Seven months after federal regulators blocked an expanded behind-the-meter arrangement at the Susquehanna nuclear plant, Talen Energy and Amazon Web Services have found another way to do much the same thing. On June 11 Talen announced a 1,920 MW power purchase agreement to supply AWS data centers in Pennsylvania from its majority-owned Susquehanna plant, the 2,475 MW station in Salem Township. The existing 300 MW co-location arrangement will shift to what Talen calls a front-of-the-meter framework, which the company says does not require Federal Energy Regulatory Commission approval.
The deal is large by any measure. Talen expects about $18 billion in revenue over the life of the contract at full quantity, according to its investor presentation as reported by Utility Dive. Deliveries ramp from 840 MW to 1,200 MW in 2029, reaching 1,680 MW to 1,920 MW in 2032, and the contract runs through 2042. Susquehanna's two units are licensed through 2042 and 2044.
From behind the fence to the grid
The difference between the old and new structures is the heart of the story. Under the original arrangement, the data center campus next to the plant took power directly, behind the meter. Talen sought to expand the amount of load served that way through an amended interconnection service agreement with PJM. FERC rejected that amendment in November 2024, and the Commission has since opened a broader review of co-location rules in PJM.
The new structure routes the power through the grid. Susquehanna injects its output into PJM like any other generator. Talen acts as the retail electricity supplier to AWS, and PPL Electric Utilities is responsible for transmission and delivery to the data center. AWS becomes a grid-connected customer that pays transmission and distribution charges. Talen expects the transition from the old arrangement to happen next spring, once transmission upgrades are finished.
From a physical standpoint, little changes. The electrons that power the data center still come, in practice, from a plant a short distance away. From a regulatory and commercial standpoint, almost everything does. The data center pays for its use of the network, the plant remains part of the PJM market, and the transaction is a bilateral contract of the kind that happens every day without FERC review.
Why the old structure drew fire
The opposition to behind-the-meter co-location in PJM came from two directions. Utilities argued that co-located data centers would avoid transmission and other charges while still relying on the grid for backup and stability, shifting costs onto other customers. PJM's market monitor, Monitoring Analytics, warned that moving existing plants to serve data centers could significantly affect PJM's markets by removing capacity that other customers depend on.
The monitor's concern has a number attached. Utility Dive reports the monitor's estimate that forecast data center load growth contributed to a $9.3 billion increase in capacity market revenue in PJM's last auction, for the 2025/2026 delivery year. The monitor's president, Joseph Bowring, has called for requiring new data centers to bring their own power supply from new resources. A behind-the-meter deal that takes an existing nuclear plant's output out of the market does the opposite.
The front-of-the-meter structure answers the first objection directly, because AWS will pay network charges. It answers the second only partly. Susquehanna's capacity remains in the market, but its output is committed under contract to a single buyer for nearly two decades. When that buyer's load grows to 1,920 MW, it adds roughly the same amount to PJM's demand, and the rest of the system must find capacity to cover it.
The backup question
The structure also handles a practical issue that behind-the-meter deals tend to gloss over. A nuclear unit is offline for several weeks every refueling cycle, and it can trip without warning. A data center that depends on a single plant needs somewhere else to get power during those periods, and that somewhere is the grid. Under the old arrangement, the question of what the co-located load should pay for that backup was exactly what the parties disputed. Under the new one, AWS is a network customer like any other, so the backup is part of the service it pays for. Talen expects the transition to coincide with work on the transmission system next spring, which shows that even a grid-connected deal of this size needs upgrades before it can proceed.
What Talen gets
For Talen, the attraction is price certainty for its most valuable asset. Talen owns about 10.7 GW of generation, almost entirely in PJM, and Susquehanna is the anchor. Its annual report says its 90% share of the plant produced power last year at an all-in cost of less than $24 per megawatt-hour. A long-term contract with a hyperscaler locks in a premium over that cost for most of the plant's remaining license term, removing exposure to wholesale price swings.
The company presented the agreement as a platform to expand across its portfolio. Talen and Amazon also said they will explore building small modular reactors in Pennsylvania and pursue uprates to increase Susquehanna's output. Amazon separately said it plans to spend about $20 billion on data centers in Pennsylvania.
What it means for other deals
The Talen-AWS restructuring shows that the co-location fight is less about physics than about who pays for what. Developers who want power from a specific existing plant can contract for it through the grid, accept network charges, and avoid the regulatory risk of a behind-the-meter deal. The cost is somewhat higher than an unregulated direct connection would be, but the contract becomes bankable much faster.
The model is likely to spread. Other nuclear owners in PJM with data center interest can use the same template, and gas plant owners can as well. The remaining question is the one Bowring raises: if data centers contract existing plants rather than funding new ones, the system's overall capacity does not grow while demand does. PJM's next capacity auction, scheduled for July, will show how much that matters. A deal that makes sense for Talen and Amazon does not, by itself, solve the region's supply problem.