Constellation Energy is looking to secure federal funding from the Biden administration to restart the Three Mile Island nuclear facility within the next four years.
The Baltimore-headquartered energy company revealed in September that it is looking to reopen the nuclear plant, which has been shut down since 2019, to help Microsoft meet the growing energy demands brought about by data centers that house artificial intelligence.
To help finance the plan, Constellation Energy submitted a federal loan application to the U.S. Energy Department in May, according to details shared with the Washington Post.
As of October, the loan guarantee request for $1.6 billion has reportedly passed an initial review. Now, negotiations will continue regarding specific details of the funding. The company has previously said $1.6 billion would cover all the costs needed to reopen the nuclear facility.
By applying for a loan guarantee, companies such as Constellation Energy can borrow money directly from the federal government, with an agency, such as the Energy Department, acting as a guarantor. However, companies are not required to borrow funds in this way.
If approved, the funding would essentially be backstopped by taxpayers, who would bear much of the risk of a default. It would also reportedly save Constellation Energy upward of $122 million in borrowing costs the company could incur by reopening the plant.
While the application is being considered, Constellation Energy said it is still undecided about whether it would accept a loan guarantee deal from the Energy Department.
“Rest assured that to the extent we may seek a loan, Constellation will guarantee full repayment,” the company said.
It also insisted that federal funding would not put default risk on taxpayers.
“Any notion that taxpayers are taking on risk here is fanciful given that any loan will be backstopped by Constellation’s entire $80-billion-plus value,” said Constellation Energy.
News of the application comes just days after the Energy and Agriculture departments announced a $1.52 billion loan to help reopen the Palisades nuclear power plant in Michigan. The site is expected to become the first-ever decommissioned plant to come back online in the United States.
Constellation Energy revealed last month that it hopes to reopen Three Mile Island, the site of the worst nuclear accident in U.S. history, by 2028. It will be renaming the nuclear plant the Crane Clean Energy Center. The company has said it plans to enter a 20-year agreement with Microsoft to supply the tech company with over 800 megawatts of carbon-free electricity. The reopening of the plant is subject to approval by the Nuclear Regulatory Commission.
The NRC informed the Washington Examiner on Wednesday that the agency has yet to receive an application for approval from Constellation Energy regarding the Pennsylvania site.
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Once received, it could take up to two years to issue a decision. However, that timeline is subject to change, as the NRC has never approved restarting a decommissioned plant in U.S. history.
The NRC is expected to provide a decision on the approval for the Palisades nuclear facility sometime in the first half of next year. The original application for restarting operations at the plant was submitted in February 2023. If they receive approval, officials hope to bring the site back online by October 2025.