The U.S. Department of Energy approved a $1 billion loan Tuesday that will support plans to restart a nuclear reactor at Three Mile Island and use the facility outside Harrisburg to power Microsoft data centers.
Constellation Energy, the largest operator of nuclear plants in the U.S., aims to bring the renamed Crane Clean Energy Center back online in 2027. Microsoft has a 20-year power-purchasing agreement for the 835 megawatt plant, which is expected to produce enough electricity to power about 800,000 homes.
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Energy Secretary Chris Wright said the federal loan is intended to bolster the project's impact by helping curb rising utility costs. He said the loan will make electricity cheaper for more than 65 million consumers in the 13-state territory that relies on the regional grid operated by PJM Interconnection.
“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.”
Pennsylvania is on track to become a national hub for data centers as tech companies invest billions in new facilities in the coming years. Most of these projects will be powered by electricity from the state's vast natural gas reserves, but nuclear energy has drawn bipartisan support as a cleaner source of power for the intensive needs of data centers. President Donald Trump signed four executive orders in May to overhaul the independent Nuclear Regulatory Commission and fast-track approvals for the deployment of reactors.
Microsoft's facility at Three Mile Island and Amazon's plan for a data center in Luzerne County are among the projects in Pennsylvania that will purchase nuclear power.
The plant at Three Mile Island is the site of a partial meltdown in 1979 that released radioactive material from one of its two reactors. The incident, considered the most significant nuclear disaster in U.S. history, fueled decades of skepticism about the safety of nuclear power. The reactor that will be brought back online was not involved in the crisis. The site remained in operation until 2019, when it was shut down for economic reasons.
The federal loan marks the first nuclear project to receive a commitment from the Trump administration. Greg Beard, senior adviser to the Energy Department’s Loan Programs Office, told reporters Tuesday that Constellation's project could have gone forward without federal support. The total cost to restart the reactor is estimated at $1.6 billion, but Beard said the loan will require Constellation to protect taxpayer money, CNBC reported.
"This loan to Constellation will lower the cost of capital and make power cheaper for those PJM ratepayers," Beard said.
The expansion of data centers has been blamed for rising electricity costs in a growing number of states. The facilities were estimated to consume about 4% of the nation's electricity in 2023 and are projected to command as much as 12% by 2028, according to research cited by the Department of Energy. In many communities, plans for new data centers also have faced pushback over concerns about water consumption and noise pollution from cooling systems.
Nuclear power now supplies about 20% of the electricity used by data centers in the U.S. Natural gas powers more than 40% of these facilities, wind and solar make up roughly 24% and coal about 15%. Despite high up-front costs for nuclear power, the Department of Energy views it as the most efficient electricity source for AI data centers because plants can operate around the clock near full capacity with fewer bottlenecks.
Joe Dominguez, president and CEO of Constellation, said the interest-bearing federal loan will lower the cost of financing the restart at Three Mile Island and attract more private investment. The company expects the restart to create about 3,400 jobs — including more than 600 permanent positions — and deliver more than $3 billion in state and federal tax revenue once the plant is running.
"DOE's quick action and leadership is another huge step toward bringing hundreds of megawatts of reliable nuclear power onto the grid at this critical moment," Dominguez said.