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

The Trump administration has approved a $1 billion federal loan to Constellation Energy to help restart a nuclear reactor at Three Mile Island, marking one of the most significant nuclear-energy moves in recent years.

Constellation announced plans last year to bring the reactor back online after Microsoft agreed to purchase its entire electricity output — an 835-megawatt supply — under a 20-year agreement. The company estimates the restart will cost around $1.6 billion and expects the plant to return to service in 2028.

Details of Microsoft’s financial arrangement were not disclosed, but analysts at Jefferies estimate the tech giant may be paying roughly $110–$115 per megawatt-hour throughout the contract term. While still cheaper than building a new nuclear plant from scratch, the cost is considerably higher than utility-scale wind, solar, geothermal, and even renewable energy paired with grid-scale batteries, according to Lazard’s levelized cost of energy analysis.

Despite that premium, nuclear has become increasingly attractive to Big Tech as AI expansion and data-centre growth fuel unprecedented electricity demand. Earlier this year, Meta signed a separate deal with Constellation to purchase clean-energy attributes tied to a 1.1-gigawatt nuclear plant in Illinois.

The unit being revived at Three Mile Island is not the notorious Unit 2 — the site of the 1979 meltdown — but Unit 1, which first came online in 1974 and was closed in 2019 amid competition from low-cost natural gas.

The loan is being issued through the U.S. Department of Energy’s Loan Programs Office (LPO), a financing arm created under the 2005 Energy Policy Act to accelerate clean-energy deployment. Although the LPO is often remembered for backing Solyndra, its overall record is strong, with a post-recovery default rate of just 3.3%. Tesla famously used a $465 million LPO loan in 2010 and paid it off early.

Last month, the office also finalised a $1.6 billion loan to American Electric Power to support upgrades to roughly 5,000 miles of transmission lines.

Under the Inflation Reduction Act, the LPO gained new authority through the Energy Infrastructure Reinvestment (EIR) program, designed to return existing energy assets to operation while reducing or avoiding emissions. The Trump administration has kept the program intact, rebranding it as the Energy Dominance Financing Program.

In its press release, the Department of Energy attributed the EDF Program to the Working Families Tax Cut Act — though it was actually authorised under the One Big Beautiful Bill Act.