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

The Trump medication announced Tuesday it would supply Constellation Energy with a $1 cardinal indebtedness to restart a atomic reactor astatine Three Mile Island.

The vigor institution said past twelvemonth it would reopen the reactor, which had been shuttered since 2019, aft Microsoft committed to purchasing each the energy from the 835 megawatt powerfulness works for 2 decades. Constellation estimated the task would outgo $1.6 billion, and it expects to implicit the refurbishment successful 2028. 

Terms of Microsoft’s woody with Constellation weren’t disclosed. Analysts astatine Jefferies person estimated the tech institution mightiness beryllium paying astir $110 to $115 per megawatt-hour implicit 20 years of the deal. 

That’s cheaper than a marque caller atomic powerfulness works would cost, but it’s a hefty premium implicit wind, solar, and geothermal, according to a comparison of vigor costs from Lazard. Even upwind and star projects outfitted with utility-scale batteries to alteration 24/7 powerfulness are cheaper.

Nonetheless, tech companies person precocious fallen successful love with atomic arsenic powerfulness demands for their information centers and AI efforts person skyrocketed. This summer, Microsoft rival Meta signed its ain deal with Constellation, buying the “clean vigor attributes” of a 1.1 gigawatt atomic powerfulness works successful Illinois.

The reactor astatine Three Mile Island that’s being restarted isn’t the infamous Unit 2, which melted down successful 1979. Rather, it’s Unit 1, which was commissioned successful 1974 and taken offline successful 2019 arsenic inexpensive earthy state eroded its profitability.

The indebtedness installation is being made done the Department of Energy’s Loan Programs Office (LPO), which was formed nether the Energy Policy Act of 2005 to foster the maturation of cleanable vigor technologies.

The LPO is astir celebrated for its indebtedness to Solyndra, a U.S. star startup that went belly-up during the Great Recession. Overall, though, experts see the LPO a success, with a default rate of 3.3% aft recoveries. Tesla, for instance, received a $465 cardinal loan nether the programme successful 2010 and paid it backmost by 2013.

Last month, the LPO finalized a $1.6 cardinal loan to American Electric Power, utilizing national dollars to enactment the upgrade of astir 5,000 miles of transmission lines.

The Inflation Reduction Act, which passed during the Biden administration, created different cookware of wealth nether the LPO known arsenic the Energy Infrastructure Reinvestment program. That programme was created to reconstruct existing powerfulness plants to cognition provided they debar oregon trim pollutants oregon greenhouse state emissions. The Trump medication kept it mostly successful tact, rebranding it the Energy Dominance Financing Program.

In its press release, the Department of Energy, possibly erroneously, says the the EDF Program was created nether the Working Families Tax Cut Act. It was alternatively authorized nether the One Big Beautiful Bill Act.