The U.S. Department of Energy on Tuesday closed on a $1 billion loan to restart Constellation Energy’s 835-MW Crane nuclear unit in Pennsylvania. Constellation plans to sell power from the unit to Microsoft under a long-term contract.
Inspections of key components at the unit, formerly Three Mile Island Unit 1, and regulatory reviews are on schedule, Constellation said Tuesday. The Baltimore-based company expects to spend about $1.6 billion — about $1,916 per kilowatt — to restart the unit, possibly as soon as in 2027.
In 1979, Three Mile Island suffered a partial reactor meltdown in what is considered “the most serious accident in U.S. commercial nuclear power plant operating history, although its small radioactive releases had no detectable health effects on plant workers or the public,” according to the Nuclear Regulatory Commission.
Under the loan, Constellation will pay an interest rate of 0.375% a year over the current average yield on outstanding marketable obligations of the United States of comparable maturity, as determined by the Secretary of the Treasury, the company said in a U.S. Securities and Exchange Commission filing.
Under the agreement, Constellation can borrow up to $1 billion through Sept. 15, 2030, according to the filing. The company must pay the loan back by November 2055.
“DOE's quick action and leadership is another huge step towards bringing hundreds of megawatts of reliable nuclear power onto the grid at this critical moment," Joe Dominguez, Constellation president and CEO, said.
The loan is part of the Trump administration’s effort to bolster nuclear power. It marks the first project to receive a concurrent conditional commitment and financial close under the Trump administration, DOE Secretary Chris Wright said in a press release.
The unit’s restart will help lower electricity costs, strengthen grid reliability and create over 600 jobs, Wright said.
Constellation’s share price jumped 5.8% Wednesday morning to $359.20/share.
