Susquehanna Nuclear Seeks Court Review of Rejected ISA
Susquehanna Nuclear LLC has filed a petition with the Fifth Circuit Court of Appeals to challenge the Federal Energy Regulatory Commission’s (FERC) rejection of an interconnection service agreement (ISA) amendment. The agreement was intended to increase the power supply to an Amazon Web Services (AWS) data center colocated with the Susquehanna Steam Electric Station in Pennsylvania. The rejected amendment aimed to raise the shared power capacity from 300 megawatts (MW) to 480MW.
FERC’s October Ruling Sparks Legal Action
In October, FERC ruled against the proposed ISA amendment, stating that the arrangement lacked sufficient justification for its nonstandard provisions. The decision followed complaints from utility companies that the proposal could raise public electricity bills and compromise grid reliability.
The Fifth Circuit—which has jurisdiction over Texas, Louisiana, and Mississippi—will now review Susquehanna Nuclear’s petition against the FERC decision.
Background: The Interconnection Service Agreement
Original and Amended Agreements
The original ISA, submitted by PJM Interconnection—the regional grid operator—and approved by FERC in 2015, supported a colocated load of up to 300MW. In February 2023, the agreement was amended to include an additional 150MW, bringing the total to 450MW. This amendment was initially accepted by FERC.
AWS’s Acquisition of Cumulus Data Center
In June 2023, AWS acquired the 960MW Cumulus data center from Talen Energy, which operates the Susquehanna Steam Electric Station. Following this acquisition, PJM submitted another amendment to the ISA, proposing an increase in the colocated load capacity to 480MW. However, this further amendment was rejected by FERC, prompting the current legal dispute.
Key Issues Raised by FERC and Utilities
Complaints from AEP Ohio and Exelon
Utilities AEP Ohio and Exelon opposed the amended ISA, arguing that:
- The agreement’s nonstandard provisions lacked adequate engineering explanations.
- AWS would use the grid without paying the required fees, potentially increasing costs for other customers.
- The proposed arrangement could set a precedent for similar agreements, affecting the broader electricity market.
FERC’s Concerns
FERC cited two primary reasons for rejecting the amendment:
- Insufficient justification for the unique provisions of the ISA.
- Potential negative impacts on public power bills and grid reliability.
Response from Susquehanna Nuclear and Talen Energy
Defense of the Proposed Amendment
Talen Energy, the parent company of Susquehanna Nuclear, strongly disagreed with FERC’s decision. In a statement, the company argued that the privately negotiated agreement was supported by all parties involved and did not pose risks to the grid or public electricity costs. Talen emphasized that the colocated data center operates independently of the broader grid, mitigating concerns about cost-shifting and reliability.
National Security and Economic Implications
Talen also highlighted the potential economic and national security benefits of the agreement. The company claimed that rejecting the ISA could hinder private sector investments in critical infrastructure, such as data centers powered by reliable and clean energy sources.
What’s Next?
The Fifth Circuit Court will now review the case and determine whether FERC’s decision was justified. If the court sides with Susquehanna Nuclear, the ISA amendment could be reinstated, allowing the AWS data center to increase its power capacity as planned.
FAQ
1. What is an interconnection service agreement (ISA)?
An ISA is a contract between a power generator, a regional grid operator, and a transmission owner to define the terms of connecting a power facility to the electrical grid or a colocated load.
2. Why did FERC reject the amended ISA?
FERC rejected the amendment due to insufficient justification for its nonstandard provisions and concerns about potential impacts on public electricity bills and grid reliability.
3. How much power does the AWS data center currently use?
The colocated AWS data center currently has an approved power capacity of 300MW, which was later amended to 450MW. The proposed amendment to increase capacity to 480MW was rejected.
4. How does the colocated data center affect the grid?
Talen Energy claims the data center operates independently of the broader grid, minimizing potential impacts on grid reliability and cost-shifting.
5. What are the next steps in this dispute?
The Fifth Circuit Court of Appeals will review the case and decide whether FERC’s rejection of the ISA amendment was appropriate.
