(Reuters) -Talen Energy is pursuing another chance to convince regulators to approve its agreement to supply more electricity to an Amazon data center connected to Talen’s nuclear power plant in Pennsylvania, company executives said on Thursday.
The Federal Energy Regulatory Commission this month struck down the deal to increase the capacity of the data center at Talen’s Susquehanna plant to 480 megawatts from 300 megawatts, noting that diverting power to a single customer could raise power bills in the region and cause grid reliability problems.
Building data centers on power plant sites, in an arrangement known as co-location, gives Big Tech a fast track to access large amounts of electricity to expand data centers instead of waiting for years to connect to the broader grid.
Power consumption is expected to reach record highs in 2024 and 2025 due to surging demand from data centers used for technologies like artificial intelligence.
“We are exploring a whole suite of commercial and legal solutions to facilitate full development of the Susquehanna campus as well as progressing other opportunities across our fleet,” Talen CEO Mark McFarland said on a company earnings call. “This includes filing a motion for FERC rehearing in parallel with AWS contract discussions.”
Talen sold its data center campus to Amazon earlier this year for $650 million under an agreement that the power capacity could eventually reach 960 megawatts, enough electricity to power all the homes in Philadelphia.
The company also said it was considering other options to increase its power supply to Amazon, including submitting a revised amended interconnection service agreement.
Talen beat Wall Street estimates for third-quarter core profit on Thursday, helped by higher electricity rates and resilient demand for power.
Talen posted adjusted earnings before interest, taxes, depreciation and amortization of $230 million for the three months ended Sept. 30, compared with analysts’ average estimate of $212.9 million, according to data compiled by LSEG.
(Reporting by Laila Kearney in New York and Vallari Srivastava in Bengaluru; Editing by Shreya Biswas and Richard Chang)
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