The Microsoft Three Mile Island deal is a 20-year power purchase agreement with Constellation Energy to restart the 835 MW Unit 1 nuclear reactor in Pennsylvania, delivering carbon-free baseload electricity for AI data centers starting in 2028. Here is what this landmark agreement means for nuclear-powered AI infrastructure.
Why Microsoft Chose Three Mile Island for AI Power
You cannot run large-scale AI training and inference on intermittent energy sources alone. Microsoft needs hundreds of megawatts of continuous, carbon-free electricity to power its Azure AI data centers in the PJM Interconnection territory spanning 13 US states. Solar delivers a 25% capacity factor. Wind reaches 35%. Nuclear operates above 93%, making it the only zero-carbon source that matches the 24/7 demand profile of nuclear power for data centers.
Grid interconnection queues in key data center markets now exceed five years. Rather than waiting, Microsoft secured dedicated generation capacity at the source. The Three Mile Island Unit 1 reactor sits in Londonderry Township, Pennsylvania, within the PJM grid where Microsoft operates significant AI infrastructure. Restarting an existing reactor avoids the decade-long timelines associated with new nuclear construction.
The Deal Structure and Financial Details
In September 2024, Constellation Energy announced the 20-year PPA with Microsoft and committed $1.6 billion to refurbish and restart the reactor. Constellation renamed the facility the Crane Clean Energy Center, honoring former CEO Chris Crane. The Unit 1 reactor had been shut down in September 2019 for economic reasons, not safety concerns. Unit 2, the reactor involved in the 1979 partial meltdown, remains permanently decommissioned and is unrelated to this project.
The US Department of Energy backed the project with a $1 billion federal loan announced in November 2025. Constellation can draw on this loan through September 2030, with full repayment due by November 2055. An independent economic impact study projects the restart will create 3,400 direct and indirect jobs, add $16 billion to Pennsylvania’s GDP, and generate over $3 billion in state and federal tax revenue.
What Constellation Must Deliver
Restoring Unit 1 requires replacing the turbine, generator, main power transformer, and upgrading cooling and control systems. Constellation targets commercial operation by 2028, subject to Nuclear Regulatory Commission approval. Inspections of key components and regulatory reviews are on schedule as of early 2026. When online, the reactor will add 835 MW of carbon-free baseload power to the grid.
How This Deal Reshaped Nuclear AI Power Across the Industry
The Microsoft AI investment in nuclear triggered a cascade of similar agreements from competing hyperscalers. Within months of the announcement, Amazon secured 960 MW of nuclear capacity through deals with Talen Energy and X-energy. Google signed with Kairos Power for 500 MW of small modular reactor capacity. Oracle announced plans for a data center campus powered by three SMRs exceeding 1 GW combined.
Combined, these commitments exceed 3.3 GW of nuclear capacity dedicated specifically to data centers. That number will grow as the AI energy crisis intensifies and grid constraints force hyperscalers to secure their own generation assets.
What This Means for Your Infrastructure Planning
If you are evaluating data center locations for AI workloads operational beyond 2028, proximity to nuclear generation should factor into your site selection. Markets near existing or restarting reactors will have structural power advantages over grid-constrained regions. The Microsoft Three Mile Island deal established a pricing benchmark for long-term nuclear PPAs that other providers will reference.
Nuclear fuel costs represent roughly 10% of total operating expense, compared to 70% for natural gas generation. A 20-year PPA locks in predictable energy costs while gas-dependent competitors face volatile pricing that directly compresses margins. The small modular reactor pipeline will expand these options further by 2030, but restarted existing reactors like Crane Clean Energy Center will deliver capacity years earlier.
Frequently Asked Questions
Is the Microsoft Three Mile Island deal related to the 1979 nuclear accident?
No. The 1979 partial meltdown occurred at Unit 2, which remains permanently decommissioned. The Microsoft deal involves Unit 1, a separate reactor that operated safely from 1974 until its economic shutdown in 2019. Constellation is investing $1.6 billion to refurbish Unit 1 under full NRC oversight.
When will the Three Mile Island reactor start powering Microsoft data centers?
Constellation targets commercial operation in 2028, subject to NRC approval. The company must replace the turbine, generator, main transformer, and upgrade cooling and control systems. Inspections and regulatory reviews remain on schedule as of early 2026, with a $1 billion DOE loan supporting the project timeline.
How much power will the restarted reactor produce?
Unit 1 will generate 835 MW of carbon-free baseload electricity, enough to power approximately 800,000 homes. At a 93%+ capacity factor, this single reactor provides more reliable output than 2,000 MW of solar or 1,500 MW of wind generation, operating continuously regardless of weather or time of day.