FERC sustained its rejection of amendments to the Susquehanna nuclear plant interconnection service agreement (ISA) to increase the amount of power serving a co-located data center (ER24-2172).

The changes sought by Talen Energy would have increased the scale of the Amazon Web Services data center operating behind the fence of Susquehanna from 300 MW to 480 MW. That was rejected by the commission on Nov. 1 on the grounds PJM had not demonstrated the proposal was “necessary for any interest unique to the interconnection of the Susquehanna customer facility.” (See FERC Rejects Expansion of Co-located Data Center at Susquehanna Nuclear Plant.)

The April 10 rehearing order defended the commission’s earlier finding that the proposed ISA amendments were not based on “specific reliability concerns, novel legal issues and unique factors” as demonstrated by it being based on PJM’s generally applicable guidance document for co-located configurations. While the RTO since has rescinded that document, the commission noted that portions of the proposed amendments to Susquehanna’s ISA mirrored the guidance and comments debating the proposal referred to it repeatedly. The rehearing order argued that allowing a standardized practice to be the basis of ISA language that does not conform to the pro forma interconnection service agreement (ISA) would weaken the commission’s necessary standard.

In its request for rehearing, Susquehanna said the commission’s rejection was not based on the unique configuration Talen sought, but rather that it could create a precedent for other resources that would not be reflected in the pro forma ISA. The company argued that being the first of its kind is not a valid reason for denying the application.

The commission wrote that reliance on the guidance document “raised the question of whether PJM intended to offer certain terms to all similarly situated interconnection customers.”

“Creating a requirement that the commission wait for a pattern to emerge before rejecting a non-conforming provision, as Susquehanna requests, would meaningfully weaken the necessary standard and meaningfully increase the possibility for disparate treatment that the necessary standard is designed to diminish,” the commission wrote.

Susquehanna also argued that reliability concerns “haunt” the rejection order despite PJM stating that necessary studies had not identified any issues with the configuration.

In the rehearing order, the commission wrote the study findings are not relevant to the rejection order, which hinged on a determination that PJM had not shown that the non-conforming language was necessary.

Vistra requested the commission clarify whether its rejection establishes a blanket limit on amending ISAs to co-locate data centers. If the intention was to hold that such amendments are not appropriate, Vistra said the underlying issues should be outlined so Susquehanna could refile without those provisions and others could do so as well. The commission responded that the rejection order does not prejudice any future co-located load configurations.

Phillips Dissents

The rehearing order was approved on the same lines as the original rejection, with Commissioners Mark Christie and Lindsay See in support and Willie Phillips dissenting. Commissioners David Rosner and Judy Chang did not participate.

Phillips wrote that he’s hopeful the commission’s order that PJM show cause investigating whether PJM’s tariff is just and reasonable without language addressing co-located load will allow such configurations to proceed. He repeated arguments he made opposing the original rejection that data centers represent an “era defining technology” that requires regulatory leadership. (See FERC Launches Rulemaking on Thorny Issues Involving Data Center Co-location.)

“Notwithstanding my disagreement with these orders’ rationale and determination, I remain hopeful that the Commission’s recently issued order … will soon result in solutions to address what I regard as unnecessary roadblocks to the continued maturing of an industry that is vital to our economic prosperity and national security,” Phillips’ dissent on the rehearing order said.

PJM’s response to the show cause order said more FERC guidance is needed on how the RTO should allow co-located configurations to proceed and laid out several possible pathways. It also noted challenges that remain unsolved, such as how to account for ancillary services the RTO maintains are consumed by co-located loads and whether protective schemes can be adequate for preventing the load from inappropriately taking energy from the grid. (See PJM Responds to FERC Co-located Load Investigation.)

Proponents of co-location have argued that in some instances the load should be considered separate from the wholesale grid and should not be charged for services such as regulation and black start.