Constellation Energy's plan to restart the Three Mile Island nuclear plant and supply power to Microsoft's artificial intelligence data centers is hitting an unexpected roadblock: the electrical grid itself cannot handle the power yet. The company aims to restart the reactor, now called Crane Clean Energy Center, by the end of 2027, but regional grid operators say multiple transmission projects must be completed first, with some not finishing until 2030 .

This infrastructure gap reveals a critical challenge in the race to power AI: building the power plants is only half the battle. The grid that connects them to data centers must be upgraded too, and those upgrades take years. Constellation Energy has requested waivers from federal regulators, warning that if transmission projects remain contingent requirements, the plant's ability to deliver electricity could be at risk .

Why Is Grid Connection Taking So Long?

The Crane Clean Energy Center will generate over 800 megawatts of power, enough to supply a large data center complex. However, the regional grid operator PJM Interconnection has determined that several transmission projects must be completed before this capacity can safely connect to the broader electrical system. These aren't quick fixes; they involve building new power lines, upgrading substations, and coordinating with multiple utilities across states .

The timing mismatch is stark. Constellation aims to restart the reactor by the end of 2027, but some of the required transmission projects have service dates as late as 2030. This creates a scenario where the nuclear plant could be operational but unable to deliver power to Microsoft's data centers on schedule .

What Does This Mean for AI Data Center Power Demands?

Microsoft signed a 20-year power supply agreement with Constellation Energy specifically to support its artificial intelligence infrastructure needs. The tech giant is betting on nuclear power to provide clean, reliable electricity for its expanding AI operations. But the grid delays could force Microsoft to seek alternative power sources or delay its own data center buildout plans .

This bottleneck is not unique to Three Mile Island. As hyperscalers like Microsoft, Google, and Meta race to build massive AI data centers, they're discovering that the U.S. electrical grid was designed for a different era. The grid was built to serve cities and industrial facilities with relatively stable power demands. AI data centers, by contrast, require enormous amounts of continuous power, and they're being built faster than the transmission infrastructure can support them .

How to Navigate Nuclear Power for Data Center Infrastructure

• Secure Federal Support Early: Constellation Energy obtained a $1 billion federal loan guarantee for the Three Mile Island restart, demonstrating the importance of government backing when facing infrastructure delays and regulatory hurdles.
• Plan for Grid Upgrades Alongside Plant Construction: Companies should coordinate with regional grid operators like PJM Interconnection during the planning phase, not after construction begins, to identify transmission bottlenecks and timeline conflicts.
• Request Regulatory Waivers Proactively: Constellation Energy filed waiver requests with federal regulators to address contingent grid connection requirements, showing that companies can negotiate flexibility when facing infrastructure constraints beyond their control.
• Diversify Power Sources: Rather than relying on a single nuclear plant, data center operators should explore partnerships with multiple energy providers, including wind, solar, and existing natural gas facilities, to ensure reliable power supply during construction delays.

The broader context makes this delay even more significant. Constellation Energy, the largest nuclear power operator in the U.S., operates approximately 55 gigawatts of capacity from nuclear, natural gas, geothermal, hydro, wind, and solar facilities. The company reported an 8.34 percent revenue increase in 2025, reflecting strong demand for clean energy . Yet even with this scale and financial strength, the company cannot overcome grid infrastructure limitations on its own.

The U.S. government has set an ambitious target to quadruple nuclear energy capacity to 400 gigawatts by 2050, signaling strong policy support for nuclear expansion. However, this Three Mile Island case demonstrates that policy support and financing are not enough. The physical infrastructure of the electrical grid must evolve in parallel with new power generation capacity .

What Are the Broader Implications for Nuclear Energy Investment?

Despite the Three Mile Island delays, investor confidence in nuclear energy remains strong. The VanEck Uranium and Nuclear ETF, which holds 30 nuclear-related stocks, surged nearly 80 percent over the past year, though it experienced a recent 10 percent pullback . Constellation Energy announced a $5 billion share buyback plan, signaling management confidence in the company's future despite the 2026 challenges .

Wall Street analysts remain optimistic about Constellation Energy's long-term prospects. Barclays analyst Nicholas Campanella raised the firm's price target on Constellation Energy to $360 from $356, maintaining an Overweight rating and projecting a conservative path to $19 per share in earnings by 2029 . BMO Capital lowered its price target to $386 from $410 but kept an Outperform rating, noting confidence in management's ability to execute above initial guidance as upside opportunities are realized .

The Three Mile Island restart also highlights the strategic importance of uranium supply. Cameco, the world's second-largest uranium miner, accounted for 15 percent of global uranium production in 2025 and signed a $2.6 billion uranium supply deal with the Indian government, underscoring its critical role in the global nuclear supply chain . As nuclear capacity expands, uranium demand will grow, benefiting companies positioned to supply the fuel.

Small modular reactors (SMRs) represent another avenue for addressing power constraints. BWX Technologies is developing small modular reactors designed for factory assembly and transport to final locations, expected to provide flexible power solutions for military bases and data centers . These smaller units could bypass some grid connection challenges by being deployed closer to where power is needed.

The Three Mile Island delay is ultimately a reminder that the energy transition for AI requires more than just building new power plants. It requires upgrading the entire electrical infrastructure that connects generation to consumption. Until the grid catches up, even the most ambitious nuclear projects will face bottlenecks that no amount of financing or policy support can immediately overcome.