Georgia Power issues bonds to invest in minority vendors, sustainability

A Georgia Power charging station for electric vehicles is located at the Georgia Power HQ visitors' parking lot on Thursday, February 17, 2022. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

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A Georgia Power charging station for electric vehicles is located at the Georgia Power HQ visitors' parking lot on Thursday, February 17, 2022. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Utility says financing to support environmental and racial equality goals

Georgia Power on Friday announced the issuance of corporate bonds designed to help the utility boost clean energy and its support of minority- and women-owned vendors.

The Atlanta-based power company said it has issued $800 million in Equality Progress Sustainability Bonds (EPSB), a corporate financing program to promote sustainability efforts that also requires the utility to spend at least half that amount with disadvantaged businesses.

The bonds were part of a larger $1.5 billion debt issuance that Georgia Power will use for a variety of purposes, including efforts to expand and maintain its power grid. Georgia Power serves 2.7 million customers across the state.

Bond debt is one of many sources of financing that Georgia Power uses to fund its operations.

Many companies have faced pressure over the years from shareholders and the public to prove they are good corporate citizens or to prove their environmental and social justice bona fides. Utilities and other emitters of greenhouse gases remain under market and regulatory pressures to expand clean energy programs.

As it turns from coal, Georgia Power plans to rapidly expand solar and other renewable sources.

“Green bonds,” which are used to finance specific environmentally friendly projects, have been around for years. A more recent variant of such corporate financing is known as Environmental, Social and Governance bond programs (ESG). These seek to promote green technologies, energy efficiency and social justice goals set by companies’ boards or shareholders.

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Socially conscious investors buy the debt, and issuers receive a small interest rate discount to promote sustainability and social justice goals, said Aaron Abramovitz, Georgia Power’s executive vice president and chief financial officer. That saves ratepayers money, he said.

Southern Company, Georgia Power’s parent company, has issued 11 ESG bonds through its subsidiaries dating to 2015, a news release said.

“Even if we didn’t have (access to) this type of bond … it would not stop us from doing what we’re supposed to do, being a good citizen wherever we serve, supporting our communities and investing and spending with diverse suppliers and in clean energy,” Abramovitz said in an interview with The Atlanta Journal-Constitution.

Abramovitz said the utility has a broad portfolio of minority- and women-owned suppliers and such businesses make up about 20% to 25% of annual vendor spending. Georgia Power has a goal to expand such spending to 30% by 2025.

The company will likely spend more than half the $800 million of the EPSB funding on its network of minority- and women-owned suppliers, as well as with veteran-owned businesses, Abramovitz said.

The $1.5 billion in total bond financing is the extent of Georgia Power’s expected bond issuances for the year. Some years, the utility has issued greater amounts of debt depending upon business needs.

The Georgia Power debt is the first Equality Progress Sustainability Bond of its kind issued by a major non-bank corporation and comes after bond agent Bank of America created the program two years ago. Bank of America issued the first two bonds of this type for its own corporate uses in 2020.

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