Shares of Constellation Energy (CEG) climbed approximately 7.2% on Friday, reaching $313.72 in afternoon trading, even as the company's plan to restart the former Three Mile Island Unit 1 encountered a fresh regulatory obstacle. The independent market monitor for PJM Interconnection has formally urged the Federal Energy Regulatory Commission (FERC) to reject a waiver request critical to the project's timeline.
Monitoring Analytics, the PJM market watchdog, filed a motion on April 21 arguing that Constellation's waiver bid fails to meet all four prongs of FERC's standard test. The filing specifically targets the Crane Clean Energy Center—the rebranded Three Mile Island Unit 1—which Constellation aims to bring back online by 2027 to supply power to Microsoft-linked data centers.
Regulatory Hurdles and Grid Rights
At the heart of the dispute is the transfer of Capacity Interconnection Rights (CIRs) from Constellation's Eddystone Units 3 and 4, older gas-and-oil generators near Philadelphia, to the Crane facility near Harrisburg. Without this transfer, the company warns that transmission upgrades could delay Crane's full output until 2030 or later. Monitoring Analytics counters that granting the waiver could impose upgrade costs on other interconnection customers and disrupt the PJM queue.
The case underscores broader tensions between surging electricity demand driven by artificial intelligence and data center expansion, and the limitations of the current transmission grid. The Energy Information Administration projects continued growth in U.S. electricity consumption through 2026 and 2027, with AI and crypto mining as key contributors.
Market Reaction and Sector Performance
Despite the regulatory headwinds, investor enthusiasm for independent power producers remained strong. Vistra (VST) rose 5.1%, while Talen Energy (TLN) gained approximately 4.6%. The sector continues to attract interest due to tight electricity supply and accelerating data center demand.
Constellation CEO Joe Dominguez reaffirmed the company's restart timeline during a March 31 investor call, stating, "We continue to expect to start this unit in '27." The company's strategy aligns with a broader industry trend noted by Zacks Investment Research strategist Andrew Rocco, who suggested in February that leading independent power producers may develop "mega-sites" bundling land, energy, and fiber for data center clients.
Strategic Implications and Risks
Constellation doubled down on its growth strategy after completing its acquisition of Calpine in January, creating a combined portfolio of 55 gigawatts spanning nuclear, natural gas, oil, geothermal, hydro, wind, and solar assets. The merger brought together Calpine's gas and geothermal facilities with Constellation's nuclear fleet.
The stakes are high: if FERC denies the waivers or if PJM studies mandate system upgrades before Crane can achieve full deliverability, Constellation could face a scenario where the reactor is operational but unable to push all its power onto the grid. Such an outcome would jeopardize one of the company's most closely watched growth projects at a time when investors are prioritizing speed-to-market from power producers.
PJM itself did not oppose the waiver request, though the grid operator noted that ongoing transmission studies will determine the timeline for Crane's electricity delivery. The final decision now rests with FERC, which will weigh the competing arguments in the coming months.
