Owner of Three Mile Island says deal with Microsoft would 'pave the way' for restart

(This story was updated to add new information.)

The owner of Three Mile Island unveiled an agreement with software giant Microsoft that it asserts will “pave the way” for the restart of the nuclear power plant’s Unit 1 reactor, the company has announced.

Constellation Energy, which acquired TMI’s Unit 1 reactor in 1999, announced it has signed an agreement that would pledge all of the generating capacity of the plant to power Microsoft’s artificial intelligence efforts and its data centers in the mid-Atlantic region.

The company hopes to have the reactor – which can produce 835 megawatts, enough electricity to power 800,000 homes – back online in 2028, should its plans receive the blessing of federal regulators and qualify for federal tax credits.

The plant has been closed since Sept. 20, 2019, when Constellation, citing economic reasons, shuttered the plant.

“Powering industries critical to our nation’s global economic and technological competitiveness, including data centers, requires an abundance of energy that is carbon-free and reliable every hour of the day, and nuclear power plants are the only energy source that can consistently deliver on that promise,” Constellation President and CEO Joe Dominguez was quoted as saying in a news release.

Dominguez was quoted as saying that Unit 1 “was prematurely shuttered due to poor economics.”

TMI’s Unit 2 reactor – the site of the nation’s worst nuclear power accident in March 1979 – is independent of Unit 1 and is currently being decommissioned by its owner, Energy Solutions, Constellation reported.

Previously: Public hearing on TMI's damaged Unit 2 set as talk swirls that Unit 1 could be restarted

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Preparing Unit 1 to begin generating electricity again includes restoring the reactor, its turbine, generator and other systems, a project that is estimated to take four years and cost $1.6 billion. The company is counting on federal subsidies in the form of tax breaks included in 2022’s Inflation Reduction Act, which included tax incentives to develop clean energy, to help fund the project.

Reopening Unit 1 would require unprecedented approval from the federal Nuclear Regulatory Commission. The commission has never approved reopening a closed-down nuclear plant. The company has also asked the NRC to extend Unit 1’s operating license to at least 2054, according to the news release.

And there are concerns, reported by the Washington Post, about tax breaks being granted to produce energy that would benefit a single private-sector company, in this case, Microsoft.

Constellation asserted that the tax breaks – which provide a credit for every megawatt of electricity produced via carbon-free means – are essential to making the plant restart economically viable.

The company, though, did not provide details of the tax credit or of its contract with Microsoft, the Washington Post reported. The newspaper reported that Energy Secretary Jennifer Granholm previously estimated that federal subsidies could cut the cost of reopening the plant by as much as half.

The company asserts that the cost to taxpayers would be offset by the economic benefits from reopening the plant, citing a study commissioned recently by the Pennsylvania Building & Construction Trades Council. The study, conducted by The Brattle Group, a Washington, D.C., consulting firm that specializes in complex economic, financial and regulatory issues for corporations, concludes that the project would create 3,400 direct and indirect jobs and would add $16 billion to Pennsylvania’s gross domestic product, resulting in generating more than $3 billion in state and federal taxes.

Rob Bair, president of the building and trades council, was quoted in the news release as saying the plant “will support thousands of family-sustaining jobs for decades to come.”

The project has also attracted support Gov. Josh Shapiro, quoted in the news release as saying that the state’s “nuclear energy industry plays a critical role in safe, reliable, carbon-free electricity that helps reduce emissions and grow Pennsylvania’s economy.”

The governor was quoted as saying that his administration “will continue to work to cut energy costs and ensure the reliability of our energy grid so that Pennsylvanians can have access to affordable power” and that restarting Unit 1 “will help us achieve those goals.”

Restarting the plant would also boost Microsoft’s efforts to reduce carbon emissions and support clean energy. Bobby Hollis, the company’s vice president of energy, called the agreement with Constellation “a major milestone in Microsoft’s efforts to help decarbonize the grid in support of our commitment to become carbon negative.”

To remove the stigma of TMI and memories of the accident and its aftermath, the plant would be rebranded as the Crane Clean Energy System, named for Constellation’s former CEO Chris Crane, an advocate for nuclear power.

Unit 1 was shut down for refueling at the time of the accident at Unit 2. It reopened in October 1985 after a lengthy regulatory review and court battles waged by various organizations hoping to prevent it from restarting.

This article originally appeared on York Daily Record: Deal to power Microsoft's AI efforts said to pave way to restart TMI