The US Department of Energy (DOE) announced on Tuesday that it will loan $1 billion to support the restart of a nuclear reactor at Three Mile Island in Pennsylvania.
The project will supply clean power to Microsoft’s fast-growing data center operations. The decision signals a fresh federal interest in nuclear energy at a time when digital infrastructure is driving record electricity demand.
A high value loan that revives a dormant reactor
The Department of Energy confirmed that the loan will support Constellation Energy as it works to bring the Three Mile Island Unit 1 reactor back to service. The company expects the federal financing to lower its project costs and accelerate restoration work.
Unit 1 has a capacity of 835 megawatts. The Department of Energy says this output can match the electricity needs of around 800,000 homes. The plant was taken offline in 2019 after its former owner reported financial losses and failed to secure state support.
Constellation Energy never dismantled the unit. The company announced last year that it would restart the facility under a long term power agreement with Microsoft. The tech company committed to buying electricity from the plant to feed growing artificial intelligence and cloud computing workloads.
The agreement set the stage for the current loan. Officials say this project fits within a large federal program that supports the renewal of existing energy assets.
A new identity and a path toward a 2027 comeback
Constellation Energy renamed the restored unit as the Crane Clean Energy Center. The company is working on major equipment that has been idle for several years. The effort includes repairs to the turbine, generator, cooling hardware and the main transformer. The company also plans upgrades across several control systems.
The federal loan comes from a $250 billion pool directed toward energy infrastructure projects. This program was authorized by Congress in 2022. Specific financial terms for the Three Mile Island loan were not released. Constellation estimates the restart will cost about $1.6 billion.
The company expects the reactor to return to full operation in 2027. Federal officials say the project will create around 600 jobs during the restart phase.
A site shaped by both history and new demand
Three Mile Island sits on the Susquehanna River near Harrisburg. The site is known internationally for the 1979 accident that destroyed Unit 2 and marked the worst commercial nuclear incident in US history. Unit 1 remained operational for four decades after the event and then went offline in 2019 due to market pressures from cheaper natural gas.
The new restart effort arrives as nuclear power regains policy attention. Many US regions face rising electricity demand from data centers and electrification projects. Federal agencies and energy planners see nuclear power as a stable option that supports climate goals and grid reliability.
Microsoft is one of several major technology firms turning to nuclear power to meet constant computational loads. The industry shift underscores the scale of energy needed to train and operate modern artificial intelligence systems.
A federal office with a mixed but influential history
The loan is issued through the Department of Energy’s Loan Programs Office. The office was created to support clean energy technologies and once backed major projects such as Tesla’s early factory expansion.
It also financed Solyndra, a solar company that failed during the last recession. Analysts say the office maintains a low default rate after recoveries and remains a central driver of large energy investments.
The office recently supported grid upgrades across several states and is now using new authority to revive older power assets. Policymakers say this tool helps extend the life of facilities that can operate with lower environmental impact.
The restart of Three Mile Island Unit 1 stands as one of the largest nuclear revival efforts supported by federal funds.