PJM Co-Located Load Appeal Rejected
Starting in March 2023, the Susquehanna Steam Electric Station began sending 300 MW to a 1200 acre data campus in Berwick. This past March, 2024, Amazon Web Services (AWS) bought the campus. It plans to power energy-hungry computers for AI, web servers, and data-mining. However, the FERC recently rejected the campus’s power connection plan. For the moment, AWS plans for the new data campus sit on hold. But with other big US data centers in the works, the situation is troubling. With other potential power-purchase plans afoot, let’s see why the FERC nixed this data center deal.
Load Behind the Generator Meter
PPL owns both the transmission lines and the power plant in Berwick. According to FERC‘s basic interconnection rules, RTO/ISO agreements must limit utilities that offer transmission so they don’t favor their own power plants. As a result, the original 2015 pro forma agreement between PPL and PJM put power from the nuclear plant straight on the grid. It also gave other power plants access to the PJM grid, as well. Customers then get their power from the grid. Of course, FERC does allow for other situations that are not as simple. But getting those approved as “non-conforming” cases isn’t easy.
For example, a power plant connects its power lines to the PJM grid at the “Point of Interconnection”. But, a power plant can also send power directly to an end-use customer on its side of the interconnection. Grid planners call this end user a “co-located load.”
In 2024, PJM, PPL, and Susquehanna changed their interconnection agreement. This way, Susquehanna could power the AWS data center as a co-located load from “Behind the Generator Meter”. In short, the nuclear plant would make enough power for the data center campus. It would also send power to the PJM grid but at an amount lower than it was rated for.
Disrupting the FERC Standard
Now while this sounds simple enough, FERC‘s job was to to decide if the deal qualified as non-conforming interconnection. It certainly disrupted the standard rules and riled several generator companies. For example, PECO parent, Exelon, and AEP cried foul because the plan seemed to raise more problems than it addressed. Their objections included:
- Although the “co-located load” was not meant to pull power from the grid, there was a chance that it could.
- There were no assurances any power coming off the grid (over 400 MW) would be metered and billed for.
- Susquehanna does pull in some power from the grid to run. So while the co-located load would receive benefits from the PPL transmission system, it wouldn’t pay any transmission rates.
Chairman Of FERC Disagrees
In its final ruling, the FERC rejected PJM’s case for its non-conforming agreement. However, their decision leaves uncertainty about how to hook up big data centers to the power they need. If data centers can’t get enough power, their high demand could strain the local grid instead.
FERC Chairman Willie Phillips came out against the ruling, calling the PJM agreement a “first of its kind”. Moreover, he urged that reliable electricity is the “lifeblood” of data centers.
Talen Energy Continues To Explore Options
Meanwhile, Talen Energy plans to power the AWS data center without straining the local grid. They are are also looking into other options, including refiling a new co-location plan. Talen Energy also plans to work with PJM on improving transmission lines to ensure reliability without troubling local ratepayers. For the time being, original 300 MW supply agreement will still be in force.
Despite the FERC ruling, the AWS data center will be a go. And it’s expected to bring several new tech jobs to Luzerne County. We’ll keep you abreast of how this will affect electric rates in your area. You can check out all of the latest news and rates at www.paenergyratings.com