FERC sends PJM deficiency letter over proposed deal to supply data center with nuclear power

The US Federal Energy Regulatory Commission has issued a deficiency letter to PJM Interconnection regarding an Interconnection Service Agreement submitted by the grid operator that amends an existing ISA to increase the volume of co-located load from 300 MW to 480 MW to accommodate a data center at the 2,494-MW Susquehanna Nuclear power plant. The regulators also initiated a technical conference about co-located loads.

"Please be advised that your submittal (ER24-2172) is deficient, and that additional information is required to process the filing," FERC said in the letter issued Aug. 2.

PJM submitted the amended ISA June 3 that involves PJM as transmission provider, Susquehanna Nuclear, as interconnection customer, and PPL Electric Utilities Corporation, or PPL, as the interconnected transmission owner.

Talen Energy affiliate Cumulus Growth Holdings sold its hyperscale datacenter campus in Pennsylvania to Amazon Web Services in March for $650 million.

The campus, which has up to 960 MW of data center capacity, is adjacent to and will be powered by Talen's 2,494-MW Susquehanna nuclear power plant in Luzerne County, Pennsylvania. The independent power producer will both supply nuclear energy through a power purchase agreement and earn additional revenue from the Amazon.com subsidiary for any remaining power sold to the PJM market, Talen said in a statement.

Regarding FERC's deficiency letter, PJM's filing amended an existing ISA between the parties to increase from 300 MW to 480 MW the volume of co-located load under the ISA, made revisions related to the treatment of the co-located load, and made other changes, FERC said.

PJM said that all the revisions are "non-conforming" and are needed to support reliable power system operations, "clarify expectations for conduct, and provide the parties with clarity as to their rights and obligations under the amended ISA," according to FERC.

The commission said that a transmission provider seeking FERC acceptance of a non-conforming agreement bears "a high burden" to justify and explain that the non-conforming aspects of the ISA agreement are not just "consistent with or superior to" a pro forma agreement but are required.

Specifically, Schedule F of the adjusted ISA includes new non-conforming provisions related to co-located load configuration, generation capacity resource status, operations, system protection facilities, co-located load transmission facilities "and other terms and conditions," the commission said, asking PJM to explain in detail why each of these proposed provisions "are necessary deviations from PJM's pro forma ISA."

In particular, FERC asked the grid operator to expand on whether there are any specific reliability concerns, "novel legal issues," or other unique factors making the non-conforming language necessary.

"For example, with specific regard to proposed Part E, Provisions Relating to System Protection Facilities, please explain in your response whether and why the proposed revisions are necessary as compared against the existing language in Schedule F, to address specific reliability concerns," FERC said.

PJM's deficiency filing is due within 30 days from the letter's date.

PJM market participants have filed comments, protests and answers supporting and opposing the proposed deal to supply the data center with power from the nuclear power plant.

Independent power producers Constellation Energy, Vistra and Calpine, which could consider similar power generation colocation deals, also filed motions to intervene on Talen's behalf in support of the interconnection agreement.

Others, including American Electric Power and Exelon have opposed the deal, saying that Talen's pending application would require the Pennsylvania nuclear plant providing the power to incur system charges from PJM.

Technical conference

Also, regarding large loads co-located at generating facilities, the commission said Aug. 2 that it is convening a technical conference on the subject (AD24-11).

"The purpose of this technical conference is to discuss generic issues related to the colocation of large loads at generating facilities," and FERC does not intend to discuss at this technical conference at any specific proceeding before the commission, the regulators said.

The meeting will be held at FERC headquarters in Washington in the fall.

"A supplemental notice will be issued with the date and time of the technical conference, as well as further details regarding the agenda and any changes in logistics," FERC said.