Constellation to ask regulators for help speeding up Three Mile Island nuclear power plant restart, CEO says

By Laila Kearney

NEW YORK, March 31 (Reuters) - Constellation Energy CEG.O will make a request to U.S. energy regulators on Tuesday to speed up its connection of the Three Mile Island nuclear power plant to the electric grid and meet its goal of restarting the plant by the end of 2027, the company's CEO said.

The giant U.S. power producer is working to resume operations of a reactor at the shut plant to deliver electricity to the regional grid to power Microsoft MSFT.O data centers by the end of next year. Recent initial feedback from grid operator PJM Interconnection, however, said the site may not be able to connect to the electrical system until 2031.

News of the potential delay, first reported by Reuters on Friday, sent shares of the company lower.

By midday on Tuesday, following a broader business outlook and earnings update for investors, Constellation stock was down roughly 8% at about $275 a share.

Constellation says it still plans to meet its timing goal of the $1.6 billion relaunch of Three Mile Island, under the new name Crane Clean Energy Center, which was first announced in 2024.

"We are working on that with PJM, and we continue to expect to start this unit in 2027," CEO Joseph Dominguez said on an investor update call.

Transmission upgrades and other studies are needed to reconnect the plant, which shut in 2019 following more than 40 years of operations. The site is widely known for having a partial nuclear meltdown at a separate reactor, which will remain shut.

The company will ask the Federal Energy Regulatory Commission on Tuesday to transfer certain rights that allow it to send electricity to the grid from its Eddystone gas-fired power plant outside of Philadelphia to the Crane site, Dominguez said.

The feedback from PJM is in its early stages, however, and Constellation said it is also speaking with transmission owners to reopen on time.

WILD RIDE FOR US POWER COMPANIES

Share prices of U.S. power producers like Constellation have more than doubled over the last two years on the prospect of the companies' cashing in on Big Tech's spending spree to build and power data centers needed for the expansion of artificial intelligence. Silicon Valley has said it will spend $600 billion on its data center expansion just in 2026.

The Three Mile Island restart, which is happening under a power purchase agreement with Microsoft, was one of the first major deals between U.S. independent power producers and Big Tech since the modern data center electricity rush began.

No fully shut nuclear power plant has been restarted, but there are currently three attempts to do so in the United States. One deal involves Alphabet-owned GOOGL.O Google contracting to restart a NextEra-owned NEE.N plant in Iowa.

The realities of a U.S. electric grid short on supplies, however, have begun to complicate some data center contracting for any type of power.

PJM, which operates the biggest regional electric grid in North America, has warned of electricity shortfalls as early as next year as demand from data centers outpaces the addition of new supplies.

That imbalance has driven up bills for homes and small businesses in the 13-state region that PJM covers, spurring local opposition to new projects that has also slowed data center deals.

GROWING DATA CENTER SCRUTINY

In response to that backlash, the White House organized a meeting with the biggest technology companies this month. Executives from Microsoft, Google, Amazon AMZN.O, Meta META.O and others signed pledges promising data center operators would pay their fair share of the energy infrastructure costs to serve data centers. Some of the terms of the non-binding pledges included that technology companies add more electricity supplies to the grid.

"There is clearly more scrutiny on data center development, and so we think it's really important that data center announcements occur when all stakeholders, including supportive policymakers and community leaders, are present," Dominguez said.

The pledges resulted in Constellation having to renegotiate some of the terms of power contracts it is negotiating for data centers, Dominguez said, potentially delaying new agreements.

U.S. regulators and PJM are also in the process of codifying how data centers, which are being built to consume more energy at a single site than any other facility, connect and operate on the grid. When those rules are put forth, independent power producers like Constellation will be able to move meaningfully forward, said Melius Research energy analyst James West.

"We continue to see PJM clarity as the unlock," West said. "The question is not if. It is when, and when is a 2026 event."