Three Mile Island Nuclear Plant to Restart as Constellation Energy Signs Major 20-Year Deal with Microsoft

Constellation Energy is set to revive the Three Mile Island nuclear plant, partnering with Microsoft to provide the power needed to fuel the tech giant’s growing data centers.

This plan highlights the massive energy demands of the tech sector, particularly in the push for artificial intelligence (AI) advancements.

The agreement, the largest of its kind for Constellation, emphasizes the role of nuclear power in supporting tech-driven climate goals.

The Unit 1 reactor of Three Mile Island, located near Middletown, Pennsylvania, is expected to resume operations by 2028, pending approval from the Nuclear Regulatory Commission (NRC).

Constellation Energy announced on Friday that it also plans to extend the Three Mile Island plant’s lifespan through 2054.

The move follows years of dormancy, as the reactor was shut down in 2019 due to economic challenges posed by the rise of cheap natural gas and renewable energy alternatives.

Stock Surge as Nuclear Power Revives

Following the announcement, Constellation Energy’s stock soared by 15%, adding to its already impressive year-to-date doubling in value.

Investors have embraced the nuclear revival, seeing it as a reliable and clean energy source capable of meeting the tech sector’s escalating energy requirements.

Constellation plans to invest $1.6 billion in restarting the plant, covering costs such as nuclear fuel, as confirmed by Chief Financial Officer Dan Eggers during a recent investor call.

The tech sector’s demand for electricity is projected to skyrocket in the coming years. Data centers are at the heart of this surge, driven by the increasing power needs of AI systems.

Goldman Sachs estimates that data centers will account for 8% of U.S. electricity demand by 2030, compared to 3% today.

As a result, tech companies are turning to nuclear energy, which is seen as both reliable and carbon-free, aligning with their environmental goals.

Microsoft’s Historic Power Purchase Agreement

Microsoft has entered a 20-year power purchase agreement with Constellation, securing enough carbon-free nuclear energy to match its data centers’ consumption.

According to Constellation CEO Joe Dominguez, this deal represents the largest power purchase agreement the nuclear operator has ever signed.

The power supplied by Three Mile Island will be crucial for Microsoft as it continues to build out its AI-driven data infrastructure.

“This decision is the most powerful symbol of the rebirth of nuclear power as a clean and reliable energy resource,” Dominguez remarked, reinforcing the renewed confidence in nuclear power’s role in the future energy mix.

Nuclear Power’s Comeback: More Than Just Three Mile Island

The resurgence of nuclear energy in the U.S. is part of a broader trend supported by bipartisan backing from both federal and state governments.

Constellation Energy’s move to restart Three Mile Island marks only the second time a U.S. nuclear plant will return to service.

The Palisades nuclear plant in Michigan is expected to be the first, with operations slated to resume by the end of 2025.

While the Three Mile Island plant gained notoriety for the 1979 partial meltdown in one of its reactors—considered the worst nuclear accident in U.S. history—the Unit 1 reactor, which will be restarted, is separate from the one involved in the accident.

To mark this new chapter, Constellation plans to rename the Three Mile Island plant the Crane Clean Energy Center, in honor of Chris Crane, the former CEO of Exelon, Constellation’s predecessor, who passed away earlier this year.

Tech Giants Seek Nuclear to Meet Energy Demands

Microsoft’s investment in nuclear energy follows a trend of tech companies seeking sustainable energy solutions to meet growing power demands.

Other major players in the industry are also looking to nuclear as a reliable and clean source of power.

In March, Amazon Web Services secured a deal with Talen Energy to power its data center campus in Pennsylvania with energy from the Susquehanna nuclear plant, a first in the sector. Oracle recently announced plans to design a data center powered by small modular nuclear reactors.

The expansion of domestic manufacturing and the rise of electric vehicles are also driving increased electricity demand.

Rystad Energy projects that data centers and electric vehicles will contribute an additional 290 terawatt-hours of power demand by the end of this decade, an amount equal to the total energy consumption of Turkey.

Regulatory Hurdles and Future Prospects

Before Three Mile Island can be restarted, the NRC must complete its safety and environmental impact review, which is expected to conclude by 2027. PJM Interconnection, the operator of the U.S.’s largest power grid, must also assess the plant’s potential impact on the grid.

However, Constellation is confident that the plant will clear these regulatory hurdles and could even return to operation earlier if PJM accelerates its interconnection processes.

Dan Eggers expressed optimism about the plant’s future, noting, “We’re highly confident we’ll be able to restore the plant’s operational licensing authority to the same state that existed prior to the shutdown in 2019.”

Eggers also mentioned that PJM’s ongoing efforts to address tightening power supplies could help expedite the interconnection process.

With the restart of Three Mile Island, the rebirth of nuclear power in the U.S. is becoming more tangible, showing that this long-standing energy source can once again be a critical part of the country’s energy future.

As Dominguez stated, “In this rebirth, we see the most powerful sign that America will turn to the enduring promise of nuclear energy, an old and loyal ally that is renewed and ready to light the way forward.”

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