Three Mile Island Restarts — Microsoft Takes Every Megawatt

No one has ever done what the United States is about to try. Three nuclear power stations that were dead — decommissioned, dismantled, in one case wrecked by a storm — are being brought back to life, on $4.4 billion of federal loans, so that artificial intelligence can keep growing. Not one commercial reactor in history has resumed generating electricity after beginning the decommissioning process. Washington is about to attempt it three times at once.

The Department of Energy is lending as much as $4.4 billion to restart the Palisades plant in Michigan, the Crane Clean Energy Center on Pennsylvania’s Three Mile Island, and the Duane Arnold Energy Center in Iowa, the Associated Press reported on October 16. Together they would restore 2.25 gigawatts of power — roughly what two million homes and businesses use — and a meaningful share of it is already spoken for by the biggest names in tech. Microsoft has a 20-year contract to take every megawatt from the restarted Three Mile Island reactor for its data centres. Google is collaborating with NextEra Energy to bring Duane Arnold back by early 2029.

All three plants closed before their operating licences expired, mostly because the electricity they produced had become too expensive to sell. Now the economics have flipped — and the reason is sitting in every chat window you have ever opened.

Photo: The Palisades Nuclear Generating Station on the shore of Lake Michigan. It operated from 1971 until 2022 and is the furthest along of the three restart projects. (Public domain, via Wikimedia Commons)

Nobody has ever done this before

The word to watch in the AP’s dispatch is “unprecedented,” and it is not hype. Reactors have come back from long outages in Canada, Japan, Belgium, South Korea and elsewhere — but no commercial reactor anywhere has restarted after beginning decommissioning, the formal process that takes a plant out of service for good. Palisades is expected to be the first in the world to pull it off. The World Nuclear Association, hardly a hostile witness, said the restarts should be celebrated — but added that preventing reactors from closing prematurely in the first place would have been the better option. When the industry’s own cheerleaders are telling you not to make a habit of this, believe them.

The engineering metaphor everyone is reaching for comes from Todd Allen, associate dean for research at the University of Michigan’s College of Engineering. Restarting a plant, he told the AP, is like restarting a car that sat idle for a few years: the driver still needs a valid licence, and every part has to work. “That’s what they’re trying to do with these nuclear plants, but it’s a much bigger, complicated system,” he said. Workers have to be rehired and retrained, maintenance brought current, fuel procured, and regulators persuaded to restore operating licences. “There’s a demand in the country for more power,” Allen added. “You have these assets that were previously hooked up. They were previously operable, and you can relatively quickly get them generating electricity again, compared to your other possibilities. For anyone who wants zero carbon, nuclear provides that. For the Trump administration, which really wants nuclear, this fits that story also.”

We read the AP dispatch in full and cross-checked the loan figures against the relay carriers and the CNBC-sourced reporting on the Crane loan: the $4.4 billion is a ceiling — “as much as” — awarded in stages, not a single cheque. What matters is the direction: the Trump administration is pushing hard to deploy nuclear power for AI and manufacturing, and it is also lending billions more to squeeze extra output from reactors that never closed at all.

Palisades: the furthest along, and the most complicated

Palisades, on the Michigan lakeshore, is the test case everything else will be judged against. It ran from 1971 until 2022, when its owner Entergy decided to leave the nuclear business. The plant’s operating licence still had nine years left in it. Holtec International bought the plant and began dismantling it — though, critically, none of the steps taken were irreversible.

Michigan officials did not want to lose the jobs or the electricity, and leaned on Holtec to try reopening it instead, with state money to help. The Biden administration approved a $1.5 billion federal loan to restart the facility in 2024, and the Trump administration kept the payments flowing — a rare thread of continuity between two administrations that agree on almost nothing else about energy.

In August, Holtec began loading nuclear fuel, one of the final major phases before a reactor can restart. Then the process paused: a fuel assembly tilted from its upright position, and Holtec decided it needed to understand why before proceeding. Its power purchase agreements require Palisades to be in service by March 2027. The tilted assembly is exactly the kind of thing that makes “unprecedented” a warning as well as a promise.

Photo: The cooling towers of Three Mile Island in Pennsylvania. The reactor being restarted as the Crane Clean Energy Center is Unit 1 — not Unit 2, which suffered the 1979 partial meltdown. Credit: formulanone via Wikimedia Commons (CC BY-SA 2.0).

Three Mile Island: the Microsoft reactor

The Pennsylvania plant needs no introduction, and that is precisely the problem. Three Mile Island was the site of the nation’s worst commercial nuclear accident in 1979, when a partial meltdown destroyed one reactor. What gets lost in the retelling: the plant had two reactors, and the other one — Unit 1 — kept running for another four decades. When Constellation Energy’s then-parent company Exelon shut Unit 1 down in 2019, it said the reactor was losing money and Pennsylvania lawmakers had refused to subsidise it. Economics killed it, not physics.

In 2024 Constellation announced it would spend $1.6 billion of its own money to restart Unit 1 as the Crane Clean Energy Center — under a 20-year agreement giving Microsoft the plant’s entire output to power its AI data centres. The Energy Department has added a $1 billion loan, and Deputy Energy Secretary James Danly toured the site last week. The company hopes to bring the plant back online in 2027. On a control-room tour the AP photographed in June 2025, Crane’s regulatory assurance manager walked reporters past panels that had sat dark for years; now the company is renovating turbines, generators, transformers and cooling systems to light them again.

The deal is the clearest illustration yet of the new energy economics. Two years ago this reactor was uneconomic at market prices. Today a hyperscaler will pay a premium for two decades of carbon-free, always-on electricity — exactly the profile an AI data centre needs, and exactly the thing wind and solar cannot provide without massive storage. This is the same logic that had Washington forcing AI data centres to pay for the grid infrastructure they consume: the industry has finally accepted that its power has to be paid for.

Duane Arnold: the storm broke it, Google will fix it

Iowa’s only nuclear plant has the strangest story of the three. Duane Arnold began operating in 1975. In 2018 its owners announced it would close permanently in late 2020 — and replacing it with cheaper sources, including wind, was projected to save Iowa customers $300 million. Then nature intervened: in August 2020 a derecho — a violent, straight-line windstorm — tore through the Midwest and badly damaged the plant’s cooling towers. It shut down early and never reopened.

NextEra Energy, which owns the plant, looked at the wreckage and saw a bargain. CEO John Ketchum said company officials “felt really good about the ability to bring it back.” NextEra and Google are now collaborating to restart Duane Arnold by early 2029, backed by a long-term contract with the hyperscaler. Ketchum’s pitch is the one every utility executive in America wishes they could make: “This is a perfect example of data centres paying their own way. We’re able to sign a long-term contract with a hyperscaler for that project. So none of the costs are being paid by residential customers in Iowa.” The plant that was too expensive to run in 2020 is worth reviving in 2026 because someone finally agreed to pay what the power actually costs.

The critics are not wrong either

Not everyone is cheering. Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, told the AP the taxpayer money should go toward fixing safety risks first: most US plants were built between 1970 and 1990 and designed for that era’s disasters, while climate change is making extreme weather more frequent and severe. “It’s possible, if they set the right level of safety and spend the necessary funds to meet that, they could restore these plants to operable condition,” he said. “That’s not happening at this point.” The derecho that finished Duane Arnold is, in his telling, Exhibit A.

From the right, Jack Spencer of the Heritage Foundation’s Center for Energy, Climate and Environment could not have been blunter: he said he can’t think of a worse use of taxpayer money than restarting reactors that private demand would evidently finance on its own. If Microsoft and Google are queueing up to pay premiums, why is the federal government the lender of first resort? And from the centre, Jennifer Gordon of the Atlantic Council’s Nuclear Energy Policy Initiative called it “a terrific way of leveraging federal financing to get needed electricity.” Three experts, three verdicts, and the honest answer is that all of them have a point.

Our take

Here is what this story really is: the AI industry’s money finally caught up with the grid’s reality. For two years the debate about artificial intelligence was conducted entirely in software — models, agents, benchmarks — while the physical question went unasked: where does the electricity come from? The answer, it turns out, is the plants your parents’ generation built and your generation’s economics shut down. Restarting a reactor is cheaper and faster than building a new one, the carbon maths is unbeatable, and hyperscalers will sign 20-year cheques for it.

But do not mistake a good deal for a safe one. Palisades is the furthest along and it just had to stop loading fuel because an assembly tilted. The NRC has never re-licensed a plant that began decommissioning. And Spencer’s objection deserves to be taken seriously rather than dismissed as ideology: $4.4 billion in federal loans for projects with guaranteed corporate buyers is Washington socialising the risk of deals that private capital was already willing to do. Whether these three restarts succeed will decide whether America’s nuclear renaissance is real engineering — or just the AI boom renting credibility it has not earned yet. The first fuel is already loaded. The first real test comes next.

Update, Oct. 19: NRC approves the Palisades fuel rescue — with caveats

Update, Oct. 19: the Palisades fuel saga moved a step forward — and the AI nuclear land-grab got bigger. On Oct 13 the NRC approved Holtec's recovery plan for the fuel assembly that tipped roughly 30 degrees inside the Palisades reactor on Aug 30, clearing the company to use specially designed equipment to move the damaged assembly (DD41) to the spent-fuel pool (Moody on the Market; Interesting Engineering; Beyond Nuclear). The approval is not a green light: the assembly has not been removed, the root cause is still under investigation, and fuel loading cannot resume until it is. Separately, Meta is now playing the same game as Microsoft and Google. Data Center Dynamics reports January 2026 deals giving Meta up to 6.6GW of nuclear via Vistra, TerraPower, Oklo and Constellation's Clinton plant. 'Our agreements with Vistra, TerraPower, Oklo, and Constellation make Meta one of the most significant corporate purchasers of nuclear energy in American history,' said Meta chief global affairs officer Joel Kaplan. The hyperscaler queue for reactors is getting longer; the supply of dead ones to restart is not.

Related: data centres demanding twice Britain's entire electricity supply; regulators blocking data-centre power-cost shortcuts on the PJM grid; Samsung's $1 billion bet on building AI's power grid.

Sources: Associated Press (Jennifer McDermott, with Sarah Rankin contributing, Oct 16, 2026); Economic Times / Arab News relays of the AP dispatch; Data Center Dynamics (CNBC-sourced) on the $1B Crane loan; Karmactive on the per-plant loan breakdown; image licences verified via Wikimedia Commons API.

By the TechPulse USA News Desk — TechPulse USA is a global technology and AI news publication covering the stories shaping the United States, Europe, Canada and Australia, with every fact verified before we publish.