02:36 PM EDT, 09/20/2024 (MT Newswires) -- (Updates with additional comments from a blog authored by Microsoft's ( MSFT ) Bobby Hollis.)

Constellation Energy ( CEG ) said Friday that it entered into a 20-year power purchase deal with Microsoft ( MSFT ) that would result in the energy company restarting the Three Mile Island nuclear plant in Pennsylvania to help power the technology giant's data centers with carbon-free energy.

The Three Mile Island Unit 1 reactor was shut down in 2019 for economic reasons. As part of the deal, Microsoft ( MSFT ) will purchase energy from the restarted plant. Constellation's shares jumped 20% in Friday trade, while Microsoft ( MSFT ) dipped 0.4%.

The plant will be renamed the Crane Clean Energy Center and is expected to come online in 2028. Constellation plans to spend $1.6 billion to restore the facility, without any state or federal aid, a spokesperson for the company told MT Newswires in an email. Constellation aims to pursue a license renewal to extend plant operations to at least 2054.

"This agreement is a major milestone in Microsoft's ( MSFT ) efforts to help decarbonize the grid in support of our commitment to become carbon negative," Bobby Hollis, the technology giant's vice president of energy, said in a Friday statement.

The retired facility was an 835-megawatt plant, Hollis said in a separate blog post published on Microsoft's ( MSFT ) website. Microsoft ( MSFT ) aims to become carbon negative by 2030, Hollis wrote.

The restored plant is anticipated to create 3,400 direct and indirect jobs and add more than 800 megawatts of carbon-free electricity to the grid, according to a recent study commissioned by the Pennsylvania Building and Construction Trades Council that was cited by the companies' joint statement.

The restarting of the facility is also estimated to add $16 billion to Pennsylvania's gross domestic product and generate more than $3 billion in state and federal taxes, the companies said, citing the study.

"Before it was prematurely shuttered due to poor economics, this plant was among the safest and most reliable nuclear plants on the grid, and we look forward to bringing it back with a new name and a renewed mission to serve as an economic engine for Pennsylvania," according to Constellation Energy ( CEG ) Chief Executive Joe Dominguez.

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