The Federal Energy Regulatory Commission plans to issue a decision next week on the PJM Interconnection's rules for colocating large loads such as data centers at power plants, according to the commission’s agenda for its Dec. 18 open meeting.
“The inclusion of PJM’s co-location proceeding on [FERC’s] open meeting agenda suggests a positive outcome for nuclear and gas plant owners hoping to contract with data centers behind-the-meter (BTM) and avoid paying full grid charges,” Josh Price and Hannah Rogers, analysts with the Capstone research firm, said in a note Thursday.
ClearView Energy Partners said Friday that FERC will most likely direct PJM to advance some of the “conceptual” colocation approaches PJM offered earlier this year as part of the agency’s review of the grid operator’s colocation rules, such as “bring your own generation.”
FERC could suggest other colocation arrangements as well, according to analysts with the research firm.
“We think such an order could include language that reflects the Commission’s long-held concerns about resource adequacy if new data centers co-locate with existing baseload generation, thereby taking capacity out of the supply stack causing prices to rise for other users,” the analysts said in a note Friday.
FERC in November 2024 rejected an amended interconnection service agreement that would have facilitated expanded power sales to a colocated Amazon data center from the 2,475-MW Susquehanna nuclear power plant in Pennsylvania that is majority-owned by Talen Energy. Three months later, FERC launched a review of issues related to colocating large loads at power plants in PJM’s footprint.
Generally, the issue of colocating large loads at power plants has pitted utilities against independent power producers, such as Constellation Energy Generation.
Earlier this month, PJM transmission owners, including utilities owned by Exelon, FirstEnergy and PPL Corp., urged FERC to ignore a request by Constellation that FERC quickly issue an order on colocating loads in PJM.
PJM also urged FERC to dismiss Constellation’s request, saying issuing an order would interfere with a pending proposal from PJM’s board on interconnecting large loads to the grid. Also, FERC should wait until it resolves its consideration of the Department of Energy’s request that the agency establish rules for interconnecting large loads to the transmission system, PJM said.
The fact that the colocation issue is on FERC’s open meeting agenda signals that the agency will likely prioritize artificial intelligence, in line with the White House's policy priorities, the Capstone analysts said.
Once FERC issues a PJM colocation order, the grid operator will likely have up to 60 days to respond with updated tariff language after getting stakeholder input, the analysts said. After holding a comment period on PJM’s compliance plan, FERC could approve it before the second quarter next year, they said.
