Amazon is set to begin drawing 1.92 gigawatts of power directly from the Susquehanna nuclear plant in Pennsylvania this spring, a deal that now has a clear regulatory runway after PJM Interconnection filed new tariff rules with federal regulators on February 23, 2026. The filing creates a formal framework for so-called co-located loads, letting large electricity consumers like data centers tap into a power plant without routing energy through the broader transmission grid. For Amazon, the arrangement cuts years off the typical wait to secure grid access. For the rest of the country, it signals a shift in how the biggest energy buyers will compete for reliable, carbon-free power.
Why PJM’s co-location tariff changes the timeline for nuclear power deals
The Federal Energy Regulatory Commission, the agency that oversees interstate electricity markets, issued a December 18, 2025 order directing PJM to build new rules for co-located load arrangements. PJM is widely described as the largest regional grid operator in the United States, managing the high-voltage transmission system across 13 states and the District of Columbia. The order required PJM to spell out how a data center or industrial facility sitting next to a generator can consume electricity before it ever hits the transmission network.
That distinction matters because the traditional path to grid connection is badly backlogged. Developers routinely wait several years in PJM’s interconnection queue before receiving approval, a bottleneck driven by surging demand from cloud computing, artificial intelligence workloads, and electrification projects. An arrangement like the Susquehanna deal sidesteps much of that queue. The data center draws power at the plant site, so it does not need a new transmission line or a slot in the broader interconnection process for most of its load.
In effect, co-location turns a generator into a dedicated power source for a nearby customer, with only residual or excess output flowing over the shared grid. That is attractive to hyperscale data center operators that prize predictable, around-the-clock power and want to lock in low-carbon electricity at scale. Nuclear plants, with their high capacity factors and long operating lifetimes, are natural candidates for this type of arrangement.
The practical test of whether this regulatory change accelerates similar deals is straightforward: count the number of FERC-approved co-location projects filed under PJM’s new tariff in the months after the ER26-1479 order takes effect, and compare that pace to the years-long timelines typical of standard interconnection requests. If the Susquehanna arrangement proves workable, other hyperscale buyers with nuclear ambitions will have a template to follow, potentially shaving 18 months or more off the traditional process.
FERC’s order and PJM’s February 2026 compliance filing
PJM submitted its compliance filing for co-located load tariff revisions on February 23, 2026, under FERC docket ER26-1479. The filing implements the December 18, 2025 order and lays out the tariff language that governs how co-located customers are metered, billed, and integrated into PJM’s reliability planning.
FERC framed its original directive as a push to “embrace innovation” in how large loads connect to the grid. The commission recognized that existing tariff structures did not account for arrangements where a single customer consumes most or all of a generator’s output on-site. Without explicit rules, those deals faced legal ambiguity over transmission charges, capacity obligations, and curtailment protocols. The new tariff sheets filed by PJM are designed to resolve those questions so that projects like the Susquehanna co-location can proceed on defined terms.
Under the proposed framework, a co-located customer is treated differently from a traditional retail or wholesale load. The tariff language describes how PJM will distinguish between power consumed behind the plant’s interconnection point and power delivered over the transmission network, using separate meters and settlement rules. This distinction is central to determining which charges apply, including transmission service, capacity payments, and ancillary services.
For Amazon, the filing provides the regulatory certainty needed to activate the spring startup. The 1.92 gigawatts at stake represent a massive block of always-on nuclear generation, enough to power roughly 1.5 million typical American homes. Securing that volume through the standard queue would have required years of study, cost allocation disputes, and transmission upgrades. The co-location path compresses that timeline into a single tariff framework and a bilateral commercial agreement with the plant’s owner.
The compliance filing also gives PJM and FERC a common reference point to evaluate future deals. Instead of negotiating bespoke terms for each project, developers and large buyers can work from a standardized set of definitions and procedures. That should reduce regulatory friction and give state regulators, consumer advocates, and competing generators clearer visibility into how these arrangements affect the broader market.
What the tariff filing does not resolve for the Susquehanna deal
Several questions remain open even after PJM’s compliance submission. The filing references tariff sheets but does not include operational details specific to the Susquehanna arrangement, such as the exact metering protocols or curtailment procedures that will govern how Amazon’s load interacts with the plant during grid emergencies. Those specifics will likely emerge in subsequent filings or operational agreements between PJM, the plant operator, and Amazon, which are not yet public.
The exact commercial effective date and the financial terms of the contract between Amazon and the plant’s owner are also absent from the FERC docket. While the headline promise is a spring 2026 startup, the precise day the data center begins pulling power depends on operational readiness, testing, and any remaining state-level permits. Insufficient data exists in the public regulatory record to pin down a specific go-live date or the contract’s duration and pricing structure.
Transmission-cost savings are another gap. The entire logic of co-location rests on the idea that bypassing the grid saves money for the buyer and avoids congestion costs for other ratepayers. But no primary data in the FERC order or PJM filing quantifies those savings for the 1.92-gigawatt Susquehanna arrangement. Independent grid analysts and consumer advocates will likely press for that analysis as FERC reviews the compliance filing and determines whether additional conditions or reporting requirements are warranted.
Grid reliability is the sharpest unresolved tension. When a single customer claims nearly two gigawatts of a nuclear plant’s output behind the meter, that power is no longer fully available to support regional reliability during peak demand or unexpected outages. PJM’s filing explains, at a high level, how co-located load will be reflected in planning studies, but it does not provide project-level modeling for Susquehanna. Questions remain about what happens if the data center suddenly ramps down, if the plant trips offline, or if PJM calls for emergency conservation while Amazon’s facilities continue operating at high utilization.
Those concerns extend to equity and market design. Other generators and load-serving entities may argue that large, sophisticated buyers are gaining privileged access to low-cost, carbon-free resources while smaller customers remain exposed to congested transmission paths and volatile wholesale prices. The co-location tariff answers the narrow legal questions around how to meter and bill these deals, but it does not address broader policy debates over who should benefit from legacy nuclear plants and how to allocate scarce clean energy in a decarbonizing grid.
For now, the Susquehanna deal will serve as the first major test of PJM’s new rules. If the project delivers reliable, low-carbon power to Amazon without undermining regional reliability or shifting costs onto other customers, it will strengthen the case for additional nuclear co-location deals. If it exposes gaps in the tariff or triggers disputes over reliability and cost allocation, FERC and PJM may be forced to revisit the framework they have just put in place.
Either way, the February 2026 filing marks a turning point. It signals that federal regulators and the country’s largest grid operator are willing to reshape long-standing rules to accommodate the scale and urgency of data center demand. As more utilities, independent power producers, and technology companies explore similar arrangements, the balance between shared-grid planning and private, plant-level deals will become a defining issue for the next phase of the clean energy transition.
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*This article was researched with the help of AI, with human editors creating the final content.
