Why the government is spending $1B to restart Three Mile Island nuclear plant
The U.S. Department of Energy (DOE) is providing $1 billion to help restart the nuclear power plant at Three Mile Island. Microsoft is behind the push to recommission one of the power plant’s reactors as the company looks to secure power for data centers.
The loan to the plant’s owner Constellation Energy will cover a majority of the project’s $1.6 billion budget. The project was already well underway before the DOE’s Loan Program Office became involved, raising questions about how vital the taxpayer funding truly is.
The alignment of Big Tech, the power generation company Constellation Energy and the federal government comes as the Trump administration wants to ensure the U.S. dominates the artificial intelligence industry. After decades of relatively stagnant growth, electricity demand is expected to surge in the U.S., driven in large part by the rapid build-out of data centers that run AI tools. In the rush to secure more power, the billion-dollar loan underscores the Trump administration’s interest in nuclear power.
In addition to the need to provide “affordable, reliable and secure energy,” to Americans, Energy Secretary Chris Wright said the taxpayer support for Constellation will “help ensure America has the energy it needs to grow its domestic manufacturing base and win the AI race.”
A brief history of three mile island
The Three Mile island nuclear power plant is located on an island in the Susquehanna River near Harrisburg, Pennsylvania. The plant’s first unit opened in 1974, six years after its construction began. A second unit opened in 1978.
Only a few months after Unit 2 began adding power to the grid, the reactor core suffered a partial meltdown due to a malfunction in its cooling system in the early hours of March 28, 1979.
About 2 million people are estimated to have been exposed to small levels of radiation as a result of the accident. However, no deaths or injuries occurred due to the partial meltdown. Studies have found increased cancer rates nearby without establishing a clear causal link.
“It was not as severe in hindsight as Chernobyl or Fukushima,” said Brian Black an energy historian and professor at Pennsylvania State University. Nevertheless, Black said the 1979 accident “burst the American bubble of confidence in nuclear power.”
Unit 2 would never return online. Unit 1 continued operating until it was decommissioned in 2019. But in 2024, Constellation Energy and Microsoft announced a deal to bring Unit 1 back online as the Crane Clean Energy Center.
Restarting nuclear power plants
Plans to restart Three Mile Island come after the early success of the Palisades Nuclear Generating Station in Michigan. The 800-megawatt facility closed in 2022, but the following year a new owner announced a deal to open it again.
James Richards, an economic and project development manager at the Nuclear Innovation Alliance, said Three Mile Island, Palisades and the Duane Arnold Energy Center in Iowa are the “lowest hanging fruit reactors to restart.”
Those power plants were all decommissioned in the past six years. But other than having their nuclear fuel removed, the infrastructure needed to run remains largely intact, Richards said.
The Palisades plant has received $300 million from the state of Michigan and a $1.5 billion loan from the DOE’s Loan Program Office to help the plant restart. This summer, Palisades was restored to operational status and approved to import new nuclear fuel. It is not yet generating electricity, but the power plant is expected to spin up in a matter of months.
Should the government be involved?
Speed appears to be the key reason the DOE Loan Program Office gave Constellation Energy a $1 billion taxpayer loan.
In a press release, Constellation President and CEO Joe Dominguez said the loan “made it possible for us to vastly expedite this restart without compromising quality or safety.”
However, Constellation had already announced in June that the project was ahead of schedule and eyeing 2027 to reopen. The company initially expected to complete the recommissioning in 2028. Constellation has also previously stated it would not need any government subsidy because of the power purchase agreement with Microsoft, according to the Associated Press.
Greg Beard, senior advisor to Loan Programs Office, told reporters that Constellation didn’t need the loan to complete the project, but he said the loan will help keep electric rates affordable for consumers, according to CNBC.
“This loan to Constellation will lower the cost of capital and make power cheaper for those PJM ratepayers,” Beard said.
Because of interest payments, the loan also is an investment not a handout, Richards told Straight Arrow News. While he acknowledged it puts the risk on taxpayers, Richards said “there’s a lot of due diligence,” and the DOE loans typically pay off.
“We are in such a crunch right now that it’s a little bit all hands on deck in making sure we have capacity,” said Richards.
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Ella Rae Greene, Editor In Chief
