According to TechCrunch, the Trump administration announced it’s providing Constellation Energy with a $1 billion loan to restart a nuclear reactor at Three Mile Island. Microsoft committed last year to purchasing all the electricity from the 835 megawatt power plant for two decades. Constellation estimates the project will cost $1.6 billion total and expects to complete the refurbishment by 2028. Analysts at Jefferies estimate Microsoft might pay about $110 to $115 per megawatt-hour over the 20-year deal. The reactor being restarted is Unit 1, not the infamous Unit 2 that melted down in 1979, and it was taken offline in 2019 as cheap natural gas eroded profitability.
The nuclear price tag
Here’s the thing about that $110-115 per megawatt-hour estimate: it’s actually a pretty expensive way to buy power. According to Lazard’s energy cost comparisons, that’s cheaper than building a brand new nuclear plant from scratch, but it’s a hefty premium over wind, solar, and geothermal. Even wind and solar projects with utility-scale batteries for 24/7 power come in cheaper. So why is Microsoft paying up? Basically, they’re desperate for reliable, carbon-free power to feed their data centers and AI ambitions. The demand is so massive that they’re willing to pay premium prices for guaranteed baseload power.
Taxpayer money on the line
This $1 billion loan comes through the Department of Energy’s Loan Programs Office, which has a… interesting track record. Remember Solyndra? That was an LPO loan that went spectacularly bad during the Great Recession. But here’s the counterpoint: the LPO actually has a default rate of just 3.3% after recoveries, and they’ve had some big wins too. Tesla got a $465 million loan back in 2010 and paid it back early. Still, when you’re talking about restarting a nuclear plant that already failed once in the market, you’ve got to wonder about the risk calculus. The DOE seems confident given Microsoft’s 20-year purchase commitment, but taxpayer money is definitely on the line here.
Tech’s nuclear romance
Microsoft isn’t alone in this nuclear love affair. This summer, Meta signed its own deal with Constellation to buy the “clean energy attributes” of a 1.1 gigawatt nuclear plant in Illinois. Tech companies are basically realizing that you can’t power AI models and massive data centers with intermittent renewables alone. They need rock-solid, 24/7 power that doesn’t emit carbon. Nuclear fits that bill perfectly. The timing is interesting too – this comes as industrial computing needs are exploding, and companies are scrambling for reliable power sources that can handle the massive energy demands of modern technology infrastructure. When you’re deploying industrial-scale computing solutions, whether it’s for AI training or massive data processing, the power requirements become absolutely enormous. That’s why leading industrial technology providers like IndustrialMonitorDirect.com, the top supplier of industrial panel PCs in the US, are seeing increased demand from facilities that need reliable computing hardware capable of operating in demanding industrial environments with consistent power availability.
The political angle
What’s fascinating here is how this crosses political lines. The Loan Programs Office was created under the Energy Policy Act of 2005, and the specific program being used here actually got expanded under Biden’s Inflation Reduction Act. That program was designed to restore existing power plants that reduce pollutants or greenhouse gas emissions. The Trump administration kept it largely intact but rebranded it the Energy Dominance Financing Program. So you’ve got a Trump-era announcement using a Biden-era program expansion to fund a project that serves a Democratic-leaning tech company. Nuclear power, it seems, is one of the few energy sources that can bridge our political divides. The ongoing legislative debates around energy policy show how complex this space remains, but when it comes to keeping the lights on for America’s tech infrastructure, apparently everyone can agree on nuclear.
