Talen goes to court over FERC's Amazon co-located data center rejection

NEW YORK (Reuters) - Talen Energy is asking a U.S. appeals court to weigh in on a decision by federal regulators last year to reject a power agreement for an Amazon data center connected directly to Talen's Pennsylvania nuclear plant, according to court filings this week.

As Big Tech attempts to quickly scale its massive AI data centers, placing the centers directly at power plant sites in an arrangement known as co-location has become an attractive prospect for the industry to get massive amounts of electricity fast.

Early last year, Talen sold Amazon the data center campus at its Susquehanna nuclear generating facility in a deal that would eventually allow the center to receive nearly 1 gigawatt of electricity, which is roughly enough energy to power all of the homes in Philadelphia.

The Federal Energy Regulatory Commission in December denied Talen's request for an amended interconnection agreement that would have allowed it to increase electricity supplies to the data center.

While there are various ways to co-locate energy supplies, the Talen deal would redirect electricity from the regional power grid, which FERC said could worsen a supply and demand imbalance on parts of the country's electric system.

Talen is now petitioning for a review of FERC's rejection, including a rejected rehearing request, by the United States Court of Appeals for the Fifth Circuit.

If the court takes up the request, it could result in FERC's decisions being overturned or being kicked back to the regulators for review. It could also result in the court upholding the regulator's decision.

(Reporting by Laila Kearney; Editing by Chris Reese)

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