American Electric Power (AEP) and Exelon are pushing for a hearing at the Federal Energy Regulatory Commission (FERC) to address concerns about a proposed agreement that would allow an Amazon data center to co-locate at Talen Energy’s Susquehanna nuclear plant in Pennsylvania. The agreement, known as the Interconnection Service Agreement (ISA), could result in significant transmission costs being passed on to other PJM customers, potentially reaching up to $140 million. AEP and Exelon argue that if similar agreements are allowed, it could lead to a decrease in capacity resources available to customers, ultimately harming existing customers.
The ISA at the center of the debate would allow Talen Energy to sell power to Amazon Web Services (AWS) from its nuclear plant in Pennsylvania. AWS plans to purchase power from Talen in 120 MW increments, with the potential for this to reach 960 MW, creating the largest shared load in North America.
FERC is being asked to consider the implications of this agreement, as it could set a precedent for future deals between nuclear power plant owners and co-located data centers. AEP and Exelon raise concerns about the fairness of the agreement, arguing that the data center should pay its fair share for benefiting from PJM’s transmission system. They also question the classification of the data center as a non-network load, which would exempt it from paying transmission fees.
The ISA has sparked debate among stakeholders, with only 16% support for a similar proposal in a recent vote. Questions remain about the implications of co-located data centers on the transmission system and the potential impact on rate design and cost allocation.
While FERC has jurisdiction over the ISA, the agreement also raises state regulatory issues due to the retail sale of electricity involved. Policymakers and regulators are encouraged to closely examine the incentives in organized markets that may lead to unfair rate impacts for consumers and challenges in reliable system operations.
Ultimately, the debate over the ISA highlights the broader implications of shared data center agreements and the need for regulatory oversight to ensure fairness and transparency in the energy market.
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https://www.utilitydive.com/news/aep-exelon-pjm-interconnection-amazon-data-center-talen-ferc-isa/719869/