Talen Energy requests US regulatory agencies to reject doubts about Amazon's acquisition of data centers

According to the Zhītōng Finance and Economics APP, a document submitted on Friday showed that Talen Energy (TLNE.US) has requested US regulatory agencies to reject the questioning of Amazon (AMZN.US) AWS's recent acquisition of data centers. The deal has faced opposition from some power companies, claiming that it may increase public electricity costs.

Talen stated that the concerns raised by utility companies including American Electric Power (AEP.US) and Exelon (EXC.US) are not accurate. The interconnection agreements provided by them for Amazon's data center websites will not lead to a surge in electricity costs for utility customers or reliability issues in the power grid.

In the document submitted to the Federal Energy Regulatory Commission (FERC), Talen stated: "This is an illegal attempt, they are trying to hijack this limited interconnection service agreement revision process and turn it into a temporary national referendum on the future of data center loads."

Tech companies are competing to secure large amounts of power supply to power data centers or large computer warehouses for technologies like generative AI and cooling. Nuclear energy, which is almost carbon-free and provides round-the-clock power, has become the preferred choice for the data center industry.

The decision of the Federal Energy Regulatory Commission could set a precedent for deals like Talen's, where data centers are located at the site of the power plants that supply them, allowing these centers to be quickly powered without struggling in interconnection queues that may take years to complete.

In March of this year, Talen announced that it had reached an agreement to sell the power and data center campus at its nuclear power plant in Pennsylvania to Amazon Web Services (AWS). This deal will provide up to 960 megawatts of power for Amazon's computer warehouses, enough to power approximately 1 million households.

Last month, several power companies, including American Electric Power and Exelon, requested the Federal Energy Regulatory Commission to hold a hearing for a more in-depth review of Talen's interconnection agreement with Amazon or to outright deny it. The organization stated that the interconnection agreements for data centers could shift costs of $140 million annually onto ordinary taxpayers.

Talen said that if the Federal Energy Regulatory Commission allows a hearing or rejects its plan, it will have a chilling effect on the expansion of data centers and prevent the construction of new power plants during a period of unprecedented growth in US electricity demand.

American Electric Power and Exelon stated that if this deal is allowed, it could burden taxpayers daily with unfavorable costs of electricity infrastructure or suddenly deplete a significant portion of the power grid's load when factories serving as direct energy sources for data centers experience unexpected interruptions.

It is currently unclear when the Federal Energy Regulatory Commission will make a ruling on this case