Amazon and Talen Energy Restructure Susquehanna Deal into Landmark $18B Front-of-the-Meter Nuclear PPA
In response to regulatory roadblocks that threatened the development of co-located data centers, Amazon Web Services (AWS) and Talen Energy (TLN) have successfully restructured and expanded their nuclear power agreement into a landmark 17-year, $18 billion Power Purchase Agreement (PPA). Under the expanded agreement, Talen will supply up to 1,920 megawatts (1.92 GW) of carbon-free nuclear electricity from the 2.5-GW Susquehanna nuclear plant in Pennsylvania to Amazon's data center campuses.
This transaction represents a major strategic pivot following the Federal Energy Regulatory Commission’s (FERC) November 2024 rejection of an amended Interconnection Service Agreement (ISA) that would have allowed AWS to expand its direct, behind-the-meter (BTM) load at the Susquehanna site from 300 MW to 480 MW. To bypass the FERC co-location bottleneck, the partners are transitioning the arrangement to a "front-of-the-meter" (FTM) retail structure.
Bypassing the FERC Co-Location Bottleneck
Under the restructured FTM retail structure:
- Susquehanna will dispatch its carbon-free power directly onto the PJM Interconnection regional grid.
- Talen Energy will act as the retail electric generation supplier to Amazon.
- Local utility PPL Electric Utilities (PPL) will be responsible for the physical transmission and delivery.
- The transition is scheduled for Spring 2026, concurrent with Susquehanna's refueling outage, following the completion of necessary transmission reconfigurations.
This FTM framework completely de-risks the regulatory hurdles of co-location, as it does not require FERC approval. Consequently, Amazon has agreed to forgo its option to limit the campus and PPA at 480 MW, accelerating the campus to its full potential of 1.92 GW by no later than 2032. Once the full contract quantity is reached, the PPA is projected to generate up to $1.4 billion in annual revenue for Talen Energy through 2042, with a visible increase in long-term contracted margins from 10% to 35%.
During Talen's Q2 2026 earnings call, CEO Mac McFarland explicitly confirmed this strategic exit from behind-the-meter development, stating that grid-connected FTM solutions are more reliable, durable, and less expensive than BTM alternatives. The agreement also establishes a collaborative framework to pursue nuclear uprates and Small Modular Reactor (SMR) development within Talen's Pennsylvania footprint to add net-new energy to the grid.
Quotes
"The existing Susquehanna co-located load arrangement between Talen and Amazon will transition to a “front-of-the-meter” arrangement after the completion of transmission reconfigurations expected in the Spring of 2026, concurrent with Susquehanna’s refueling outage. Under the terms of the new agreement, Susquehanna will provide its carbon-free power to the PJM grid, Talen will act as the retail electric generation supplier to Amazon, and PPL Electric Utilities (“PPL”) will be responsible for transmission and delivery." — Talen Energy Press Release via SEC filing
"However, by working with local communities and the local utilities to power sites for late 2020s electrification, we are enabling front-of-the-meter solutions. We believe blending new capacity with existing energy on a front-of-the-meter grid-connected site is more reliable and durable, and in fact, less expensive than any behind-the-meter solution... The one we’re not doing is behind the meter." — Talen Energy Q2 2026 Earnings Call Transcript via Investing.com