FERC State-Resistance to BTM Colocation (Susquehanna ISA Rejection Nov 2024 + PJM Show-Cause 2025)
event
Federal regulators are actively fighting to stop tech giants from quietly annexing power plants to feed their data centers.
Who they are
A pair of 2024-2025 fights between U[1].S[2]. energy regulators and the big tech firms hungry for electricity[3].[4]
What they do
They show the government pushing back as data-center operators try to hook directly into power plants, though the operators keep finding ways around the rules. Sequel added: in December 2025 the regulator ruled the grid operator's data-center rules unlawful and ordered new ones. One circulating error rejected: there is no 'PECO-Amazon' deal — the real move was Talen and Amazon restructuring around the regulator entirely.
How it works
In November 2024, regulators (FERC) rejected a deal that would have let Amazon Web Services draw more power (from 300 up to 480 megawatts) straight from Talen's Susquehanna nuclear plant, after old-line utilities complained the costs would shift onto everyone else. The chairman's dissent called data centers necessary for national security. In early 2025 FERC ordered the grid operator PJM to justify its rules on these arrangements. But the tech firms are routing around FERC by lobbying regional grid bodies to rewrite their tariffs instead. Checked against the actual federal order on 13 Sep 2026 (downloaded, 607 KB): it confirms the 300-to-480 megawatt figure word for word. Two numbers from that document worth keeping straight, because they get mixed up: the plant itself is 2,520 MW, and the site was built to move 960 MW. A 2026 report described the blocked deal as 'gigawatt-scale' — the part actually refused was 480 MW.
Why it matters
It shows the regulatory state is not simply captured by big tech; parts of it are pushing back hard, even as the tech side keeps maneuvering to win at a different level. Both things are true at once and the engine holds both: the separation was refused at the connection-agreement level in November 2024, and achieved at the contract level in June 2025. Different layers, not a winner.
The engine's record — word for word
Consolidated regulatory-state-vs-operator-class friction events. **November 2024 (Talen-AWS Susquehanna ISA rejection):** FERC rejected amended Interconnection Service Agreement that would have increased Amazon Web Services behind-the-meter load at Talen Energy's Susquehanna nuclear plant from 300 MW to 480 MW. Driven by protests from legacy utilities (Exelon, AEP) over transmission cost-shifting (per ir.talenenergy.com + ferc.gov + utilitydive.com). Chairman Willie Phillips DISSENT explicitly framed data-center colocation as 'an industry that is necessary for our national security' — formalizing the executive-branch psychological shift (Joulework Audit Finding 34, Apex (c) collective-psychology). **Early 2025 (FERC Show-Cause Order on PJM):** FERC issued show-cause order demanding PJM justify tariffs regarding BTM generation + colocation, citing grid-reliability + unfair-cost-shifting concerns to retail consumers. Engine reading per Joulework Cycle-Control Thesis Audit Findings 03+31+38 (Tier-1, consolidated node, Apex (b) structural-recurrence): the regulatory state is NOT a monolith captured by operator class — legacy grid governance is actively + aggressively resisting hyperscaler annexation of public utility assets. **However**, operator class is successfully maneuvering AROUND FERC by lobbying RTOs to rewrite regional tariffs (PJM EIT, ERCOT Batch Studies) — substrate fight at tariff-layer rather than ISA-layer. Cross-reference grid_collision + aip_consortium_2024 (the AIP exists partly because direct ISA-layer extraction was rejected; consortium-level coordination becomes the workaround).
**Report #91 May 18 2026 — Talen-Amazon June 2025 front-of-meter pivot is the consortium-level workaround validated:** Following the November 2024 FERC ISA rejection of the 300→480 MW BTM expansion at Susquehanna documented in this node, Talen Energy 8-K June 11 2025 announced a restructured 17-year $18B PPA with Amazon at **1,920 MW front-of-the-meter** (Talen acts as retail supplier; PPL Electric Utilities handles physical transmission). The FOM structure explicitly avoids the FERC interconnection-dispute approval pathway that bogged down BTM colocation. Chairman Phillips' BTM dissent (data centers as 'industry necessary for national security') is operationally vindicated at the tariff-and-PPA layer rather than the ISA layer — consortium-level coordination becomes the workaround as predicted by the closing line of this node, here with a 4x capacity-jump as the FOM-arbitrage premium. [Report #189] Sequel: Dec 19, 2025 (193 FERC ¶ 61,217) — FERC found PJM's co-location tariff provisions unjust and unreasonable and directed new rules (EL25-49; compliance briefing into spring 2026). NAMING CORRECTION recorded: a 2026 audit's 'FERC accepted a revised PECO-Amazon framework' is REJECTED — no such acceptance exists; the actual resolution was the Talen-AWS front-of-meter conversion (Jun 11, 2025 8-K) with PPL as the wires company, structured to avoid the FERC pathway (PECO/Exelon was on the PROTESTER side). The friction-and-maneuver reading this node holds stands; the 'grid adopting rigid compute-to-energy ledgering' one-pole reading does not. [2026-09-13 primary-source verification] The order itself was retrieved and read (ferc.gov PDF, 607,216 bytes). It confirms this node's figures exactly: the Amended ISA sought 'to increase the amount of Co-Located Load from 300 megawatts (MW) to 480 MW' and 'In this order, we reject the Amended ISA'[5]. Two magnitudes from the order that this node did not carry and that are the ones most often conflated: the plant is Susquehanna's 2,520 MW nuclear generating facility, and the proposed modifications would 'physically transfer 960 MW of power to the Co-Located Load's transmission facility'. A 2026 report integrated this event as a blocked 'gigawatt-scale' colocation; the primary shows the refused increment was 480 MW. HELD CONTESTED at the layer question: physical separation refused at the interconnection-agreement layer (Nov 2024) and achieved at the PPA/tariff layer (Jun 2025 front-of-meter restructuring, above). The engine does not collapse between 'separation blocked' and 'separation achieved' — both legs are documented and they sit at different layers.
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