Talen Energy and Amazon Web Services (AWS) have expanded an existing agreement to supply nuclear energy to an AWS data center in Pennsylvania.

The companies signed a 17-year Power Purchase Agreement (PPA) to supply AWS with 1.92GW of energy from the 2.5GW Susquehanna nuclear power plant. The PPA is contracted until 2042 and contains an option to extend.

The delivery of the power is expected to be ramped up over the next seven years, with full volume anticipated no later than 2032.

The two companies will also explore the construction of new small modular reactors (SMR) within Talen’s Pennsylvania footprint, as well as pursue the expansion of the Susquehanna plant’s output through uprates.

AWS has previously invested heavily in the SMR sector, including a direct investment in SMR manufacturer X-energy, to support more than 5GW of nuclear power by 2039.

“Our agreement with Amazon is designed to provide us with a long-term, steady source of revenue and greater balance sheet flexibility through contracted revenues. We remain a first mover in this space and intend to continue to execute on our data center strategy,” said Talen President and CEO Mac McFarland. “Talen is well-positioned to support Amazon’s energy needs as it invests further in the Commonwealth of Pennsylvania.”

The PPA will modify the existing colocated load agreement between the two companies to one that serves the data center via a “front-of-the-meter” arrangement. The transition is expected to occur in the spring of 2026 following the completion of the necessary transmission reconfigurations.

“Amazon is proud to help Pennsylvania advance AI innovation through investments in the Commonwealth’s economic and energy future,” said AWS vice president of Global Data Centers Kevin Miller. “That’s why we’re making the largest private sector investment in state history – $20bn – to bring 1,250 high-skilled jobs and economic benefits to the state, while also collaborating with Talen Energy to help power our infrastructure with carbon-free energy.”

Under the terms of the new agreement, power from the Susquehanna plant will now supply power to the PJM Interconnection grid, with Talen acting as the retail electric generation supplier to AWS, and PPL Utilities responsible for transmission and delivery of power.

The revisions represent a notable change of tack for Talen. The initial agreement, signed last year, followed AWS’ acquisition of the 960MW Cumulus data center from Talen Energy. Following the acquisition, the partners submitted an amended Interconnection Service Agreement (ISA) that would have served the AWS data center behind-the-meter, boosting the data centers' shared power demand from 300MW to 480MW.

Despite gaining initial approval from the Federal Energy Regulatory Commission (FERC), last June, AEP Ohio and Exelon filed a complaint against the proposal. The complaint contended that the proposed ISA didn’t fit the current service class models, was poorly explained from an engineering point of view, and would result in AWS using the grid but not paying the required fees, pushing up costs for other customers.

Subsequently, in November, FERC rejected the proposal on a two-to-one ruling, determining that the ISA could potentially raise public power bills and affect the grid's reliability. After much legal wrangling, including several rejected appeals to FERC and a still pending appeal to the Fifth Circuit Court, the regulatory authority ultimately upheld the rejection and initiated a broader review of colocation agreements.

As a result, last month, Talen Energy indicated that it was set to pivot away from behind-the-meter agreements and refocus its energy on traditional commercial power contracts.

Talen is not the only power producer to pivot away from colocation. Constellation Energy has also announced its intention to refocus on conventional data center power arrangements, citing uncertainty surrounding the approval of colocation agreements.

Constellation has signed two long-term PPAs with data centers to provide them with nuclear power. Last year, it signed a 20-year PPA with Microsoft to provide 100 percent of the capacity of the revived Three Mile Island nuclear power plant. The reactor is expected to come online in 2028, with the PPA subject to approval from the Nuclear Regulatory Commission sometime this year.

Earlier this month, Constellation signed another 20-year PPA with Meta to supply the tech giant with 1.1GW of power from its Clinton, Illinois, nuclear power plant. The contract, which will commence in June 2027, will see Meta offtake the entire output of the Constellation-owned 1.121GW Clinton Clean Energy Center.