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.
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.