Talen Urges US Regulators To Dismiss Opposition To Amazon's Data Center Agreement

Talen Energy has requested U.S. regulators to dismiss a challenge to its recent data center deal with Amazon. The opposition, led by a group of electric utilities, argues that the agreement might lead to higher power bills for the public.

"It is an unlawful attempt to hijack this limited interconnection service agreement amendment proceeding that they have no stake in and turn it into an ad hoc national referendum on the future of data center load," Talen said in its filing with the Federal Energy Regulatory Commission (FERC).

According to Reuters, Talen stated that the challenge, initiated by utilities such as American Electric Power and Exelon, was based on inaccurate information. They asserted that their interconnection agreement for the Amazon data center site would not lead to increased power costs for utility customers or create grid reliability issues.

In March, Talen announced an agreement to sell electricity and a data center campus at its Pennsylvania nuclear power plant to Amazon Web Services. This deal would supply Amazon's data warehouses with up to 960 megawatts of electric capacity, sufficient to power approximately one million homes.

Last month, a few electric utilities, including American Electric Power and Exelon, requested FERC to conduct a hearing to thoroughly examine Talen's interconnection agreement with Amazon or reject it altogether. The group argued that the data center's interconnection agreement could lead to a $140 million annual cost burden for regular ratepayers.

Talen asserts that if FERC proceeds with the hearing or rejects its proposal, it could significantly hinder the expansion of data centers and discourage the construction of new power plants during a period of unprecedented growth in U.S. electricity demand.

Technology firms are racing to secure substantial electricity supplies to operate and cool data centers, critical for deploying advanced technologies such as generative AI. Nuclear energy, valued for its minimal carbon emissions and dependable, uninterrupted power generation, has become a leading option for the data center industry.

FERC's ruling has the potential to create a standard for agreements like the one involving Talen, where data centers are colocated with power plants that directly provide them with electricity. This setup allows data centers to swiftly commence operations without the delays typically associated with lengthy interconnection queues, which can span several years.