The U.S. Department of Energy has approved a $1 billion federal loan to support the restart of the shuttered Unit 1 reactor at the Three Mile Island nuclear power plant in Pennsylvania, in a landmark move driven by soaring electricity demand from artificial intelligence data centers.
The loan, issued through the Energy Department’s Loan Programs Office (LPO), was awarded to Constellation Energy (CEG), the nation’s largest nuclear power operator. The unit, which was shut down in 2019 due to economic pressures from cheap natural gas, will be revived under the new name Crane Clean Energy Center.
The revival is largely enabled by a 20-year, $16 billion power purchase agreement with Microsoft, which is seeking large-scale, carbon-free electricity to power its energy-intensive AI data centers. The deal ensures a stable revenue stream for the project and underscores the growing partnership between Big Tech and nuclear energy.
Following the announcement, Constellation Energy’s stock rose 5% in after-hours trading.
Once operational, the 800-megawatt reactor will supply enough electricity to power approximately 800,000 homes in the PJM Interconnection region, one of the largest U.S. power grids. The project is expected to enhance grid reliability, provide affordable baseload power, and create more than 600 jobs.
Energy Secretary Chris Wright said the initiative will “provide affordable, reliable, and secure energy to Americans across the Mid-Atlantic region” and “help ensure America has the energy it needs to grow its domestic manufacturing base and win the AI race.”
Thomas Hochman, Director of Energy & Infrastructure Policy at the Foundation for American Innovation, highlighted the broader significance of the deal. He noted it is the first LPO loan specifically addressing AI-driven electricity load growth and represents a novel partnership model between a tech firm and an energy developer. Hochman also emphasized that the power will flow into the public grid, benefiting all ratepayers and strengthening system-wide reserves.
The project signals a strategic pivot by the U.S. to expand its nuclear energy capacity amid intensifying global competition, particularly with China, which has taken a significant lead in nuclear development. Constellation plans to invest roughly $1.6 billion to bring the reactor back online between 2027 and 2028. The Three Mile Island revival is seen as just the beginning of a new wave of public and private investment in nuclear power, as the U.S. scrambles to meet the energy demands of the AI era.
