US independent power producer Talen Energy is considering pivoting away from colocated power agreements with data centers.
The decision follows the rejection of a plan to power an Amazon Web Services (AWS) data center behind-the-meter from its 2.5GW Susquehanna nuclear power plant in Pennsylvania.
According to reporting from Reuters, Talen CEO Mac McFarland said that the company could seek arrangements that connect the centers to the grid as part of traditional commercial power contracts.
The decision follows the Federal Energy Regulatory Commission (FERC) upholding its decision to block a revised Interconnection Service Agreement (ISA) that would have increased the capacity available to the AWS data center. FERC had initially rejected the proposal last October.
In that ruling, FERC members determined that the ISA had the potential to raise public power bills and affect the grid's reliability.
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 have boosted the data center's shared power demand from 300MW to 480MW.
FERC initially accepted a PJM-filed ISA in 2015, which was amended in February 2023 to add 150MW of colocated load. However, following AWS' acquisition of the 960MW Cumulus data center from Talen Energy, FERC rejected a further amendment submitted in June and updated in September to increase the load capacity.
Despite the rejection, Talen said that it continues to supply electricity to the Amazon data center, with plans to reach 120MW by the end of 2025. Talen remains in the appeals process regarding the rejection, having submitted a petition to the Fifth Circuit - which covers Texas, Louisiana, and Mississippi - with an outcome expected in a matter of weeks.
Talen follows Constellation Energy in announcing its intention to refocus on conventional data center power arrangements due to the uncertainty surrounding the approval of colocation agreements, especially with nuclear power plants.
FERC is expected to provide further guidance on the future of colocated agreements with large load users, following the approval of a review in February. The review is expected to focus on PJM Interconnection, due to the high prevalence of potential colocated agreements across its footprint.
Earlier this week, however, PJM Transmission owners said in a filing that FERC should dismiss the review and ignore calls for settlement discussions made in April by the Electric Power Supply Association, and others.
“The national interest will be best served by a quick dismissal of this proceeding, and a ruling that the existing PJM Tariff remains just and reasonable,” PJM transmission owners said. “Rather than fighting about a wish list of new rules, the parties will then instead begin to focus on obtaining service under the rules in place today.”
The owners include major utilities, American Electric Power, Dominion Energy, Duke Energy, Exelon, FirstEnergy, and PPL Electric.
