Talen asks US regulators to reject challenge to Amazon data center deal

By Laila Kearney

NEW YORK (Reuters) – Talen Energy has asked U.S. regulators to reject a challenge to its recent Amazon (NASDAQ:) data center deal, which is being opposed by a group of electric utilities that say the agreement could raise power bills for the general public, according to a filing on Friday.

Talen said the challenge, brought by utilities including American Electric Power (NASDAQ:) and Exelon (NASDAQ:), was inaccurate and that its interconnection agreement for the Amazon data center site would not cause grid reliability problems or spiking power costs for the utility customers.

“It is an unlawful attempt to hijack this limited interconnection service agreement amendment proceeding that they have no stake in and turn it into an ad hoc national referendum on the future of data center load,” Talen said in its filing with the Federal Energy Regulatory Commission.

Technology companies are in a race to access massive amounts of electricity supplies to power and cool the data centers, or giant computer warehouses, needed to roll out technologies like generative AI. Nuclear energy, which is virtually carbon free and provides around-the-clock power, has become a top pick for the data center industry.

Talen announced in March that it had entered into an agreement to sell electricity and a data center campus located at its Pennsylvania nuclear power plant to Amazon Web Services. The deal would provide Amazon’s computer warehouses with an electric capacity of up to 960 megawatts, or enough to power about a million homes.

A handful of electric utilities, including American Electric Power and Exelon, last month asked FERC to hold a hearing to more deeply scrutinize Talen’s interconnection agreement with Amazon or deny it outright. The group said the interconnection agreement for the data center could result in a $140 million per year cost shift to everyday ratepayers.