Talen Energy said that the Amazon data center contract won't increase power bills or compromise grid stability, and it encouraged U.S. regulators to reject the electric utilities' challenge to it.
Talen stated that the challenge, which was presented by utilities such as Exelon (EXC.O) and American Electric Power (AEP.O), opens new tab, was erroneous and that its interconnection agreement for the Amazon data center site would not result in problems with grid reliability or spikes in power costs for utility customers.
According to a filing on Friday, Talen Energy has requested that US regulators reject a challenge to its recent Amazon data center contract. The complaint is being raised by a consortium of electric utilities who claim that the arrangement might result in higher power costs for the general public.
Talen said that the challenge, which was presented by utilities such as Exelon and American Electric Power, was untrue and that the interconnection deal for the Amazon data center facility would not result in an increase in utility customers' power bills or issues with grid dependability.
In their complaint with the Federal Energy Regulatory Commission (FERC), Talen said, "It is an unlawful attempt to hijack this confined interconnection service agreement amendment proceeding of which they have no stake within and turn it into an ad hoc national opinion on the future of data center load."
In order to power and cool the data centers, or enormous computer warehouses, required to implement technologies like generative AI, technology firms are competing to get large volumes of electrical supply. Nuclear energy has emerged as a preferred choice for the data center business since it is essentially carbon free and offers continuous electricity.
The ruling by FERC may establish a standard for agreements like as the one with Talen, in which data centers are situated near the power plants that supply them. This arrangement enables the centers to start up fast and avoid waiting years to go through interconnection lines.
In March, Talen said that it had reached a deal with Amazon Web Services to sell energy and a data center campus situated at its nuclear power facility in Pennsylvania. Through the agreement, Amazon would have access to up to 960 megawatts of electricity, or enough power to power over a million households, for its computer warehouses.
A few electric companies, including as Exelon and American Electric Power, requested last month that FERC convene a hearing in order to either fully examine Talen's interconnection arrangement with Amazon or reject it. According to the organization, the data center's interconnection arrangement may cause regular customers to bear a $140 million annual cost shift.
In a time of unprecedented increase in the demand for energy in the United States, Talen claims that if FERC permits the hearing or rejects its proposal, it would have a chilling effect on the development of data centers and discourage the construction of new power plants.
If the deal is approved as is, according to AEP and Exelon, ordinary ratepayers may be forced to foot the bill for unnecessary power infrastructure or the grid may be suddenly depleted of large amounts of electricity in the event that the plants that supply the data centers directly experience unplanned outages.
When FERC would rule on the matter remained uncertain.
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