In a state now dominated by wind energy, the electric utility company is reviving its Duane Arnold nuclear facility to power Google’s data centers.
When the Duane Arnold Energy Center in Palo, Iowa, closed in 2020, it shuttered the state’s only nuclear facility and erased hundreds of jobs from the local economy. Just a few years later, the incredible demand for energy to power data centers for artificial intelligence has sparked owner and operator NextEra Energy Inc. to reopen the nuclear plant despite local pushback in a state now dominated by wind energy.
In October, NextEra — which produces roughly 5.5% of the electricity generated in the country — announced a 25-year power purchase agreement with the tech giant Google that will breathe new life into Duane Arnold and boost the energy company’s earnings per share by roughly 14% per year over the first decade. The reopened plant will also create over a thousand jobs in construction and operations.
“We are in the early stages of a nuclear renaissance,” said James West, head of energy and power at the investment firm Melius Research. “We’re now going through a period where everyone understands and has gotten a little more comfortable with nuclear.”
NextEra has revamped its strategy to capitalize on the surge of AI-driven buildout, which could strengthen its position as the country’s largest electric utility. But this move runs the risk of significant losses if the energy firm’s large market bets falter, aside from local concerns over health, safety, and regulatory issues.
The plant’s recommissioning comes amid a regulatory revival for nuclear power, with President Donald Trump championing nuclear energy deployment and AI innovation. At the same time, companies, such as Google’s parent Alphabet Inc., Amazon.com Inc., Microsoft Corporation, and Meta Platforms Inc., are all spending billions of dollars building AI infrastructure that needs to be powered.
Duane Arnold is the third nuclear facility slated for recommissioning in the U.S., following the Palisades nuclear plant in Michigan and the Crane Clean Energy Center (formerly the Three Mile Island nuclear plant) in Pennsylvania, which are also restarting to meet the demand from data centers.
For NextEra, recommissioning Duane Arnold makes sense, hence the year-long rumor that the plant would be made operational again. In the 45 years from its 1975 opening to its 2020 close, the plant contributed 615 megawatts to Iowa’s energy mix — enough to power more than 400,000 homes. Nuclear energy is valued for its baseload capacity, or the ability to reliably meet 24/7 power demand. This consistency makes it attractive to hyperscalers, or companies building and operating massive data centers.
Investors have taken notice. Shares of NextEra jumped 1.9% to a record $86.03 after it announced the Google partnership, extending year-to-date gains to 23% and outpacing the broader S&P 500 Index.
The AI-fueled future will be a pivot from NextEra’s previous plans for the plant. It was shut down after a $110 million buyout and a derecho — intense and fast-moving windstorms — that severely damaged its cooling towers. NextEra had planned to build a massive solar farm and battery storage at the shuttered facility.
As part of its restart, Duane Arnold will undergo “a significant modernization effort” including digital control system upgrades, new cooling towers and operations buildings, and a training center, said Bill Orlove, NextEra’s senior manager of generation communications. Orlove is also the spokesperson for the energy center.
Once construction and operations begin, Duane Arnold is projected to create 1,900 jobs, according to an impact study published by the Illinois-based Strategic Economic Research. The facility is expected to generate $3.2 billion in labor earnings in Linn County alone, where the plant is located.
“It would be wonderful to see the plant reopen,” said Iowa State Representative Jason Gearhart. Gearhart worked at Duane Arnold for 12 years as an armed security officer and central alarm station operator before leaving in 2021, a year after the facility shut down.
“Duane Arnold employees were well compensated,” he said. “Even armed security could make a six-figure salary with overtime.”
But some local advocates are more concerned about the health and safety risks of nuclear energy in the region.
The New Jersey-based Radiation and Public Health Project, a nonprofit led by scientists and physicians, published data in October showing rising cancer incidence, infant deaths, and premature births in Linn County after Duane Arnold’s decades of operations. It also found that these health indicators were not only worsening but also falling behind state and nationwide averages.
In August, Wallace Taylor, a lawyer who lives in Linn County, wrote to the Board of Supervisors, arguing that a nuclear plant should be in an industrial zone like any other power-generating plant. In an interview, Taylor called the current zoning policy, which allows Duane Arnold to be within the renewable energy overlay district, “the most egregious thing.” He argued that nuclear power is neither renewable nor clean because it uses uranium, a finite resource, and operating the facility produces radioactive waste and runoff.
The current setback of 200 feet — the distance allowed between the nuclear facility and other nearby property lines — is also “inadequate to protect the public,” he said.
“The plume exposure pathway extends 10 miles in radius around the reactor site,” Taylor, who lives within a 10-mile radius of the plant, explained in his letter. “It is this 10-mile radius that is used for emergency preparedness should radiation be released by the facility.”
Taylor added that the focus on jobs in Linn County is overshadowing the risks of the nuclear facility.
“We ought to be able to create good jobs that benefit the common good rather than just accepting any job that corporate America throws on us,” he said in an interview.
“Emergency plans continually evolve,” Orlove said. “We will incorporate new processes and lessons learned from our other nuclear facilities and industry events into the site’s emergency planning.”
Taylor, who is also the legal chair of the environmental organization Sierra Club’s Iowa Chapter and is litigating against the Palisades plant, also called out the process by which the NRC is recommissioning plants. Because the regulator does not have a formal policy for the process, companies are filing for exemptions from decommissioning status.
“The exemption is an ad hoc rule without going through the formal rulemaking process, which would allow a lot of investigation and public input,” he said. “They’ve bypassed all of that by making this exemption a de facto rule.”
NRC also began easing regulations for permits for new facilities and fast-tracking approvals for existing reactor technologies to maintain momentum. Analysts forecast the most activity in the mid-2030s.
But the real problem was not a lack of energy supply to meet demand but grid infrastructure, said Daniel Kammen, an energy scientist who is a Bloomberg Distinguished Professor of Energy and Climate Justice at Johns Hopkins University. Kammen said building new big projects, whether power-generating plants or transmission lines, would take a long time because of regulatory hurdles.
“If you genuinely want to power a new data center and the data center makes sense, you can find or work with the local utility or public-private partnerships to get the energy and storage you need,” said Kammen, who used to teach nuclear engineering. He added that data centers could be built near renewable sources where there could be on-site generation and storage, and building locally would require less red tape.
“If people really want to get it done, they can get it done. What you’re seeing is people asking for a handout,” Kammen said, referring to the push to speed up approval procedures. “It’s largely an overblown issue to clear bureaucratic hurdles” for corporate owners, he added.
The buildout of AI and nuclear also has a “big timing mismatch,” said Dennis Wamsted, an energy analyst at the think tank Institute for Energy Economics and Financial Analysis. While tech firms invest billions of dollars to get data centers built and connected as soon as possible, he said, “nuclear power is not a ‘now’ thing.”
The planning-to-operations timeline for nuclear facilities averages 10 to more than 20 years, far longer than wind and solar projects’ three-year development. Wamsted said data centers’ energy demand and the need for nuclear are not at all related because other options exist, like solar and battery storage.
“And nobody in the industry seems to want to really acknowledge that or talk about it,” said Wamsted, previously executive editor of The Energy Daily, a Washington-based trade publication.
NextEra, though, also has this ground covered: The company has a continuing procurement pact with Google for its 420-MW solar, 680-MWh battery storage, and 600-MW wind projects in Nebraska — its more recent string of deals in its history of renewable energy agreements with the tech giant.
And having as many options to power AI makes financial sense for the company. NextEra forecasts earnings per share to reach up to $3.70 by the end of the year, with further growth of up to $4.00 and $4.32 in 2026 and 2027, respectively.
For now, electric utilities and power producers will continue riding the AI wave, with states like Iowa emerging as top markets. But if the wave ebbs and the market crashes, companies would be left with stranded assets and “costs still would have to get paid for,” said Wamsted.
If data centers go bust and utility companies’ shareholders lose out, “then you have to go back to the existing rate-payers to make them pay for all of it,” he said. “It gets really messy and potentially really controversial and expensive for people.”