Talen, Constellation and Vistra tumble after government rejects Amazon nuclear data center agreement

Expertise corporations’ push to immediately energy synthetic intelligence with nuclear crops hit a significant roadblock, after a federal regulator rejected a request to extend energy for an Amazon information middle.

The Federal Power Regulatory Fee on Friday rejected a request to extend the quantity of energy the Susquehanna nuclear plant in Pennsylvania can dispatch to an Amazon information middle campus.

Impartial energy producer Talen Power in March offered the info middle campus to Amazon for $650 million, which might be powered by the nuclear plant in a first-of-its-kind deal.

Talen’s inventory closed greater than 2% decrease Monday within the wake of FERC’s denial order. Constellation Power and Vistra Corp. tumbled greater than 12% and about 3%, respectively, in sympathy as traders Buyers anticipate the businesses to announce related offers in some unspecified time in the future. Constellation posted its worst day for the reason that firm spun off from Exelon in February 2022.

The grid operator PJM Interconnection and the Susquehanna plant, which Talen owns, had filed a request to extend the quantity of energy dispatched to the Amazon information middle from 300 megawatts at present to 480 megawatts.

The association, referred to as co-location by the ability trade, “may have big ramifications for each grid reliability and shopper prices,” mentioned FERC Commissioner Mark Christie in his opinion backing the order.

Talen mentioned FERC’s determination can have a “chilling impact on financial growth in states comparable to Pennsylvania, Ohio, and New Jersey” in a press release Monday. The facility firm mentioned it’s evaluating its choices with a “concentrate on business options.”

The Amazon information middle campus can nonetheless use 300 megawatts of energy from the Susquehanna nuclear plant, in accordance with Talen. The corporate mentioned the deal is “is simply and cheap and in the very best curiosity of customers.”

The FERC determination doesn’t immediately have an effect on Constellation’s plans to restart the Three Mile Island nuclear plant in 2028 by way of an influence buy settlement with Microsoft. Three Mile Island will dispatch energy to the electrical grid, reasonably than immediately energy Microsoft’s information facilities.

However Constellation and Vistra have expressed curiosity in hanging offers with tech corporations which can be much like the settlement between Talen and Amazon.

Information facilities that energy AI and cloud computing are consuming rising quantities of electrical energy. Utilities are scrambling to seek out methods to energy the rising electrical load. Tech corporations are more and more turning to nuclear energy as a result of it’s dependable, fossil free and doesn’t emit carbon dioxide.

Vistra and Constellation are two of the best-performing shares within the S&P 500 this yr, as traders guess on a possible windfall from the tech sector’s rising power wants.

Vistra’s inventory has greater than tripled this yr, outpacing even Nvidia to grow to be the best-performing inventory out there. Constellation has greater than doubled and is the fourth-best inventory within the S&P 500 this yr.