AEP and others push for FERC guidance on “gigantic” data center colocation problem

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Ensuring the grid has adequate power supply was one of the key topics raised during a Federal Energy Regulatory Commission technical conference on colocating data center load at power plants on Friday.

“Colocation, in my view, is a necessary but insufficient cure for the larger disease we face today of inadequate spinal transmission and inadequate forward-looking generational development,” said Aubrey Johnson, vice president of systems and resource planning for the Midcontinent Independent System Operator.

On the same day FERC held the conference, the agency rejected an amended interconnection services agreement that would have facilitated the sale of electricity to an Amazon Web Services data center at the Susquehanna nuclear power plant in Pennsylvania.

FERC commissioners raise concerns

According to FERC Chairman Willie Phillips, data centers, artificial intelligence and other information-related technologies are national resources of enormous security and economic importance.

“They belong in the United States, and I believe that the federal government, including this agency, should do its best to encourage and encourage their development,” Phillips said. Phillips objected to the decision to reject the Susquehanna Interconnection Agreement, in part on national security grounds.

FERC Commissioner Mark Christie said colocation is a “giant” problem that impacts resource adequacy and fairness to consumers. “If you take available resources – and when we're talking about nuclear weapons, we're clearly talking about available resources – if you take them out of the supply pile, what does that mean for the adequacy of the resources?”

During the conference, FERC Commissioner David Rosner called for finding a way to unlock shared load and generation efficiencies while ensuring everyone pays their “fair share” for the grid system.

FERC Commissioner Judy Chang asked whether there are short-term actions the agency could take while also considering longer-term solutions, such as developing rules to accommodate new types of customers.

AEP, others turn to FERC

According to Stacey Burbure, vice president of FERC and RTO strategy and policy at American Electric Power, the PJM Interconnection failed to reach stakeholder agreement on how to handle shared load.

“The Commission’s leadership on this issue is urgent, and it is needed now,” Burbure said. “As we think about the need for regulatory certainty that lies ahead, we need to keep our core principles simple and ensure that when you use the transmission system, you rely on it and depend on it and it is necessary.” For your configuration to work, bear your fair share of the costs.

According to Cole Muller, executive vice president of strategic ventures at Talen Energy, each consolidated load will likely have unique circumstances that are best addressed at the local level by the regional transmission organization, local utility and generator. “If not, there will be uncertainty … that will cause the burden to shift elsewhere,” Muller said.

According to Mason Emnett, senior vice president of public policy at Constellation Energy, colocation is part of a broader problem.

“Excessive switching between colocation and grid connectivity somewhat distracts from some of the larger challenges we have that will require collaboration,” Emnett said, pointing to issues such as determining exactly how much load should be paid for broad grid services.

According to Brian George, U.S. director of global energy market development at Google, co-locating data centers is a response to a “market inadequacy” in power supply. “We're trying to figure out how to bring new loads into the system in a way that meets our growth goals,” George said. “It is not due to the need to avoid upgrades to transmission and distribution infrastructure.”