On November 1, 2024, the Federal Energy Regulatory Commission (“FERC”) rejected an amended Interconnection Service Agreement (“ISA”) filed by PJM Interconnection, L.L.C. (“PJM”) that proposed increasing the co-located data center load at a Susquehanna Nuclear, LLC (“Susquehanna”) nuclear generating facility. FERC held that PJM did not meet FERC’s “high burden” to justify the provisions in the amended ISA that deviated from the standard PJM ISA. The order was voted out by a 2-1 majority, with Chairman Willie Phillips issuing a separate dissent and Commissioner Mark C. Christie concurring. Commissioners David Rosner and Judy W. Chang did not participate in voting on the order.

FERC accepted the original ISA between PJM, Susquehanna, and PPL Electric Utilities Corporation (the interconnected transmission owner) in 2015 and accepted an amended ISA to accommodate 300 MW of co-located data center load in 2023. Under the amended ISA at issue in FERC’s order, PJM sought to increase that existing co-located data center load to 480 MW and included other terms and conditions that did not conform to the standard ISA in the PJM Open Access Transmission Tariff. PJM argued that the “first-of-its-kind Co-Located Load configuration between an existing nuclear power plant and a large data center” fit into the “small number of extraordinary interconnections where reliability concerns, novel legal issues, or other unique factors would call for the filing of a non-conforming interconnection agreement.”

FERC held that PJM failed to meet its “high burden” to demonstrate that the non-conforming provisions were necessary. While PJM emphasized that the proposed amendments were developed to address the particular circumstances of the Susquehanna nuclear facility and could be limited to only those circumstances, FERC took issue with the fact that “significant aspects” of the provisions relied heavily on a generally applicable PJM guidance document. FERC stated that this raised a question as to whether PJM would offer these terms to all similarly situated interconnection customers and noted that the record showed that other parties are in fact interested in such arrangements. Although FERC acknowledged that the filing “leaves multiple questions unresolved,” FERC declined to “opine” on them given that it already found that PJM failed to meet its burden.

The order was issued with a 2-1 majority, with Republic Commissioners Christie and Lindsay S. See representing the majority and Democratic Chairman Phillips as the dissenting vote. Democratic Commissioners Rosner and Chang did not participate. In his separate concurrence, Commissioner Christie emphasized that the filing was rejected without prejudice.

In his dissent, Chairman Phillips stated that he would have accepted the amended ISA but ordered PJM to submit regular informational filings to provide transparency into operations and to allow PJM to go through stakeholder processes for tariff revisions and generic next steps. He criticized the majority as “miss[ing] the forest for the trees.” Chairman Phillips further stated that the rejection of the amended ISA erects a “roadblock” in the nation’s energy transition, potentially depriving the country of the resources needed to ensure reliable and affordable electricity, economic prosperity, and national security amid soaring energy demand and rapid changes in the resource mix.

FERC’s decision, issued in docket No. ER24-2172, can be found here.

Also on November 1, 2024, FERC Commissioners led a technical conference on co-location of large load at generation facilities, and on November 8, 2024, FERC issued a formal notice requesting written post-conference comments. A webcast of the conference and comments filed in Docket No. AD24-11 are available here, with a summary of the conference available here. The formal notice requesting post-conference comments is available here.