The Federal Vitality Regulatory Fee (FERC) has rejected an amended interconnection settlement that will have supported expanded co-located load at an Amazon Net Companies (AWS) knowledge middle related to the two,520–MWe Susquehanna nuclear energy plant in Pennsylvania, citing grid reliability and price equity considerations.
FERC on Nov. 1 voted 2–1, with Commissioners Mark Christie and Lindsay See in favor and Chairman Willie Phillips dissenting, to disclaim the proposed modification from PJM Interconnection. The proposal sought to change an interconnection service settlement (ISA) amongst PJM, the grid operator, the ability plant proprietor, Susquehanna Nuclear, and interconnected transmission proprietor PPL Corp. that sought to extend the info middle’s co-located load from 300 MW to 480 MW.
The FERC motion serves as yet one more instance of tensions arising as the ability trade makes an attempt to grapple with hovering calls for from giant hundreds like knowledge facilities—which require dependable, high-capacity energy—whereas avoiding burdensome prices for different grid customers. As POWER has reported, AEP Ohio not too long ago launched a structured tariff for hyperscalers that makes an attempt to deal with a few of these uncertainties.
A Consequential Order
As FERC’s order notes, FERC initially accepted a PJM-filed ISA for the two-unit nuclear energy plant owned 90% by Talen Vitality and 10% by Allegheny Electrical in Luzerne County in 2015. In February 2023, PJM submitted an amended, uncontested ISA so as to add as much as 150 MW—a mixed 300 MW—of co-located load behind every of Susquehanna’s two 1,260 MW items interconnected to PJM’s transmission system.
In March 2024, Talen Vitality bought its 960-MW Cumulus knowledge middle campus, instantly related to the Susquehanna nuclear plant, to Amazon Net Companies (AWS) for $650 million. AWS has minimal contractual energy commitments for the info middle, which was slated to ramp up in 120-MW increments over a number of years, with a one-time choice to cap commitments to 480 MW. To accommodate this, PJM submitted one other modification to the ISA in June 2024, up to date in September 2024, to extend the co-located load capability from 300 MW to 480 MW. Nevertheless, that modification was rejected by FERC on Friday.
In its modification, the grid operator prompt that the rise wouldn’t disrupt transmission reliability. Nevertheless, it warned that any demand over 480 MW may create “era deliverability violations.” The modification additionally added flexibility for future load changes, permitting Susquehanna to doubtlessly provide as much as 960 MW contingent upon resolving grid stability challenges. Reliability measures, for instance, included requiring Susquehanna to disconnect the info middle throughout system disruptions and limiting backup energy utilization to particular circumstances pre-approved by PJM and PPL.
In June, AEP and Exelon challenged the ISA modification, which they argued lacked enough assist and will doubtlessly set a precedent that permits sure giant hundreds to learn from transmission sources with out paying corresponding prices. The utilities warned in proceedings that such a precedent may hurt PJM’s capability markets by incentivizing giant hundreds to disconnect from PJM’s grid, doubtlessly elevating substitute prices and making a burden for different clients.
PJM’s unbiased market monitor, in the meantime, contended that the difficulty had “extraordinarily giant significance for the way forward for PJM markets.” PJM “has not defined the way it plans to satisfy anticipated will increase within the demand for energy, given ongoing generator retirements, even with out eradicating a number of giant base load items from the system,” it mentioned. “PJM’s newest reliability report and PJM’s RTEP don’t deal with the potential vital modifications that will end result from reliance on the proposed ISA as a precedent.”
Nevertheless, the submitting was backed by a number of aggressive mills, together with PPL, Calpine, Constellation, and Vistra. The events argued the scope of the continuing was restricted, and whereas utilities’ protest raised points outdoors its scope. A number of events prompt that if FERC didn’t settle for the amended ISA, it could frustrate industrial preparations involving knowledge middle load progress. PPL notably careworn that FERC’s rejection of the ISA would go away PJM and PPL in an “untenable” place from a reliability standpoint and that the prevailing ISA had develop into “unjust and unreasonable.”
Rejection Makes an attempt to Keep away from Undermining Value Equity
FERC in the end sided with the challengers, concluding that PJM had not offered enough justification for the non-standard provisions that will enable a “distinctive” association for the info middle. Commissioners Christie and See famous that PJM’s proposal didn’t meet FERC’s requirements for deviating from established transmission protocols, which require clear proof of the need for non-standard agreements. Of their opinion, the enlargement may undermine value equity and burden different PJM clients with potential reliability points.
“Co-location preparations of the kind offered right here current an array of difficult, nuanced, and multifaceted points, which collectively may have enormous ramifications for each grid reliability and client prices,” Christie wrote. “Given these ramifications, the Fee really must ‘get it proper’ on the subject of evaluating co-location points.” If FERC had been to approve the proposal, “we might be setting a precedent that will be used to justify an identical or comparable preparations in future circumstances,” he mentioned.
Nonetheless, as Stu Bresler, PJM’s government vice chairman of Market Companies and Technique, defined in testimony at FERC’s commissioner-led Technical Convention Concerning Giant Hundreds Co-Situated at Producing Services on Friday, the urgency to deal with knowledge middle integration points is mounting. Builders have requested that PJM research practically 8.5 GW of enormous hundreds to be co-located with current generator interconnections, Bresler underscored.
As a result of no regulatory governing paperwork at the moment deal with processes and choices for co-located load, PJM has been evaluating interconnection modifications on a case-by-case foundation. “The Fee ought to discover the event of a uniform strategy to this concern that promotes certainty and readability to entities fascinated about pursuing co-located load configurations and people entities doubtlessly impacted by such configurations,” he really helpful.
Ideally, giant co-located hundreds needs to be in entrance of the meter and designated as community load, Bresler mentioned. “Community Load standing affords essentially the most strong reliability advantages and holistic planning efficiencies, minimizes the necessity for one-off operational procedures (each interim and long run), and affords a price allocation framework that assesses fees to be used of and reliance on the transmission system.” Nevertheless, he famous that rising giant co-located load integrations principally assume “a behind-the-meter, off-system assemble.” Any monetary association between the generator and the load happens outdoors of the PJM settlements system and isn’t factored into future planning forecasts.
Reliability points come up when conventional baseload era exits the provision stack quickly to completely serve off-system co-located load, or if behind-the-meter hundreds combine quicker than might be reliably deliberate for, he defined. Reliability considerations can materialize if a generator serving a co-located load journeys offline and the load inadvertently continues to attract from the grid, failing to open the supposed breakers.
Past reliability, Bresler famous, surging behind-the-meter knowledge middle integration raises extra crucial points. These embody whether or not situations needs to be imposed on transmission suppliers’ obligation to serve such hundreds, the potential want for co-located services to pay for ancillary and transmission companies, particular planning and operational particulars to incorporate in interconnection agreements, and complicated jurisdictional questions on whether or not such configurations fall below federal or state authority.
“These are complicated points, and generic steering (versus case-by-case determinations) will facilitate effectivity and predictability for builders advancing rising and evolving applied sciences in fields like synthetic intelligence and knowledge computing and the electrical trade being known as upon to facilitate and serve this innovation,” he mentioned. “Extra work stays to be completed.”
Phillips: Order Misses ‘Forest for the Bushes’
On Friday, Phillips, in his dissent, prompt FERC missed its alternative to deal with a few of these points and described the order as “a step backward for each electrical reliability and nationwide safety.” He argued that the amended ISA amongst PJM, Susquehanna Nuclear, and PPL represents a “first of its variety” co-located load configuration “that presents exactly the type of particular reliability considerations, novel authorized points, and different distinctive components that ought to have justified the submitting of a non-conforming interconnection settlement.”
PJM’s evaluation, Phillips famous, discovered no want for transmission upgrades to assist the proposed 480 MW load improve and included extra reliability measures—corresponding to protections to forestall unintended energy circulate to the info middle and generator shutdown notifications—that will strengthen grid stability. He contended that FERC ought to have accepted the proposal whereas requiring PJM to submit common informational filings, “to offer transparency into the association’s operations over time, together with sure of the problems in dispute, corresponding to back-up service.”
“That strategy would even have allowed PJM to undergo an extra stakeholder course of for tariff revisions and resolve on generic subsequent steps concerning these vital points within the months forward,” he added. “In failing to simply accept the settlement, we’re rejecting protections that the interconnected transmission proprietor says will improve reliability whereas additionally creating pointless roadblocks to an trade that’s needed for our nationwide safety.”
“On the finish of the day, I’m involved that the arguments the Fee depends on to reject the Amended ISA lead it to overlook the forest for the timber,” he mentioned. “We’re on the cusp of a brand new section within the power transition, one that’s characterised as a lot by hovering power demand, due largely to [artificial intelligence (AI)], as it’s by fast modifications within the useful resource combine. Guaranteeing dependable and inexpensive provides of electrical energy all through the approaching interval of accelerating demand and altering provide would require pragmatic management that facilitates that transition.”
In an announcement, Todd Snitchler, president and CEO of the Electrical Energy Provide Affiliation (EPSA), a commerce group for aggressive energy suppliers, prompt optimism, pointing to FERC’s practically six-hour technical convention on Friday to deal with considerations about giant co-located hundreds at producing services. “We’re happy to see FERC’s management on this concern and imagine at the moment’s constructive and enlightening discussions will assist present alternatives to flesh out the optimum outcomes for shoppers and a dependable energy system,” he mentioned.
“Whereas we’ve seen various estimates about how a lot power demand knowledge middle progress will convey within the coming decade, it’s clear that new approaches to resolve the rising state of affairs are wanted to construct and ship extra energy quickly, as cost-effectively as attainable, and most significantly—reliably,” he mentioned. “Whereas many paths might be taken, aggressive energy suppliers are uniquely suited—and are already performing—to satisfy the second. Our members’ enterprise mannequin permits them to reply nimbly and effectively to this new market sign to deploy dependable, long-duration era sources, shielding shoppers from funding dangers related to the anticipated buildout of latest sources.”
Whereas co-locating sources with giant demand clients “has emerged as an modern and promising strategy to deal with this concern,” as “with any new association that would impression the prevailing grid and aggressive markets, getting the particulars proper and thoroughly assessing surrounding market ramifications is crucial,” Snitcher mentioned. “Now we have already seen the impacts to shoppers and reliability imposed by insurance policies and rules that result in the retirement of dispatchable sources and tightening energy provide, underscoring the necessity for options and new concepts that may advance a dependable and cost-effective power enlargement.”
—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).
