US regulator rejects bid to boost nuclear power to Amazon data center

The Federal Energy Regulatory Commission (FERC) rejected an effort Friday to allow an Amazon data center to tap into additional power from a nearby Pennsylvania nuclear plant.

The decision could throw a wrench in efforts by large technology companies to secure so-called “behind the meter” power from nuclear plants as they seek to meet the growing energy demands of artificial intelligence (AI).

In a 2-1 decision, the FERC found the regional grid operator, PJM Interconnection, failed to prove that the changes to the transmission agreement with Susquehanna power plant were necessary.

The regulator’s two Republican commissioners, Mark Christie and Lindsay See, outvoted Democratic chair Willie Phillips. The chair’s two fellow Democratic commissioners, David Rosner and Judy Chang, sat out the vote.

“Co-location arrangements of the type presented here present an array of complicated, nuanced and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs,” Christie wrote in a concurring statement.

In a dissenting statement, Phillips argued the deal with Amazon “represents a ‘first of its kind’ co-located load configuration” and that Friday’s decision is a “step backward for both electric reliability and national security.”

“We are on the cusp of a new phase in the energy transition, one that is characterized as much by soaring energy demand, due in large part to AI, as it is by rapid changes in the resource mix,” Phillips wrote.

Amazon purchased a 960-megawatt data center next to the Susquehanna power plant for $650 million earlier this year.

Following the announcement, PJM sought to increase the amount of power running directly to the co-located data center. However, the move faced pushback from regional utilities, including Exelon and American Electric Power (AEP).

Tech giants have increasingly turned to nuclear energy to power AI. Last month, Google announced a deal to purchase nuclear energy from a fleet of small modular reactors, a new type of nuclear reactor, set to be built by Kairos Power.

Just days later, Amazon unveiled a series of deals to invest in advanced nuclear reactors, including an agreement with Northwest Energy to build four small modular reactors in Washington.

Nuclear energy operator Constellation Energy also announced a deal with Microsoft in September to reopen Three Mile Island to power the tech giant's data centers for two decades starting in 2028.

Nuclear offers a carbon-free source of energy for tech giants. It could be key to keeping down emissions, as many companies seek to keep their public promises to become carbon-neutral or negative by the end of the decade.