US backs $1 billion loan to restart the Three Mile Island nuclear plant

Energy Secretary Chris Wright said Tuesday that restarting the plant will help bring down electricity prices and that the administration will act to bring more nuclear generation online.

“We want to bring as much addition of reliable electricity onto the grid to stop these price rises," he said, adding that such moves will help “reshore manufacturing in our country."

Constellation announced last year that it would restart the Three Mile Island site of the country’s worst nuclear power accident, to help generate electricity for Microsoft, which needs more power to fuel its artificial intelligence business.

The deal calls for Constellation to revive the plant’s undamaged reactor, which was too costly to run and closed in 2019. The power generated will be sold to Microsoft under a 20-year deal. The tech industry has a nearly insatiable demand for 24-hour-a-day power for AI data centers.

The Trump administration is a strong proponent of nuclear power and has vowed to quadruple U.S. nuclear generation by 2050. The plan involves restarting existing reactors and developing 10 large-scale new ones that will expand nuclear capacity from 100 gigawatts currently to 400 gigawatts.

The U.S. has added only three new big reactors since the 1990s. The most recent ones were years delayed and over budget. Years of flat U.S. power demand created a battle for market share, and nuclear plants had a tough time competing against many renewable projects and natural-gas-fired power plants that tapped into a cheap source of fuel from the U.S. shale boom.

Perceptions of nuclear power have evolved after Russia’s invasion of Ukraine and the ensuing energy crunch in Europe that stemmed from sanctions on Russian energy like natural gas. Countries including France, Japan and the U.K. are also looking to add nuclear power to their national grids.

Wright said Three Mile Island will add around 800 megawatts of power generation to the grid. Constellation has said it will pay about $1.6 billion to restart the plant in 2027.

The plant had two reactors, with one permanently shut down after the accident, while the second was shut down in 2019. It is the second reactor that Constellation aims to reboot.

The company has renamed the site the Crane Clean Energy Center. Under the Trump administration, Constellation said it has been possible to “vastly expedite this restart without compromising quality or safety. It’s a great example of how America first energy policies create jobs, growth and opportunities and make the grid more reliable."

The Nuclear Regulatory Commission’s new focus is on less bureaucracy and more safety, Wright said. “With the new generation of reactors that’s even easier," he said.

Write to Costas Paris at costas.paris@wsj.com