Constellation to restart Three Mile Island nuclear power plant as part of Microsoft AI Energy deal

(Reuters) – Constellation Energy has signed an exclusive deal with Microsoft to restart one of the units at Pennsylvania’s famed Three Mile Island nuclear power plant to power data centers for the tech giant, the company said on Friday.

This would be the first restart of a US nuclear plant since the shutdown and shows how utilities are benefiting from a massive increase in demand from data center operators looking to ride an artificial intelligence boom.

The company’s shares rose nearly 8 percent to $224.4 in premarket trading.

The deal would allow the restart of Unit 1 of the five-decade-old nuclear power plant in Pennsylvania, which was shut down in 2019 for operational reasons. Unit 2, which was shut down after a partial meltdown in 1979 — the most famous commercial nuclear accident in U.S. history — will not be restarted.

Constellation, which plans to spend about $1.6 billion to restart the plant, is awaiting permits and expects the facility to be operational by 2028.

Under the deal, unveiled Friday, Microsoft will buy power from the restarted plant for 20 years.

Reuters first reported on the potential reboot in July.

A restart is expected to be logistically challenging, but as energy demand grows from tech companies, the virtually carbon-free electricity source is getting renewed support.

If the restart is approved, Three Mile Island would provide Microsoft with 835 megawatts of power.

Financial details of the transaction were not disclosed. Microsoft and Constellation declined to provide further details about the deal.

(Reporting by Mrinalika Roy and Sourasis Bose in Bengaluru; Editing by Janane Venkatraman and Sriraj Kalluvila)