(Reuters) -Constellation Energy has signed an exclusive deal with Microsoft to restart one of the units at the noted Three Mile Island nuclear plant in Pennsylvania to power data centers for the tech giant, the company said on Friday.
This would be the first ever restart of a nuclear power plant in the U.S. after shutting, and shows how utilities are benefiting from a massive surge in demand from data-center operators looking to ride a boom in artificial intelligence.
Shares of the company were up nearly 8% at $224.4 premarket.
The deal would enable a restart of Unit 1 of the five-decades-old nuclear power facility in Pennsylvania that was shut in 2019 due to operational reasons. Unit 2, which was shut after a partial meltdown in 1979 - the most famous commercial nuclear accident in U.S. history - is not going to be restarted.
Constellation, which plans to spend about $1.6 billion to restart the plant, is awaiting permits and expects the facility to come online by 2028.
Under the deal, disclosed on Friday, Microsoft will purchase energy from the restarted plant for a period of 20 years.
Reuters first reported on the potential restart in July.
A restart is expected to be logistically challenging, but as power demand increases from tech companies, the virtually carbon-free electricity source is seeing renewed support.
If the restart is approved, Three Mile Island would provide Microsoft with 835 megawatts of energy.
Financial details of the deal were not disclosed. Microsoft and Constellation declined to give more details on the agreement.
(Reporting by Mrinalika Roy and Sourasis Bose in Bengaluru; Editing by Janane Venkatraman and Sriraj Kalluvila)