The Trump administration made headlines on Tuesday by announcing a $1 billion loan to Constellation Energy to revive a nuclear reactor at Three Mile Island. This reactor had been inactive since 2019 but is set to be restarted following a commitment from Microsoft to purchase all the electricity generated by the 835-megawatt power plant for the next two decades. The estimated cost of the project is $1.6 billion, with completion expected in 2028.
While the terms of Microsoft’s deal with Constellation were not disclosed, analysts at Jefferies suggest that the tech giant may be paying around $110 to $115 per megawatt-hour over the course of the 20-year agreement. This price, although more expensive than wind, solar, and geothermal energy sources, is still more cost-effective than building a new nuclear power plant. Even when compared to wind and solar projects with utility-scale batteries for continuous power supply, nuclear energy remains competitive.
Tech companies like Microsoft and Meta have shown a growing interest in nuclear power as they seek clean energy sources to meet the demands of their data centers and AI operations. Meta recently signed a deal with Constellation to acquire the “clean energy attributes” of a 1.1 gigawatt nuclear power plant in Illinois.
It’s important to note that the reactor being restarted at Three Mile Island is Unit 1, not the infamous Unit 2 that experienced a meltdown in 1979. Unit 1 was commissioned in 1974 and was taken offline in 2019 due to declining profitability caused by the availability of cheap natural gas.
The loan facility for this project is being provided through the Department of Energy’s Loan Programs Office (LPO), which was established in 2005 to promote the development of clean energy technologies. While the LPO is most commonly associated with the failed loan to Solyndra, experts generally view it as a success, with a default rate of 3.3% after recoveries.
Recently, the LPO finalized a $1.6 billion loan to American Electric Power for the upgrade of approximately 5,000 miles of transmission lines. Additionally, the Energy Infrastructure Reinvestment program, created under the Inflation Reduction Act passed during the Biden administration, aims to support the restoration of existing power plants to operation while reducing pollutants and greenhouse gas emissions. The program was continued by the Trump administration under the name Energy Dominance Financing Program.
In a press release, the Department of Energy mistakenly attributed the creation of the Energy Dominance Financing Program to the Working Families Tax Cut Act when it was actually authorized under the One Big Beautiful Bill Act. Despite this error, the program is expected to play a crucial role in advancing clean energy initiatives and revitalizing the nation’s power infrastructure.
