


Traders may be having doubts regarding the strength and viability of partnerships between Big Tech and energy companies backing nuclear as federal regulators blocked a request to expand nuclear power set to support an Amazon data center.
On Friday, the Federal Energy Regulatory Commission rejected a request from Talen Energy to expand the energy produced at its Susquehanna nuclear plant in Pennsylvania for Amazon, citing the possibility of higher bills for customers and risks to grid reliability.
Earlier this year, Amazon announced it would be colocating a data center with the nuclear plant, which is expected to provide up to 960 megawatts of power in total. Talen has since sought to increase the amount that would be sent directly to the Amazon data center.
Alongside grid operator PJM Interconnection, the energy company requested that the amount of nuclear energy increase to 480 megawatts from 300 megawatts. If approved, the expansion of the amount of energy used by Amazon’s data centers would signal major regulatory support for such agreements between energy companies and Big Tech to use nuclear power to advance artificial intelligence.
However, FERC rejected the request last week in a 2-1 vote.
“Colocation arrangements of the type presented here present an array of complicated, nuanced, and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs,” FERC Commissioner Mark Christie wrote in the order rejecting the request.
The decision appeared to spark doubt among traders and investors on Monday, with Talen’s stock dropping by more than 9% in premarket trading, according to CNBC. Constellation Energy and Vistra, which are expected to announce similar colocation partnerships, also saw their stocks fall by nearly 8% and over 3%, respectively.
FERC Chairman Willie Phillips dissented from the vote, calling it a “step backwards” regarding electric reliability and national security. Phillips emphasized that access to reliable electricity is key for AI data centers and other similar large-load facilities to survive.
As the United States looks to lead in the AI race against China and other nations, Phillips said a lack of regulatory leadership and flexibility puts the country’s “pole position on this critically important issue” at risk.
Talen also lambasted FERC’s order in a Sunday statement. The energy company insisted that its amendment to expand energy for Amazon’s data center campus would, in fact, be in the “best interest” of local consumers. The company also indicated that the order could put other similar purchase agreements at risk.
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“FERC’s decisions will have a chilling effect on economic development in states such as Pennsylvania, Ohio, and New Jersey,” Talen wrote.
As the company looks for other options to boost the energy supplied to Amazon, Talen said the Susquehanna plant will be able to supply the tech company with 300 megawatts of power.