FERC Blocks PJM Proposal to Expand Amazon Data Center Load at Susquehanna Nuclear Plant

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The Federal Energy Regulatory Commission (FERC) has rejected an amended interconnection agreement that would have supported expanded co-located load at an Amazon Web Services (AWS) data center connected to the 2,520–MWe Susquehanna nuclear power plant in Pennsylvania, citing grid reliability and cost fairness concerns.

FERC on Nov. 1 voted 2–1, with Commissioners Mark Christie and Lindsay See in favor and Chairman Willie Phillips dissenting, to deny the proposed amendment from PJM Interconnection. The proposal sought to modify an interconnection service agreement (ISA) among PJM, the grid operator, the power plant owner, Susquehanna Nuclear, and interconnected transmission owner PPL Corp. that sought to increase the data center’s co-located load from 300 MW to 480 MW.

The FERC action serves as yet another example of tensions arising as the power industry attempts to grapple with soaring demands from large loads like data centers—which require reliable, high-capacity power—while avoiding burdensome costs for other grid users. As POWER has reported, AEP Ohio recently introduced a structured tariff for hyperscalers that attempts to address some of these uncertainties.

As FERC’s order notes, FERC originally accepted a PJM-filed ISA for the two-unit nuclear power plant owned 90% by Talen Energy and 10% by Allegheny Electric in Luzerne County in 2015. In February 2023, PJM submitted an amended, uncontested ISA to add up to 150 MW—a combined 300 MW—of co-located load behind each of Susquehanna’s two 1,260 MW units interconnected to PJM’s transmission system.

In March 2024, Talen Energy sold its 960-MW Cumulus data center campus, directly connected to the Susquehanna nuclear plant, to Amazon Web Services (AWS) for $650 million. AWS has minimum contractual power commitments for the data center, which was slated to ramp up in 120-MW increments over several years, with a one-time option to cap commitments to 480 MW. To accommodate this, PJM submitted another amendment to the ISA in June 2024, updated in September 2024, to increase the co-located load capacity from 300 MW to 480 MW. However, that amendment was rejected by FERC on Friday.

In its amendment, the grid operator suggested that the increase would not disrupt transmission reliability. However, it warned that any demand over 480 MW could create “generation deliverability violations.” The amendment also added flexibility for future load adjustments, allowing Susquehanna to potentially supply up to 960 MW contingent upon resolving grid stability challenges. Reliability measures, for example, included requiring Susquehanna to disconnect the data center during system disruptions and restricting backup power usage to specific cases pre-approved by PJM and PPL​.

I gave many years of my nuclear engineering career to the building of Susquehanna Nuclear Plant.

Jaak

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In June, AEP and Exelon challenged the ISA amendment, which they argued lacked adequate support and could potentially set a precedent that allows certain large loads to benefit from transmission resources without paying corresponding costs. The utilities warned in proceedings that such a precedent could harm PJM’s capacity markets by incentivizing large loads to disconnect from PJM’s grid, potentially raising replacement costs and creating a burden for other customers.

PJM’s independent market monitor, meanwhile, contended that the issue had “extremely large significance for the future of PJM markets.” PJM “has not explained how it plans to meet expected increases in the demand for power, given ongoing generator retirements, even without removing multiple large base load units from the system,” it said. “PJM’s latest reliability report and PJM’s RTEP do not address the potential significant changes that would result from reliance on the proposed ISA as a precedent.”

However, the filing was backed by several competitive generators, including PPL, Calpine, Constellation, and Vistra. The parties argued the scope of the proceeding was limited, and utilities’ protest raised issues outside its scope. Several parties suggested that if FERC did not accept the amended ISA, it would frustrate commercial arrangements involving data center load growth. PPL notably stressed that FERC’s rejection of the ISA would leave PJM and PPL in an “untenable” position from a reliability standpoint and that the existing ISA had become “unjust and unreasonable.”

FERC ultimately sided with the challengers, concluding that PJM had not provided sufficient justification for the non-standard provisions that would allow a “unique” arrangement for the data center. Commissioners Christie and See noted that PJM’s proposal did not meet FERC’s standards for deviating from established transmission protocols, which require clear evidence of the necessity for non-standard agreements. In their opinion, the expansion could undermine cost fairness and burden other PJM customers with potential reliability issues.