Talen Energy and Amazon Web Services (AWS) have entered into a power purchase agreement for the Susquehanna nuclear generator to supply 1.9 GW to the tech company as its retail supplier.
“Amazon is proud to help Pennsylvania advance AI innovation through investments in the commonwealth’s economic and energy future,” AWS Vice President of Global Data Centers Kevin Miller said in an announcement of the June 11 agreement. “That’s why we’re making the largest private-sector investment in state history — $20 billion — to bring 1,250 high-skilled jobs and economic benefits to the state, while also collaborating with Talen Energy to help power our infrastructure with carbon-free energy.”
The agreement is effective through 2042 and will ramp up to the full 1,920 MW by 2032. The announcement states the two companies will explore possible uprates to the generator, as well as the installation of small modular reactor (SMR) resources within Pennsylvania.
“This long-term transaction will significantly decrease Talen’s market risk and minimize its reliance on the federal nuclear production tax credit,” the announcement states.
The deal ratchets up a partnership between the two companies that includes a data center co-located with Susquehanna, an arrangement Talen has sought to expand. FERC rejected an amendment to Susquehanna’s interconnection service agreement (ISA) that would have increased the amount of power serving the co-located load from 300 MW to 480 MW. (See FERC Rejects Expansion of Co-located Data Center at Susquehanna Nuclear Plant.)
Following a configuration of the transmission around Susquehanna in spring 2026, the co-located data center would shift from being behind the generator’s meter to receiving full grid service. The change will occur at the same time as the generator’s scheduled refueling outage.
“Our agreement with Amazon is designed to provide us with a long-term, steady source of revenue and greater balance sheet flexibility through contracted revenues. We remain a first mover in this space and intend to continue to execute on our data center strategy,” Talen CEO Mac McFarland said. “Talen is well positioned to support Amazon’s energy needs as it invests further in the Commonwealth of Pennsylvania.”
Susquehanna would remain available for PJM dispatch under the PPA, with transmission and distribution service provided to the data centers by PPL.
“PPL Electric Utilities is investing in the resiliency of its transmission system so we can better serve our customers, meet growing energy demands and ensure power is delivered reliably,” PPL Electric Utilities President Christine Martin said. “Connecting large load customers like data centers to our transmission system helps lower the transmission component of energy bills for all customers, as large load customers pay significant transmission charges on our network. We’re excited to be part of Amazon’s broader investment in Pennsylvania and look forward to the positive effects it can have for our customers and the local economy.”
In an analysis of the transaction, financial firm Jefferies said it believes front-of-meter deals will become the norm going forward. The firm estimated that when the transaction fully ramps up, it will be worth between $82 and $88/MWh, higher than Jefferies’ earlier $75/MWh estimate and above other recent PPAs between nuclear operators and tech companies.
“We believe this puts to bed the debate on BTM nuclear in PJM, consistent with our long-held view. We expect FTM involving hyperscaler companies paying full transmission charges or virtual (i.e. financial/carbon deals) in future transactions,” Jefferies wrote.
Siting data centers behind generators’ meters has been a point of contention for state regulators and FERC. Proponents have pushed for clearer rules on the practice and argued it would increase the efficiency of the grid, reduce network upgrades and create flexibility for loads that don’t require all the characteristics that come with full network service.
Opponents say co-location could allow the load to avoid paying for ancillary services, like regulation or black start, that they consume. PJM also has posed engineering challenges with behind-the-meter load, saying its rules are designed for small configurations and protective relay failures could cause reliability issues.
Nuclear generators have been of particular interest to data centers looking for co-location opportunities or PPAs. Meta and Constellation energy announced a PPA on June 3 for the output of the 1,121-MW Clinton nuclear generator in Illinois, and another Constellation deal with Microsoft is set to revive the Three Mile Island Unit 1 as the Crane Clean Energy Center. (See Constellation, Meta Sign 20-year Nuclear PPA.)
Pennsylvania Gov. Josh Shapiro (D), U.S. Sen. Dave McCormick (R) and U.S. Rep. Dan Meuser (R) threw their support behind the agreement in the announcement.
“My administration is going to continue to bring people together to attract new investment to Pennsylvania, and we stand ready to work with Talen Energy and its partners to review permits for this project as efficiently as possible,” Shapiro said.
