ATLANTA — Federal energy officials on Wednesday announced a record $27 billion loan to electric utilities in Georgia and Alabama, saying the loan will save customers money as the companies undertake a huge expansion driven by demand from computer data centers.
A total of $22.4 billion will go to Georgia Power and $4.1 billion to Alabama Power. Both are subsidiaries of Atlanta-based Southern Company, one of the nation’s largest utilities. The companies plan to use the cash to build new natural-gas fueled power plants, build new transmission lines and upgrade existing power plants.
Energy Secretary Chris Wright said the loan will result in more than $7 billion in savings over decades from a lower, federally subsidized interest rate.
“We’re focused on driving down costs,” Wright said. He added that the loan would help ensure Southern customers “have access to affordable, reliable and secure energy for decades to come.”
Wright and President Donald Trump have frequently made the case for their fossil fuel-friendly policies — including orders over the past nine months to keep some coal-fired plants open past planned retirement dates — as necessary to ensure reliability of the nation’s electric grid.
Wright says the orders have saved utility customers millions of dollars and helped keep lights on during last month’s winter storm. Critics say the orders are unnecessary and have raised electric bills as utilities keep older, more expensive plants operating.
“These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers,” said Chris Womack, Southern’s chairman, president and CEO.
The new loan comes amid scrutiny on rising utility bills, with electricity prices increasing faster than inflation in many states. There is also widespread opposition to new data centers for artificial intelligence.
Trump in his State of the Union Tuesday announced a “ratepayer protection pledge” against higher utility bills tied to AI. He said tech companies will provide their own power as they build data centers. Trump didn’t provide details but claimed prices will go down.
It is unclear whether any tech companies have signed pledges to build their own power plants, but Wright said on a call with reporters Wednesday t