Microsoft Nuclear Deal Resurrects Three Mile Island Unit 1 for AI Power Demand
Federal regulators officially cleared the financial pathway for the reopening of Three Mile Island this week, approving a $1 billion loan guarantee to Constellation Energy to restart the dormant nuclear facility in Londonderry Township, Pennsylvania. The approval solidifies a controversial but landmark roadmap for Big Tech to secure 24/7 carbon-free baseload power, driven specifically by a 20-year purchase agreement with Microsoft. The facility, rebranded as the Crane Clean Energy Center, is now on track to bring 835 megawatts of capacity back to the grid by 2028, marking the first time a decommissioned nuclear plant has been revived in the United States for the express purpose of feeding data centers.
The economics of the restart hinge entirely on the voracious energy appetite of artificial intelligence. While Three Mile Island Unit 1—which sits adjacent to, but is physically separate from, the site of the 1979 partial meltdown—was shuttered in 2019 due to competition from cheap natural gas, the valuation of constant power has skyrocketed. Microsoft’s agreement effectively monopolizes the plant’s output to offset the massive electricity consumption of its cloud and AI operations in the PJM Interconnection region. Constellation Energy projects the total refurbishment will cost approximately $1.6 billion, requiring significant updates to the turbine, generator, and main power transformer after six years of inactivity.
This federal endorsement comes sharply on the heels of a regulatory crackdown on similar “co-location” deals. Just last year, the Federal Energy Regulatory Commission (FERC) rejected a proposal by Amazon and Talen Energy to route power directly from the Susquehanna nuclear plant to a data center, citing concerns that bypassing the wider grid would raise costs for regular utility customers. The Microsoft-Constellation deal circumvents this specific regulatory pitfall by feeding the power back into the broader PJM grid rather than using a direct “behind-the-meter” connection, allowing Microsoft to claim the clean energy credits while technically supporting regional grid reliability.
Local infrastructure planning in Dauphin County is already shifting to accommodate the restart. The project is expected to require 600 permanent skilled operators and security personnel, reversing the economic slump that followed the 2019 closure. However, the technical challenges remain immense. Engineers must re-certify pressure vessels and piping that have sat idle, and the Nuclear Regulatory Commission (NRC) has mandated a rigorous inspection schedule that will continue through late 2027. Unlike new small modular reactors (SMRs) being pursued by Google and Amazon, which rely on unproven designs, the Crane Clean Energy Center utilizes established pressurized water reactor technology, trading innovation risk for the hurdles of aging infrastructure.
The deal underscores the stark energy reality facing the technology sector: renewable sources like wind and solar cannot provide the uninterrupted gigawatt-scale power required for training large language models without prohibitively expensive battery storage. With a single AI query consuming nearly ten times the electricity of a standard keyword search, the resurrection of Unit 1 represents a pivot toward nuclear energy as the only scalable solution for decarbonizing the industry’s expanding footprint. As refurbishment crews mobilize next month, the industry is watching closely; a successful restart could trigger a wave of revivals for other retired reactors across the Midwest and Mid-Atlantic.
