(The Center Square) – Development of electricity infrastructure by the Southern Company in Georgia and Alabama capable of generating up to 16 gigawatts of power will be funded through a $26.5 billion loan under Office of Energy Dominance Financing, said Energy Secretary Chris Wright.
The loan will support development of new power generation and grid upgrades as the Atlanta-based company works to meet escalating demand for electricity from scores of energy-hungry data centers in Georgia along with industrial customers in Alabama.
Funded under second-term Republican President Donald Trump’s Working Families Tax Cut, the loan represents the largest investment made by the federal government aimed directly at lowering consumer electricity costs and increasing grid reliability, according to the Energy Department.
Over the approximately 30-year term of the loan, customers of Southern Company subsidiaries Georgia Power and Alabama Power will save approximately $7 billion, according to the department. A total of $22.4 billion will go to Georgia Power and $4.1 billion to Alabama Power.
“Thanks to President Trump and the Working Families Tax Cut, the Energy Department is lowering energy costs and ensuring the American people have access to affordable, reliable, and secure energy for decades to come,” 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 funding will finance new power generation and plant upgrades expected to deliver more than 16 gigawatts of electricity to the grid. The Southern Company’s plans call for about 5 gigawatts of new gas-fired generation along with 6 gigawatts of nuclear power through upgrades and license renewals for eight existing reactors.
The funds will also be used to modernize hydroelectric power generation, in the development of battery storage systems, and on transmission and grid enhancement projects, according to the Department of Energy.
Last May, Georgia Power agreed to freeze rates through the end of 2028. The Georgia Public Service Commission approved the rate freeze in July 2025.
The Alabama Public Service Commission approved a voluntary moratorium in December effectively freezing customer electric rates through the end of 2027.
In January, the average price for electricity paid by Georgia Power customers was up 6.3% from the previous year while general consumer prices had risen by only 2.4%.
In his State of the Union address on Tuesday, Trump announced a new “Ratepayer Protection Pledge.” The president said tech companies have an “obligation to provide for their own power needs” and that they should build on-site power plants.
While the federal loan aims to lower costs for all Southern Company customers by providing low-interest financing, Georgia lawmakers are pushing legislation that would ensure residential customers do not subsidize the massive power needs of data centers.
Georgia House Bill 1063, passed Feb. 17, would require utilities to write contracts that shield existing customers from the construction and operational costs of new data center infrastructure. Similar legislation in the Georgia Senate with weaker consumer protections is now in committee.
The state has used sales and use tax exemptions to attract data centers, but Georgia lawmakers are now moving to end those incentives. House Bill 559 would end the tax exemption for data centers on Dec. 31 while Senate Bill 408 and Senate Bill 410 propose either an immediate repeal or an end date on Jan. 1.