The U.S. Department of Energy said Tuesday it will provide a USD$1 billion loan to help restart the nuclear power plant at Pennsylvania’s Three Mile Island, which will supply electricity to Microsoft’s data centers.
U.S. Energy Secretary Chris Wright said the loan to Constellation Energy Corp (NASDAQ: CEG) (FRA: E7S), the plant’s operator, would “ensure America has the energy it needs to grow its domestic manufacturing base and win the AI race.”
Constellation signed a 20-year purchase agreement in 2024 with Microsoft Corp (NASDAQ: MSFT) to restart the 835-megawatt reactor. Furthermore, the utility renamed the active unit the Crane Clean Energy Center and is restoring key equipment. These include the turbine, generator, main power transformer, and cooling and control systems.
It has also hired hundreds of workers, completed infrastructure inspections, and ordered critical components. The company said it also requires Nuclear Regulatory Commission approval and water-related permits.
Once operational, the reactor will power 800,000 homes, lower electricity costs, strengthen grid reliability, and create more than 600 jobs.
“Constellation’s restart of a nuclear power plant in Pennsylvania will provide affordable, reliable and secure energy to Americans across the mid-Atlantic region,” Wright said.
“It will also help ensure America has the energy it needs to grow its domestic manufacturing base and win the AI race.”
The loan will reduce Constellation’s financing costs and help leverage private investment. Greg Beard, head of the Energy Department’s Loan Programs Office, said Constellation is guaranteeing the loan.
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Policymakers look to nuclear to secure electricity supply
Three Mile Island was the site of the nation’s worst commercial nuclear accident in 1979. Unit 2 was destroyed, leaving only Unit 1 operating. In 2019, Constellation’s then-parent company, Exelon (NASDAQ: EXC), shut down the functioning reactor due to financial losses.
The restart also comes amid a broader revival of nuclear power as policymakers look to secure the nation’s electricity supply, reduce carbon emissions, and meet rising demand. U.S. power use is growing for the first time in two decades, driven by artificial intelligence and new data centers.
Companies including Microsoft, Alphabet (NASDAQ: GOOG), OpenAI, Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META) are investing hundreds of billions of dollars in new facilities. Nuclear energy, which is virtually carbon-free, offers a key option. Critics note, however, that the U.S. still lacks permanent storage for radioactive waste.
Constellation plans to bring the reactor online in 2027. The project involves overhauling cooling towers, refueling, and restoring other systems. Additionally, the DOE says the project will secure more reliable energy, reduce electricity costs, and create hundreds of local jobs.
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