Regulator rejects amended Susquehanna power agreement
The US Federal Energy Regulatory Commission (FERC) has issued an order rejecting the amended Susquehanna Interconnection Service Agreement between PJM Interconnection, PPL Electric Utilities and Talen Energy Corporation proposing to increase the load capacity of Amazon's data centre at the Susquehanna nuclear power plant in Pennsylvania.
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In March, Talen announced the sale of its 960 MW Cumulus data centre campus in northeast Pennsylvania to Amazon Web Services (AWS), with a long-term agreement to provide power from its Susquehanna plant. The Cumulus campus is directly connected to the two-unit nuclear power plant.
AWS plans to develop a 960 MW data centre at the site and has minimum contractual power commitments ramping up in 120 MW increments over several years, starting in 2025. Each step up in capacity commitment is at a fixed price for an initial 10 years, after which it will be based on a fixed margin above prevailing prices. AWS will have a one-time option to cap commitments at 480 MW and has two 10-year extension options, which are tied to the renewals of the two nuclear units' licences in 2042 and 2044.
PJM is the regional transmission organisation that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. Its request to amend an existing Interconnection Service Agreement (ISA) to increase from 300 MW to 480 MW the amount of load it is allowed to transfer from Susquehanna as "co-located load" was filed with FERC on 3 June. (Co-located load refers to end-use customer load that is physically connected to the facilities of an existing or planned customer facility at the point of interconnection to the PJM transmission system).
The amendment states that 480 MW of load may be physically transferred to a co-located load's transmission facilities without a material impact on the transmission system, and also notes that Susquehanna has proposed modifications to allow it to physically transfer 960 MW of power.
Exelon Corporation and American Electric Power lodged a protest with FERC on 24 June, saying that the regulator must either hold a hearing, or, failing that, reject the Interconnection Service Agreement (ISA).
FERC commissioners have now voted 2-1 against the proposal, saying "PJM has not demonstrated that the proposed non-conforming provisions in the Amended ISA are necessary deviations from the pro forma ISA due to specific reliability concerns, novel legal issues, or other unique factors".
Talen said it believes FERC "erred" in its decision and the company is evaluating its options, "with a focus on commercial solutions". It added: "We believe this ISA amendment is just and reasonable and in the best interest of consumers. FERC's decision will have a chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey.
"Importantly, the existing ISA allows for 300 megawatts of co-located load at Susquehanna, and development of the first phases of the Amazon Web Services data centre campus can proceed using those 300 megawatts while Talen continues to pursue approval of the amended ISA."
The Susquehanna plant, in Salem Township, comprises two boiling water reactors and is 90%-owned and operated by Talen subsidiary Susquehanna Nuclear, LLC. Allegheny Electric owns 10% of the 2475 MWe plant.
Nuclear power is increasingly being eyed by energy-intensive data centres as a means of meeting their energy demand while achieving zero-carbon objectives, whether through co-location of resources, or energy-matching deals.
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