Talen, Amazon Launch $18B Nuclear PPA—A Grid-Connected IPP Model for the Data Center Era

Talen Energy has restructured and significantly expanded its nuclear energy agreement with Amazon Web Services (AWS), finalizing a 17-year, $18 billion power purchase agreement (PPA) that will supply up to 1,920 MW of carbon-free electricity from the 2.5-GW Susquehanna nuclear plant to Amazon’s data centers across Pennsylvania.

The deal, announced on June 11, restructures a previously approved co-located behind-the-meter (BTM) model into a grid-connected, front-of-the-meter (FTM) retail structure. Under the new arrangement, Talen will serve as AWS’s licensed retail electricity provider in Pennsylvania, enabling it to source power from the grid and contract directly with AWS. PPL Electric Utilities will deliver the power across the grid, while generation from the two-unit, 2.5-GW Susquehanna nuclear plant will be injected into PJM Interconnection. The reconfiguration will take place during a scheduled refueling outage in spring 2026. Until then, Talen will continue powering the campus under the existing 300-MW BTM setup.

The restructured PPA, which will run through 2042, outlines a staged ramp-up in carbon-free electricity deliveries from the Susquehanna nuclear plant to AWS’s data center campuses across Pennsylvania. Under the contract, deliveries are slated to reach between 840 MW and 1,200 MW by 2029, and between 1,680 MW and 1,920 MW by 2032, depending on AWS’s development pace. According to Talen executives, the full contracted volume is expected to be achieved “no later than 2032,” though both parties have indicated it could be met sooner.

A Strategic Pivot After FERC’s Rejection

The news comes on the heels of Amazon’s announcement on June 10 that it plans to invest at least $20 billion in Pennsylvania to expand its artificial intelligence (AI) infrastructure. The landmark investment, which Amazon calls the largest private sector commitment in Pennsylvania’s history, will initially focus on new data center campuses in Salem Township and Falls Township, with additional communities under consideration.

During an investor call on June 11, Talen executives said the revised agreement with AWS was necessary to navigate regulatory headwinds created by the Federal Energy Regulatory Commission’s (FERC’s) November 2024 rejection of an amended interconnection service agreement (ISA) that would have enabled AWS to expand its direct, behind-the-meter (BTM) load at the Susquehanna nuclear site.

As POWER reported in November, FERC denied the PJM-filed amendment on a 2–1 vote, citing fairness and reliability concerns. The proposed amendment would have increased the co-located load at Susquehanna from 300 MW to 480 MW and allowed for future growth up to 960 MW, but opponents—including AEP and Exelon—warned the model could allow large load customers to sidestep costs borne by other grid users. FERC ultimately agreed, concluding that PJM had not justified its deviation from established transmission rules.

Because power is delivered via standard grid channels, the new approach directly responds to FERC’s concerns while simplifying approvals. It does not require a special FERC-approved amendment to the ISA. It also ensures transparent cost allocation: AWS, as a retail customer, pays all applicable transmission and distribution charges, eliminating the risk of shifting costs to other ratepayers, which was a central concern in FERC’s 2024 rejection. “And, as PPL has said numerous times, this will reduce transmission costs for residential customers. Everyone benefits,” noted Talen CEO Mac McFarland.

The agreement will also support AWS’s build-out of multiple hyperscale data center campuses across Pennsylvania, including a flagship facility adjacent to the Susquehanna site in Luzerne County. As a signal of confidence in the grid-connected model, “Amazon is forgoing its option to limit the campus and PPA at 480 MW—an important commitment to accelerating the campus to its full potential,” noted Cole Moeller, Talen’s executive vice president of strategic ventures.

As notably, Talen’s revised agreement with AWS also includes the termination of the Nautilus lease, a legacy arrangement tied to a bitcoin mining facility and PPA that previously occupied part of the Susquehanna site and locked up nuclear capacity at below-market rates. “We will also terminate the Nautilus lease, unlocking more land and infrastructure to quickly power the Amazon campus,” said Cole Moeller, Talen’s executive vice president of strategic ventures.

And, to protect Talen’s downside in the event of a slower-than-expected AWS buildout, the agreement mirrors the previous deal’s structure by including minimum volume commitments that scale over time. “Just like the first deal that we did, there are minimum commitments that ramp over time through 2032 here to the full max—or full main—commitment,” Moeller explained. “And if they’re not met, there’s a payment to make us whole, relative based on the market price at that time versus the contract price,” he said. “Just like the first deal, there is a cap to those should that difference be great enough over a period of time based on the minimum commitments for that year.”

While the contract is structured to prioritize nuclear power from the Susquehanna plant, it also includes operational safeguards to ensure reliability. “This is a contract where we are supplying nuclear, carbon-free energy, and that’s the objective of the contract,” said Talen CEO Mac McFarland. “However, if a unit is in an outage or is enforced out, it can be backstopped by the rest of our fleet, but that isn’t the intent. And so we can supply the energy, but carbon-free, it has to come from the nuclear plant. But that, you know, is a smaller component than the overall energy and capacity. So that’s why we get the portfolio effect. But let’s just be clear: We’re trying to generate as many megawatts to supply this contract out of the nuke.”

“Rather than challenge the FERC order or slow down our development, we restructured the contract,” Moeller explained. “We will now serve AWS as a retail supplier and deliver power across the grid to any AWS facility in Pennsylvania. That’s a better model, and it allows for acceleration.”

Moeller also noted that the retail structure enables flexible power delivery aligned with AWS’s infrastructure pace: “Amazon has the flexibility with this contract to flex the PPA across all of its sites across Pennsylvania, and we think that meaningfully gives opportunity for acceleration,” he said. “So the opportunity to build multiple campuses in parallel and power them through this PPA provides a lot of upside opportunities for us.”

Generating Up to $1.4B in Annual Revenue

The Talen-Amazon deal offers a potentially replicable model for merchant generators looking to secure long-term revenue through large-load retail delivery rather than volatile market exposure. It also offers a framework for integrating nuclear power, traditionally viewed as inflexible or high-cost, into the fast-moving world of hyperscale infrastructure.

According to Talen, the PPA is expected to generate up to $1.4 billion in annual revenue once the full contract quantity of 1,920 MW is reached—an estimate that reflects the fully ramped contract volume and incorporates annual price escalators of 2% beginning in 2028, as detailed in the investor presentation footnotes. The company projects the contract will drive a 50% increase in after-tax cash flow per share compared to 2026 guidance—reaching more than $8 per share by 2030–2032—and deliver a 20% compound annual growth rate from 2024 levels.

“This contract creates an $18 billion revenue stream over the 17-year term,” said Terry Nutt, Talen’s CFO. “And [it] enhances our value to our shareholders through resilient cash flows. This strengthens our balance sheet and adds significant flexibility across our business, while also maintaining exposure to the constructive power fundamentals for the rest of our generation.”

The deal could also fundamentally transform Talen’s business profile. “We now have the know-how on both front-of-the-meter and behind-the-meter contracting solutions for our customers,” said McFarland. “We will build on this know-how as an [independent power producer (IPP). This is repeatable, and we will continue to look for opportunities to expand on our strategy.”

Nuclear Innovation: Uprates and Small Modular Reactors

On Wednesday, Talen executives also revealed that, as part of the broader agreement, AWS and Talen have committed to exploring advanced nuclear technology development across the company’s Pennsylvania nuclear footprint.

As part of the deal, the two companies have agreed to jointly evaluate adding potential new capacity at Susquehanna, a nuclear plant that has been operating since the 1980s. “We are working together to evaluate potential plant uprates, as well as the potential deployment of small modular reactors (SMRs) on or near our sites,” said Moeller. “And that really reflects a platform of collaboration, shared values, and a common mission. And as we begin to think through long-term solutions together, we see nuclear innovation—uprates, SMRs, firm power—as part of the vision to decarbonize and meet the scale of energy demand these facilities will require.”

While still preliminary, the initiative points to growing momentum behind advanced nuclear as a power source for hyperscale digital infrastructure. McFarland framed the company’s long-term strategy around a phased development horizon: “We sort of see things as, you know, the short term, five years, midterm, five years, and then longer term, what happens years 11 through 15, and SMRs [are in] years 11 through 15. But you have to start at some point,” he said.

That strategic vision underpins the agreement with AWS to begin evaluating SMR deployment at Talen-owned sites in Pennsylvania. “And so we’ve agreed with Amazon to explore putting SMRs at our sites across Pennsylvania—but it’s the start of that. We’re not into making a capital commitment, but obviously, this is why,” McFarland continued. “Both in terms of that—the longer-term solution that’s years 11 through 15—as well as the gas solution that is going to be needed in the years five through or six through 10.”

Stakeholder Support Signals Broad Alignment

The revised agreement has garnered strong support from key stakeholders across the state.

PPL Electric Utilities, which will deliver power under the new retail arrangement, affirmed that the deal benefits all customers in its service territory. “Connecting large load customers like data centers to our transmission system helps lower the transmission component of energy bills for all customers, as large load customers pay significant transmission charges on our network,” said Christine Martin, president of PPL Electric Utilities. “We’re excited to be part of Amazon’s broader investment in Pennsylvania and look forward to the positive effects it can have for our customers and the local economy.”

AWS, too, expresssed its support. “Amazon is proud to help Pennsylvania advance AI innovation through investments in the Commonwealth’s economic and energy future,” said AWS Vice President of Global Data Centers Kevin Miller. “That’s why we’re making the largest private sector investment in state history – $20 billion – to bring 1,250 high-skilled jobs and economic benefits to the state, while also collaborating with Talen Energy to help power our infrastructure with carbon-free energy.”

Pennsylvania Governor Josh Shapiro welcomed the announcement, calling it “a big deal for Northeast Pennsylvania and another sign that Pennsylvania is open for business.” He added: “We are bringing together world-class companies, innovative energy solutions, and good-paying jobs to grow the economy and create opportunity.”

Labor leaders and local officials also praised the deal’s economic and energy implications. “This announcement is good for family-sustaining jobs, our local communities, and Pennsylvania’s energy future,” said Dave Derbes, business manager of IBEW Local 1600. “We’re proud to support the continued operation and potential expansion of nuclear energy in Luzerne County and across the Commonwealth.” Luzerne County Manager Romilda Crocamo added: “The future of the Susquehanna station and data center development is critical to Luzerne County’s economy and long-term prosperity. We look forward to continuing to work with Talen and AWS to ensure sustainable growth in the region.”

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).

Editor’s Note:This story reflects ongoing developments related to Talen Energy’s expanded nuclear power agreement with Amazon Web Services. Additional updates, stakeholder commentary, and technical details will be incorporated as they become available.