Pennsylvania Gov. Josh Shapiro is urging the PJM Interconnection to quickly develop a fast-track process to review interconnection requests for shovel-ready generation such as Constellation Energy’s 835-MW unit 1 at the Three Mile Island nuclear power plant — dubbed the Crane Clean Energy Center.
“Given the lengthy review process for new projects, it is imperative that shovel-ready resources like the Crane Clean Energy Center be allowed to come online as quickly as possible rather than waiting in the [interconnection] queue as if they were an entirely new development,” Shapiro, a Democrat, said in a letter to PJM on Friday.
Earlier that day, Constellation said it has a 20-year deal to sell all the energy, capacity and clean energy attributes from the nuclear unit near Harrisburg, Pennsylvania, to Microsoft for the tech company’s data centers across PJM’s Mid-Atlantic and Midwest footprint. Constellation aims to restart the unit in 2028. It shuttered the unit in 2019 because it wasn’t economically viable.
Constellation plans to file an interconnection request with PJM early next year so it would be part of an interconnection study process set to begin in early 2026, Dan Eggers, executive vice president and CFO for Constellation, said Friday during a conference call with equity analysts. Constellation expects the review to be finished in early 2028. The company will ask the Federal Energy Regulatory Commission to approve an interconnection service agreement by the spring of 2028 to allow the power plant to sync with the grid, Eggers said.
However, the unit’s restart date could come sooner if PJM adopts an interconnection review pathway for shovel-ready projects, according to Eggers.
“We are hopeful that PJM will embrace changes to the interconnect process to speed up interconnection for new firm resources to address tightening demand-supply fundamentals and the market’s need for more firm generation,” Eggers said.
PJM plans to propose an expedited framework to fast-track some generation interconnection projects, the grid operator said in a Sept. 19 letter to state ratepayer advocates.
Stu Bresler, PJM executive vice president for market services and strategy, outlined the potential proposal in a late-August interview with Utility Dive.
“We’re thinking really hard about whether there might be something we could put in place that could run in parallel with at least the second half of this [interconnection queue] transition we’re in, that would accommodate shovel-ready projects,” Bresler said. “They have site control. They can get on the system very quickly. They can benefit system reliability … without perturbing the transition as we go through it.”
During Friday’s conference call, Constellation officials declined to say how much revenue the company could earn from the PPA with Microsoft.
However, Morgan Stanley analysts estimate Constellation will sell power to Microsoft for $98/MWh compared to market power prices of around $50/MWh. Constellation also expects the unit’s output will receive a roughly $30/MWh clean energy tax credit.
“Future data center contracts with nuclear plants could come at an even higher price when colocated, given the time advantage of building at an existing plant,” the analysts said in a research note Monday.
Based on the Microsoft deal, the analysts raised their outlook on Public Service Enterprise Group and Vistra, two companies with nuclear power plants. Constellation’s stock price jumped about 22% Friday to nearly $255 per share.
Constellation is adding 185 MW in total to its Byron and Braidwood nuclear plants in Illinois, and could add another 1,000 MW through uprates to its other nuclear power plants, Joe Dominguez, Constellation president and CEO, said during the conference call.
The Microsoft deal could spark a range of offerings for major data centers, according to Dominguez. “It does not at all change the trajectory or our optimism for co-located deals,” he said. “In fact, it encourages them. It encourages more deals around uprates and relicensings, and it encourages on-grid solutions that we know at Constellation we could provide, and we are working those things every single day.”
Also, the deal is a sign that competitive markets can respond to the needs of data center owners, including on the transmission side of grid operations, according to Dominguez.
“I think it answers a lot of questions about the competitive market’s ability to respond at a time where some people are asking those questions,” he said. Officials from Exelon, FirstEnergy and PPL have argued their utility companies could help provide power in PJM, though none currently own generation.
