Amazon backs Talen nuclear deal despite regulatory rejection - Bloomberg News

Amazon (NASDAQ:AMZN ) remains committed to building a data center campus adjacent to a nuclear power plant in Pennsylvania despite the deal being rejected by a federal regulator, Bloomberg News has reported.

On Friday, the top US energy authority -- the Federal Energy Regulatory Commission (FERC) -- voted against a request by Talen Energy (NASDAQ:TLN ) that would have boosted the amount of power it is allowed to supply to an Amazon Web Services data center.

Talen had previously said Amazon Web Services, the e-commerce giant's all-important cloud computing division also known as AWS, would pay $650 million for a data center campus of as much as 960 megawatts next to its Susquehanna nuclear plant. Talen currently has the rights to power the facility with 300 megawatts.

It was seen as an example of the willingness of big cloud-computing players to spend on sourcing power for their key data centers.

However, the deal, which would have allowed Amazon to plug directly into Talen's plant instead of the wider power grid, faced opposition from some utility groups. They argued the move could threaten the reliability of the grid and make rates more expensive.

Shares in US power producers dipped following the FERC's decision, with investors flagging concerns the ruling could make it more difficult for big technology firms like Amazon to get their hands on the nuclear energy needed to run their data centers.

Even still, Amazon is aiming to "continue innovating and advancing carbon-free energy solution" with companies like Talen to help it power data centers across the US, Bloomberg said, citing an email from an Amazon spokesperson. The spokesperson added that Amazon intends to go ahead with the Talen project, Bloomberg reported.

Shares in Talen were little changed in premarket US trading on Tuesday, but have spiked by more than 160% so far this year.

Source: Investing.com