The Federal Energy Regulatory Commission (FERC) has rejected a proposed interconnection service agreement (ISA) for the Susquehanna nuclear power station in Luzerne County, Pennsylvania.
FERC voted two to one on the decision, with commissioners Mark Christie and Lindsay See in favor and chairman Willie Phillips dissenting. Commissioners Rosner and Chang did not participate in the vote.
The agreement would have supported an expanded colocated load at an Amazon Web Services (AWS) data center connected to the 2.5GW plant, enabling it to serve the data center behind the meter.
The proposal aimed to revise an ISA involving PJM, the regional grid operator, Susquehanna Nuclear, which owns the power plant, and transmission owner PPL Corp. The amendment would boost the data center's shared power demand from 300MW to 480MW.
FERC initially accepted a PJM-filed ISA in 2015, amended in February 2023 to add a further 150MW of colocated load behind Susquehanna’s two 1,260MW units interconnected to PJM’s transmission system.
Following Talen Energy's sale of the 960MW Cumulus data center to AWS, PJM submitted a further amendment in June, updated in September, to increase the colocated load capacity from 300MW to 480MW. FERC rejected this subsequent amendment.
In June, utilities AEP Ohio and Exelon filed a complaint against the ISA, arguing the proposed interconnection security agreement 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.
In rejecting the amended proposal, FERC stated that PJM had not provided sufficient justification for the nonstandard provisions that would allow a “unique” arrangement for the data center.
FERC members determined that the ISA could potentially raise public power bills and affect the grid's reliability.
"Colocation arrangements of the type presented here present an array of complicated, nuanced, and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs," FERC Commissioner Mark Christie said in the order.
FERC chairman Willie Phillips, who voted in favor of the ISA, described the ruling as “a step backward for both electric reliability and national security.” He argued that the PJM proposal found no requirement for transmission upgrades to facilitate the load increase, contending that FERC should have accepted the proposal while ensuring PJM submitted regular informational filings to ensure transparency.
“In failing to accept the agreement, we are rejecting protections that the interconnected transmission owner says will enhance reliability while also creating unnecessary roadblocks to an industry necessary for our national security,” Phillips argued.
Talen Energy responded to the ruling, stating: "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."
The decision could have significant implications for utilities and the data center market at large. The ruling by FERC was based on whether such an amendment to a substantial load interconnection agreement is "necessary" for reliability or legal issues.
A high burden is required to acquire protection to open access to transmission networks. In ruling that said burden was not met, FERC has suggested that data center companies, generators, and utilities don't have much room to innovate around standard interconnection agreements, creating a significant challenge for the sector.
