Talen Energy Corp. says it can still develop the first phases of a planned Amazon Web Services data center at the site of its Susquehanna nuclear power plant even after the Federal Energy Regulatory Commission rejected it on Nov. 1 a modified network connection agreement with operator PJM Interconnection. LLC that would have allowed him to increase the amount of power available to the data center through a direct connection.
PJM Interconnection, which operates in 13 northeastern and midwestern states, filed the agreement, known as the ISA, along with Talen’s Susquehanna Nuclear LLC and local utility PPL Electric Utilities Corp. earlier this year on the Susquehanna plant, a 2,520 MW facility. in Luzerne County, Pennsylvania. They intend to update an existing agreement to increase the amount of co-located load from 300 MW to 480 MW and make other revisions.
But the energy regulator’s commissioners voted 2-1 to reject the deal, finding that the applicants “failed to meet the high burden” of showing that the amended provisions are necessary. In its order, written by Acting Deputy Secretary Carlos Clay, FERC questioned whether PJM intends to offer the terms to similarly situated interconnection customers, even though the utility had said the proposed changes would they developed to address the circumstances of this particular interconnection.
“Talen believes that FERC has erred and we are evaluating our options, focusing on commercial solutions,” the energy firm said in a statement.
The company previously reached an agreement to sell the data center campus to Amazon for $650 million and supply it with power for the facility. Plans shared by Talen indicate that Amazon could develop the campus up to 960 MW. Talen said it would pursue approval of the amended ISA while development of the first phases of the project continues with the available 300MW of co-located load.
FERC did not address other issues raised during the process, such as whether agreements like this one could affect grid load or whether costs will be passed on to other electric customers.
The commissioners’ decision came on the same day that FERC was holding a technical conference on large power loads located at generating facilities. Talen said in its statement that the co-location agreement with Amazon “is part of the solution” to the problems raised at the conference.
“It provides customer service quickly and without expensive transmission upgrades needed to meet high-load demand,” Talen said.
“It’s not the final word”
The rejection comes after Constellation Energy Corp. announced that it would restart Unit 1 of the Three Mile Island Nuclear Station in Middletown, Pa., as part of a 20-year deal with Microsoft Corp. to power their data centers.
Speaking to investors on a quarterly earnings call on Nov. 4, Joseph Domínguez, the developers’ president and CEO, said the FERC ruling “is not final [agency] word on co-location”, and which he hopes will provide further guidance. Colocation “is one of the best ways for the United States to quickly build the large data centers that are needed to lead [artificial intelligence]”, he said.
Domínguez also explained how he thinks co-location should work. Power should always go to the grid first during an emergency, he said. If a co-located load has reserve power, it should be able to offer that power to the grid, subject to authorization rules. In addition, the co-located load should pay its share of the grid costs for what it uses.
“Frankly, I think part of the problem with the [agreement] The procedure is that it did not bring these issues together and understandably some of the commissioners want to see the full package,” he said.
Constellation will seek regulatory clarity while pursuing commercial strategies for co-location that are permitted under existing rules, Domínguez added.
