American Electric Power Co. Inc. and Exelon Corp. are maintaining that Talen Energy Corp.'s pending application to deliver 480 MW of colocated load to an Amazon.com Inc. datacenter requires the Pennsylvania nuclear plant providing the power to incur system charges from PJM Interconnection LLC.
Talen subsidiary Susquehanna Nuclear LLC, which operates the 2,494-MW Susquehanna Nuclear plant, asked the Federal Energy Regulatory Commission in June to authorize the interconnection service agreement with local transmission operator PPL Corp. American Electric Power (AEP) and Exelon protested that request, warning that ratepayers would bear another $58 million to $140 million per year in transmission system costs, but Talen responded July 5 that the "behind-the-meter configuration" requires the datacenter to pay delivery facility costs, calling on FERC to reject the utilities' challenge.
"The core assumption of the [interconnection service agreement] — that load colocated at a nuclear plant can be fully isolated from the grid, is an illusion — and potentially a dangerous one," AEP and Exelon countered in a July 17 FERC filing, emphasizing "the clear intention of attempting to allow the load to avoid PJM transmission charges."
"Load oscillations will have to be followed by other generators, a service transmitted through PJM's system and paid for by customers," AEP and Exelon said. "Likewise, the load cannot access ancillary services like voltage support absent the transmission system; they are not severable."
Independent power producers Constellation Energy Corp., Vistra Corp. and Calpine Corp., which could consider similar generation colocation deals, also filed motions to intervene on Talen's behalf in support of the interconnection agreement.
A July report from former PJM COO Michael Kormos published by the Nuclear Energy Institute, a trade organization representing Talen and other independent power producers with nuclear portfolios, directly rebutted AEP and Exelon's claims.
"Some opposing voices still claim that transmission and related services are being provided to the disconnected load through the colocated generator," Kormos wrote in the report. "This argument is creative but reflects a fundamental misunderstanding of the open access rate design established by [FERC] 30 years ago."
"Generators always have been connected to the grid and have never been charged for most of the services in question," Kormos added.
Talen sold the datacenter campus to Amazon Web Services Inc. for $650 million in March. The Amazon unit is also reportedly nearing a deal with Constellation to secure electricity supplied directly from a nuclear plant on the East Coast to power datacenters.
