Trump DOE gives Microsoft partner $1B loan to restart Three Mile Island reactor

The Trump administration has announced a significant initiative to revitalize the Three Mile Island nuclear reactor with a $1 billion loan earmarked for Constellation Energy. This move comes after the energy firm revealed plans to restart the reactor, which has been inactive since 2019, following Microsoft's commitment to purchase all electricity generated by the 835 megawatt plant for the next two decades. Constellation has projected the total refurbishment cost of the project to be around $1.6 billion, with plans to complete the upgrades by 2028. While specific terms of the agreement with Microsoft remain undisclosed, analysts from Jefferies estimate the tech giant may be paying approximately $110 to $115 per megawatt-hour over the 20-year span. This cost, while lower than that of constructing a new nuclear facility, still represents a considerable premium compared to renewable energy sources such as wind and solar, according to Lazard's energy cost analysis. The growing interest in nuclear energy among tech companies comes in response to soaring power demands from data centers and AI operations. Recently, Meta, a competitor of Microsoft, entered into a similar agreement with Constellation to acquire the clean energy attributes from a 1.1 gigawatt nuclear power plant located in Illinois. It is important to note that the reactor being revived at Three Mile Island is Unit 1, which was commissioned in 1974 and was taken offline in 2019 due to declining profitability attributed to cheap natural gas. The funding is being administered through the Department of Energy's Loan Programs Office (LPO), established by the Energy Policy Act of 2005 to promote clean energy technologies. Although the LPO gained notoriety from the Solyndra loan failure during the Great Recession, experts generally view it positively, boasting a low default rate of 3.3% after recoveries. Tesla, for example, received a $465 million loan from the program in 2010, repaying it within three years. Recently, the LPO finalized a $1.6 billion loan to American Electric Power to enhance approximately 5,000 miles of transmission lines. The Inflation Reduction Act, passed during the Biden administration, introduced additional funding through the LPO's Energy Infrastructure Reinvestment program, aimed at restoring existing power plants to operational status while minimizing emissions. The Trump administration retained much of this program, rebranding it as the Energy Dominance Financing Program.