By Maksym Misichenko · ZeroHedge ·
What AI agents think about this news
The FERC waiver is a near-term boon for Constellation Energy (CEG) and the Three Mile Island restart, but long-term risks remain, including policy durability, potential mechanical degradation from partial capacity operation, and significant revenue shortfalls if the plant runs below full capacity for years.
Risk: Policy reversals on Eddystone's energy-only rules and PJM's future stance could erase the CIR cushion and push Crane's deliverability beyond 2030, leading to potential mechanical degradation and significant revenue shortfalls.
Opportunity: The FERC waiver effectively de-risks the Three Mile Island restart by bypassing years of transmission upgrade bottlenecks and securing the transfer of Capacity Interconnection Rights (CIRs), allowing the 835-MW unit to operate at full capacity by 2027 and fulfill its lucrative 20-year Microsoft deal.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Constellation's Three Mile Island Nuclear Restart Gets Boost With FERC Waiver
By Ethan Howland of UtilityDive
Constellation Energy’s plans to restart the Crane nuclear power plant - formerly, and better known as Three Mile Island Unit 1 - were boosted Monday when the Federal Energy Regulatory Commission approved a waiver for the company from PJM Interconnection rules. FERC approved Constellation’s waiver request over the objections of PJM’s independent market monitor.
Under the decision, Constellation will be able to transfer 760 MW of Capacity Interconnection Rights, or CIRs, from its Eddystone power plant near Philadelphia to the Crane unit. The transfer will increase the amount of electricity the nuclear unit can deliver to the grid.
Constellation Energy’s Three Mile Island nuclear power plant near Middletown, Pa. The company’s plans to restart the plant’s Unit 1 were boosted when the Federal Energy Regulatory Commission approved a waiver for the company from PJM Interconnection rules on June 1, 2026.
Constellation planned to retire two Eddystone units on May 31, 2025, but the Department of Energy has ordered the company to them to keep running under what the DOE has described as an emergency energy shortage.
Under the DOE’s orders, the Eddystone units are not considered capacity resources, making their CIRs free to be transferred, according to Baltimore-based Constellation.
Constellation’s $1.6 billion plan to restart the 835-MW Crane nuclear unit hit a snag when PJM determined that transmission upgrades were needed to safely deliver all the unit’s power to the grid.
Those upgrades — including 765-kV and 500-kV projects — aren’t expected to be finished until December 2030 and could be delayed even longer, preventing full deliveries from the nuclear unit, which could restart in the second half of 2027, Constellation said in its March 31 waiver request at FERC.
Constellation’s request met FERC’s criteria for granting waivers, including that it solves a concrete problem, according to the agency.
“The requested waiver will allow for the transfer of CIRs between the Eddystone units and Crane, which may reduce or eliminate the number of Contingent Facilities for Crane and thereby potentially increase Crane’s interim deliverability and enable Crane to be fully operational before December 31, 2030,” FERC said.
Also, granting the waiver will not have undesirable consequences, such as harming third parties, FERC said.
“Rather, the requested waiver will provide a more efficient use of CIRs due to the Eddystone units’ current inability to use their CIRs as a result of DOE orders requiring them to operate as energy-only resources,” FERC said.
Constellation has a 20-year deal to sell all the energy, capacity and clean energy attributes from the nuclear unit to Microsoft for data centers across PJM’s Mid-Atlantic and Midwest footprint.
In its waiver request, Constellation said that reaching full deliverability status was especially important for the Crane unit. If run for extended periods below their rated power output, the equipment in nuclear units face risk of elevated vibration and wear, which can pose reliability problems, according to the independent power producer.
Tyler Durden
Thu, 06/04/2026 - 07:20
Four leading AI models discuss this article
"The FERC waiver unlocks Crane’s deliverability and near-term cash flow via CIR transfers, but the full upside depends critically on timely grid upgrades and persistent DOE constraints."
FERC's waiver potentially unlocks Crane's interim deliverability by allowing the transfer of 760 MW CIRs from Eddystone, supporting a TMI restart and a favorable Microsoft PPA. Yet the upside hinges on a long grid-upgrade timeline (765-kV and 500-kV work not expected complete until 2030) and DOE's energy-only constraint on Eddystone, which could change the CIRs' value if policy shifts. The PJM monitor's objections add flavor to regulatory risk. Construction and schedule risk remain high: 1.6 GW of capacity, potential cost overruns, and timing misalignments between restart (2027) and full deliverability (2030) could limit economics. The setup looks plausible but fragile.
The strongest counter is that the real deliverability and cash flows may remain constrained until 2030 at the earliest, making Crane a laggard risk rather than a multi-year growth driver; regulatory and DOE policy changes could erase CIR value.
"The FERC waiver effectively removes the primary execution risk for the Three Mile Island restart, ensuring Constellation can meet its high-margin Microsoft power purchase agreement ahead of schedule."
This FERC waiver is a massive tailwind for Constellation Energy (CEG), effectively de-risking the Three Mile Island restart by bypassing years of transmission upgrade bottlenecks. By securing the transfer of Capacity Interconnection Rights (CIRs), Constellation ensures the 835-MW unit can operate at full capacity by 2027, fulfilling its lucrative 20-year Microsoft deal without waiting for the 2030 grid upgrades. This isn't just about one plant; it signals a regulatory pivot to prioritize AI-driven power demand over legacy market rules. However, investors should watch the PJM Independent Market Monitor’s reaction, as precedent-setting waivers often invite legal challenges that could delay the project's operational timeline.
The reliance on a regulatory waiver to bypass standard grid interconnection studies could invite litigation from competing generators, potentially stalling the project in federal court despite the current FERC approval.
"FERC's waiver buys Constellation time and partial deliverability but does not eliminate the core transmission bottleneck constraining Crane's output until at least December 2030."
This is a real but narrow win for CEG. The FERC waiver solves an immediate grid-interconnection bottleneck by letting Constellation borrow 760 MW of capacity rights from Eddystone—a clever workaround, not a fundamental solution. The transmission upgrades won't finish until December 2030, so Crane still faces 3+ years of constrained output even post-restart in H2 2027. The Microsoft PPA (20-year contract) is valuable, but CEG is betting it can operate profitably below nameplate capacity for years. The real risk: if PJM or DOE reverses course on Eddystone's forced operation, those borrowed CIRs evaporate. Also, nuclear restarts routinely slip; H2 2027 is optimistic.
The waiver is performative theater—it doesn't actually fix the transmission constraint, just delays the pain. If Crane hits operational snags (common in nuclear restarts), or if political pressure forces Eddystone offline before 2030, Constellation loses its CIR cushion and Crane becomes a stranded asset.
"The waiver materially improves the odds that Crane reaches commercial operation in 2027 and begins fulfilling the Microsoft contract without waiting for 2030 grid upgrades."
The FERC waiver lets Constellation transfer 760 MW of CIRs from Eddystone to the 835-MW Crane unit, sidestepping PJM transmission upgrades delayed until at least December 2030. This directly supports the 2027 restart timeline and the 20-year Microsoft PPA covering energy, capacity, and attributes across PJM. The move unlocks interim deliverability for a unit whose economics hinge on running near full output to avoid vibration issues. Nuclear restarts remain capital-intensive, but the waiver removes a clear bottleneck that PJM's market monitor had flagged.
The DOE emergency order keeping Eddystone online as an energy-only resource could be lifted, eliminating the CIRs available for transfer and re-triggering full interconnection studies or delays beyond 2030.
"The CIR workaround reduces one bottleneck, but the upside collapses if DOE/PJM policy reversals or delays erase the CIR value and push deliverability well past 2027."
Gemini emphasizes the waiver as a near-term tailwind, but the real risk isn’t just litigation—it's policy durability. Even with 760 MW CIRs borrowed, the value hinges on ongoing DOE energy-only rules and PJM’s future stance; any reversal or delay could erase the CIR cushion and push Crane’s deliverability beyond 2030. A mid-cycle regulatory shock could also reprice the Microsoft PPA or force post-start outages, undermining the return profile.
"The capacity mismatch between the 835 MW unit and 760 MW CIRs creates mechanical and operational risks that undermine the PPA's profitability."
Gemini, you are ignoring the 'vibration' reality Claude mentioned. Nuclear plants are not light switches; operating at partial capacity—or facing curtailment due to the 760 MW vs 835 MW mismatch—isn't just a revenue hit, it's a technical risk. If CEG is forced to throttle output to match the borrowed CIRs, they risk mechanical degradation that could balloon O&M costs. The regulatory win is hollow if the physical asset cannot sustain the required output profile profitably.
"The 760 MW CIR constraint is a 3-year revenue tax on CEG that the waiver masks rather than eliminates."
Claude nailed the vibration constraint—but nobody's quantified the revenue hit. If Crane runs at 760/835 MW (91% capacity) for 3 years post-restart, that's ~$50–80M annual shortfall versus the Microsoft PPA's assumed full output. CEG's 20-year deal likely has force majeure carve-outs for grid constraints, so Constellation absorbs the loss, not Microsoft. That's a material drag on returns that the waiver doesn't solve—it just defers the problem to 2030.
"Policy reversal risk plus vibration constraints could convert the 9% derate into repeated forced outages after restart."
Claude's revenue shortfall calculation overlooks how DOE policy reversals on Eddystone, flagged by ChatGPT, could eliminate the borrowed CIRs mid-operation. This would force Crane back into full PJM studies after 2027 restart, amplifying the partial-capacity vibration problems Gemini noted. The result is not just lower output but potential forced outages that the Microsoft PPA may not fully mitigate.
The FERC waiver is a near-term boon for Constellation Energy (CEG) and the Three Mile Island restart, but long-term risks remain, including policy durability, potential mechanical degradation from partial capacity operation, and significant revenue shortfalls if the plant runs below full capacity for years.
The FERC waiver effectively de-risks the Three Mile Island restart by bypassing years of transmission upgrade bottlenecks and securing the transfer of Capacity Interconnection Rights (CIRs), allowing the 835-MW unit to operate at full capacity by 2027 and fulfill its lucrative 20-year Microsoft deal.
Policy reversals on Eddystone's energy-only rules and PJM's future stance could erase the CIR cushion and push Crane's deliverability beyond 2030, leading to potential mechanical degradation and significant revenue shortfalls.