Federal regulators are forcing the nation’s largest grid operator to rewrite its rules for data centers that plug directly into power plants, a move aimed squarely at the wave of nuclear deals Big Tech companies are assembling to feed artificial intelligence workloads. The Federal Energy Regulatory Commission has opened a show-cause proceeding directing PJM Interconnection to propose new tariff provisions for co-located load, including data centers, along with the interconnection and transmission service terms that govern how those facilities connect to the grid. At the same time, Constellation Energy is advancing regulatory steps to restart the reactor formerly known as Three Mile Island Unit 1, and Amazon has already filed a transmission security agreement with a local utility to secure capacity in the same region. Together, these actions set up a direct collision between Big Tech’s appetite for carbon-free power and the grid rules designed to keep electricity affordable for everyone else.
FERC’s co-location order and the cost question for nuclear deals
The show-cause proceeding is not a routine housekeeping exercise. FERC is requiring PJM to file tariff language that spells out how large loads sitting behind a power plant’s meter should pay for the grid services they still rely on. Data centers are named explicitly as a type of co-located load covered by the order. The proceeding also addresses the interconnection and transmission service terms that determine how much a co-located customer pays to access the broader grid when its host plant cannot meet full demand, according to FERC staff.
For Amazon, Google, Microsoft, and other hyperscalers negotiating long-term nuclear offtake contracts, the practical effect is straightforward: whatever tariff PJM ultimately proposes will determine the true all-in cost of co-locating a data center next to a reactor. If PJM’s new rules assign higher network-service charges or require co-located loads to pay for transmission upgrades they previously avoided, the economics of these deals shift. A reasonable working hypothesis, based on the scope of the proceeding, is that FERC’s rulemaking will produce interconnection pricing that raises the effective cost of co-located nuclear arrangements. Whether that increase reaches a threshold large enough to slow future filings depends on the tariff language PJM submits and the comments FERC receives from utilities, generators, and tech companies during the proceeding.
The tension is sharpest in PJM’s territory, which stretches across 13 states and the District of Columbia and already faces the fastest data-center load growth of any U.S. grid region. Co-location lets a data center draw power directly from a generator without competing in the wholesale market or paying full transmission charges. That arrangement benefits the buyer and the plant owner but can leave other ratepayers covering a larger share of grid maintenance costs. FERC’s order signals that the commission views the current rules as insufficient to prevent cost-shifting.
At a technical level, the proceeding also forces PJM to clarify how co-located customers will be treated during system emergencies and congestion events. If a nuclear unit trips offline or must ramp down unexpectedly, the associated data center may need to draw large amounts of power from the grid on short notice. Without clear rules on reservation rights and curtailment priorities, that sudden shift can strain transmission lines and push up prices for other customers. By compelling PJM to define these terms in its tariff, FERC is trying to ensure that bespoke nuclear-data center deals do not undermine broader reliability standards.
Amazon’s PECO filing and Constellation’s reactor restart
A concrete example of the deals FERC is trying to regulate is already on file. A transmission security agreement between PECO Energy Company and Amazon Data Services, Inc. was submitted to FERC under docket ER25-3492. Commissioner Chang issued a concurrence in the proceeding, flagging concerns about how custom arrangements for large loads should be evaluated for fairness and reliability. The filing illustrates how tech companies are locking in grid access through bilateral agreements with utilities even as FERC works to establish broader rules.
The PECO-Amazon agreement underscores two dynamics that FERC is now trying to get ahead of. First, large data center customers are willing to negotiate tailored transmission commitments that guarantee them capacity even under stressed system conditions. Second, those commitments can be structured in ways that are difficult for outside parties to compare against standard tariff service, raising questions about whether similarly situated customers are being treated consistently. FERC’s decision to highlight this agreement in a separate concurrence suggests regulators are sensitive to the risk that one-off deals could proliferate before PJM’s generic co-location rules are in place.
The generation side of the equation is moving just as fast. Constellation Energy has renamed the shuttered Three Mile Island Unit 1 reactor as the Christopher M. Crane Clean Energy Center and is pursuing the regulatory approvals needed to bring it back online. The company submitted a notice of intent to pursue subsequent license renewal and has filed quality assurance program documents with the Nuclear Regulatory Commission. The NRC has scheduled public meetings to discuss Constellation’s restart-related filings for the facility. These steps represent the early phases of a multi-year licensing process, and the NRC records do not yet include detailed cost estimates or confirmed power-purchase terms with any data-center buyer.
The restart of a reactor that has been offline for years is not a small undertaking. License renewal, quality assurance reviews, and public comment periods each add time and regulatory risk. Engineering assessments must confirm that safety systems meet current standards, not just the ones in place when the plant originally operated. Local communities and state officials also have opportunities to weigh in on emergency planning, environmental impacts, and economic benefits. But the prize for a tech company that secures the output is substantial: a single large reactor can produce hundreds of megawatts of around-the-clock, zero-carbon electricity, exactly the profile AI training clusters require. That combination of scale and reliability explains why companies are willing to negotiate complex transmission agreements and wait years for a reactor to clear regulatory review.
Open questions on pricing, timeline, and grid reliability
Several critical gaps remain in the public record. FERC’s show-cause order directs PJM to propose tariff rules, but PJM has not yet filed its response. Until that language is public, neither tech companies nor consumer advocates can calculate the precise cost impact on co-located nuclear deals. The proceeding will likely attract comments from generators, utilities, state regulators, and the tech industry itself, and those filings will shape how aggressively PJM seeks to recover network costs from behind-the-meter data centers.
On the nuclear side, Constellation has signaled its intent to pursue a restart at the Christopher M. Crane Clean Energy Center, but the company has not disclosed a definitive construction schedule or a list of committed offtakers. The NRC docket shows that the project is still in preliminary licensing stages, which means any data center developer banking on its output must plan for regulatory uncertainty and the possibility of delays. That uncertainty could influence how much such a customer is willing to pay for dedicated transmission service in the interim.
Grid reliability is the third unresolved piece. As more hyperscale data centers cluster near nuclear plants, local transmission constraints could become binding more often, even if the reactors themselves operate reliably. FERC’s directive to PJM is partly an attempt to ensure that these large, relatively inflexible loads do not erode reliability for surrounding communities by consuming a disproportionate share of limited transmission capacity. The final tariff will need to balance the desire to attract data center investment with the obligation to maintain dependable service and just, reasonable rates for all customers.
In the near term, the outcome of PJM’s filing and FERC’s review will determine whether co-located nuclear projects remain a niche strategy or scale into a dominant model for powering AI. If the commission insists on robust cost allocation and transparent curtailment rules, the most speculative deals may not pencil out. If, instead, the final tariff preserves significant advantages for behind-the-meter arrangements, Big Tech’s nuclear push could accelerate, putting even more pressure on regulators to monitor who ultimately pays for the grid that keeps those reactors and data centers online.
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*This article was researched with the help of AI, with human editors creating the final content.
