Power Provider Southern Company Gets Largest-Ever DOE Loan

---

Written by Danny Levin, Deputy Editor for IIR News (Sugar Land, Texas)

---

Summary

The U.S. Department of Energy awarded Southern Company the largest loan package in department history. The loan package of $26.5 billion will support power generation and grid reliability, which comes as Southern recently raised its five-year spending plan by roughly 7% to $81 billion.

---

DOE's Historic Loan

The U.S. Department of Energy's (DOE) $26.54 billion, 30-year loan package will support power generation and grid reliability for Southern Company's Georgia Power and Alabama Power subsidiaries, representing the department's largest-ever investment.

The DOE funding is through the new Office of Energy Dominance Financing (EDF), which was established under the One Big Beautiful Bill Act and supports the Trump administration's effort to lower energy costs and increase grid reliability while moving away from funding for renewable energy like wind and solar.

Last month, the Trump administration said it was restructuring or eliminating about $84 billion in renewable-energy project funding pledged during former President Biden's term.

"The two loans will build or upgrade over 16 gigawatts (GW) of firm reliable power to the electrical grid," the DOE said in a press release. "This includes 5 GW of new gas generation, 6 GW in nuclear improved through upgrades license renewals, hydropower modernization, battery energy storage systems and over 1,300 miles of transmission and grid enhancement projects."

Electric and gas utility Southern Company said in its press release that the 30-year loan package will "finance a portfolio of projects across its Southeastern service territory," which includes Georgia Power and Alabama Power--Southern's two largest subsidiaries, serving a combined 4.3 million customers.

Other subsidiaries include Southern Power--a non-regulated utility that constructs and operates power generation assets, selling power to commercial customers such as data centers.

Southern Company's Capital Spending Plan

Southern Company recently raised its five-year (2026-2030) capital spending plan by about 7%, to $81 billion. About half of the spending is attributed to boosting power generation.

"The main drivers of this capital plan's increase are related to new generation facilities, most of which were announced or approved in 2025, and the approved Integrated Resource Plan or IRP in Georgia, which included incremental investments in existing infrastructure," Chief Financial Officer David Poroch said in the company's recent fourth-quarter 2025 earnings-related conference call. "These investments include uprates for more capacity at existing natural gas and nuclear facilities, as well as modernization of hydroelectric dams."

According to the earnings presentation, more than half of the planned five-year investment is for growth-related capital:

• $21 billion for new generation resources, uprates and modernization: five combined-cycle and three combustion natural gas turbines; 17 battery energy storage system (BESS) projects; and two solar-plus-BESS sites
• $17 billion for transmission and distribution: more than 500 miles of new transmission lines, 1,100+ miles of reconductors, rebuilds and upgrades.
• $3 billion for regulated natural gas local distribution (LDC).
• $1 billion for renewable investment through Southern Power: five windfarms are expected to be in service by third-quarter 2027, while a 500-megawatt (MW) multi-phase solar facility is projected to be in service by the fourth quarter.

The investment will support the company's large-load pipeline, which now sits at 75 GW; 10 GW are fully contracted, largely due to data center demand.

According to the company's earnings presentation, projects expected to be placed in service during the five-year capital plan include:

• Combustion-turbine natural gas units 8, 9 and 10 at Plant Yates in Georgia (totaling 1.3 GW) and eight unnamed BESS facilities (total of 1.3 GW), by the end of 2027.
• Another nine unnamed BESS facilities by the end of 2030, representing 2.76 GW
• Five combined-cycle natural gas units, totaling nearly 4 GW, by year-end 2030.

For more information on Georgia Power's Georgia Power Service Commission-approved plan to add 10 GW of new generation over the next five years, see December 22, 2025, article - Second Gas Turbine Delivered to Support Georgia Power's New Generation Capacity.

Industrial Info is tracking $17.8 billion worth of active and planned projects from Southern Company, nearly all of which is attributed to Georgia Power. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can view a full list of project reports.

Southern Company's capex increase follows an ongoing trend among power companies across the country looking to support the vast buildout of data centers. For more information, see February 19, 2026, article - Entergy Rides Natural Gas Generation, T&D to Higher Capital Spending; February 18, 2026, article - Data Center Demand Drives DTE's Five-Year Capex Increase, to $36.5 Billion; and February 11, 2026, article - Duke Energy Boosts Five-Year Capex to $103 Billion.

Future Outlook and Earnings Results

Poroch said the 10 GW of contracted large-load capacity represents 26 customer projects, nearly all of which are currently under construction. In addition, there are load ramps totaling 8 GW by the end of 2030, ultimately ramping up to 10 GW beyond that year. Meanwhile, he said discussions for another 10 GW of load are in late stages, with 3 GW "working through final reviews and are highly likely to progress to an executed contract in the near term."

The contracts carry minimum terms of at least 15 years for data centers, he said, with some of those extended further. In addition, there are provisions in place, similar to take-or-pay agreements, that make sure the company recovers the costs of building energy infrastructure needed to serve the facility as well as additional operating and maintenance costs, and financing costs.

As a result, "we project sales growth and the associated revenues to accelerate into 2027, with an even more pronounced expansion in 2028. Considering the composition and strength of our large load pipeline, we project commercial sales, which currently comprise roughly one-third of our total retail sales, to more than double, growing roughly 20% annually through the end of the decade."

The company reported retail sales in 2025 grew 1.7% year-over-year, more than double the cumulative growth over the last decade. Commercial sales were up 17% year-over-year for the second year in a row, boosted by increased usage from existing and new large-load data center customers.

Southern Company reported $416 million in fourth-quarter net income, down from $534 million year-over-year. Full-year 2025 income of $4.3 billion was roughly flat compared with 2024.

Key Takeaways

• The DOE awarded its largest-ever loan package to Southern Company and its Alabama Power and Georgia Power subsidiaries to boost power generation and grid reliability.
• The parent company recently raised its five-year capital plan 7%, to $81 billion.
• That investment will focus mainly on generation, particularly natural gas, as well as T&D.
• Like many other energy companies, Southern sees data centers as a major driver for capital spending, electricity demand and sales growth.

---

About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).