Shares in companies looking to power data centres with nuclear energy fell after a proposed deal by Amazon.com Inc (NASDAQ:AMZN) was rejected by the Federal Energy Regulatory Commission.
The FERC on Friday rejected a request to increase the amount of power sent from a nuclear power plant in Pennsylvania to an Amazon data center from 300MW currently to 480MW.
Susquehanna power plant is owned by Talen Energy, which in March this year sold a cluster of nearby data centers to Amazon’s cloud computing unit, Amazon Web Services, for $650 million in a novel deal that would have seen them powered by energy from the plant.
It is one of several nuclear-linked deals Amazon has agreed this year, including last month's triple-decker announcement, which included what could be the largest commercial deployment target of next-generation small modular reactors.
Shares in Talen fell 3.1%, while other companies expected to do similar deals, Constellation Energy Corp, Public Service Enterprise Group and Vistra Corp fell 11%, 5.9% and 3.4% respectively.
FERC rebuffed an interconnection service agreement on a 2-1, with chairman Willie Phillips saying the decision threatened national security and grid reliability.
“In failing to accept the agreement, we are rejecting protections that the interconnected transmission owner says will enhance reliability while also creating unnecessary roadblocks to an industry that is necessary for our national security,” he said.
Analysts at Jefferies said it had held "extensive investor conversations" and "very few" expected an outright FERC rejection.
Jefferies said it also expected negative share responses for Constellation Energy, Vistra and Public Service Enterprise Group as all companies that own nuclear power plants that could serve data centers.