By Laila Kearney and Timothy Gardner
NEW YORK/WASHINGTON (Reuters) -Constellation Energy has been awarded a record $1 billion in contracts to supply nuclear power to the U.S. government over the next decade, the company said on Thursday.
Constellation, the country's largest operator of nuclear power plants, will deliver electricity to more than 13 federal agencies as part of the agreements with the U.S. General Services Administration.
The deal is the biggest energy purchase in the history of the GSA, which constructs and manages federal buildings, and is among the first major climate-focused energy agreement by the U.S. government to include electricity generated from existing nuclear reactors.
The GSA estimated that the contracts, set to begin on April 25, will comprise over 10 million megawatt-hours over 10 years and provide electricity equivalent to powering more than 1 million homes annually.
The procurement will deliver electricity to 80 federal facilities located throughout the PJM Interconnection, a regional transmission operator with service covering more than 65 million people. The U.S. Department of Transportation, the Federal Reserve Board of Governors and the Army Corps of Engineers are some of the facilities that will receive the power.
The nuclear power industry, which saw several decades of contraction over rising safety costs and concerns about radioactive waste, has attracted renewed interest in the last year from Big Tech and government agencies in search of carbon-free electricity to meet the rising energy needs.
"This agreement is another powerful example of how things have changed," Constellation CEO Joe Dominguez said in a release.
Constellation said the deal will enable it to extend the licenses of existing nuclear plants and invest in new equipment and technology that will increase output by about 135 megawatts.
“The investments we make as a result of this contract will keep these plants operating reliably for decades to come and put new, clean nuclear energy on the grid while making the best use of taxpayer dollars," Dominguez said.
The GSA said in the face of uncertainty over future electricity prices and soaring power demand from data centers and AI facilities, the contracts will provide federal agencies with budgetary stability by keeping electricity costs fixed for 10 years.
Robin Carnahan, the GSA administrator, said the deal demonstrates "how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone."
The deal includes $840 million for power supplied by Constellation and $172 million for the company to complete energy efficiency work, including weatherizing federal buildings and expanding the use of LED lighting.
Four buildings in the nation's capital will be converted to electric boilers and heat pumps from current steam power systems.