Tue Nov 05 04:25:48 UTC 2024: ## Constellation Energy to Push Forward with Data Center Deals Despite Regulatory Setback
**New York, November 5, 2024** – Constellation Energy, the largest operator of U.S. nuclear power plants, has announced it will continue pursuing deals to develop data centers on the sites of its power plants, despite a recent regulatory blow to the so-called co-location arrangements.
Last week, the Federal Energy Regulatory Commission (FERC) rejected a proposal to increase the power capacity of an Amazon data center directly connected to Talen Energy’s nuclear power plant in Pennsylvania. The decision was seen as a setback for similar co-location projects, which had been considered a promising way for tech giants to quickly access large amounts of power for their AI expansion.
However, Constellation CEO Joseph Dominguez stated that the company will seek guidance from regulators while simultaneously pursuing commercial strategies for co-location that are permitted under existing rules. He outlined potential future agreements that would require nuclear energy directly fueling data centers to be switched over to powering the grid in times of supply emergencies, with backup power for the centers potentially sold back to the regional market.
Constellation’s stock dropped by about 10% on Monday following the FERC decision. The company had backed Talen in the regulatory battle, and the prospect of developing co-located data centers had contributed to a rise in shares of nuclear power operators this year.
The FERC decision was prompted by concerns from electric utilities Exelon and American Electric Power, who argued that the Talen-Amazon data center interconnection agreement could raise power bills for everyday customers and erode grid reliability.
In a 2-1 vote, FERC rejected Talen’s request to expand the data center capacity beyond 300 megawatts. The majority of voting commissioners expressed concerns about diverting electricity from the nuclear plant to the data center, which could unfairly shift costs to the public and worsen the supply-demand balance in the PJM Interconnection regional power market.
Despite the setback, Talen Energy has stated it will explore various methods to quickly power up data centers, highlighting the growing demand for data center capacity.
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