Foundation and Journalism Funding Partners. You can learn more and support our climate reporting by donating at AJC.com/donate/climate.