DOE Loan Supports Restart of Three Mile Island’s Unit 1 Reactor
The Trump administration said Tuesday it will provide Constellation Energy with a $1 billion loan to restart a nuclear reactor at Three Mile Island. The reactor, known as Unit 1, has been offline since 2019 and is expected to return to service after a refurbishment scheduled for completion in 2028. Constellation previously announced its plan to reopen the plant after securing a long-term power purchase agreement with Microsoft.
Microsoft Commits to Two-Decade Electricity Purchase
Constellation said the deal involves Microsoft purchasing all electricity produced by the 835 megawatt reactor for 20 years. The terms were not disclosed, but Jefferies analysts estimate Microsoft may be paying between $110 and $115 per megawatt-hour. That cost is lower than new nuclear construction but higher than wind, solar, and geothermal, including versions paired with utility-scale batteries, according to Lazard’s cost comparisons.
Tech Sector Interest in Nuclear Grows as Power Demand Rises
Technology companies have increased their interest in nuclear energy as electricity requirements for data centers and AI infrastructure surge. Earlier this year, Meta signed an agreement with Constellation to buy the clean energy attributes of a 1.1 gigawatt nuclear plant in Illinois. Three Mile Island’s restart applies only to Unit 1, commissioned in 1974, and not Unit 2, which suffered a partial meltdown in 1979.
Loan Programs Office Continues Expanding Portfolio
The financing comes through the Department of Energy’s Loan Programs Office (LPO), established in 2005 to support clean energy projects. The LPO is widely known for its loan to Solyndra, which failed during the Great Recession, though the office maintains a post-recovery default rate of 3.3%. Tesla received a $465 million loan through the same program in 2010 and repaid it in 2013.
Other Recent LPO Projects and Policy Background
Last month, the LPO finalized a $1.6 billion loan to American Electric Power to upgrade roughly 5,000 miles of transmission lines. The Inflation Reduction Act created an additional LPO category called the Energy Infrastructure Reinvestment program, intended to revive existing power plants that avoid or reduce emissions. The Trump administration kept the program largely intact and renamed it the Energy Dominance Financing Program.
DOE Press Release Contains Apparent Legislative Error
In its announcement, the Department of Energy said the EDF Program was created under the Working Families Tax Cut Act. It was instead authorized under the One Big Beautiful Bill Act.
Featured image credits: Exelon via Wikimedia Commons
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