US regulators deny rehearing on co-located Amazon data center energy pact

By Laila Kearney

NEW YORK (Reuters) - U.S. energy regulators this week denied a request to reconsider a decision that blocked an Amazon data center, connected directly to a Talen Energy nuclear power plant in Pennsylvania, from ramping up its power use, government filings show.

Big Tech's race to secure massive amounts of electricity to fuel its AI data centers has led to unprecedented arrangements with power companies, including new types of so-called co-located deals, where the giant computer warehouses are powered right from the power source.

The arrangements have promised to speed up the technology industry's artificial intelligence expansion by eliminating wait times to connect to the broader grid and have propelled company shares of independent power companies like Talen on the prospect of signing multiple co-located power deals.

Members of the Federal Energy Regulatory Commission have voiced concern about how the Amazon data center, which diverts electricity from the broader grid, might affect power reliability and costs for the general public. In November, FERC rejected Talen's request to increase power supplied to the Amazon data center beyond 300 megawatts.

When Talen Energy sold the data center to Amazon, the company said the facility could use almost 1,000 megawatts of energy supplied directly from Talen's Susquehanna nuclear facility.

FERC, on Thursday, denied a request for a rehearing on the matter. Talen, which has separately asked a U.S. appeals court to weigh FERC's rejection, said it wasn't surprised by the decision. "The ruling now allows us to pursue our appeal rights on the merits in the Fifth Circuit," Talen spokesperson Taryne Williams said on Friday.

FERC is still considering establishing broader rules governing co-location as it becomes and increasingly popular choice for data center developers.

(Reporting by Laila Kearney; editing by Philippa Fletcher)

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