Utility Firms Go Nuclear Over Amazon Datacenter Power Deal

Matthew Connatser reports via The Register: Utility firms American Electric Power (AEP) and Exelon have filed an official objection with the Federal Energy Regulatory Commission (FERC) over Talen Energy's nuclear power deal with Amazon. Back in March, Amazon bought a nuclear-powered datacenter from Talen Energy -- an operator of electricity generation and transmission facilities in the US. As part of the deal, Amazon would get 480 MW straight from the 2.7 GW Talen nuclear power plant in Susquehanna, Pennsylvania, and may even be able to upgrade to 960 MW down the line. However, that Susquehanna atomic plant also provides power to PJM Interconnection, the regional power grid operator for much of the eastern US. The two companies -- Talen and PJM -- have an interconnection service agreement (ISA) that sets the rules for how Talen should deliver power to PJM's transmission system. To better accommodate the nuclear datacenter, Talen and PJM agreed to a new ISA, which has caught the ire of AEP and Exelon. The duo claim Talen and Amazon are basically getting a free ride that other PJM ratepayers will have to pay for, saying that even though Amazon's datacenter isn't directly connected to PJM, it still benefits from the power grid, meaning the other ratepayers are left holding the short end of the stick. Each of the station's two reactors has 1,350 MW available, and Amazon is already able to use 480 MW, and up to 960 MW in the future. If one of the reactors experiences an outage, the ISA says the datacenter is first in line for power from the other reactor, which leaves PJM with far less electricity than normal. That in turn would mean a lower energy supply for PJM's customers, who would have to pay more, at least according to the complaint's reasoning. The Talen-PJM ISA states that in this event, the nuclear datacenter will separate from the plant and get its power elsewhere, but AEP and Exelon are skeptical and want to know how exactly that would work. The complaint argues Amazon's DC is essentially using the grid, saying the "premise" of the tweaked ISA "is that this datacenter co-located load is like load on a remote island -- one that simply has no impact on the PJM grid and would thus be properly excluded from economic and other responsibility for maintaining the PJM grid. But that storyline does not stand up to scrutiny." "They present their filing as no more than a replacement of older agreements with updated terms and 'clarifications' regarding the parties' roles and obligations," the two utility companies told [PDF] FERC, requesting a hearing over the matter. "The filing [new ISA] casts the submission as a mere housekeeping exercise, as if there is nothing to see here." The protest adds: "The co-located load should not be allowed to operate as a free rider, making use of, and receiving the benefits of, a transmission system paid for by transmission ratepayers. We have no objection to co-location per se, but such load should pay its fair share of system use and other charges, just like other loads and customers." AEP and Exelon claim the new terms of the ISA contains a key loophole that hinges on the datacenter's co-location with the nuclear power plant, which allows its power usage to not be considered "in-network," even though the power load is synced to PJM's grid and could theoretically get power from it. [...] The end result, or so AEP and Exelon allege, is that Talen would be able to benefit from PJM's services without the associated cost. That would cost other customers between $58 million and $140 million per year overall, according to an analysis from Concentric Energy Advisors CEO Danielle Powers and chairman John Reed included with the filing. AEP and Exelon asked FERC to either hold a hearing to answer questions it feels are unresolved or to reject the new ISA outright. For its part, Talen claims the complaint's narrative is "demonstrably false" and that "transmission is not implicated."

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