This week, the Loan Programs Office closed its first new loan under the Trump administration – a $1 billion loan to Constellation Energy Group to assist with the restart of the once-infamous Three Mile Island Nuclear Generating Station’s Unit 1.
This loan is historic for several reasons, including some LPO-specific novelties that energy wonks in particular may appreciate.
First, while Three Mile Island isn’t the first nuclear reactor to restart in the US – the Palisades plant in Michigan gets that distinction* – bringing back Three Mile Island is hugely symbolic. The Three Mile Island partial nuclear meltdown in 1979 was the worst commercial nuclear accident in US history (though we should note that it had no broadly-verified public health effects), and hastened the decline of the US nuclear industry. Today, many local residents are celebrating the reactor restart. It’s a new era in the political economy of nuclear power.
Second, it’s really the first LPO loan to tackle the issue of AI-driven load growth. Microsoft has signed a PPA with Constellation for 800+ megawatts as part of this deal; such a construct between a Big Tech firm and an energy developer would have been unthinkable just a few years ago, and represents the tech sector’s continued move into the infrastructure space. (Note: A technical but important point of clarification here – Microsoft has a PPA, but this is not a behind-the-meter deal. The electrons from Three Mile Island will flow directly into PJM, benefitting ratepayers and adding extra reserve margin to the grid.)
