Federal Loan Backs Three Mile Island Restart, Powers Microsoft AI Hubs

The Biden administration took a significant step toward reviving a storied and controversial nuclear plant when the Department of Energy announced on November 18, 2025 that it would provide a one billion dollar loan to Constellation Energy to support the restart of Three Mile Island Unit 1. The mothballed 835 megawatt reactor, which was taken offline in 2019 for economic reasons, is slated for return to service in 2027 under a 20 year power purchase arrangement with Microsoft to supply electricity to its nearby data centers.

The loan is intended to reduce Constellation’s financing costs as it moves through licensing, upgrades and workforce mobilization necessary for a commercial restart. Officials framed the move as part of a broader federal push to expand nuclear capacity as a source of firm, low carbon electricity to serve compute intensive industries. The Department of Energy did not disclose detailed loan terms and Constellation likewise withheld specifics, noting only that the financing is being provided under a larger federal energy infrastructure finance program.

Three Mile Island carries a weighty legacy. Unit 2 was the site of the United States’ most serious commercial nuclear accident in 1979, and Unit 1 was shut down in 2019 after market pressures rendered continued operation uneconomic. Restart proponents argue the project will deliver regional economic benefits through construction and operations jobs, additional tax revenue and renewed energy sector investment. Critics point to the plant’s history and the challenges of securing public trust, regulatory approval and long term waste management.

The deal highlights how large technology firms are reshaping energy procurement. Microsoft’s 20 year agreement for power from Unit 1 reflects a growing strategy among cloud and AI companies to secure long term, low carbon supply to stabilize operating costs and meet emissions targets. For utilities and developers, corporate offtake can de risk projects and improve access to capital, a dynamic that may encourage further investments in firm clean resources.

Market implications extend beyond a single plant. A successful restart could set a precedent for other economic restarts of idled reactors, altering the investment calculus in a sector where fixed costs and financing are decisive. From a policy perspective, the loan underscores the administration’s emphasis on nuclear as part of a diversified decarbonization agenda, even as questions remain about lifecycle costs, regulatory timelines and community acceptance.

Analysts will watch the timeline to 2027 closely. The project must navigate federal and state safety reviews, supply chain demands for specialized components and workforce recruitment. If completed on schedule, Three Mile Island Unit 1 would add a substantial block of firm, low carbon capacity at a time when demand for reliable power to run artificial intelligence infrastructure is rising rapidly. The DOE and Constellation’s silence on loan specifics will leave investors and ratepayers seeking more clarity about risk sharing and long term economic consequences.