The Federal Energy Regulatory Commission should reject a call for a 90-day pause in its deliberations over the PJM Interconnection’s rules for colocating data centers at power plants, according to PJM, major utilities and other organizations.
“The national interest will be best served by a quick dismissal of this proceeding, and a ruling that the existing PJM Tariff remains just and reasonable,” PJM transmission owners said in a Wednesday filing urging FERC to dismiss a call for stakeholder settlement talks. “Rather than fighting about a wish list of new rules, the parties will then instead begin to focus on obtaining service under the rules in place today.”
The transmission owners include utility companies such as American Electric Power, Dominion Energy, Duke Energy, Exelon, FirstEnergy and PPL Electric.
“The record is clear — no matter how connected to the PJM transmission system, large loads pose both a safety and a reliability concern,” the utilities said. “It is unrealistic to ask the [transmission owners] to accede to these demands in the context of settlement procedures while those questions remain unresolved.”
PJM also wants FERC to ignore the call for settlement discussions that was made in late April by the Electric Power Supply Association, the PJM Power Providers Group, Calpine, Cogentrix Energy Power Management, Constellation Energy Generation and LS Power Development.
“The Commission should not pause its work on offering the industry guidance on a path forward for co-location arrangements,” PJM said in a Monday filing. The call for settlement talks lacks broad stakeholder support, PJM said, noting it is holding a workshop on “large load” issues on Friday.
American Municipal Power, a wholesale power provider for public power utilities, and Northern Virginia Electric Cooperative and Northeastern Rural Electric Membership Corp. also oppose holding settlement talks. Beside the power generators and trade organizations, the Data Center Coalition is the only group supporting a stay on the colocation proceeding for settlement discussions.
It is unlikely that FERC will approve the request for settlement talks, according to research firm Capstone.
“Capstone continues to believe that guidance from [FERC] on co-location will be delayed until the end of the year; we doubt a settlement proceeding would accelerate regulatory clarity or result in near-term guidance, nor do we expect FERC to grant the stay,” Hannah Rogers, a Capstone analyst, said in a comment to clients. “We also do not anticipate transmission owners … making meaningful concessions in any negotiations.”
The outcome of FERC’s review could set a precedent for colocated load in the power markets the agency oversees. It will arrive amid a surge in data center development across the United States.
Constellation, Vistra and Public Service Enterprise Group are among the companies that could host data centers at their nuclear power plants. They also held quarterly earnings calls in the last week, during which data center deals were discussed.
Constellation officials indicated that net pricing on new “front-of-the-meter” power purchase deals is roughly in the $80/MWh to $90/MWh range, Jefferies analysts said in a note Wednesday.
On its call, Constellation management did not seem interested in a potential colocation settlement, according to Jeffries. Constellation and Vistra appear confident FERC will issue a colocation decision later this year, the Jeffries analysts said.
Constellation management indicated the company is close to signing long-term power offtake agreements, Morgan Stanley analysts said Wednesday. “[Constellation] has seen a shift in customer interest toward front-of-the-meter configurations and away from behind-the-meter structures,” the analysts said.
Meanwhile, it appears less likely that PSEG will pursue data center deals at its nuclear power plants in New Jersey “given the ‘affordability crisis’ that many stakeholders and elected officials have described,” the Jeffries analysts said. They cited a Monday letter from Public Service Electric and Gas to PJM that highlighted resource adequacy concerns and a May 2 letter to PJM from members of the state’s congressional delegation, including Democratic Sens. Cory Booker and Andy Kim.
