The U.S. Energy Department has offered a record $26.54 billion loan package to subsidiaries of Southern Company to strengthen and expand the electric grid in Georgia and Alabama.

The financing, described by federal officials as the largest ever provided through the department’s loan office, would go to Georgia Power and Alabama Power. The Energy Department says the investment could save customers in the two states more than $7 billion while helping improve the reliability and resilience of the power grid.

The two loans, which would span roughly 30 years, are intended to support more than 16 gigawatts of power additions and upgrades. Planned projects include approximately 5 gigawatts of new natural gas generation, upgrades to existing nuclear facilities, modernization of hydropower plants, development of battery energy storage systems, and more than 1,300 miles of transmission and grid enhancement projects.

U.S. Energy Secretary Chris Wright said the loans would help lower energy costs, create jobs, and improve grid reliability across Georgia and Alabama.

Southern Company Chairman, President and CEO Chris Womack said the financing would reduce the cost of major grid investments and help deliver greater reliability and resilience for customers.

The company noted that funds would be drawn only after certain conditions are met and could be accessed through September 15, 2033.

While supporters point to the potential benefits for electric reliability and long-term infrastructure improvements, the proposal has also drawn criticism from some consumer advocates, watchdog groups, and environmental organizations.

Critics argue that taxpayers could ultimately face financial risk if projects experience significant cost overruns or repayment issues. Others note that although federal officials project billions of dollars in customer savings, state utility regulators will continue to play a key role in determining how infrastructure costs are reflected in future electric rates.

Some observers have also pointed to Southern Company’s history with large-scale energy projects, including delays and cost overruns associated with the Plant Vogtle nuclear expansion in Georgia and the Kemper energy project in Mississippi, arguing that strong oversight will be necessary as the utility moves forward with another major infrastructure program.

Environmental groups have additionally raised concerns about plans to add approximately 5 gigawatts of new natural gas generation, contending that federal energy investments should focus more heavily on renewable energy sources and reducing carbon emissions.

The proposed loan package remains subject to final conditions and approvals before funds can be fully utilized.