Utilities warm up to nuclear revival, with conditions attached

Two of the United States' most prominent public power institutions are moving toward new nuclear capacity on parallel but distinct tracks, underscoring how the sector's revival is gaining traction among utilities even as financial risk remains a central obstacle.

Duke Energy signals openness to nuclear growth—with strings attached

Duke Energy, one of the country's largest regulated electric utilities, has indicated it is willing to expand its nuclear footprint to meet surging electricity demand from data center operators, according to Reuters. The company is actively exploring technology partnerships structured to shift a portion of the financial risk associated with new nuclear construction onto developers rather than ratepayers.

Nuclear construction has historically carried extraordinary cost and schedule risk in the United States, most notably illustrated by the years of delays and billions in overruns at the Vogtle project in Georgia. Duke's conditional posture—grow nuclear, but share the downside—reflects how that legacy continues to shape utility decision-making even as the policy and commercial environment shifts.

Data centers are placing unprecedented strain on regional grids, and nuclear's around-the-clock output makes it an attractive baseload option for utilities seeking to honor long-term power purchase agreements with hyperscale technology companies. Duke's approach suggests utilities may increasingly use risk-sharing agreements as a mechanism to bring new reactors online without exposing shareholders or customers to the full burden of project failure.

NYPA sets a 2033 construction deadline to capture IRA tax credits

On the public power side, the New York Power Authority has issued a formal request for qualifications aimed at both small modular reactor developers and builders of conventional large-scale reactors, according to the NYPA procurement portal. The RFQ is an early-stage competitive process designed to identify developers with the technical and financial standing to advance a project in New York State.

A defining condition in the NYPA solicitation is a requirement that qualified companies demonstrate the ability to begin construction before 2033. That deadline is not arbitrary: projects that break ground within that window stand to qualify for tax credits available under the Inflation Reduction Act, making the timeline a direct function of federal incentive policy.

Small modular reactors, which are designed to be factory-manufactured and deployed at lower upfront capital cost than conventional plants, have attracted significant developer interest in recent years. NYPA's decision to include both SMR and large-scale options in a single solicitation keeps the door open for established reactor vendors while also welcoming next-generation entrants.

What these moves signal for the broader nuclear market

Taken together, the Duke and NYPA developments point to a maturing conversation within the utility sector about how to structure nuclear deals rather than whether to pursue them at all. The shift from exploratory interest to formal procurement processes and partnership negotiations marks a meaningful step forward for an industry that spent much of the past decade in retreat.

The IRA's tax credit provisions have become a central organizing principle for project timelines, with the 2033 construction-start threshold functioning as a hard deadline that developers and utilities must plan around. For SMR vendors in particular, the window creates both urgency and opportunity: companies that can credibly demonstrate construction readiness within the next several years will hold a distinct competitive advantage in procurement processes like NYPA's.

Risk allocation will likely define which nuclear projects actually reach financial close in this cycle. Duke's insistence on developer risk-sharing, if adopted broadly, could reshape how nuclear supply contracts are written and who ultimately bears the cost of delays—a question the industry has struggled to answer for decades.