Exelon’s Commonwealth Edison utility subsidiary stands to add up to $5 billion to its rate base by building transmission infrastructure to serve planned data centers in Illinois, according to Constellation Energy.
That potential rate base growth explains why Exelon and American Electric Power are challenging a proposed amended interconnection service agreement, or ISA, for an Amazon data center to be co-located at Talen Energy’s majority-owned Susquehanna nuclear power plant in Pennsylvania, the independent power producer said in a filing at the Federal Energy Regulatory Commission on Tuesday.
“Protestors are here to protect their ability to monopolize data center interconnection by limiting non-wires (i.e., colocation) alternatives for customers and ensuring that the utilities can grow their rate base,” Constellation said.
AEP and Exelon — on behalf of their utilities — challenged the ISA, in part because they claim it could cause an annual shift of up to $140 million in transmission costs onto PJM ratepayers. AEP and Exelon said FERC should start a hearing process to consider the issue, or reject the amended ISA outright.
The Organization of PJM States, which represents state utility regulators, last week urged FERC to start a hearing process because “questions of fact and law remain unresolved” about the amended ISA. Also, earlier this month, PJM’s market monitor said FERC should reject or start a hearing process on the amended ISA.
PPL told FERC that PJM’s independent market monitor, AEP and Exelon raise “important issues,” but they relate to general policies and should be considered outside the ISA docket. “Joint protesters and the IMM supply no grounds to reject the revised ISA, which greatly enhances the reliability of the PJM transmission system compared to the current version … of the same ISA,” PPL said in a July 12 filing.
Based on information gleaned from a regulatory proceeding involving ComEd at the Illinois Commerce Commission, it appears that nearly all the costs of power line facilities built to support data centers in Illinois are paid for by all ratepayers, according to Constellation.
Since 2017, ComEd has interconnected 12 data centers totaling nearly 120 MW, according to Constellation. The Chicago-based utility has about 25 data centers in some phase of engineering or construction with a peak demand of about 5,000 MW, the IPP said.
Extrapolating from the existing data centers, the new ones could add about $5 billion to ComEd’s rate base, with customers paying about $4.5 billion of that amount, Constellation said.
“Viewed through the lens of rate base growth opportunity, the unusual intervention of Exelon and AEP in the filing of an amended interconnection agreement agreed to by the host utility, the generator, and the independent grid operator makes more sense,” Constellation said. “Entities that socialize 90% or more of those costs to their other customers should not be able to derail this proceeding – and denigrate co-location configurations – in the name of consumer protection.”
If FERC has concerns about co-locating large loads, they should be addressed in a stakeholder process, not as part of the ISA decision, Constellation said.
Constellation owns eight nuclear power plants in PJM totaling nearly 16 GW — or about half the nuclear capacity in the grid operator’s footprint, which covers all or part of 13 Mid-Atlantic and Midwest states and the District of Columbia.
FERC is slated to take action on the ISA proposal by an Aug. 3 deadline.
Exelon and AEP did not immediately respond to a request for comment.
