Constellation Energy has filed a complaint to the Federal Energy Regulatory Commission (FERC) requesting a fast-track ruling on PJM’s lack of clear rules for interconnected generators to follow when seeking to provide a behind-the-meter service to fully isolated colocated load facilities, such as data centers.
The company argued that while there is no prohibition against isolated colocated load, certain utility companies, such as Exelon, “are taking advantage of the lack of Tariff rules to thwart competition to serve large end use loads, thereby delaying by several years and significantly increasing costs to serve data centers critical to national security, economic development, and other national priorities.”
Subsequently, Constellation has contended that FERC should adopt a replacement rate consistent with PJM's guidance on colocated load, which was updated in April.
The complaint is the latest in a series concerning colocated load. At the start of November, FERC rejected an amended interconnection service agreement (ISA) made by Talen Energy that would have increased the volume of energy to a colocated AWS data center from the Susquehanna nuclear power plant in Pennsylvania.
Following the decision, Constellation contended that rules on colocated load in PJM are now in complete “limbo.”
The decision by FERC was precipitated by a complaint made by AEP Ohio and Exelon in June, who argued 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.
FERC agreed with the assessment, stating that PJM had not provided sufficient justification for the nonstandard provisions allowing a “unique” arrangement for the data center.
In response, last week, Talen requested a rehearing of its ISA proposal, arguing that FERC failed to apply the correct legal standard in its decision-making process, consider all of the recorded evidence, and explain why the ISA was subsequently rejected.
Constellation, which has the largest nuclear fleet in the US, has warned that the lack of clarity is subsequently impacting some of its plans to colocate data centers at nuclear power sites.
"Utilities have taken the law into their own hands and are unilaterally blocking co-location projects unless the future data center customers accede to utility demands," Constellation said in its complaint.
Constellation stated that Exelon has refused to complete the interconnection at its 2.3GW LaSalle nuclear plant in Illinois for a new colocated data center, potentially costing the company $19 million.
In turn, the company warned that these delays could significantly affect the data center power supply, limiting the options for large-load customers to acquire reliable power.
Exelon told Reuters on Tuesday that it would participate in the FERC proceeding and advocate for policies that were fair, support reliability, and affordable power prices.
Constellation has a vested interest in the colocated sector after signing a 20-year power purchase agreement with Microsoft to provide 100 percent of the energy from the revived Three Mile Island nuclear power plant, subject to regulatory approval.
In its Q3 earnings call, the company remained bullish on colocated data centers, believing that narrow reforms are required to provide clarity, fair pricing, and price stability for customers and generators alike.
