Constellation Energy has secured a $1 billion loan from the US Department of Energy (DOE) to support the restart of the Three Mile Island nuclear plant.

The plant is set to supply Microsoft with power via a long-term Power Purchase Agreement (PPA).

According to reporting from CNBC, the loan is expected to cover the majority of the estimated project startup costs, which is set at around $1.6bn. The first advance is due in Q1 of 2026. The loan would be provided through the DOE’s Loan Programs Office and comes with a guarantee from Constellation that it will protect taxpayer money.

According to Greg Beard, senior advisor to the Energy Department’s Loan Programs Office, Constellation could have completed the project without federal funding. However, the loan will reduce electricity prices for consumers across the PJM Interconnection grid.

“What’s important for the administration is to show support for affordable, reliable, secure energy in the US,” Beard told reporters. “This loan to Constellation will lower the cost of capital and make power cheaper for those PJM ratepayers.”

Constellation and Microsoft signed a 20-year PPA last September, where the tech giant agreed to offtake the entire capacity of the plant's unit one reactor, which has a capacity of 837MW.

The reactor near Harrisburg, Pennsylvania, was retired in 2019 after failing to secure the subsidies needed to compete with cheaper alternatives.

Restarting the reactor is expected to be difficult, as it will require a renovation of much of its inner workings, including the turbine, generator, transformers, and cooling and control systems. However, in June, it was reported that Constellation was ahead of schedule in the restart.

Constellation acquired unit one of the plant in 1999 and intends to pursue a license renewal that will extend plant operations to at least 2054. The project will be renamed the Crane Clean Energy Center.

Constellation runs the largest nuclear fleet in the US, with 21 reactors spread across 12 sites in the Midwest, Mid-Atlantic, and Northeast. In addition to its nuclear operations, the company manages a diverse portfolio of low-carbon energy assets, including hydropower, wind, and solar, totaling more than 32.4GW of capacity.

Over recent years, the major hyperscalers have increasingly signed huge PPAs with nuclear plants to shore up their supply of reliable power. Constellation signed its second major PPA with a data center developer in June, inking a 20-year PPA with Meta to supply the tech giant with 1.1GW of power from its Clinton, Illinois, nuclear power plant. The contract, which will commence in June 2027, will see Meta offtake the entire output of the Constellation-owned 1.121GW Clinton Clean Energy Center.

Also, in June, Amazon Web Services (AWS) signed a 17-year PPA with Talen Energy for 1.92GW of energy from the 2.5GW Susquehanna nuclear power plant. The PPA is contracted until 2042 and contains an option to extend.