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FERC Blocks Amazon's $650M Nuclear Deal Citing Grid Concerns; Nuclear Stocks Drop

Nov 4, 2024, 12:30 PM

US regulators have rejected an agreement between Amazon Web Services and Talen Energy to supply power from the Susquehanna nuclear plant to Amazon's data center in Pennsylvania. The Federal Energy Regulatory Commission (FERC) denied the proposal, citing concerns that the plan did not adequately prove why the special contract should be allowed under federal rules and highlighting grid reliability issues. The agreement would have allowed Amazon to avoid paying transmission costs by co-locating at the nuclear plant, potentially shifting an estimated $140 million per year in costs onto other customers. In March, Amazon had paid Talen $650 million for a 960-megawatt data center campus adjacent to the plant and signed a long-term agreement to buy power, aiming to power AI data centers. The rejected plan would have increased co-located load capacity from 300MW to 480MW. The decision has caused nuclear power and uranium stocks, including Talen Energy, Constellation Energy, Vistra Corp, and Oklo Inc., to fall significantly in premarket trading. Independent power producers may also see sell-offs due to this development.