Two energy companies have filed a complaint with the Federal Energy Regulatory Commission (FERC) against the interconnection request for an Amazon data center powered by nuclear energy in Pennsylvania.
According to UtilityDive, American Electric Power (AEP) and Exelon have requested that FERC hold a hearing on the matter. The companies argue that the proposed agreement would allow Amazon and the operator of the Talen nuclear plant to benefit from using the electric grid without paying the usual transmission fees.
In March, Amazon acquired a data center and land in Salem Township, Pennsylvania, which is powered by nuclear energy from the adjacent Talen Energy’s Susquehanna Steam Electric Station (SSES). Amazon plans to develop around 15 data centers on a 1,600-acre site.
The agreement stipulates minimum energy commitments from Amazon to Talen that increase in 120MW increments over several years, with an AWS option to limit commitments to 480MW. Additionally, AWS has two 10-year extension options, linked to nuclear license renewals. As part of the agreement, Talen will also supply energy to AWS through a 10-year Power Purchase Agreement (PPA) from the Susquehanna site.
Earlier this month, PJM requested FERC approval of an amended Interconnection Service Agreement (ISA) that would allow Talen to sell 480MW to the data center without making transmission upgrades. Under this application, the colocated data center would not be classified as network load and would be exempt from transmission fees.
In their complaint filed with FERC, AEP and Exelon argue that the proposed ISA does not fit into current service models, is poorly explained from a technical standpoint, and would result in AWS using the grid without paying necessary fees, increasing costs for other customers. According to the companies’ estimates, the cost of this agreement could be up to $140 million per year.
“The premise of the amended Susquehanna ISA is that this colocated data center load is like load on a remote island, that simply has no impact on the PJM grid and, therefore, would be excluded from economic responsibility and otherwise to maintain the PJM grid,” the complaint says. “But that narrative does not withstand scrutiny.”
AEP and Exelon pointed out that the Susquehanna units must be connected to the grid, meaning the data centers will also be connected and use transmission infrastructure. The companies also claimed that the ISA is a “new and unnamed type of transmission service that is poorly explained or defined.”
The complaint requests that FERC hold a hearing to further investigate the ISA or reject it if a hearing is not held.
In response, Talen described the protest as a “misguided attempt to hinder this innovation by interfering with an agreed-upon and supported ISA amendment by all affected parties, of which Exelon and AEP are decidedly not.”
Talen claims to have the right to contract with AWS and that PPL, the regulated company that “has a real interest in this ISA,” agrees that Talen has the right to sell energy directly to AWS.
The resolution of this conflict could set an important precedent for future agreements and the energy market, as regulatory decisions will have a significant impact on how costs are distributed among consumers, the financial health of utility companies, and the overall efficiency of the energy market.
Source: Data Center Dynamics