Dive Brief:
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The Federal Energy Regulatory Commission is seeking more information about an amended interconnection service agreement that would facilitate the sale of power to an Amazon data center from a nuclear power plant in Pennsylvania.
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FERC on Friday also said it plans to hold a technical conference in the fall to discuss generic issues related to co-locating large loads at generating facilities.
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The questions FERC raised in the “deficiency letter” are “neutral-to-positive” for the PJM Interconnection and Talen Energy, majority owner of the Susquehanna nuclear plant, according to ClearView Energy Partners. The research firm said on Monday FERC could approve the amended ISA in late October or early November.
Dive Insight:
The amended ISA is seen as a potential precedent for what could be a wave of co-located data centers at nuclear power plants owned by companies such as Constellation Energy, PSEG Power and Vistra.
On Friday, Talen said it would work closely with PJM and PPL Electric Utilities, the utility that serves the area around the power plant, to respond quickly to FERC.
“We are committed to making sure that the commission has the information that it needs, and we are optimistic that once it has that information, the commission will affirm PJM’s determination that the ISA amendments will not negatively impact system-wide reliability,” Talen said.
Talen intends to participate in FERC’s technical conference on co-located load. “The broader issues need to be decided quickly, as delay will chill investment and growth in an important sector of the modern economy,” the Houston-based independent power producer said.
ClearView said FERC’s decision to open the generic proceeding reinforces its view that the agency could approve the amended ISA without a hearing while still addressing concerns raised in the ISA docket.
In March, Talen said it sold a data center campus in Pennsylvania to Amazon’s cloud computing unit, Amazon Web Services, for $650 million. Talen intends to sell power to AWS from its 2,228-MW stake in the Susquehanna nuclear power plant, according to the company.
AWS has agreed to buy power from Talen in 120-MW increments for the data center, which could grow to 960 MW, according to Talen.
To facilitate the sale of power to the co-located data center, PJM in June asked FERC to approve an amended ISA among the grid operator, Susquehanna Nuclear and PPL. The amended ISA would increase the behind-the-meter connection between the power plant and the co-located data center to 480 MW from 300 MW in the existing ISA.
American Electric Power and Exelon — on behalf of their utilities — challenged the ISA, in part because they claim it could cause an annual shift of up to $140 million in transmission costs onto PJM ratepayers. AEP and Exelon said FERC should start a hearing process to consider the issue, or reject the amended ISA outright.
PJM’s market monitor and the Organization of PJM States have asked FERC to hold hearings on the amended ISA — a process that would delay a potential FERC decision on the proposal.
In its deficiency letter, FERC staff said the amended ISA includes a range of provisions that aren’t found in PJM’s standard, pro forma ISA, including ones related to co-located load configuration, generation capacity resource status and capacity modifications, and system protection facilities, among others.
FERC staff asked PJM to explain why the proposed provisions are required deviations from the grid operator’s pro forma ISA. “In particular, please elaborate on whether there are any specific reliability concerns, novel legal issues, or other unique factors that make the non-conforming language necessary,” staff said.
PJM has 30 days to respond to the deficiency letter. Once FERC receives a response, the agency has 60 days to make a decision, or the amended ISA automatically takes effect. FERC could decide to hold hearings on the proposed ISA, which would extend the review process.
