Talen defends Amazon agreement against utility claims

The deal, which provides up to 960 megawatts of electricity, is argued by opponents to potentially increase public power bills by $140 million annually and pose grid reliability issues.
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Talen Energy has urged US regulators to dismiss a challenge to its recent agreement with Amazon for a data centre, which has faced opposition from electric utilities like American Electric Power and Exelon. These utilities argue that the deal could lead to higher power bills for the public. Talen countered this claim, stating that the interconnection agreement for the Amazon data centre would not result in increased costs for utility customers or impact grid reliability.

In its filing with the Federal Energy Regulatory Commission (FERC), Talen criticised the challenge as an unlawful attempt to derail a straightforward interconnection service agreement amendment. They argued it was being turned into a national debate on the future of data centre energy consumption, which was unwarranted. The decision by FERC on this matter could set a precedent for future deals where data centres are co-located with power plants, enabling quicker power supply without long interconnection delays.

Talen’s agreement, announced in March, involves selling electricity and a data centre campus at its Pennsylvania nuclear power plant to Amazon Web Services. However, this deal would provide Amazon’s data centres with up to 960 megawatts of electric capacity, sufficient to power around a million homes. Utilities like American Electric Power and Exelon have raised concerns that the agreement could impose a $140 million annual cost shift to regular ratepayers and potentially disrupt the grid during unexpected power plant interruptions.

Talen warned that if FERC allowed the challenge to proceed or rejected the agreement, it could stifle data centre expansion and deter the construction of new power plants amidst rising US electricity demand. Conversely, AEP and Exelon argue that the deal, if approved, could unfairly burden everyday ratepayers with costs associated with power infrastructure that doesn’t benefit them. The timing of FERC’s decision on the case remains uncertain.

Why does it matter?

The IATSE’s tentative agreement represents a significant step forward in securing fair wages and job protections for Hollywood’s behind-the-scenes workers, ensuring that the rapid technological advancements do not come at the expense of human employment.